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Prepared By and Recorded At The
Request Of: Paul, Weiss, Rifkind,
Wharton & Garrison
1285 Avenue of the Americas
New York, New York 10019-6064
Attention: Steven Simkin, Esq.
When Recorded Return To:
Lionel Sawyer & Collins
1700 Bank of Americas Plaza
300 South Fourth Street
Las Vegas, Nevada 89101
Attention: David Whittemore, Esq.
AMENDED AND RESTATED RECIPROCAL
EASEMENT, USE AND OPERATING AGREEMENT
between
INTERFACE GROUP - NEVADA, INC.,
GRAND CANAL SHOPS MALL CONSTRUCTION, LLC
and
VENETIAN CASINO RESORT, LLC
Dated as of November 14, 1997
TABLE OF CONTENTS
Page
ARTICLE I CONSTRUCTION OF THE VENETIAN...........................10
ARTICLE II HVAC; ACCESS/UTILITY EASEMENTS; COMMON
AREAS..................................................25
A. Central Utility Plants and New Electric Substation.....25
B. HVAC...................................................31
C. Other Reciprocal Easements.............................43
D. Common Areas; Access Rights to Affect Maintenance and
Repair; Parking Access; Emergency Access; Vertical and
Lateral Support; Miscellaneous.........................49
ARTICLE III COVENANTS REGARDING SECC LAND..........................60
ARTICLE IV CONTINUOUS OPERATION OF PHASE I
HOTEL/CASINO AND PHASE I MALL..........................68
ARTICLE V COVENANTS REGARDING PHASE I LAND
OPERATIONS.............................................68
ARTICLE VI TAXES AND INSURANCE PREMIUMS...........................88
ARTICLE VII PERMANENT PARKING......................................98
ARTICLE VIII THE VENETIAN AND THE LIDO.............................103
A. Construction..........................................103
B. Venetian/Lido Inter-relationship and Cooperation......107
C. Other Covenants and Agreements........................109
ARTICLE IX RESTRICTIVE COVENANTS.................................112
ARTICLE X INSURANCE.............................................114
ARTICLE XI DAMAGE OR DESTRUCTION BY FIRE OR OTHER
CASUALTY..............................................136
ARTICLE XII CONDEMNATION..........................................141
ARTICLE XIII COMPLIANCE WITH LAWS..................................147
ARTICLE XIV MISCELLANEOUS.........................................150
ARTICLE XV ARBITRATION...........................................173
ARTICLE XVI BILLBOARD SPACE.......................................176
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Schedule I Definitions
Schedule II Hotel/Casino/Mall/SECC Common Area Charges
Schedule III Parking Rules and Regulations
Exhibits
Exhibit A-1 - The Phase I Land
Exhibit A-2 - The Phase II Land
Exhibit B - The SECC Land
Exhibit C-1 - The Mall I Airspace
Exhibit C-2 - Retail Annex Land
Exhibit C-3 - Additional Billboard Space
Exhibit D - Mall I Space
Exhibit E - Buffer Zone
Exhibit F - SECC Parking as of the Test Date
Exhibit G - Existing HVAC Plant
Exhibit H - New HVAC Plant
Exhibit I - The HVAC Space
Exhibit J - Existing Utility Equipment
Exhibit K - H/C Pass-through Areas, H/C-Mall Common Areas, Mall I Pass-
through Areas, SECC Pass-through Areas, H/C Limited Common
Areas, Mall I Limited Common Areas
Exhibit L - Intentionally Deleted
Exhibit M - Intentionally Deleted
Exhibit N - Intentionally Deleted
Exhibit O - Intentionally Deleted
Exhibit P - Intentionally Deleted
Exhibit Q - Parking Access Easements
Exhibit R - SECC Party Wall
Exhibit S - Preliminary Parking Plan
Exhibit T - Predevelopment Agreement
Exhibit U - Phase I Automobile Parking Area
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AMENDED AND RESTATED RECIPROCAL EASEMENT,
USE AND OPERATING AGREEMENT
This AMENDED AND RESTATED RECIPROCAL EASEMENT, USE AND OPERATING
AGREEMENT (this "Agreement") is dated as of this 14th day of November, 1997, by
and among VENETIAN CASINO RESORT, LLC, a Nevada limited liability company having
an address at 3355 Las Vegas Boulevard South, room 1C Las Vegas, Nevada 89109
("Phase I LLC," in its capacity as "H/C I Owner" (as hereinafter defined) and
the Owner of the Phase II Land), as successor-in-interest to Las Vegas Sands,
Inc. ("LVSI"), GRAND CANAL SHOPS MALL CONSTRUCTION, LLC ("Interim Mall LLC," in
its capacity as Mall I Owner), a Delaware limited liability company having an
address at 3355 Las Vegas Boulevard South, room 1G, Las Vegas, Nevada 89109 and
INTERFACE GROUP - NEVADA, INC., a Nevada corporation having an address at 3355
Las Vegas Boulevard South, room 1B, Las Vegas, Nevada 89109 ("Interface," in its
capacity as "SECC Owner" (as hereinafter defined)).
