EXHIBIT 99.8
ENERGY SERVICE AGREEMENT
ENERGY SERVICE AGREEMENT, dated as of September 24, 1998,
between Aladdin Gaming, LLC, a Nevada limited-liability company (the
"Customer"), and Northwind Aladdin, LLC, a Nevada limited-liability company (the
"Supplier").
WITNESSETH:
WHEREAS, Customer, in conjunction with the Aladdin Bazaar, LLC
("Bazaar") and Aladdin Music, LLC ("Music") (Customer and Music collectively are
referred to as the "Parties" and each individually as a "Party"), are developing
a resort, casino, shopping and entertainment complex in Clark County, Nevada to
be comprised of the Aladdin Hotel and Casino, the Desert Passage Mall and a
music-themed hotel and casino and certain related facilities (collectively, the
"Complex"); and
WHEREAS, concurrently with the execution of this Agreement,
Music and Bazaar also are executing Energy Service Agreements with the Supplier
(such Energy Service Agreements, together with this Agreement, as any of them
may be amended, restated, modified or supplemented and in effect from time to
time, are collectively referred to herein as the "Complex Energy Service
Agreements"); and
WHEREAS, the Customer is developing a luxury themed hotel of
approximately 2,600 rooms (the "Hotel"), a 116,000 square foot casino (the
"Casino"), a 1,400-seat production showroom, seven restaurants and a newly
renovated 7,000-seat Theatre of the Performing Arts (the "Theatre" and together
with the Hotel and Casino, the ."Premises") which will be part of the Complex;
and,
WHEREAS, the Customer has entered into an agreement with the
Supplier dated as of December 3, 1997 (the "Development Agreement") to develop
and construct an energy facility (such facility, together with the Supplier
Interconnection Equipment, the "Northwind Facilities") on a 0.64 acre portion of
the Complex site to supply hot water, chilled water and electricity to the
Complex, including supplying hot water, chilled water and electricity to the
Premises;
WHEREAS, the Customer intends to purchase its chilled water,
hot water and electricity needs for the premises from the Supplier, and
WHEREAS, the Customer is the beneficiary of a guaranty, of
Unicom Corporation (the "Guarantor"), a parent company of the Supplier, dated as
of December 3, 1997 (the "Guaranty") pursuant to which the Guarantor
unconditionally and irrevocably guaranties to the Customer the performance of
the obligations and duties of the Supplier under the Development Agreement and
this Agreement to construct and demonstrate "Final Completion" of the Plant,
subject to a limitation of the lesser of (i) $30 million or (ii) the "Guaranteed
Maximum Price" as finally determined and agreed upon pursuant to the Development
Agreement, plus interim operating costs up to the "Substantial Completion Date";
and
WHEREAS, the Customer has entered into a lease with the
Supplier dated as of December 3, 1997 (the "Lease") to lease a site (the "Site")
to the Supplier on which the Supplier will construct and operate the Plant
pursuant to the Development Agreement and this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, it is hereby agreed between the Supplier and
the Customer as follows:
ARTICLE 1
DEFINITIONS
1.1 Definitions. As used herein, the terms set forth in Annex A
hereto shall have the meanings specified or referred to in Annex A
ARTICLE 2
ENERGY SERVICE
2.1 Services; Exclusivity; Right of First Refusal; Performance;
Customer Agreements.
(a) Project Scope; Customer Energy Requirements. The Northwind
Facilities will be engineered, designed and constructed under the terms of the
Development Agreement and in accordance with the design and equipment parameters
set forth in Exhibit A hereto (such Exhibit, as it may be amended, restated,
modified or supplemented and in effect from time to time, is referred to as the
"Project Scope"), to generate and provide to the Complex: (a) chilled water
("Chilled Water Services"), (b) hot water ("Hot Water Services"), and (c)
primary and secondary AC electricity (up to and including the initial
transformation) generated both by the Northwind Facilities and third party
sources of electricity ("Electricity Services", and together with Chilled Water
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Services and Hot Water Services, the "Services"), in capacities which are set
forth in Exhibit A. The characteristics and capacities of the Northwind
Facilities have been agreed upon by the Parties pursuant to the statement of
projected energy requirements for the Complex under the heading "Contracted
Demand" set forth in Exhibit B hereto. (The definitive specifications of the
Plant Energy Requirements are set forth in Exhibit B.1 and the Customer Energy
Requirements are set forth in Exhibit B.2. Exhibit B.1, as it may be amended,
restated, modified or supplemented and in effect from time to time, is referred
to as the "Energy Requirements.")
(b) Services. Subject to the provisions of the Development
Agreement, Which govern the Supplier's obligation to engineer; design and
construct the Northwind Facilities, the Supplier agrees that it will provide
Initial Services up to the Initial Energy Requirements to the Customer on the
Initial Services Date and Services to the Customer on the Substantial Completion
Date up to the Energy Requirements.
With respect to Electricity Services, the Northwind Facilities
shall be capable of generating 4.9 megawatts. The Supplier shall have the sole
responsibility for procuring from third party electricity sources, and providing
to the Customer up to the Specified Demand Amount in effect from time to time,
the Electricity Services whether or not generated by the Northwind Facilities.
(c) Exclusivity; Right of First Refusal. The Supplier agrees
that, so long as the Customer is not in default hereunder and subject to the
provisions of the following paragraphs of this Section 2.l(c), the Customer
shall have first call on that portion of the Services produced and procured by
the Northwind Facilities necessary to serve the Customer Energy Requirements set
forth in Exhibit B.1. The Customer agrees that, for the term of this Agreement
and thereafter so long as this Agreement remains in effect, it shall purchase
all of its requirements for Services from the Supplier, except to the extent
that, (i) the Customer's requirements for Services exceed its allocated portion
of Services as set forth in Exhibit B.1 and the Supplier does not agree to
supply such excess in accordance with this Section 2.1, or (ii) the Supplier
does not supply such Services for any reason.
If the Northwind Facilities are being operated to meet the
Energy Requirements and the Customer determines that its requirements for one or
more Services exceed those set forth in Exhibit B.1, and if the Northwind
Facilities are then able to supply such additional requirements of Services (the
"Additional Services") and the Supplier has not entered into commitments to sell
such Services to anyone else other than the Complex Energy Service Agreements,
which, while this Agreement is in effect, the Supplier shall not do without the
prior written consent of the Customer, then the
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Customer shall have the obligation to purchase all the Additional Services from
the Supplier except as otherwise permitted by this Section 2.1 and Section
6.1(c) and Section 6.3, and the Supplier shall be obligated to supply the
Additional Services.
In the event that the Customer shall determine that its
Services requirements exceed those set forth in Exhibit B.1 hereto and the
provision of such Services would not require the Plant to exceed the capacities
set forth on Exhibit A hereto and the Supplier has not entered into commitments
to sell such Services to third parties, in accordance with the terms hereof,
then the Supplier shall provide such Services to the Customer at the existing
rates comprising the Consumption Charges applicable to such Services, and
- -without any increase in the Capacity Charges payable hereunder.
In the event that the Customer shall determine that its
Services requirements exceeds those set forth in Exhibit B.1 hereto and such
Services requirements would cause the Plant to exceed the capacities set forth
in Exhibit A hereto, then the Customer will negotiate in good faith with the
Supplier to reach agreement as to the terms and conditions upon which the
Supplier will provide Additional Services, in accordance with Section
2.1(c)(i)-(v) of this Agreement. Customer may simultaneously solicit bids from
other sources of energy services. Supplier shall have the right to match the
terms and conditions of the lowest tender or proposal within the bid process set
forth below. The terms and conditions of the bid process shall be as follows:
(i) the Customer shall prepare a statement (the
"Additional Services Request") setting forth specifics of the amount and type of
the Additional Services which the Customer desires to obtain, the period for
which the Additional Services are to be obtained, the date (or dates) upon which
such Services are to commence, any changes to the Customer's equipment which are
contemplated or intended to be made in connection therewith and such other
information as may be relevant, and shall provide a copy of the Additional
Services Request to the Supplier and request the Supplier to consider providing
the Additional Services in accordance with the Additional Services Request. In
the event that the Supplier shall desire additional information or
specifications concerning the matter, the Supplier shall request such
information or specifications in writing and the Customer shall thereafter
provide such additional information or specifications to the Supplier as soon as
reasonably possible following such request and the Additional Services Request
shall be deemed modified or supplemented to include the same;
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(ii) if the Supplier determines that it will
offer to provide the Additional Services requested, then the parties shall
negotiate in good faith the terms upon which the Additional Services shall be
provided, including the amount of additional Contract Capacity Charges payable
as a result of changes to the Plant and increased operations expenses only and
additional Consumption Charges which will be payable by the Customer in respect
thereof and upon reaching agreement with respect thereto the parties shall
thereupon take all actions which are necessary to implement and carry out such
agreement, including negotiating and executing any relevant documents or
agreements (or amendments to existing documents and agreements) including an
appropriate amendment to the Project Scope and to the Contract Capacity Charge
and the Consumption Charges;
(iii) in addition to the above paragraphs (i) and
(ii), the Customer may simultaneously provide the Additional Services Request to
any other Person or Persons and solicit offers to provide the Additional
Services from such other Person or Persons and if any of such other Persons
responds with an offer to provide the Additional Services and the Customer
determines that it intends to accept such an offer, then the Customer shall give
written notice thereof to the Supplier which notice shall include a summary of
the terms and conditions of the offer which the Customer intends to accept (the
"Offer"). In the event that the Supplier desires additional information or
clarification concerning the Offer, the Supplier shall request the same in
writing within four (4) days of the date upon which it receives the notification
and the Customer shall thereafter provide such additional information or
clarification to the Supplier as permitted under the terms of the Offer as soon
as reasonably possible following such request and the Offer shall be deemed
modified or supplemented to include the same;
(iv) the Supplier shall have ten (10) days from
the date upon which it receives the notification (or ten (10) days from the date
upon which it receives any additional information or clarification requested)
under clause (iii) above that the Customer intends to accept the Offer to
determine if the Supplier is willing to provide the Additional Services on the
terms of the Offer and, if it is so willing, to so indicate to the Customer by
written notice thereof to the Customer (the "Notice of Exercise") given within
such ten (10) day period stating that the Supplier will provide the Additional
Services on the terms and conditions set forth in the Offer, whereupon the
Supplier shall be deemed to have made an offer to the Customer to provide the
Additional Services on the terms and conditions set forth in the Notice of
Exercise and the Offer and the Customer shall be deemed to have accepted such
offer by the Supplier. Notwithstanding anything to the contrary contained
herein, if the Supplier is unwilling or unable to match the Offer, the Customer
shall have the right to purchase the Additional Services from such other Person
or Persons;
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(v) the Customer and the Supplier shall
thereupon take all actions which are necessary to implement and carry out the
arrangements and undertakings contemplated by the Notice of Exercise and the
Offer, including negotiating and executing any relevant documents or agreements
(or amendments to existing documents and agreements), including an appropriate
amendment to the Project Scope and to the Contract Capacity Charge and the
Consumption Charges.
In the event that any Additional Services Request contemplates
increasing services in two or more phases, then, unless the Supplier and the
Customer shall then agree otherwise, each such phase shall be deemed to be
subject to a distinct right of first refusal hereunder and,the Customer shall
he-required to comply with the procedures set forth herein with respect to each
such phase.
(d) Performance. At all times while this Agreement is in
force, but subject to the terms hereof, the Supplier will operate the Northwind
Facilities to comply with the Project Scope and all applicable federal, state
and local codes, laws, rules and regulations. The Supplier's obligations will
include, but not be limited to, (i) performing all day-to-day operations,
routine testing, normal maintenance, service and repair of the Northwind
Facilities; (ii) the estimating, scheduling, coordinating and monitoring the
performance of any extraordinary service, maintenance, repair, improvement or
modification to the Northwind Facilities; (iii) carrying out such performance
tests of equipment as is required under this Agreement or otherwise reasonably
requested by the Customer; (iv) coordinating maintenance and power deliveries
with the Customer and (v) providing for the handling and disposal of chemicals
and hazardous materials at and from the Site; and (vi) subject to Section 5.7,
obtaining and maintaining all required licenses, permits, approvals and
clearances to provide the Services and operate the Northwind Facilities. The
Supplier shall at all times maintain the appropriate operating personnel at the
Northwind Facilities, twenty four (24) hours per day, seven (7) days per week.
The Supplier agrees to coordinate matters with those parties designated by the
Customer to be the Customer's representative with respect to this Agreement or
portions thereof.
The Customer shall have the right, upon at least twenty four
(24) hours' advance notice, or no notice in the event of an emergency, to
inspect the operation of the Northwind Facilities during normal business hours
and to review the Supplier's maintenance and operating records to assure
compliance with this Section 2.l(d).
2.2 Chilled Water.
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(a) Commencing on the Commencement Date, the Supplier agrees
to supply at the Chilled Water Delivery Point and the Customer agrees to
purchase the Customer's requirements of Chilled Water Service up to the capacity
or capacities described in Exhibit B.2 under the heading "Contracted Demand".
Chilled water the Supplier provides under this Agreement shall not be intermixed
by the Customer with any other water or other substances without the prior
written consent of the Supplier, which consent shall not be unreasonably
withheld.
(b) The Supplier shall ensure that the chilled water is
delivered to the Chilled Water Delivery Point at a design temperature of not
more than 36 degrees Fahrenheit, measured at the Chilled Water Delivery Point.
(c) Provided that the Supplier is in compliance with Section
2.2(b) above, the Customer will ensure that all chilled water supplied hereunder
is returned to the Supplier at the Chilled Water Return Point at a temperature
not less than 20 degrees Fahrenheit in excess of the temperature at which such
chilled water was supplied and otherwise uncontaminated in any material respect
and in the condition in which it was received. In the event Customer fails to
comply with this Section 2.2(c), the Supplied may elect, as its sole remedy
(other than as set forth in Section 6.2(a) and Section 6.3(a) with respect to a
Payment Default), to determine the actual cost(s) to the Supplier of such
failure and invoice the Customer on the next monthly invoice under Section 2.7
for such amount(s) as additional Consumption Charges hereunder. In such event,
the Supplier shall notify the Customer of such action and such invoice(s) shall
be accompanied by detailed calculations demonstrating the manner in which such
additional Consumption Charges have been determined, and such additional
Consumption Charges shall thereupon be payable in accordance with Section 2.8
2.3 Hot Water.
(a) Commencing on the Commencement Date, the Supplier agrees
to supply at the Hot Water Delivery Point and the Customer agrees to purchase
the Customer's requirements of Hot Water Services up to the capacity or
capacities described in Exhibit B under the heading "Customer Energy
Requirements." Hot water the Supplier provides under this Agreement shall not be
intermixed by the Customer with any other water or other substances without the
prior written consent of the Supplier, which consent shall not be unreasonably
withheld.
(b) The Supplier will ensure that the hot water is delivered
to the Hot Water Delivery Point at a design temperature of not less than 180
degrees Fahrenheit, measured at the Hot Water Delivery Point.
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(c) Provided that the Supplier is in compliance with Section
2.3(b) above, the Customer will ensure that all hot water supplied hereunder is
returned to the Supplier at the Hot Water Return Point at a temperature at least
35 degrees Fahrenheit less than the temperature at which it was delivered and
otherwise uncontaminated in any material respect and in the condition in which
it was received. In the event Customer fails to comply with this Section 2.3(c),
the Supplier may elect to determine the actual cost(s) to the Supplier of such
failure and invoice the Customer on the next monthly invoice under Section 2.7
for such amount(s) as additional Consumption Charges hereunder. In such event,
the Supplier shall notify the Customer of such action and such invoice(s) shall
be accompanied by detailed calculations demonstrating the manner in which such
additional Consumption Charges have been determined, and such additional
Consumption Charges shall thereupon be payable in accordance with Section 2.8.
2.4 Electricity. Commencing on the Commencement Date, the Supplier
shall make available at the Electricity Delivery Points electricity to meet all
of the Customer's primary and secondary AC electricity (up to and including the
initial transformation -- i.e., immediately prior to the Customer
Interconnection Equipment) needs for the Premises, up to the Specified Demand
Amount then in effect.
2.5 Charges. In consideration of the Supplier's undertakings hereunder,
the Customer shall pay to the Supplier, when and in the manner required by
Section 2.8, the following charges, as the same may be adjusted from time to
time pursuant to Section 2.6 and any other applicable provisions of this
Agreement:
(a) Contract Capacity Charge - a monthly Contract Capacity
Charge for Customer's share of the capital cost of the Plant determined in
accordance with Exhibit C hereto, as the same may be amended, restated,
modified, or supplemented and in effect from time to time, for each month or
portion thereof occurring after the Commencement Date, whether or not any
Services are taken by the Customer during such month; and
(b) Consumption Charge - a monthly Consumption Charge for
Services actually taken by the Customer during each month or portion thereof
occurring after the Substantial Completion Date, determined in accordance with
Exhibit C hereto, as the same may be amended, restated, modified or supplemented
and in effect from time to time, for each month or portion thereof occurring
after the Substantial Completion Date:
The Contract Capacity Charge shall be paid by the Customer monthly in accordance
with Section 2.8 so long as this Agreement remains in force and has not been
terminated,
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whether or not the Customer actually takes or uses any Services and, except as
provided for in Section 6.1(c), whether or not there shall exist a default by
the Supplier in any of its obligations hereunder.
2.6 Adjustments.
(a) On each annual anniversary of the Commencement Date, the
Contract Capacity Charge and the Consumption Charges for the Contract Year then
beginning shall be adjusted as set forth in Section 2.6 (b) and in accordance
with Exhibit C.
(b) The Supplier shall adjust the Contract Capacity Charge
payable during the remaining term hereof then in effect and the Consumption
Charges to reflect any changes in Supplier's costs of providing any Service that
results directly from the adoption or modification of any applicable laws, rules
or regulations of any governmental authority, or from any change in the
interpretation by any court, tribunal or regulatory agency of any such
applicable laws, rules or regulations or any other Force Majeure Event, after
the date of this Agreement, and such adjustment shall become effective
immediately upon notice of the adjustment to Customer.
2.7 Service Invoices. On or about the first day of each month,
beginning with the first month which commences after the Substantial Completion
Date, the Supplier shall deliver to the Customer a monthly invoice which
reflects any Consumption Charges for the prior month just ended. Beginning with
the first invoice delivered following the Commencement Date, such invoice shall
also reflect the Contract Capacity Charge for the month then beginning and any
other amounts then owing by the Customer under this Agreement. In the event that
the Commencement Date is a date other than the first day of a calender month,
then the first invoice for Contract Capacity Charges shall also include a
prorated Contract Capacity Charge for the portion of the immediately preceding
month occurring after the Commencement Date. In the event that the term of this
Agreement ends on a date other than the first day of a calender month, then the
Contract Capacity Charge for the final month shall be prorated accordingly.
2.8 Payment. Payment of each invoice shall be due in full, on or before
the thirtieth (30th) day following the date each invoice is received by the
Customer (each a "Due Date"). The Customer shall make each payment invoiced by
the Supplier when due without any further notice or demand, without offset of
any kind, and irrespective of dispute to the amount of such invoice or
otherwise, except as provided for in Section 6.1(b). In addition to any actions
which the Supplier may take during the continuance of a Customer Default,
whether at law or in equity or otherwise, a service charge shall
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be imposed if payment of an invoice is not received within thirty (30) days
after such invoice is delivered to the Customer equal to one and one-half
percent (1.50%) per month, or the maximum legal rate, whichever is less, on the
unpaid balance of such invoice for the period from the fifteenth (15th) day
after such invoice was delivered through and including the date of payment
thereof (calculated using actual days elapsed and a year of 365 or 366 days, as
applicable).
2.9 Taxes. In addition to the Contract Capacity Charges and the
Consumption Charges payable hereunder, the Customer will pay all Taxes,
including, without limitation, any Taxes which the Supplier is required to
collect, except to the extent that such Taxes have been included in determining
the Contract Capacity Charges then payable.
ARTICLE 3
MAINTENANCE OF EQUIPMENT, SYSTEMS AND METERS
3.1 Maintenance of Supplier Interconnection Equipment.
(a) At all times while this Agreement is in force, the
Supplier shall operate and maintain the Supplier Interconnection Equipment, in
accordance with the O&M Specifications. If any of the Supplier Interconnection
Equipment is damaged or destroyed as a direct result of the acts of the Customer
or its agents, employees, tenants, customers, contractors or other Persons for
whom the Customer is responsible, then the Customer shall be liable for the cost
of the required repair or replacement.
(b) The Supplier, its agents and employees will not authorize
or knowingly permit any Person, except a duly authorized employee or agent of
the Supplier or the Customer, to operate, maintain, alter or otherwise affect
the Supplier Interconnection Equipment or any component thereof or any equipment
of the Customer, to break or replace any seal or lock of the Supplier or the
Customer, or to alter or interfere with the operation of any item of equipment
installed by the Customer.
(c) The Supplier will not modify the Supplier Interconnection
Equipment in any material respect without the prior written consent of the
Customer, which consent shall not be unreasonably withheld. The Supplier's
operations or equipment shall not adversely affect the Customer's ability to
receive the Services in accordance with the provisions hereof and the Exhibits
attached hereto and, in the event they do, the Supplier shall, at its own
expense, except as set forth in Section 3.2, make such reasonable changes in its
operations or equipment as are necessary to restore capacity in respect of the
Services.
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3.2 Customer's Equipment.
The Customer will notify the Supplier of substantial
modifications it makes to the operating equipment and systems of the Premises
and will be responsible for the maintenance of such equipment and systems. The
Customer will not modify its equipment so as to adversely affect the Supplier's
ability to deliver or the Customer's ability to receive the Services, or, if it
does, the Customer shall, at its own expense, make such reasonable changes in
its equipment as are necessary to permit the Supplier to deliver, and the
Customer to receive, the Services in the capacities required hereby.
3.3 Metering.
(a) The Supplier will provide metering equipment to measure
the delivery of electricity to the Customer, the quantity of chilled water and
hot water delivered to the Customer and the temperature at the Chilled Water
Delivery Points and the Hot Water Delivery Points, respectively, of the chilled
water and hot water being delivered to, and returned by, the Customer.
Electrical meters shall be placed on the secondary site of each transformer, and
the results of the electrical metering shall be based on coincidental demand.
All metering equipment will be furnished, paid for, owned and maintained by the
Supplier. All such metering equipment shall be of the type which provides, and
preserves a continuous flow of the relevant data twenty four (24) hours per day;
all parties shall have full right of access to all such data and printouts
thereof at all times and without reference to the other parties. The Supplier
will regularly test its metering equipment in accordance with the manufacturer's
recommendations but not less than two (2) times per year and, if requested by
the Customer, will conduct such tests in the presence of a representative of the
Customer. All testing shall include recalibration. If requested by the Customer,
the Supplier will conduct such testing on additional occasions; provided, that
unless such testing indicates that the tested equipment provides metering
results which are inaccurate by three percent (3%) or more with respect to water
or by one-half of one percent (0.5%) or more with respect to electricity in a
manner which is adverse to the Customer, the Customer will pay all out-of-pocket
costs and expenses incurred by the Supplier in conducting such additional tests.
The Supplier will maintain an accurate log or record of all tests, whether
initiated, by the Supplier or the Customer, and will make the results of such
tests available in a comprehensible manner to the Customer promptly upon
request.
(b) If any test of the metering equipment reveals equipment
that has failed to accurately record consumption of the Services metered
thereby, the Supplier shall restore such metering equipment to a condition of
accuracy or replace it. If the metering equipment is in error by three percent
(3%) or more with respect to water or
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by one-half of one percent (0.5%) or more with respect to electricity, then the
Supplier will repair or replace such defective metering equipment within a
reasonable period after receiving notice or becoming aware thereof and an
adjustment shall be made in respect of the Consumption Charges for such Service
in accordance with clause (d) below.
(c) The regular meter reading and billing period will be
monthly. If more than one meter is installed on the Premises, the readings of
all meters will be used in calculating the invoice with respect thereto.
(d) If the Supplier's metering record is interrupted at any
time for any reason, or is found to be inaccurate and in need of repair or
replacement under Section 3.3(b), the measurement of Services to be billed for
such period of interruption, or for the period from the last test of the
affected meters which shows them to have been operating within the acceptable
limits of error under Section 3.3(b) through the date upon which such meters are
corrected, will be estimated by the Supplier, acting reasonably, based upon past
Customer usage during a similar period and under similar conditions if such
information is available (and if such information is not available, based upon
fuels consumed during such period and any other relevant information and/or
bases which may reasonably be used for such purpose in the circumstances), and
the Customer will pay invoices during such period based on the estimated
measurement; subject to the Customer's right to withhold up to $12,500 in the
aggregate from invoices based on estimates in any such period and dispute the
same in good faith if the Customer reasonably disagrees with such estimated
measurement.
(e) The Customer will provide to Supplier, without charge,
adequate space, power and access on the Premises for the housing and maintenance
of all metering and related equipment and other equipment related to the
delivery of Energy which the Supplier provides to comply with its obligations
hereunder; provided, however, that the Supplier shall act in accordance with all
reasonable safety and security rules, regulations and policies then in effect on
the Customer's property or other reasonable rules or requirements which the
Customer may impose, and the Supplier's use shall in no way materially adversely
affect the Customer's other activities at the Premises.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1 Mutual Representations.
(a) Each party represents and warrants to the other that it
has the requisite limited-liability company capacity to enter into this
Agreement and fulfill its
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obligations hereunder, that the execution and delivery by it of this Agreement
and the performance by it of its obligations hereunder have been duly authorized
by all requisite action of its members, and by its board of directors or other
governing body, and that, subject to compliance with any applicable regulatory
laws or regulations governing the sale or delivery of the Services, the entering
into of this Agreement and the fulfillment of its obligations hereunder does not
contravene any law, statute or contractual obligation of the parry giving the
representation or warranty.
(b) Each party represents and warrants to the other that no
suit, action or arbitration, or legal administrative or other proceeding is
pending or has been threatened against the representing party that would affect
the validity or enforceability of this Agreement or the ability of the
representing party to fulfill its commitments hereunder, or that could result in
any material adverse change in the business or financial condition of the
representing party.
4.2 Supplier Representations. The Supplier hereby represents and
warrants to the Customer that, as of the date of this Agreement, the Supplier is
an indirect wholly-owned subsidiary of Unicom Corporation.
4.3 Supplier Covenants.
(a) Contingency Plan. The Supplier covenants that it shall be
responsible for developing a written contingency plan, with the technical
assistance of the Customer, setting forth an agreed upon process for dealing
with interruptions to Services, which contingency plan shall have as its goal
minimizing the duration and effect of such interruptions to Services. Because
the contingency plan may require the purchase or lease of equipment, the parties
shall use their best efforts to agree upon the contingency plan on or before the
date upon which the "Guaranteed Maximum Plant Price" is fixed under the
Development Agreement. If the parties are unable to agree upon the contingency
plan on or before such date, then the Supplier shall be entitled to require an
increase in the Guaranteed Maximum Plant Price with respect to any items
required by the final contingency plan agreed upon which terms were not included
in determining the Guaranteed Maximum Plant Price. In order to facilitate the
process of establishing the contingency plan, within 120 days after the date of
receipt of the Notice to Proceed by the Supplier, the Supplier will prepare an
initial draft thereof and provide the same to the Customer, which, within
fifteen (15) days of receipt thereof, shall review the same and provide written
comments with respect thereto to the Supplier, or, if the Customer deems such
plan to be satisfactory, then the Customer shall provide written confirmation of
such satisfaction to the Supplier within such fifteen (15) day period. (In the
absence of any written comments from the Customer within such fifteen (15) day
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period, the Supplier shall be entitled to presume that the Customer is satisfied
with such plan as provided.) In the event that the Customer provides comments,
the parties will meet to review the same and seek in good faith to incorporate
such comments into the agreed final plan.
(b) Ownership of Northwind. The Supplier covenants that it
shall not permit any transfer of any membership interest in the Supplier by the
sole member of the Supplier as of the date of this Agreement, and not to issue
any new membership interests in the Supplier, except as provided for in Section
10.2, without the prior written consent of the Customer (such consent not to be
unreasonably withheld).
(c) Third Party Energy Service Agreements. The Supplier
covenants that it shall not modify the Energy Service Agreement entered into by
the Supplier with Music without Customer's prior written consent, provided such
consent is not unreasonably withheld (provided, however, that Customer's consent
shall not be required in the event of a Payment Default), and that such
Agreement is in force substantially identical to this Agreement.
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 Conditions Precedent To Effectiveness.
(a) The Supplier and the Customer agree that this Agreement
and the obligations of the parties hereunder shall not become effective until
each of the following conditions has been satisfied:
(i) all exhibits to this Agreement shall have
been agreed upon in definitive form, initialed by the parties and attached
hereto, it being agreed and acknowledged that certain of the exhibits attached
hereto on the date of execution of this Agreement have been identified as
"preliminary" and are subject to further refinement as agreed by the parties,
within specified applicable time limits identified herein, in connection with
finalization of the plans and specifications for the Premises;
(ii) the Supplier shall have entered into a
construction agreement in form and terms reasonably satisfactory to the Supplier
providing for the construction of the Northwind Facilities; and
(iii) Financial Closing shall have occurred and
the Customer shall have become the fee owner of the "Aladdin Lands" (as such
term is defined in the
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Development Agreement), subject to any Customer obligations to convey portions
thereof to Bazaar and Music.
(b) In addition, it shall be a condition precedent to the
initial obligation of the Supplier to deliver any Service hereunder on the date
when such Service is first required to be provided by it hereunder that (i) the
Customer shall have complied in all material, respects with all of its covenants
and Agreements contained herein to be complied with during the period from the
date hereof to the date upon which such Service is to be delivered, and (ii) the
Customer shall have provided to the Supplier evidence reasonably satisfactory to
the Supplier that the Customer has obtained or is or will use all reasonable
efforts to obtain all clearances, permits, licenses and approvals which are
necessary for the Customer to construct and/or operate the Premises as
contemplated hereby and receive such Services from the Supplier as of such date.
(c) In addition, it shall be a condition precedent to the
initial obligation of the Customer to receive any Service hereunder on the date
when such Service is first required to be provided hereunder or to pay Contract
Capacity Charges or Consumption Charges otherwise required to be received by it
hereunder that: (i) the Supplier shall have complied in all material respects
with all of its covenants and Agreements contained herein to be complied with
during the period from the date hereof to the date when such Service is to be
delivered, and (ii) the Supplier shall have provided to the Customer evidence
reasonably satisfactory to the Customer that the Supplier has obtained or will
use all reasonable efforts to obtain all third party clearances, permits,
licenses and approvals which are necessary for the Supplier to construct and/or
operate the Northwind Facilities as contemplated hereby.
5.2 Insurance. The respective insurance requirements for the Supplier
and the Customer are set forth in Exhibit E attached hereto, and shall be
maintained throughout the term of this Agreement. The liability of each party
under this Agreement to the other party shall not be diminished by the insurance
limitations set forth in said Exhibit E, except as set forth in below in this
Section 5.2. All insurance policies required by this Section shall provide that
such policies may not be cancelled or terminated without thirty (30) days prior
written notice to the Customer, Customer's lenders and the Supplier. All
liability insurance policies of Supplier and all insurance policies of Customer
shall name the Customer's lender as an additional insured.
Each party hereto agrees that the insurance described above to
be provided by the other party may be provided through blanket coverages which
may be provided in whole or in part through a policy or policies covering other
liabilities and locations of the party obligated to provide such insurance and
its affiliates.
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Each party hereby releases, to the extent legally possible for
it to do so without invalidating its insurance coverages, for itself and on
behalf of its insurer, the other party hereto and its respective officers,
directors, agents, members, partners, servants and employees from liability for
any loss or damage to any or all property located on the Aladdin Lands which
loss or damage is of the type and within the limits covered by the "all-risk"
property damage insurance and other property/casualty insurance which the
parties have agreed to obtain and maintain in effect pursuant to this Section
5.2, irrespective of any negligence on the part of the released party and its
respective officers, directors, agents, members, partners, servants or
employees, which may have contributed to or caused such loss or damage. Each
party covenants that it will,if available; obtain for the benefit of the other
party and its officers, directors, agents, members, partners, servants and
employees, a waiver of any right of subrogation which the insurer of such party
may acquire against such parry by virtue of the payment of any such loss covered
by insurance. In the event a party is by law, statute or governmental regulation
unable to obtain a waiver of the right of subrogation for the benefit of the
other party (and its respective officers, directors, agents, members, partners,
servants and employees), or its insurance carriers will not give such a waiver,
or its property/casualty insurance will be invalidated or terminated by the
waiver and release set forth in the first sentence of this paragraph, then,
during any period of time when such waiver is unobtainable, said party shall not
have been deemed to have released any subrogated claim of its insurance carrier
against such party (or its respective officers, directors, agents, members,
partners, servants and employees), and during the same period of time, such
other party shall not have been deemed to have released the party which has been
unable to obtain such waiver (or such party's respective officers, directors,
agents, members, partners, servants, or employees) from any claims it or its
insurance carrier may assert which otherwise would have been released pursuant
to this Section 5.2.
5.3 Confidential Information. The Customer and the Supplier each agree
to treat in confidence all information regarding this Agreement and the
performance by the parties of their obligations hereunder and all information
which either the Customer or the Supplier will have obtained from the other
party in contemplation of entering into, or in the performance of, this
Agreement and not make any use of any of such information for any purpose other
than complying with its obligations under this Agreement and the Related
Agreements. Such information will not be communicated to any Person other than
the Customer, the Supplier, Aladdin Bazaar, LLC and Aladdin Music, LLC and their
respective officers, directors, employees, members, agents, attorneys and
professional consultants, except to the extent disclosure of such information:
16
(a) is required by law or governmental authority;
(b) is made by a party pursuant to litigation in which such
party is a party;
(c) is made to any lender or prospective lender to such party
(provided, such lender or prospective lender agrees in writing to keep such
information confidential on the terms set forth in this Section 5.3); or
(d) is made to a Person under contract with the disclosing
party, or to which the disclosing party wishes to sell or assign all or part of
its business or an equity interest in such Person in a transaction permitted
hereby, which Person has given a confidentiality undertaking which is
substantially similar to this one.
If either party is required to disclose confidential information pursuant to
clause (a) above, such party will take reasonable steps to limit the extent of
the disclosure and to make such disclosure confidential under the circumstances
and will, to the extent it reasonably can do so in the circumstances, afford the
other party hereto notice of such request for disclosure so as to permit such
other party to seek an appropriate protective order or other means by which such
information may be maintained in confidence pursuant to such disclosure.
Information provided by a party hereunder will remain the sole property of the
party providing such information. The obligation of each party to treat in
confidence, and not to use, information which it will have obtained from the
other party will not apply to any information which (x) is or becomes available
to such party from a source not otherwise under obligations of confidentiality
with respect thereto, other than the party providing such information, or (y) is
or becomes available to the public other than as a result of disclosure by such
party or its agents in breach of this Section 5.3.
5.4 Financial Information. The Customer agrees to provide to the
Supplier from time to time the following financial information concerning the
Customer:
(a) copies of all definitive documentation governing
indebtedness incurred by the Customer to finance (or refinance) the construction
of the Premises;
(b) until such time, if ever, as the Customer becomes a
reporting company under the Securities Exchange Act of 1934, as amended (or any
successor statute thereto), copies of all monthly, quarterly and annual
financial statements and forecasts which the Customer is obligated to provide
to its lenders or to the trustee in respect of the 13.5% Senior Discount Notes
Due 2010 to be issued by certain Affiliates
17
of the Customer, which financial statements and forecasts will be provided
concurrently or promptly after they are provided to such lenders and/or such
trustee;
(c) in the event that the Customer or its parent entity shall
file a registration statement under the Securities Act of 1933, as amended (or
any successor statute thereto), the Customer will provide a copy of such
registration statement (including any preliminary prospectus contained therein)
to the Supplier promptly after the same has been filed with the United States
Securities and Exchange Commission, or any successor entity thereto (the "SEC");
and
(d) from and after the date, if ever, upon which the Customer
or its parent entity shall become a reporting company under the Securities
Exchange Act of 1934, as amended (or any successor statute thereto), in lieu of
the financial statements required by the preceding clause (b), the Customer will
provide to the Supplier, by hard copy or electronically, promptly after filing
of the same with the SEC, copies of all reports and financial statements filed
with the SEC, including, but not limited to, any reports on any of Form S-K,
Form 10-K or Form 10-Q and any annual reports to shareholders.
All such financial information, other than information which is contained in
filings with the SEC, shall be received and held in confidence and shall not be
used or disclosed by the Supplier except as permitted by Section 5.3 hereof with
respect to the confidential information provided by the Customer to the
Supplier.
5.5 Transfer of Information to Customer Pursuant to Sale. The Supplier
hereby agrees that in the event that the Customer acquires the Northwind
Facilities pursuant to Section 6.3, 6.4 or 9.3, the Supplier will provide the
Customer with copies of all specifications, manufacturers' warranties, design
drawings, operating manuals and maintenance records for the Northwind
Facilities, as well as other information concerning the design, operation and
maintenance of the Northwind Facilities which are in the possession or control
of the Supplier and which are relevant or reasonably necessary to the Customer's
ownership or operation of the Northwind Facilities and will transfer to the
Customer all of the Supplier's right, title and interest in and to such
materials and items, which transfer shall be without recourse and without
representation or warranty as to title to any such materials or items.
5.6 Fuel and Electricity Arrangements. From time to time, as the
Customer may reasonably request, the Supplier shall provide the Customer with
information concerning the Supplier's arrangements then in effect with respect
to the purchase of fuels for use in providing Services hereunder and with
respect to obtaining electricity
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from third party providers. The Supplier agrees that it shall use best efforts
to obtain economical and reliable sources of fuels and electricity from third
party providers.
5.7 Regulatory Compliance Re Electricity.
(a) The provisions of this Section 5.7 shall not in any way
affect the obligation of the Supplier to construct and demonstrate "Final
Completion" (as such term is defined in the Development Agreement) of the
Northwind Facilities, or to provide Chilled Water Service or Hot Water Service
or to procure and provide to the Customer electricity up to the Specified Demand
Amount applicable from time to time under this Agreement. The parties
acknowledge that the generation, distribution, transmission and/or sale of
Electricity Services by the Supplier hereunder may cause the Supplier and/or its
Affiliates to be subject to compliance with or obtaining exemption from certain
federal and Nevada laws and regulations. The Supplier agrees, for itself and its
Affiliates, subject to Section 5.7(b) hereof, to comply with, or obtain the
necessary exemption from, any applicable laws and regulations affecting the
Supplier's generation, distribution, transmission and/or sale of Electricity
Services hereunder such that, on the Substantial Completion Date, the Supplier
will lawfully be able to provide, or cause to be provided, such Electricity
Services to the Customer. The Customer, in turn, agrees to comply with any
request of the Supplier which the Customer, in its good faith judgment, deems
reasonable in connection with such regulatory compliance, including, without
limitation, a request to amend this Agreement, the Lease or the Development
Agreement in any way reasonably (in the good faith judgment of the Customer)
necessary in the circumstances, so long as, as a result thereof, (i) the
reliability of the Electric Services provided to the Customer is not adversely
affected, (ii) the Supplier's responsibility to comply with its obligations in
accordance with this Agreement, the Development Agreement and the Lease remains
in full force and effect, (iii) the fees paid by the Customer pursuant to this
Agreement are not increased, and (iv) the Customer's costs and expenses of any
such action will be borne solely by the Supplier, provided that this subsection
(iv) shall not apply to the extent such action becomes reasonably necessary, in
whole or in part, as a result of a change in the Customer's circumstances.
(b) The Customer agrees that, provided the Supplier uses best
efforts to comply or obtain any necessary exemption from any applicable federal
and Nevada laws and regulations, the Supplier need not become a "public utility"
under Nevada law in order to comply with its obligations under this Agreement
and Unicom Corporation need not, solely as a result of Supplier's compliance
with its obligations under this Agreement, become a registered holding company
pursuant to the Public Utility Holding Company Act of 1935 ("PUHCA"), as
amended. Subject to the foregoing, the Customer and the Supplier agree to the
following:
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(i) Notwithstanding any other provisions in this
Agreement, from the Substantial Completion Date to March 1, 2000, the
Supplier shall only be obligated to provide the Customer with
electricity produced by the Northwind Facilities;
(ii) The Supplier shall use best efforts to ensure
that on or before March 1, 2000 it will be able to provide to the
Customer, pursuant to the terms of this Agreement, the Electricity
Services as defined in Section 2.1; best efforts shall not include
requiring the Supplier to become a "public utility" under Nevada law,
but shall include, if necessary to meet the Supplier's obligations,
certification of the Northwind Facilities as a "Qualifying Facility" as
defined in the Public Utility Regulatory Policies Act of 1978, as
amended, and the regulations implementing such Act promulgated by the
Federal Energy Regulatory Commission, as amended; provided that in
order to certify the Northwind Facilities as a Qualifying Facility, the
Supplier shall be permitted to transfer a membership interest in the
Supplier to a third party, provided the Supplier obtains the Customer's
prior written approval, such approval not to be unreasonably withheld
or delayed, and provided the Supplier allows the Customer the right of
first refusal to acquire the requisite membership interest in the
Supplier;
(iii) For so long as the Supplier is lawfully able to
do so without becoming a "public utility" under Nevada Law, after March
1, 2000, the Supplier shall provide the Customer its Electricity
Services, which shall include both electricity generated by the
Supplier and electricity otherwise obtained by the Supplier for the
Customer; provided, however that such electricity not generated by the
Supplier shall be provided by the Supplier to the Customer pursuant to
and as part of this Agreement; or
(iv) In the event the Supplier, despite its best
efforts, is unable to provide the Electricity Services without becoming
a "public utility" under Nevada Law or a registered holding company
under PUHCA, then after March 1, 2000:
1. the Supplier shall sell to the Customer
and the Customer shall purchase from the Supplier all
electricity generated by the Northwind Facilities;
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2. the Supplier shall be required to obtain
on its own behalf, from a third party, electricity required to
serve the Northwind Facilities;
3. the Customer shall contract with a third
party of its choosing to supply the Customer with the
electricity required by the Customer not generated by the
Supplier at the Northwind Facilities. Such contract shall be
of the shortest term practicable to ensure that the rates,
terms and conditions thereof are commercially reasonable (and
the Customer and the Supplier shall use reasonable efforts to
coordinate their purchases under clauses (iv)2 and (iv)3 to
seek to obtain advantageous rates);
4. the Supplier guarantees to the Customer
that the blended rate paid by the Customer after March 1, 2000
for electricity, such blended rate to include the rate paid by
the Customer to the Supplier and by the Customer to the third
party Supplier pursuant to the previous subparagraph 3, shall
be lower than the rate then charged by Nevada Power Company to
customers with a load comparable to the Customer's load (the
"Rate Standard"). The Customer shall provide the Supplier
with, yearly statements, if applicable, establishing that the
blended rate paid by the Customer for such year was not lower
than the Rate Standard for such year. In such event, and
within thirty (30) days of receipt of such statement, the
Supplier shall make a payment to the Customer sufficient to
give the Customer a blended rate which is lower than the Rate
Standard.
(v) The Customer agrees that in the event the
Supplier subsequently becomes able to provide the total Electric
Services to the Customer without being considered a "public utility"
under Nevada law, then the Customer shall purchase the total
Electricity Services from the Supplier in accordance with the terms of
this Agreement upon the expiration of any third party contract(s)
described above in Section 5.7(b)(iv)(3) then in effect.
ARTICLE 6
DEFAULTS AND REMEDIES
6.1 Supplier Defaults.
(a) Performance Failures.
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(i) the occurrence of any of the following
events shall constitute a "Performance Failure":
1. if, at any time after the Substantial
Completion Date and for any reason other than a Force Majeure
Event, chilled water is not provided to the Supplier's side of
the Chilled Water Delivery Point at 13,905 gallons per minute
and 42 degrees Fahrenheit or lower;
2. if, at any time after the Substantial
Completion Date and for any reason other than a Force Majeure
Event, hot water is not-provided, to the Supplier's side of
the Hot Water Delivery Point at 2882 gallons per minute and
200 degrees Fahrenheit or higher; or
3. if, at any time after the Initial
Services Date but prior to the Substantial Completion Date for
any reason other than a Force Majeure Event, chilled water is
not provided to the Supplier's side of a Chilled Water
Delivery Point at 4800 gallons per minute and 46 degrees
Fahrenheit or lower.
(ii) Actions To Be Taken. Promptly upon becoming
aware of a Performance Failure (whether by notice thereof from the Customer or
by the Supplier's monitoring of its systems and the operation of the Northwind
Facilities or otherwise) the Supplier shall:
1. immediately seek to determine the cause
of such Performance Failure and shall apprise the Customer of
the Supplier's conclusion as to such cause as quickly as
possible and provide the Customer with a corrective action
plan consistent with the Contingency Plan, which the Supplier
will implement at its sole cost and expense where the
Performance Failure is for any reason other than a Force
Majeure Event, except that such implementation with respect to
a Performance Failure described in Section 6.1(a)(i)3 will be
at the Customer's expense, and use its best efforts to
accommodate any changes thereto which the Customer reasonably
requests;
2. commence implementation of such
corrective action plan, using all best efforts to correct or
cure such Performance Failure in the shortest period of time;
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(iii) Additional Measures. In addition to the
above, immediately upon becoming aware of a Performance Failure, Supplier shall
allow Customer or Customer's agents immediate access to the Northwind Facilities
and permit Customer full inspection rights of the Northwind Facilities.
(b) Service Failures.
(i) the occurrence of any of the following
events shall constitute a "Service Failure":
1. if, at any time after the Substantial
Completion. Date and for any reason other than a Force Majeure
Event, chilled water is not provided to the Supplier's side of
the Chilled Water Delivery Point at 13,905 gallons per minute
and 44 degrees Fahrenheit or lower;
2. if, at any time after the Substantial
Completion Date and for any reason other than a Force Majeure
Event, hot water is not provided to the Supplier's side of the
Hot Water Delivery Point at 2882 gallons per minute and 190
degrees Fahrenheit or higher;
3. if, at any time after the Substantial
Completion Date and for any reason other than a Force Majeure
Event, primary and, secondary AC electricity (up to and
including the initial transformation) delivered to an
Electricity Delivery Point is less than the Specified Demand
Amount then in effect;
4. if, at any time after the Initial
Services Date but prior to the Substantial Completion Date for
any reason other than a Force Majeure Event, chilled water is
not provided to the Supplier's side of the Chilled Water
Delivery Point at 4800 gallons per minute and 48 degrees
Fahrenheit or lower; or
5. if any Performance Failure exists for any
seventy two (72) hours of any ninety six (96) hour period.
(ii) Actions To Be Taken. Promptly upon becoming
aware of a Service Failure (whether by notice thereof from the Customer or by
the Supplier's monitoring of its systems and the operation of the Northwind
Facilities or otherwise) the Supplier shall:
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1. immediately seek to determine the cause
of such Service Failure and shall apprise the Customer of the
Supplier's conclusion as to such cause as quickly as possible
and provide the Customer with a corrective action plan
consistent with the Contingency Plan, which the Supplier will
implement at its sole cost and expense where the Service
Failure is for any reason other than a Force Majeure Event,
except that such implementation with respect to a Performance
Failure described in Section 6.1 (b)(i)4 will be at the
Customer's expense, and use its best efforts to accommodate
any changes thereto which the Customer reasonably requests;
2. commence implementation of such
corrective action plan, using all best efforts to correct or
cure such Service Failure in the shortest period of time;
3. if the Supplier believes that correcting
or curing such Service Failure requires or can reasonably be
anticipated to require more than eight (8) hours from the time
either party became aware of the Service Failure, promptly
notify the Customer of the same and advise the Customer of the
efforts which the Supplier believes will be necessary to
accomplish such correction or cure, the probable timetable for
doing so and any load management adjustments which the
Supplier believes will be helpful to minimizing the impact of
such Service Failure on the operation of the Premises; and
4. if the Supplier believes that correcting
or curing such Service Failure requires or can reasonably be
anticipated to require more than twenty four (24) additional
hours (thirty two (32) hours from the time either party became
aware of the Service Failure), and the Customer believes that
the Premises cannot be operated in a reasonably normal manner
due to such ongoing Service Failure, Supplier shall procure,
at its own expense (but without reduction of the Contract
Capacity Charges and Consumption Charges hereunder except to
the extent each reduction is mandated by Section 6.1 (c)(ii)
below), substitute Services (meaning, for example, in the case
of Chilled Water Services or Hot Water Services, portable
temporary chillers or boilers) in accordance with the
Contingency Plan to be brought to the site and put into
operation as quickly as possible.
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(iii) Additional Measures. In addition to the
above, immediately upon becoming aware of a Service Failure, Supplier shall
allow Customer or Customer's agents immediate access to the Northwind Facilities
and permit Customer full inspection rights of the Northwind Facilities. If
Customer identifies the cause of such Service Failure and requires corrective
action or cure, Supplier shall either promptly take such corrective action or
promptly make such cure, or permit the Customer to take any action reasonably
intended to correct or cure such Service Failure at the Supplier's sole cost and
expense (except that, other than as provided in Section 6. l(c)(ii) below, the
Customer shall remain liable for the Contract Capacity Charge) and/or assume
control of the Northwind Facilities and maintain such control until the Service
Failure has been cured or corrected.
(c) Service Defaults. If any Service Failure other than a
Service Failure under Section 6.1(b)(i)(4) continues for any thirty, two (32)
hours of any forty eight (48) hour period, it shall be deemed a "Service
Default" and the following additional provisions shall apply:
(i) Control of Northwind Facilities. The
Customer shall have the right to assume control of the Northwind Facilities and
maintain such control until such Service Default has been cured or corrected and
take any action reasonably intended to correct or cure such Service Default at
the Supplier's sole cost and expense (except that, other than as provided in
Section 6.1(c)(ii) below, the Customer shall remain liable for the Contract
Capacity Charge).
(ii) Abatement. The Customer shall be entitled to
an abatement of the Contract Capacity Charge for the month during which such
Service Default has occurred in an amount equal to (A) the Contract Capacity
Charge then in effect for such month multiplied by a fraction, the numerator of
which shall be the number of days during which such Service Default has occurred
during such month and the denominator of which shall be the number of days in
such months, multiplied by (B) 70% if such Service Default was with respect to
Chilled Water Service, or 9% if such Service Failure was with respect to Hot
Water Service, or 21% if such Service Default was with respect to Electricity
Service. The amount of any applicable abatement of Contract Capacity Charges
under this Section 6.1 (b) shall be due and payable on the first day of the
month following the month during which such Service Default shall have occurred
and may be off-set by the Customer against the Contract Capacity Charge which is
due and payable on such date with respect to the month then beginning.
(iii) Retain Consultants and Implement
Consultants' Recommendations. The Customer shall have the right to hire, at the
expense of the
25
Supplier, an independent consultant to review the circumstances involving the
Service Default and make written recommendations as to reasonable corrective
action (the "Consultants' Recommendations"), which shall be provided to the
Supplier and promptly implemented by the Supplier at its sole expense (or, if
the Customer has assumed control of the Northwind Facilities pursuant to Section
6.1(b)(i), may be implemented by the Customer at the Supplier's sole expense).
(iv) Termination of Agreement. In the event that
the Supplier fails to promptly implement the Consultants' Recommendations in
accordance with a reasonable timetable agreed upon by the consultant, or to
otherwise correct any Service Default (or provide substitute services
reasonably acceptable to the Customer for the Services which are the subject of
such Service Default) within the timetable reasonably recommended by such
independent consultants, the Customer shall have the right to terminate this
Agreement by not less than thirty (30) days' prior written notice to the
Supplier specifying the effective date of termination, which shall be the date
upon which Customer acquires the Northwind Facilities pursuant to Section 6.4.
(d) Other Defaults.
(i) In the event of failure, other than a
Performance Failure, a Service Failure or a Service Default, by the Supplier to
comply with or perform any agreement or obligation to be complied with or
performed by the Supplier in accordance with this Agreement, which failure is
not the result of actions or omissions of the Customer and which failure remains
uncorrected or uncured thirty (30) days after notice of such failure is given to
the Supplier by the Customer (or, if such failure is of such a nature that it
cannot reasonably and with due diligence be corrected or cured within such
thirty (30) day period and the Supplier commences action to correct or cure such
default within such thirty (30) day period and thereafter diligently and without
interruption or delay completes the correction or cure of such failure, such
longer time as is necessary to complete such correction or cure, in no event to
exceed one hundred eighty (180) days), the Customer shall have the right: (1) at
the Supplier's sole cost and expense (except that, other than as provided in
Section 6.1(c)(ii) below, the Customer shall remain liable for the Contract
Capacity Charge), to take any action reasonably intended to correct or cure such
failure; or (2) to terminate this Agreement by not less than thirty (30) days'
prior written notice to the Supplier specifying the effective date of
termination.
(ii) Termination Without Prejudice. Any election
by the Customer to terminate this Agreement under Section 6.1 shall be without
prejudice to the other rights and obligations of the parties hereunder and shall
not relieve the Supplier of its obligation to provide Services hereunder until
the effective date of termination, but
26
any subsequent correction by the Supplier of the event which is the basis for
such notice of termination shall not be effective to cause rescission of the
effectiveness of such termination unless the Customer shall otherwise agree at
the time of the subsequent correction, provided that the Customer acquires the
Northwind Facilities pursuant to Section 6.4.
6.2 Customer Defaults. The occurrence at any time with respect to
the Customer of any of the following events constitutes a Customer Default:
(a) failure by the Customer to make, within twenty five (25)
days after the Due Date, any payment stated herein, to be due from it hereunder
(each, a "Payment Default"); provided, however, that failure to make a payment
which results from the Customer's right of abatement pursuant to Section 6.1
hereof shall not be a Payment Default;
(b) except as otherwise excused pursuant to Section 7.1
hereof, failure, other than a Payment Default, by the Customer to comply with or
perform any agreement or obligation to be complied with or performed exclusively
by the Customer in accordance with this Agreement, which failure is not the
result of actions or omissions by the Supplier, or Music, if such failure is not
remedied on or before the 30th day after notice of such failure is given to the
Customer and Music by the Supplier, provided if such default is of such a nature
that it cannot reasonably and with due diligence be cured within such thirty
(30) day period and the Customer commences to cure such default within such
thirty (30) day period and thereafter diligently and without interruption or
delay completes the cure of such default within a reasonable period of time, but
in no event to exceed one hundred eighty (180) days, it will not constitute a
Customer Default.
6.3 Remedies Upon Customer Default.
(a) In addition to any other remedies available at law or in
equity, upon the occurrence of a Payment Default, the Supplier shall have the
right, upon providing the Customer with an additional five (5) days' prior
written notice (sixty (60) days from when the invoice was received by the
Customer), to discontinue the supply of Services to the Customer until the
Customer remedies such Payment Default; provided that if such Payment Default
continues for a period of one hundred fifty (150) consecutive days (one hundred
eighty (180) days from when the invoice was received) or more the Supplier, by
written notice to the Customer, may terminate the Customer's right to cure such
Payment Default by terminating this Agreement, without prejudice to the
Supplier's claims in respect to such Payment Default and other rights accruing
hereunder prior to such termination.
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(b) In the event of a Customer Default, other than a Payment
Default, which remains uncorrected or uncured thirty (30) days after notice of
such Customer Default is given to the Customer by the Supplier (or if such
Customer Default is of such a nature that it cannot reasonably and with due
diligence be corrected or cured within such thirty (30) day period and the
Customer commences action to cure or correct such Customer Default within such
thirty (30) day period and thereafter diligently and without interruption or
delay completes the correction or cure such Customer Default, such longer time
as is necessary to complete such connection or cure, in no event to exceed one
hundred eighty (180) days), the Supplier shall have the right to require the
Customer to purchase the Northwind Facilities for a purchase price equal to the
Make Whole Amount at such time.
6.4 Customer's Obligation to Purchase Upon Termination. If the Supplier
shall fail to comply with its obligations to correct any Service Default which
it is obligated to correct hereunder and the Customer has given notice of
termination of this Agreement pursuant to Section 6.1(b), Section 6.1(c) or
Section 6.1(d), then the Supplier shall thereupon be obligated to sell, assign
and transfer, and the Customer shall thereby be obligated to purchase and
acquire possession and ownership of the Northwind Facilities upon the effective
date of termination for a purchase price (the "Payment Amount") equal to (a) the
Supplier's investment in the Northwind Facilities, determined in accordance with
Exhibit C, multiplied by a fraction the numerator of which shall be the number
of months remaining in the Initial Term and the denominator of which shall be
240, minus (b) any costs incurred by Customer for required repair and/or
maintenance. The Payment Amount shall not provide for any return on Supplier's
project investment. (See 9.2)
In such event, on such date of termination or as soon as
reasonably possible, the Customer shall pay to the Supplier through escrow and
by wire transfer of immediately available funds, an amount equal to the Payment
Amount and shall, with respect to all contracts approved of by Customer in
advance of their execution (which approval the Customer will consider in good
faith) concurrently assume, and agree to indemnify and hold the Supplier
harmless from, as of the date of such termination and for all periods
thereafter, all obligations of the Supplier accruing on or after the date of
termination under any contracts or Agreements with respect to the Northwind
Facilities (excluding, however, at the option of the Customer, any such contract
or agreement entered into with Nevada Power Company (or any wholly-owned
subsidiary of Nevada Power Company), Boston Edison, Ontario Hydro, Houston
Industries or UTT or any of their Affiliates which in Customer's sole discretion
is deemed to be materially more onerous to the Supplier than a third party arm's
length agreement for the same goods or services would be in the circumstances)
under a written assignment and assumption
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agreement in form and substance reasonably satisfactory to the Supplier and its
counsel, against delivery by the Supplier of possession of the Northwind
Facilities and an executed bill of sale therefor in form and substance
reasonably satisfactory to the Customer and its counsel.
6.5 Lenders' Right to Cure. Each party hereto hereby agrees that in the
event that the other party hereto shall make any assignment of its rights
hereunder to any lender or lenders to whom such party provides a security
interest in such party's right, title and interest in the Premises or the
Northwind Facilities, as applicable, in connection with financing (or
refinancing) the Premises or the Northwind Facilities, respectively, that each
party will provide such lenders or the entity identified to the parties as
having authority to act as the agent for such lenders with all notices given
pursuant to this Agreement and that such lender or lenders shall have an
additional ten (10) days to cure any failure by such party to comply with its
obligations hereunder. The Supplier agrees that it shall afford Music and
Bazaar, and their lenders, identical cure rights.
6.6 Remedies Not Exclusive. The right of the Customer to terminate this
Agreement pursuant to Section 6.1 and to acquire the Northwind Facilities
pursuant to Section 6.4 and the rights of the Supplier to cease providing
Services and to terminate this Agreement and/or require the Customer to purchase
the Northwind Facilities pursuant to Section 6.3 shall not be deemed to be
exclusive and, except as expressly waived in Section 8.1 and Section 8.2, shall
be in addition to any and all other rights either of them may have at law or in
equity for any default under Section 6.1(d) or any Service Default or Customer
Default (as applicable) hereunder after notice and any opportunity to cure
provided for herein. The remedies provided herein for a Performance Failure or a
Service Failure shall be the exclusive remedies until such failure or failures
become a Service Default.
ARTICLE 7
FORCE MAJEURE
7.1 Force Majeure.
(a) If either party hereto is prevented from or delayed in
performing any of its obligations hereunder by reason of a Force Majeure Event,
such party will notify the other party in writing as soon as practicable and
will be excused from its obligations hereunder to the extent of such
interference; provided, that no payment obligation hereunder will be excused or
delayed as the result of a Force Majeure Event.
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(b) The party whose performance hereunder is prevented or
delayed as the result of a Force Majeure Event will use reasonable efforts to
remedy its inability to perform; provided, however, nothing in this Section 7.1
(b) will be construed to require the settlement of any strike, walkout or other
labor dispute with its employees on terms which are contrary to its interest.
The Supplier agrees however, that in the event of a strike, walkout or other
labor dispute which may reasonably be expected to interrupt the providing of
Services due to the Supplier's employees participating in or honoring such
strike, walkout or dispute, (i) the Supplier, at Supplier's sole cost and
expense (but without reduction in Contract Capacity Charges), shall use good
faith efforts to operate the Northwind Facilities using management or other
personnel which will not participate in or honor such strike, walkout or
dispute, and (ii) if the Supplier will not be able to operate the Northwind
Facilities using such management or other personnel, the Supplier will cooperate
with the Customer to permit the Customer or its duly authorized representative,
at Supplier's sole cost and expense (without reduction in Consumption Charges
and Contract Capacity Charges), to operate the Northwind Facilities in such
circumstances, provided that such operation is carried out by personnel which
are, in the Supplier's reasonable judgment, adequately trained and experienced
to operate the Northwind Facilities.
(c) Condemnation. In the event of a condemnation or eminent
domain taking of all or part of the site upon which the Plant is to be located
(a "Taking"), Supplier shall, as soon as practicable, determine whether it is
commercially reasonable and technically feasible in the circumstances for
Supplier to redesign, repair and/or restore the Northwind Facilities such that
the Supplier can meet its obligations to provide Services to the Customer
hereunder. In the event Supplier determines that it is commercially reasonable
and technically feasible, Supplier will so inform Customer, this Agreement shall
remain in force and, to the extent set forth in Section 8.2 of the Northwind
Lease, Supplier shall be entitled to the award or awards from such Taking and
the Contract Capacity Charges payable hereunder thereafter shall be adjusted
downward in an amount corresponding to any such award paid to the Supplier. In
the event that Supplier determines that it is not commercially reasonable or
technically feasible in the circumstances to redesign, repair or restore the
Northwind Facilities, then Supplier shall so notify Customer and such notice
shall also constitute termination of this Agreement, effective on the date when
such Taking shall effectively prevent Supplier from complying with its
obligations to provide Services hereunder, and, to the extent set forth in
Section 8.1 of the Northwind Lease, Supplier shall be entitled to the award or
awards from such Taking. Notwithstanding the foregoing, in the event Supplier
and Customer disagree as to whether it is commercially reasonably and
technically feasible in the circumstances for Supplier to redesign, repair or
restore the Northwind Facilities, then Supplier and Customer shall promptly meet
and use their best efforts to resolve such dispute. If the
30
Parties are unable to resolve such dispute within ten (10) days, then the
Parties shall refer such dispute to the "Independent Engineer"(as defined in the
Development Agreement). The Independent Engineer's conclusion as to whether it
is commercially reasonable and technically feasible in the circumstances for
Supplier to redesign, repair or restore the Northwind Facilities shall be
accepted by and binding upon the Parties.
(d) In the event of a Force Majeure Event of a nature such
that, by implementation of the Contingency Plan (or a part thereof), Services
may be provided to the Customer during the interruption caused by such Force
Majeure Event, then, upon the Customer's request and at the Customer's expense,
except as set forth in Section 7.l(b) above the, Supplier shall use its best
efforts to implement the Contingency Plan (or portion thereof which is
applicable) to mitigate the interruption of Services caused by such Force
Majeure Event.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification by the Supplier. The Supplier agrees to protect,
indemnify and hold harmless the Customer Group Member from and against any and
all Loss and/or Expense, other than loss business, lost profits and other
special and/or consequential damages, whether direct or indirect (all claims for
which are hereby irrevocably waived), incurred by the Customer Group Member in
connection with or arising from:
(a) any breach by the Supplier of its obligations hereunder;
(b) the installation, maintenance, operation, repair, removal,
replacement or alteration of any portion of the Northwind Facilities or the
Supplier's metering and other equipment and piping on the Premises, including
the Supplier Interconnection Equipment, or any acts or omissions of the Supplier
or those Persons under its direction or control in connection therewith;
provided such Loss or Expense does not result from actions or omissions of the
Customer or those Persons under its direction or control (including its agents
and those which it has authorized or knowingly permitted to act on its behalf);
(c) any unauthorized operation, maintenance or alteration of,
or action affecting, the Customer's equipment, or any component thereof, by the
Supplier or those Persons under its direction or control (including its agents
and those which it has authorized or knowingly permitted to act on its behalf);
or
31
(d) any claims, obligations, damages, expenses or liabilities
to third parties for personal injury or property damage to the extent they arise
out of any legally actionable action of the Supplier or its agents, contractors
or employees, or those Persons under its direction or control, provided that
this indemnity shall not apply to the extent that the claim, obligation, damage,
expense or liability arises from the negligence or willful misconduct of, or a
breach of the Customer's obligations under this Agreement by, the Customer, its
agents, contractors or employees, or those Persons under its direction or
control;
but excluding any Loss or Expense arising from interruption of Services
permitted by Section 6.3(a) or Section 7.1.
8.2 Indemnification by the Customer. The Customer agrees to protect,
indemnify and hold harmless the Supplier Group Member from and against any and
all Loss and/or Expense incurred by the Supplier Group Member in connection with
or arising from:
(a) any breach by the Customer of its obligations hereunder;
(b) any acts or omissions of the Customer or those Persons
under its direction or control; provided such Loss or Expense does not result
from the acts or omissions of the Supplier or those Persons under its
direction or control (including its agents and those which it has authorized or
knowingly permitted to act on its behalf) or, other than as set forth in clause
(c) below, any third Persons; or
(c) any claims, obligations, damages, expenses or liabilities
to third parties for personal injury or property damage to the extent they arise
out of any legally actionable action of the Customer or its agents, contractors
or employees, or those Persons under its direction or control, provided that
this indemnity shall not apply to the extent that the claim, obligation, damage,
expense or liability arises from the negligence or willful misconduct of, or a
breach of the Supplier's obligations under this Agreement by, the Supplier, its
agents, contractors or employees, or those Persons under its direction or
control.
8.3 Notice of Claims.
(a) If a claim is asserted or action brought against an
Indemnified Party and the Indemnified Party believes that it is entitled to
indemnification under this Article 8, the Indemnified Party shall promptly
notify the Indemnitor, in writing, of such claim or action. Such notice shall be
provided in sufficient time to enable the Indemnitor
32
to assert and prosecute appropriate defenses to the claim or action; provided,
that failure to give such notice shall not relieve the Indemnitor of its
obligations hereunder except to the extent it will have been prejudiced by such
failure. Upon the receipt of such notice, the Indemnitor shall make a prompt
determination of whether it believes it is required to indemnify the Indemnified
Party, and shall promptly notify the Indemnified Party, in writing, of its
determination. If the Indemnitor determines that it is required to indemnify, it
shall assume the defense of the Indemnified Party, including the employment of
counsel, and shall thereafter pay all costs and expenses relative to the defense
of the claim or action. The Indemnified Party shall cooperate with the
Indemnitor in all reasonable aspect in this defense. The Indemnified Party shall
also have the right, at its own expense, to employ separate counsel in any such
action and to participate in the defense thereof. The Indemnitor shall not be
liable for any settlement of any claim or action made without its consent.
(b) In calculating any Loss or Expense there will be deducted
(i) the amount of any insurance recovery by the Indemnified Party in respect
thereof (and no right or subrogation will accrue hereunder to any insurer) or,
in the event that the Indemnified Party has failed to maintain any insurance
coverage required by this Agreement to be maintained by such party or fails to
make a timely claim under any applicable insurance, the amount of the insurance
recovery which would reasonably be expected to have been received had such
insurance been maintained and/or such claim been timely filed, and (ii) the
amount of any tax benefit to the Indemnified Party (or any of its Affiliates)
with respect to such Loss or Expense (after giving effect to the tax effect of
receipt of the indemnification payments).
(c) After any Claim Notice has been given pursuant hereto, the
amount of indemnification to which an Indemnified Party will be entitled under
this Article 8 will be determined: (i) by the written agreement between the
Indemnified Party and the Indemnitor; (ii) by a final judgment or decree of any
court of competent jurisdiction; or (iii) by any other means to which the
Indemnified Party and the Indemnitor agree.
ARTICLE 9
TERM
9.1 Term.
(a) Unless the Supplier has been given by Customer the Notice
to Proceed on or before May 1, 1998 and the conditions precedent set forth in
Section 5.1 hereof have been met to the Supplier's reasonable satisfaction on or
before such date (or,
33
with respect to any condition which the Supplier is willing to waive on or
before such date, waived in a writing delivered to the Customer on or before
such date), at any time thereafter the Supplier may terminate this Agreement and
its obligations hereunder by written notice to the Customer, such termination to
be effective immediately; provided, however, that upon Supplier's acceptance of
the Notice to Proceed, Supplier's right to terminate this Agreement pursuant to
this section shall be null and void, and no longer in effect. In the event that
the Development Agreement is terminated by Aladdin pursuant to Section 10(b)
thereof, or by the Supplier pursuant to Section 2(k), Section 10(d) or Section
10(c) thereof, then this Agreement shall concurrently terminate and be of no
further force or effect.
(b) Unless sooner terminated pursuant to clause (a) above or
any of Section 6.1 or Section 6.4, Section 7.1(c) or Section 9.3, this Agreement
will remain in effect for the Initial Term, and will continue in effect for each
Renewal Term, if any; provided that there shall not be more than three (3)
Renewal Terms hereunder. Unless written notice that this Agreement will
terminate on the last day of the then current Initial Term or Renewal Term is
provided by either party at least twelve (12) months prior to the end of the
then current Initial Term or Renewal Term, this Agreement will continue for an
additional Renewal Term.
9.2 Effect of Termination. Upon the expiration or termination of
this Agreement:
(a) unless the Customer purchases the Northwind Facilities
pursuant to Section 9.3 or directs the Supplier to remove the Northwind
Facilities pursuant to Section 9.2(b) (in which case the Supplier shall so
disconnect and remove the Northwind Facilities), the Supplier shall abandon the
Northwind Facilities as is and where is and shall have no further obligations
under this Agreement or the Lease in respect thereof;
(b) if the Customer directs the Supplier to remove the
Northwind Facilities, then the Supplier, at the Customer's expense (less any net
proceeds of salvage or other disposition of the Northwind Facilities), will
remove the Northwind Facilities and all Supplier Interconnection Equipment and
any other property of the Supplier on the Premises in a prudent and workmanlike
manner, and will repair and restore in a manner reasonably satisfactory to the
Customer all damage to the Premises caused by such removal (and pay for such
damage where caused by Supplier's negligence or wilful misconduct), and the
Customer will provide the Supplier access to the Premises reasonably requested
by the Supplier to allow the Supplier to remove such property in a timely
fashion;
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(c) the Customer will pay the Supplier all amounts then
payable to the Supplier hereunder (including costs of removal under clause (b)
above or, in the event the Customer is purchasing the Northwind Facilities under
any of Sections 6.3, 6.4, or 9.3, the purchase price payable); and
(d) the Customer and the Supplier will have no further
obligations hereunder other than (i) obligations accruing prior to the date of
such termination or expiration, (ii) Customer's obligations to provide access
rights pursuant to Section 9.2(b) and (iii) obligations under Section 5.3 and
Article 8, all of which will survive the expiration or termination of this
Agreement.
9.3 The Customer's Option to Purchase.
(a) Each of the Customer and the other Customer Group Members
shall have a continuing non-exclusive option to purchase the Northwind
Facilities at any time prior to termination of this Agreement, exercisable by
the Customer alone or together with one or both Customer Group Members by
written notice given to the Supplier not less than one (1) year prior to the
date upon which such purchase shall close as specified in such notice (the
"Closing Date"), which notice shall state that the option under this Section 9.3
is being exercised. The purchase price payable upon such exercise shall equal
the Make Whole Amount as of the date of such purchase. The option granted hereby
shall expire and be of no further force or effect on the earliest of (i) the
expiration of the Term hereof, or (ii) the date upon which any other entity
which has an option to purchase the Northwind Facilities effectively exercises
such option.
It shall be a condition to the Supplier's obligation to
consummate the sale hereunder that concurrently with closing the Customer shall
assume, and indemnify and hold the Supplier harmless from, all obligations of
the Supplier accruing after the Closing Date under all contracts and Agreements
with respect to the Northwind Facilities under which any performance obligations
will continue following such sale and at the closing the Supplier shall assign
and the Customer shall assume all such contracts and Agreements under a written
assignment and assumption agreement.
(b) In the event that the Customer gives notice that it is
exercising its option under this Section 9.3 to acquire the Northwind
Facilities, then:
(i) not less than ten (10) days nor more than
six (6) months prior to the Closing Date, the Supplier shall obtain and deliver
to the Customer payoff letters, in form and substance reasonably satisfactory to
the Customer, from the holders of any Facilities Debt or any trustee or agent
with power to act for such holders stating
35
the principal amount of such Facilities Debt as of the Closing Date, any accrued
interest thereon through such date, and any other amounts which shall be payable
in respect thereof as of the Closing Date;
(ii) not less than ten (10) days prior to the
Closing Date, the Supplier shall provide to the Customer a written statement of
the Make Whole Amount, determined as of the Closing Date, accompanied by
appropriate detail. The Customer and its advisors shall be deemed to have
accepted such statement unless written objection thereto is delivered to the
Supplier within three (3) days after the date of receipt thereof by the
Customer. Any such written objection shall specify in reasonable detail the
reasons therefor. In the event of such objection, the Supplier and the Customer
shall meet and try to reach agreement as to the Make Whole Amount, but if such
agreement is not reached within five (5) days after the date upon which such
written objections are received by the Supplier, then such matter shall be
submitted to three outside accounting firms, one of which shall be the
Customer's outside accounting firm, one of which shall be the Supplier's outside
accounting firm, and the third of which shall be chosen by the first two firms,
and such accounting firms shall each determine the Make Whole Amount and the two
determinations which are closest together shall then be averaged and the average
of such two determinations shall be the Make Whole Amount;
(c) Closing of the purchase shall occur on the Closing Date
(or, if such day is not a business day, on the next following business day) or
such other date as the parties may agree upon through an escrow established by
the Parties. At the closing, the Supplier shall execute and deliver to the
Customer such bills of sale and instruments of assignment (including the
assignment and assumption agreement referred to in clause (a) above) as are
necessary or appropriate to transfer to the Customer all of the Supplier's
right, title and interest in and to the Northwind Facilities and any contracts
or Agreements to be assigned, on an "as is, where is" basis, without
representation or warranty other than as to the Supplier's due authorization and
legal capacity to execute and deliver such instruments, documents and
Agreements, and the Customer shall deliver to the Supplier the purchase price,
by wire transfer of immediately available funds or by other payment means
acceptable to the Supplier, and shall execute and deliver such assignment and
assumption agreement.
(d) In the event that the Customer exercises its option to
purchase under this Section 9.3, effective upon closing of the purchase, this
Agreement and the Lease shall automatically terminate.
(e) In the event that the Customer exercises the option
granted by this Section 9.3 but shall fail to consummate the purchase pursuant
to such option, such
36
failure shall be a breach of the Customer's obligation to purchase the Northwind
Facilities arising pursuant to exercise of such option and the Supplier shall be
entitled to any remedies therefor which may be available at law or in equity.
ARTICLE 10
GENERAL PROVISIONS
10.1 Notices. All notices or other communications required or permitted
hereunder shall be in writing addressed to the respective party as set forth
below and shall be personally served, telecopied or sent by reputable overnight
courier service and shall be deemed to have been given: (a) if delivered in
person, when delivered; (b) if delivered by telecopy, on the date of
transmission if transmitted on a Business Day before 4:00 p.m. Chicago time,
otherwise on the next Business Day (provided, in either case, that receipt of
such transmission is confirmed); and (c) if delivered by overnight courier, one
(1) day after delivery to courier properly addressed. Notices and other
communications shall be addressed to the applicable party as follows:
If to the Customer, to:
Aladdin Gaming, LLC
c/o Aladdin Management Corporation
280 Park Avenue, 38th Floor
New York, New York 10017
Attention: Ronald Dictrow
Fax: (212)661-0844
If to the Supplier, to:
Northwind Aladdin, LLC
c/o Unicom Thermal Technologies Inc.
30 West Monroe Street
Suite 500
Chicago, IL 60603
Attention: President
Fax:312-346-3201
If to the Customer's Lender(s), to such addresses as Customer specifies to
Supplier in writing.
37
If to the Supplier's Lender(s), to such addresses as Supplier specifies to
Customer in writing.
Any party hereto may change its address for notices and other communications
hereunder by a notice delivered to the other party hereto in accordance with
this Section 10.1 as then in effect.
10.2 Successors and Assigns.
(a) Neither party shall assign its interest or delegate its
duties under this Agreement without the prior written consent of the other
party, (which consent shall not be unreasonably withheld), except:
(i) the Supplier may assign its right, title and
interest under this Agreement, or any part thereof, to any wholly-owned
subsidiary of Unicom Corporation;
(ii) the Customer may assign its right, title and
interest under this Agreement, or any part thereof, to any Affiliate, or to
Music. Upon any such assignment by the Customer, the Supplier will provide any
such assignee with all Notices given by the Supplier pursuant to this Agreement
and such assignee (and its lenders) shall have the same respective rights to
cure any failure by the Customer to comply with its obligations hereunder that
the Customer and its lenders have hereunder In addition, if such assignee (or
its lenders) assumes the Customer's rights and obligations hereunder,
unconditionally and in a writing delivered to the Supplier, then, upon a request
in writing from all such assignees stating that they desire the Supplier to sell
some or all of the Services to third parties and specifying the portions of
Services which they wish to have the Supplier sell to third parties and
expressly and unconditionally committing to relinquish back to the Supplier such
portions of the Services to effect such sale (the "Relinquished Services") as of
a date specified in such request (but without any reduction in Contract Capacity
Charges or Consumption Charges payable hereunder), and provided that such
assignees pay all reasonable costs and expenses thereof, then the Supplier will
use commercially reasonable efforts to sell any or all of the Relinquished
Services to third parties on terms and conditions acceptable to such assignees,
and any amounts which the Supplier receives from third parties in respect of
Relinquished Services (if any) shall be applied to the Contract Capacity Charges
and Consumption Charges payable hereunder (such application to be determined by
the Supplier reasonably and in good faith and consistent with the concepts
reflected in Exhibit C hereto and subject to such assignees' approval, not to be
unreasonably withheld).
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(iii) the Customer may assign its right, title and
interest in this Agreement to any lender or lenders to whom the Customer
provides a security interest in the Customer's right, title and interest in the
Premises in connection with financing (or refinancing) the Premises;
(iv) the Customer may assign, without the
Supplier's consent, the Customers's right, title and interest in this Agreement
to any purchaser of the Premises or all of the interests in the Customer; and
(v) the Supplier may assign its right, title and
interest in this Agreement to any lender or lenders to whom the Supplier
provides a security interest in the Supplier's right, title and interest in the
Northwind Facilities in connection with financing (or refinancing) the Northwind
Facilities.
In connection with any such financing or refinancing, from time to time, upon
request, each party will provide one or more estoppel certificates in form and
substance reasonably satisfactory to the other or such lender. No consent by
either party to any assignment or delegation by the other party shall be deemed
to be a novation or otherwise to relieve the transferring party of its
obligations hereunder unless otherwise expressly so stated in such consent.
(b) The Supplier agrees not to permit any transfer of any
membership interest in the Supplier, and not to issue any new membership
interests in the Supplier without the prior written consent of the Customer
(such consent not to be unreasonably withheld); provided, however, that the
Customer hereby agrees to any such transfer or issuance to Nevada Power Company
(or any wholly-owned subsidiary of Nevada Power Company), Boston Edison, Ontario
Hydro, Houston Industries, or to any entity which is beneficially owned solely
by Unicom Corporation and one of Nevada Power Company, Boston Edison, Ontario
Hydro or Houston Industries (or any wholly owned subsidiary of Unicom
Corporation); provided further that Unicom Corporation (or any wholly-owned
subsidiary of Unicom Corporation) at all times holds at least a 51% share in the
Supplier, unless such percentage requirement needs to be modified in order for
Supplier to comply with Section 5.7 hereof.
(c) This Agreement will be binding upon and inure to the
benefit of the parties hereto and their successors and permitted assigns.
Nothing in this Agreement, expressed or implied, is intended or will be
construed to confer upon any Person (other than the parties and successors and
assigns permitted by this Section 10.2 and Persons expressly benefited by the
provisions of Sections 8.1 and 8.2) any right, remedy or claim under or by
reason of this Agreement.
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10.3 Entire Agreement; Amendments. This Agreement, the Annex, the
Exhibits and Schedules referred to herein, the Development Agreement, the
Guaranty the Lease and the Energy Services Coordination Agreement and the
documents delivered pursuant hereto and thereto contain the entire understanding
of the parties hereto with regard to the subject matter contained herein or
therein, and supersede all prior Agreements or understandings between or among
any of the parties hereto. This Agreement will not be amended, restated,
modified or supplemented except by a written instrument signed by an authorized
representative of each of the parties hereto.
10.4 Interpretation. Article titles and headings to sections herein are
inserted for convenience of reference only and are not intended to be a part of
or to affect the meaning or interpretation of this Agreement.
10.5 Waivers. Any term or provision of this Agreement may be waived, or
the time for its performance may be extended, by the party or parties entitled
to the benefit thereof. Any such waiver will be validly and sufficiently
authorized for the purposes of this Agreement if, as to any party, it is
authorized in writing by an authorized representative of such party. The failure
of any hereto to enforce at any time any provision of this Agreement will not be
construed to be a waiver of such provision, nor in any way to affect the
validity of this Agreement or any part hereof or the right of any party
thereafter to enforce each and every such provision. No waiver of any breach of
this Agreement will be held to constitute a waiver of any other or subsequent
breach.
10.6 Expenses. Except as otherwise set forth herein, each party hereto
will pay all costs and expenses incident to its negotiation and preparation of
this Agreement and to its performance and compliance with all Agreements and
conditions contained herein on its part to be performed or complied with,
including the fees, expenses and disbursements of its counsel and accountants.
10.7 Partial Invalidity. Wherever possible, each provision hereof will
be interpreted in such manner as to be effective and valid under applicable law,
but in case any one or more of the provisions contained herein will, for any
reason, be held to be invalid, illegal or unenforceable in any respect, such
provision will be ineffective to the extent, but only to the extent, of such
invalidity, illegality or unenforceability without invalidating the remainder of
such invalid, illegal or unenforceable provision or provisions or any other
provisions hereof, unless such a construction would be unreasonable. Upon any
such determination that any term or other provision hereof is invalid, illegal
or unenforceable, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable
40
manner, to the end that the transactions contemplated hereby are fulfilled to
the extent possible in the circumstances.
10.8 Execution in Counterparts. This Agreement may be executed in one
or more counterparts, each of which will be considered an original instrument,
but all of which will be considered one and the same agreement, and will become
binding when one or more counterparts have been signed by each of the parties
hereto and delivered to the Supplier and the Customer.
10.9 Governing Law. This Agreement will be governed by and construed in
accordance with the internal laws and decisions of the State of Nevada.
10.10 Time. Time is of the essence hereof.
10.11 No Partnership. This Agreement does not and shall not be
construed to create or establish a partnership, agency, joint venture, lease,
license or any other relationship between the parties hereto, nor constitute
either party as an agent of the other. Neither party hereto shall hold itself
out to others, by act or omission, contrary to the terms of this Section 10.11.
10.12 Arbitration. In the event of any dispute hereunder between the
parties, either party may at any time refer the dispute to be settled by binding
arbitration pursuant to the Commercial Arbitration Rules of the American
Arbitration Association.
[Balance of page intentionally left blank; signature page follows.]
41
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed the day and year first written above.
ALADDIN GAMING, LLC
By:
---------------------------
Name: RONALD DICTROW
Title: EXEC. V.P.
NORTHWIND ALADDIN, LLC
By:
---------------------------
Name: JOHN MITOLA
Title: VICE PRESIDENT & G.M.
42
ANNEX A
DEFINITIONS
The following terms shall have the meanings specified or
referred to herein:
"Additional Project Investment" means capital expenditures,
finance costs and other related costs and expenses incurred by the Supplier for
the purposes of the Northwind Facilities at any time after original completion
thereof, determined on an "all costs" basis and inclusive of all financing costs
through the date of determination, but shall not include Development Expenses or
Total Project Investment.
"Additional Services" shall have the meaning set forth in
Section 2.1(c).
"Additional Services Request" shall have the meaning set forth
in Section 2.1(c).
"Affiliate" means (i) Bazaar and Music and (ii) with respect
to any Person, any other Person which directly or indirectly controls, is
controlled by or is under common control with such Person.
"Business Day" means a weekday which is not a statutory legal
holiday in the city of Las Vegas, Nevada.
"Chilled Water Delivery Point" means the Delivery Point for
chilled water, as further set forth in Exhibit A.
"Chilled Water Interconnection Equipment" means Supplier
Interconnection Equipment used for the transfer of Energy from chilled water.
"Chilled Water Return Point" means a Return Point for chilled
water after it has passed through the Chilled Water Interconnection Equipment
for return to the Northwind Facilities.
"Chilled Water Services" has the meaning set forth in Section
2.1(a).
"Claim Notice" means a notice by a Customer Group Member or a
Supplier Group Member seeking indemnification pursuant to Article 8.
43
"Commencement Date" means the earlier of (a) the date upon
which the Premises is first opened for business to the public, or (b) March 1,
2000.
"Complex" is defined in the Recitals hereto.
"Consultant's Recommendations" has the meaning set forth in
Section 6.1.
"Consumer Price Index" means the U.S. City Average Consumer
Price Index, all items other than food and Energy, not seasonably adjusted, as
it appears in the "News" as published monthly by the United States Department of
Labor, Bureau of Labor Statistics; provided, however, that if said Consumer
Price Index shall cease to exist or is changed, then the term "Consumer Price
Index" shall mean such other or similar index or formula as Supplier reasonably
selects to measure change in the purchasing power of the U.S. dollar.
"Consumption Charge" has the meaning set forth in Section
2.5(b).
"Contract Capacity Charge" has the meaning set forth in
Section 2.5(a).
"Contract Year" means a one year period to time beginning on
the Commencement Date or any anniversary thereof and ending one day less than
one year later.
"Customer" means the Person identified as the "Customer" in
the first paragraph of this Agreement, and the successors and permitted assigns
of such Person.
"Customer Agreement" means each agreement under which the
Customer agrees to provide to any third Person any Services to be obtained from
the Supplier hereunder, as any such agreement may be in effect from time to
time.
"Customer Default" means the events described in Section 6.2.
"Customer Energy Requirements" means those energy requirements
of the Customer as set forth in Exhibit B.2.
"Customer Group Member" means the Customer, its successors and
permitted assigns, its officers, directors, employees and agents, and its
Affiliates and their respective successors and permitted assigns.
44
"Customer Indemnifiable Event" means the events described in
Section 8.2.
"Customer Interconnection Equipment" means that equipment
owned and operated by the Customer to receive Services, as shown on Exhibit D
hereto.
"Delivery Point" means a point at which the Supplier delivers
Services, as shown on Exhibit A hereto.
"Development Agreement" means that certain Development
Agreement dated as of December 3, 1997, between the Customer and the Supplier,
as the same may be amended, restated, modified or supplemented and in effect
from time to time.
"Development Costs" means the aggregate of: (a) all costs and
expenses of the Supplier, the Customer, and Music incurred prior to December 3,
1997 for outside engineering work in connection with the design and construction
of the Northwind Facilities and the matters set forth in this Agreement and the
Related Agreements and the documentation thereof; (b) all costs and expenses of
the Supplier incurred on or after December 3, 1997 in connection with the
design and construction of the Northwind Facilities and the matters set forth in
this Agreement and the Related Agreements and the documentation thereof,
provided that internal legal and engineering costs and expenses shall only be
included to the extent that the same do not exceed, in the aggregate, $375,000;
and (c) all costs and expenses of the Customer, and Music incurred on or after
December 3, 1997 for outside engineering work in connection with the design and
construction of the Northwind Facilities and the matters set forth in this
Agreement and the Related Agreements and the documentation thereof; but only to
the extent that the same, when aggregated with all of the costs and expenses of
Customer and Music for outside engineering work prior to December 3, 1997, in
the aggregate do not exceed an amount reasonably agreed to, in writing, by
Customer and Supplier.
"Due Date has the meaning set forth in Section 2.8.
"Electricity Delivery Point" means any point in the Premises
at which electricity is to be received by the Customer, as shown on Exhibit A
hereto.
"Electricity Services" has the meaning set forth in Section
2.1 (a).
"Energy" means any or all of chilled water, hot water and/or
electricity, as the context may require.
45
"Expenses" means any and all expenses incurred in connection
with investigating, defending or asserting any claim, action, suit or proceeding
incident to any matter indemnified against hereunder (including, without
limitation, court filing fees, court costs, arbitration fees or costs, witness
fees, and reasonable fees and disbursements of legal counsel, investigators,
expert witnesses, consultants, accountants and other professionals).
"Financial Closing" has the meaning given such term in the
Development Agreement.
"Force Majeure Event" means any act, event, cause or condition
that is beyond the control of the party hereto which is affected thereby, that
is not caused by such party's fault or negligence, to the extent by the exercise
of reasonable diligence such party is unable to overcome or prevent, including,
but not limited to: acts of God, war, civil commotion, embargoes, epidemic,
fires, cyclones, droughts or floods, emergencies (other than those caused by the
negligence or willful misconduct of the party claiming the Force Majeure Event),
change in applicable law and Takings under the terms of this Agreement.
"Hot Water Delivery Point" means the Delivery Point for hot
water, as further described in Exhibit A.
"Hot Water Interconnection Equipment" means Supplier
Interconnection Equipment used for the transfer of Energy from hot water.
"Hot Water Return Point" means a Return Point for hot water
after it has passed through the Hot Water Energy Transfer Stations for return to
the Northwind Facilities.
"Hot Water Services" has the meaning set forth in Section 2.1
(a).
"Indemnified Party" means a Customer Group Member or a
Supplier Group Member seeking indemnification pursuant to Section 8.3.
"Indemnitor" means a Supplier Group Member or a Customer Group
Member from which indemnification is sought pursuant to Section 8.3.
"Initial Customer Energy Requirements" shall have the meaning
set forth in Exhibit B.
46
"Initial Services" means the delivery of chilled water from
the Initial Services Date to the Commencement Date at the capacity and
temperature specified in Exhibit B under the heading "Initial Services".
"Initial Services Date" means the date nine months from the
date on which the Notice to Proceed is received by the Supplier.
"Initial Term" means the period of time beginning on and
including the Commencement Date and ending on and including the day immediately
prior to the twentieth (20th) anniversary of the Commencement Date.
"O&M Specifications" means the Operation and Maintenance
Specifications to be agreed upon by the parties prior to Final Completion and
initialed by the parties and attached hereto as Exhibit F, as the same may be
amended, restated, modified or supplemented and in effect from time to time.
"Loss" means any and all losses, costs, obligations,
liabilities, settlement payments, awards, judgments, fines, penalties, damages,
expenses, deficiencies or other charges, but excluding in any event any lost
profits and other special or consequential damages, which result from any
Customer Indemnifiable Event or Supplier Indemnifiable Event.
"Make Whole Amount" means, as of any date of determination
thereof, an amount equal to the aggregate of (a) the Debt Amount, plus (b) the
Equity Amount.
For purposes of this definition of "Make Whole Amount":
(a) "Debt Amount" shall mean, as of any date of determination
thereof, the aggregate of:
(i) the then outstanding Debt Service Amount as finally
determined pursuant to Exhibit C; plus
(ii) any prepayment penalty, premium or other charge
payable in connection with the payment or prepayment of such
indebtedness, provided that, unless the Customer has approved
the terms of the indebtedness, the amount(s) under this
clause (iii) shall be limited to such prepayment penalty,
premium or charge as would be payable in a comparable
financing negotiated at arm's length with unrelated parties;
provided, however, that if, in connection with the purchase
of the
47
Northwind Facilities, the Customer is permitted by the holders
of such indebtedness to assume the Supplier's obligations in
respect thereof and the Supplier is released of its
obligations in respect thereof concurrently with such
assumption, then the Debt Amount shall be zero (0). (The
Supplier agrees to use reasonable efforts to obtain the
consent of such holders to any such rights of assumption.);
and
(b) "Equity Amount" shall mean, as of any date of
determination thereof, an amount equal to "Return on Equity
Amounts" for all remaining Contract Years or portions thereof
in the Initial Term discounted by, for each monthly payment
thereof, the interest rate applicable to the U.S. Treasury
bill, bond or note (as applicable) having a maturity
comparable (or as nearly comparable as there may be) to the
date when such payment is scheduled to be due, plus (ii) 250
basis points.
"Northwind Facilities" has the meaning given in the Recitals
of this Agreement.
"Northwind Lease" means that certain ground lease of the Site
dated as of December 3, 1997, between the Supplier, as lessee, and the Customer
as lessor, as the same may be amended, restated, modified or supplemented and in
effect from time to time.
"Notice of Exercise" has the meaning set forth in Section
2.1(c).
"Notice to Proceed" means a written notice from the Customer
to the Supplier given in accordance with the Development Agreement and stating
that the Supplier shall commence the design and construction of the Northwind
Facilities under the Development Agreement.
"Offer" has the meaning set forth in Section 2.1(c).
"Payment Amount" has the meaning set forth in Section 6.4.
"Payment Default" has the meaning set forth in Section 6.2(a).
"Performance Failure" has the meaning set forth in Section
6.1.
48
"Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or governmental authority or regulatory body.
"Plant Energy Requirements" means the full requirements of the
Northwind Facilities as set forth in Exhibit B.1.
"Project Scope" has the meaning set forth in Section 2.1(a).
"Premises" has the meaning set out in the Recitals to this
Agreement.
"PPI" means the Producer Price Index-Commodities for Western
South Central Region for commercial natural gas, as it appears in the Producer
Price Index published by the United States Department of Labor, Bureau of Labor
Statistics; provided, however, that if said Producer Price Index shall cease to
exist or is changed, then the term "PPI" shall mean such other or similar index
or formula as Supplier reasonably selects to measure change in the price for
commercial natural gas in the Southwestern United States.
"Related Agreements" means collectively, the Northwind Lease
and the Development Agreement.
"Return Point" means, with respect to Chilled Water Services,
the point at which chilled water returns to Supplier's pipes after it has passed
through an Energy transfer station, as shown on Exhibit A hereto, and, with
respect to Hot Water Services, the point at which hot water returns to
Supplier's pipes after it has passed through an Energy transfer station, as
shown on Exhibit A hereto.
"Renewal Term" means, in the event that no party has given the
notice of termination described in Section 9.1 with respect to the Initial Term
or any Renewal Term, the period of time beginning on and including the day
immediately after the last day of such Initial Term or Renewal Term and ending
on and including the day immediately prior to the fifth (5th) anniversary of the
last day of such Initial Term or Renewal Term.
"SEC" means the United States Securities Exchange Commission.
"Service Default" has the meaning set forth in Section 6.1(b).
"Service Failure" has the meaning set forth in Section 6.1(b).
49
"Services" has the meaning set forth in Section 2.1(a).
"Site" means the real property in Las Vegas, Nevada, which is
leased to the Supplier and is subject to the Northwind Lease and which is
described in Exhibit G hereto.
"Specified Demand Amount" means, as of any date of
determination, the amount of Electricity Service which the Supplier is then
obligated to provide to the Customer under this Agreement, which amount shall be
4.9 megawatts (or 4.1 megawatts in the event one generating unit is shut down
during required maintenance) for the period from the Substantial Completion Date
to March 1, 2000, and thereafter shall be 20 megawatts but which amount may,
after March 1, 2000, be decreased from time to time by the Customer by giving
not less than thirty (30) days prior written notice thereof to the Supplier;
provided that if a reduction is requested, then such reduction can only be made
if notice is in accordance with notice required under any applicable third party
electricity supply Agreements and the Customer pays any corresponding charges
under such electricity contracts attributable to such reduction.
"Substantial Completion Date" means the date of "Substantial
Completion" as such term is defined in the Development Agreement.
"Supplier" means the Person identified as the "Supplier" in
the first paragraph of this Agreement, and the successors and permitted assigns
of such Person.
"Supplier Group Member" means Supplier, its successors and
permitted assigns, and its officers, directors, employees and agents, and its
Affiliates and their respective successors and permitted assigns.
"Supplier Indemnifiable Event" means the events described in
Section 8.1.
"Supplier Interconnection Equipment" means the equipment and
related piping and apparatus between the Supplier's distribution system and the
Customer's equipment, including, without limitation, a plate frame heat
exchanger assembly or. equivalent device, piping, valves, metering equipment and
controls and additional equipment, if any, described in the Q&M Specifications,
installed by the Supplier on the Premises pursuant to the terms of this
Agreement for use in providing the Services to the Customer, and all
replacements and additions thereto from time to time.
"Takings" has the meaning set forth in Section 7.1(c).
50
"Tax" means any present or future tax (including all sales and
use taxes), levy, impost, duty, charge, assessment or fee of any nature
(including interest, penalties and additions thereto) that is imposed by any
federal, provincial or local taxing authority on Services provided by Supplier
or on the Northwind Facilities or the Supplier's operations in respect thereof,
or any payments made by Customer under this Agreement, excluding taxes on the
income of the Supplier.
"Total Project Investment" means the aggregate investment of
the Supplier in the Northwind Facilities and all related equipment and piping,
when completed, determined on an "all costs" basis and inclusive of all
financing costs and Development Costs through the date of determination,
including Pre-Commencement Capacity Charge, as defined in Exhibit C.
51
AMENDMENT AND AGREEMENT
This Amendment and Agreement (hereinafter the "Amendment") is made and
entered into as of the 25 day of September, 1998 between Northwind Aladdin, LLC,
a Nevada limited-liability company ("Northwind") and Aladdin Gaming, LLC, a
Nevada limited-liability company ("Aladdin").
W I T N E S S E T H:
WHEREAS, Northwind and Aladdin are parties to (i) that certain Lease
dated as of December 3, 1997 (the "Lease"), (ii) that certain Development
Agreement dated as of December 3, 1997 (the "Development Agreement"), and (iii)
that certain Energy Service Agreement dated as of September 24, 1998 (the
"Energy Service Agreement", and, collectively with the Lease and the Development
Agreement, the "Agreements"); and
WHEREAS, the Agreements contemplate that Northwind will construct and
operate the "Northwind Facilities" (as such term is defined in the Energy
Service Agreement) to provide hot water, chilled water and electricity services
to Aladdin, including construction and operation of certain facilities to
generate electricity; and
WHEREAS, the parties have determined that it shall not be necessary for
the Northwind Facilities to include facilities for generating electricity and
accordingly the parties desire to amend the Agreements to reflect such
determination;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, it is hereby agreed between Northwind and Aladdin as
follows:
1. Any capitalized term in this Amendment that is not defined
herein shall have the meaning specified or referred to in Annex A to
the Energy Service Agreement.
2. Notwithstanding any provisions in the Lease which obligate
Northwind to construct or operate facilities for the generation of
electricity for the benefit of Aladdin or obligate Aladdin to
compensate Northwind therefor, neither Northwind nor Aladdin shall have
any such obligations nor shall Northwind or Aladdin be entitled to
receive any such benefits and the Lease is amended accordingly,
effective immediately. This Amendment
shall be considered Amendment No. 1 to the Lease. Except as expressly
amended herein, the Lease remains in force.
3. Notwithstanding any provisions in the Development Agreement
which obligate Northwind to construct or operate facilities for the
generation of electricity for the benefit of Aladdin or obligate
Aladdin to compensate Northwind therefor, neither Northwind nor
Aladdin shall have any such obligations nor shall Northwind or Aladdin
be entitled to receive any such benefits and the Development Agreement
is amended accordingly, effective immediately. This Amendment shall be
considered Amendment No. 1 to the Development Agreement. Except as
expressly amended herein, the Development Agreement remains in force.
4. Notwithstanding any provisions in the Energy Service Agreement
which obligate Northwind to construct or operate facilities for the
generation of electricity for the benefit of Aladdin or obligate
Aladdin to compensate Northwind therefor, neither Northwind nor
Aladdin shall have any such obligations nor shall Northwind or Aladdin
be entitled to receive any such benefits and the Energy Service
Agreement is amended accordingly, effective immediately. This Amendment
shall be considered Amendment No. 1 to the Energy Service Agreement.
Except as expressly amended herein, the Energy Service Agreement
remains in force.
5. Notwithstanding any provision in this Amendment, as of the
Substantial Completion Date, Northwind shall supply Services to
Aladdin in an amount equal to the Customer Energy Requirements,
including, but not limited to, the Specified Demand Amount.
6. This Amendment will be governed by and construed in accordance
with the internal laws and decisions of the State of Nevada.
7. Time is of the essence hereof.
8. This Amendment may be executed in one or more counterparts,
each of which will be considered an original instrument, but all of
which will be considered one and the same agreement, and will become
binding when one or more counterparts have been signed by each of the
parties hereto and delivered to Northwind and to Aladdin.
2
9. Neither Northwind nor Aladdin shall assign its interest or
delegate its duties under this Amendment except in accordance with
Section 10.2 of the Energy Service Agreement.
[Balance of page intentionally left blank; signature page follows.]
3
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.
NORTHWIND ALADDIN, LLC, ALADDIN GAMING, LLC,
a Nevada limited-liability company a Nevada limited-Habilicy company
By: By:
----------------------- ---------------------------------
Name: JOHN MITOLA Name:
Title: VICE PRESIDENT & G.M. Title:
4
SECOND AMENDMENT AND AGREEMENT
This Second Amendment and Agreement (hereinafter the
"Amendment") is made and entered into as of the 28th of May, 1999 between
Northwind Aladdin, LLC, a Nevada limited-liability company ("Northwind") and
Aladdin Gaming, LLC, a Nevada limited-liability company ("Aladdin").
WITNESSETH:
WHEREAS, Northwind and Aladdin are parties to (i) that certain
Lease dated as of December 3, 1997 (the "Lease"), (ii) that certain Development
Agreement dated as of December 3, 1997 (the "Development Agreement"), and (iii)
that certain Energy Service Agreement dated as of September 24, 1998 (the
'Energy Service Agreement", and, collectively with the Lease and the Development
Agreement, the "Agreements"); and
WHEREAS, the Agreements contemplate that Northwind will
construct and operate the "Northwind Facilities" (as such term is defined in the
Energy Service Agreement) to provide hot water, chilled water and electricity
services to Aladdin, including construction and operation of certain facilities
to generate electricity; and
WHEREAS, the parties on September 25, 1998 executed an
Amendment and Agreement to the Agreements ("Amendment No. 1") providing that is
shall not be necessary for the Northwind Facilities to construct or operate
facilities for generating electricity; and
WHEREAS, the parties have determined that is shall be
necessary for Northwind to construct and operate facilities for generating
"Emergency Power" (as such term is defined herein below), and accordingly the
parties desire to amend the Agreements to reflect such determination;
WHEREAS, the parties also have determined that is shall be
necessary to clarify the definition of "Investment in the Northwind Facilities,"
and accordingly the parties desire to amend the Energy Service Agreement
accordingly.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, it is hereby agreed between Northwind and
Aladdin as follows:
1. Any capitalized term in this Amendment that is not defined herein
shall have the meaning specified or referred to in Annex A to the
Energy Service Agreement.
2. The definition of "Development Costs" in Annex A to the Energy
Service Agreement is hereby deleted and replaced with the following:
"Development Costs" means the aggregate of: (a) all costs and expenses
of the Supplier, the Customer, and Music incurred prior to December 3,
1997 for outside engineering work in connection with the design and
construction of the Northwind Facilities and the matters set forth in
this Agreement and the Related Agreements and the documentation
thereof; (b) all costs and expenses of the Supplier incurred on or
after December 3, 1997 in connection with the design and construction
of the Northwind Facilities and the matters set forth in this Agreement
and the Related Agreements and the documentation thereof, provided that
internal legal and engineering costs and expenses shall only be
included to the extent that the same do not exceed, in the aggregate,
$375,000; and (c) all costs and expenses of the Customer incurred, in
connection with the matters set forth in this Agreement and the Related
Agreements and the documentation thereof, and (d) all costs and
expenses of the Customer incurred on or after December 3, 1997 for
outside engineering work in connection with the design and construction
of the Northwind Facilities and the matters set forth in this Agreement
and the Related Agreements and the documentation thereof; but only to
the extent that the same, when aggregated with all of the costs and
expenses of Customer for outside engineering work prior to December 3,
1997, in the aggregate do not exceed an amount reasonably agreed to in
writing, by Customer and Supplier.
3. Section I-D.(i) of Exhibit C to the Energy Service Agreement is
hereby deleted and replaced with the following:
["]the 'Plant Price' (as defined in the Development Agreement[)]; plus"
4. Notwithstanding any provisions in Amendment No. 1 to the Lease,
Northwind shall have the obligation to construct, operate and maintain
facilities for the generation and delivery of Emergency Power, as defined below,
for the benefit of Aladdin and shall deliver Emergency Power to Aladdin in
accordance with Paragraph 7 hereof, and the Lease is amended accordingly,
effective immediately. This
2
Amendment shall be considered Amendment No. 2 to the Lease. Except as expressly
amended herein, the Lease remains in force.
5. Notwithstanding any provisions in Amendment No. 1 to the Development
Agreement, Northwind shall have the obligation to construct, operate and
maintain facilities for the generation and delivery of Emergency Power, as
defined below, for the benefit of Aladdin and shall deliver Emergency Power to
Aladdin in accordance with Paragraph 7 hereof, and the Development Agreement is
amended accordingly, effective immediately. This Amendment shall be considered
Amendment No. 2 to the Development Agreement. Except as expressly amended
herein, the Development Agreement remains in force.
6. Notwithstanding any provisions in Amendment No. 1 to the Energy
Service Agreement, Northwind shall have the obligation to construct, operate and
maintain facilities for the generation and delivery of Emergency Power, as
defined below, for the benefit of Aladdin and shall deliver Emergency Power to
Aladdin in accordance with paragraph 7 hereof, but only on a standby basis in
the event that Aladdin's regular electricity supply has failed for whatsoever
reason. The Energy Service Agreement is amended accordingly, effective
immediately.
7. Emergency Power shall mean the supply, installation, operation and
servicing of three (3) 1,750 kilowatt diesel engine generators, with a total
capacity of 5.25 megawatts. Two such generators shall start, synchronize and
deliver power within ten (10) seconds or less from any loss of electric power.
The third such generator shall start, synchronize and deliver power within
fifteen (15) to twenty (20) seconds or less from any loss of electric power. All
three generators shall be operated using diesel fuel. Northwind shall maintain a
fuel supply sufficient to run all three generators at full capacity for a
minimum time of two (2) hours. Emergency Power shall be provided for the
"Legally Required Load" to all Aladdin facilities served in ten (10) seconds or
less from the loss of electric power. The Legally Required Load is defined as
1.9 MVA delivered to Aladdin and which shall provide electricity for egress
lighting, smoke management, special egress control devices, required elevators,
and cooling for associated machine rooms, fire pumps and emergency communication
systems.
Once power is delivered for the Legally Required Load, Emergency
Power shall be provided for all designated "Optional Loads" in twenty (20)
seconds or less from the loss of electric power. Optional Loads means 1.55 MVA
delivered to Aladdin and which shall be segregated from the Legally Required
Load pursuant
3
to National Electric Code requirements, and shall have load and delay
capabilities. The method of segregation shall be compatible with the Plant's
paralleling switchgear master controls. Integration at the controls must be a
coordinated effort between the CUP and user engineers. In the case where one (1)
of the three (3) diesel generator sets is not operations or the Legally Required
Load approaches the rating of two (2) of the three (3) diesel generator sets,
delayed optional load transfer and/or load shedding shall be utilized to provide
priority and capacity for the legally Required Load.
8. Notwithstanding any provision in this Amendment, as of the Initial
Services Date, Northwind shall provide the Initial Services to Aladdin in an
amount required by Aladdin which does not exceed the Initial Customer Energy
Requirements and as of the Substantial Completion Date, and Northwind shall
supply Services to Aladdin in an amount required by Aladdin which does not
exceed the Customer Energy Requirement, including, but not limited to, the
Specified Demand Amount.
9. This Amendment shall be considered Amendment No. 2 to the Energy
Service Agreement. Except as expressly amended herein, the Energy Service
Agreement remains in force.
10. This Amendment will be governed by and construed in accordance with
the internal laws and decisions of the State of Nevada.
11. Time is of the essence hereof.
12. This Amendment may be executed in one or more counterparts, each of
which will be considered an original instrument, but all of which will be
considered one and the same agreement, and will become biding when one or more
counterparts have been signed by each of the parties hereto and delivered to
Northwind and to Aladdin.
13. Neither Northwind nor Aladdin shall assign its interest or delegate
its dudes under this Amendment except in accordance with Section 10.2 of the
Energy Service Agreement.
4
IN WITNESS WHEREOF, the parties hereto have executed this
Amendment as of the date first written above.
NORTHWIND ALADDIN, LLC, ALADDIN GAMING, LLC,
a Nevada limited-liability company a Nevada limited-liability company
By: By:
----------------------- --------------------------
Name: JOHN P. MITOLA Name:
Title: MANAGER Title:
5
THIRD AMENDMENT AND AGREEMENT
This Third Amendment is made and entered into as of the 28th day of
May, 1999 between Northwind Aladdin, LLC, a Nevada limited-liability company
("Northwind") and Aladdin Gaming, LLC, a Nevada limited-liability company
("Aladdin").
WITNESSETH:
WHEREAS, Northwind and Aladdin are parties to (i) that certain Lease
dated as of December 3, 1997 (the same, as previously amended and in effect on
the date hereof, being herein referred to as the "Lease"), (ii) that certain
Development Agreement dated as of December 3, 1997 (the same, as previously
amended and in effect on the date hereof, being herein referred to as the
"Development Agreement"), and (iii) that certain Energy Service Agreement dated
as of September 24, 1998 (the same, as previously amended and in effect on the
date hereof, being herein referred to as the "Energy Service Agreement"); and
WHEREAS, the parties desire to further amend the Lease, the Development
Agreement and the Energy Service Agreement in certain respects set forth herein;
NOW, THEREFORE, the parties hereby agree as follows:
1. Amendment of Lease. The Lease is hereby amended to provide that (i)
notwithstanding anything in Article 12 of the Lease to the contrary, water for
the operation of the Project shall be supplied by Landlord. Tenant shall, at its
expense, install a submeter to measure the consumption of water by Tenant.
Tenant shall reimburse Landlord, within 30 days after being billed therefor, for
such water consumed by Tenant. The amount to be reimbursed by Tenant shall equal
Tenant's pro rata share of Landlord's actual, total bill from the utility
providing the water (and Tenant's pro rata share shall be determined based upon
the consumption measured by the submeter); and (ii) Exhibit A and Exhibit B
thereto shall be in the form of Exhibit I and II to this Amendment.
2. Amendment of Development Agreement. The Development Agreement is
hereby amended to provide that Exhibit A thereto shall be in the form of Exhibit
II to this Amendment, Exhibit B thereto shall be in the form of Exhibit III to
this Amendment, Exhibit E thereto shall be in the form of Exhibit IV to this
Amendment and Exhibit F thereto shall be in the form of Exhibit V to this
Amendment.
3. Amendment of Energy Service Agreement. The Energy Service Agree-
ment is hereby amended to provide that Exhibit A thereto shall be in the form of
Exhibit VI to this Amendment, Exhibit B thereto shall be in the form of Exhibit
VII to this Amendment, Exhibit D thereto is deleted in its entirety, and Exhibit
G thereto shall be in the form of Exhibit I to this Amendment. The Energy
Service Agreement is further amended to provide that:
(i) the "Initial Services Date" shall be that date specified
by Aladdin which date shall not be less than 45 days after receipt by Northwind
Aladdin of such written specification;
(ii) the temperature at which chilled water shall be delivered
by the Supplier to the customer at the Chilled Water Delivery Point shall be not
higher than forty degrees Fahrenheit (40 degrees F).
(iii) the temperature at which chilled water shall be returned
to the Supplier by the Customer at the Chilled Water Return Point shall be not
lower than fifty six degrees Fahrenheit (56 degrees F);
(iv) the temperature at which hot water shall be delivered by
the Supplier to the Customer at the Hot Water Delivery Point shall be not lower
than two hundred ten degrees Fahrenheit (210 degrees F); and
(v) the temperature at which hot water shall be returned tot
he Supplier by the Customer at the Hot Water Delivery Point shall be not lower
than one hundred seventy five degrees Fahrenheit (175 degrees F).
The Energy Service Agreement is further amended by amending Exhibit C thereto as
follows: The final paragraph of the definition of the "Operational Charge" set
forth in D of I of Exhibit C is restated in its entirety as follows:
At the option of the Customer, exercised by written notice to the
Supplier given not less than thirty (30) days prior to the end of any
Contract Year, the Customer may elect to have the Operational Charge
for the next Contract Year fixed at an amount equal to one hundred
twenty percent (120%) of the Operational Charge for the Contract Year
then ended (as determined pursuant to clause i above (the "Fixed
Operational Charge Amount")). Thereafter, for each new Contract Year
the Operational Charge shall be equal to the Fixed Operational Charge
Amount multiplied by a fraction, the denominator of which shall be the
CPI as of the most recent date of publication thereof prior to the
first day of the Contract Year for which the Fixed Operational Charge
Amount was first established and the numerator of which shall be the
CPI most recently published prior to the first day of such new Contract
Year.
5. Effectiveness. The amendments set forth in Sections 1, 2 and 3 shall
be effective immediately upon execution of this Amendment by Northwind and
Aladdin. Except as expressly set forth herein, the Lease, the Development
Agreement and the Energy Service Agreement are not amended or modified hereby
and continue in full force and effect. From and after the date of execution of
this Amendment by Northwind and Aladdin, unless the context otherwise expressly
so states, all refer-
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ences to the Lease, the Development Agreement or the Energy Service Agreement
shall mean and include such agreement as amended hereby.
6. Shortly after executing the Lease and the Development Agreement,
Northwind and Aladdin agreed to amend and restate (i) the Lease in the form
attached hereto as Exhibit A and (ii) the Development Agreement in the form
attached hereto as Exhibit B. Northwind and Aladdin hereby ratify and adopt the
Lease and the Development Agreement, as so amended and restated, effective as of
December 3, 1997, and agree that as of such date the original Lease and the
original Development Agreement were superceded by the Lease attached hereto as
Exhibit A and the Development Agreement attached hereto as Exhibit B,
respectively. All references to the Lease and/or the Development Agreement
contained herein or in any other instrument executed by the parties hereto shall
refer to the Lease and/or the Development Agreement, as the case may be, as so
amended and restated.
[Balance of page intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.
ALADDIN GAMING, LLC,
a Nevada limited liability company
By:
--------------------------------
Name:
------------------------------
Title:
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NORTHWIND ALADDIN, LLC,
a Nevada limited-liability company
By:
--------------------------------
Name:
------------------------------
Title:
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