R E C I T A L S
A. WHEREAS, LVSI and Interface have entered into that certain
Reciprocal Easement, Use and Operating Agreement, dated as of June 26, 1997 (the
"Existing REA") which was recorded on July 3, 1997 as document number 01056 of
Book 970703 and re-recorded on July 28, 1997 as document number 00576 in Book
970728 in the Recorder's Office; and
B. WHEREAS, LVSI has transferred ownership of the Phase I Land and
the Phase II Land to Phase I LLC and Phase I LLC is now the owner in fee
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simple of (a) that certain parcel of land located in the County of Clark, State
of Nevada, as the same is more particularly described on Exhibit A-1 annexed
hereto and made a part hereof (the "Phase I Land"), and (b) that certain parcel
of land located in the County of Clark, State of Nevada, as the same is more
particularly described in Exhibit A-2 annexed hereto and made a part hereof (the
"Phase II Land"); and
C. WHEREAS, Interface is the owner in fee simple of that certain
parcel of land located in the County of Clark, State of Nevada, as the same is
more particularly described on Exhibit B annexed hereto and made a part hereof
(the "SECC Land"); and
D. WHEREAS, Interface owns a certain building (i) that is used as,
among other things, a convention, trade show and exposition center, (ii) that is
presently commonly known as the "Sands Exposition and Convention Center" and
(iii) which is located on the SECC Land (such building, the "SECC"); and
E. WHEREAS, LVSI, Phase I LLC and Interim Mall LLC (collectively as
"Borrowers") and GMAC Commercial Mortgage Corporation ("GMAC"), The Bank of Nova
Scotia as the Bank Agent, First Trust National Association as the Mortgage Notes
Indenture Trustee, APJV and The Bank of Nova Scotia as the Disbursement Agent
have entered into that certain Funding Agents' Disbursement and Administration
Agreement, dated as of the date hereof (the "FADAA") pursuant to which Borrowers
have agreed to construct, or cause to be constructed, a complex on the Phase I
Land (such complex shall include, without limitation, the Phase I Hotel/Casino
including, without limitation, the Congress
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Facility, the New HVAC Plant, the New Electric Substation, the Phase I
Automobile Parking Area and the Phase I Mall, and be referred to herein,
collectively, as the "Venetian"); and
F. WHEREAS, LVSI, Phase I LLC, the Bank Agent (as defined in the
FADAA), Goldman Sachs Credit Partners L.P. and the Bank Lenders (as defined in
the FADAA) have entered into a Bank Credit Agreement (the "Bank Credit
Agreement"), dated as of November 14th, 1997 pursuant to which the Bank Lenders
have agreed to provide certain loans to LVSI and Phase I LLC, jointly and
severally, in an aggregate amount not to exceed $170,000,000 of which, subject
to certain exceptions, $150,000,000 is intended to finance Project Costs (as
defined in the FADAA); and
G. WHEREAS, LVSI, Phase I LLC, Interim Mall LLC and GMAC have
entered into the Credit Agreement (the "Interim Mall Credit Agreement"), dated
as of November 14th, 1997, pursuant to which GMAC has agreed to provide certain
loans to LVSI, Interim Mall LLC and Phase I LLC, jointly and severally, in an
aggregate amount not to exceed $140,000,000 to finance Project Costs; and
H. WHEREAS, LVSI, Phase I LLC, certain guarantors named therein and
First Trust National Association, as the Initial Mortgage Notes Indenture
Trustee, have entered into an Indenture, dated as of November 14th, 1997
pursuant to which LVSI and Phase I LLC will issue certain mortgage notes (the
"Mortgage Notes") in an aggregate principal amount equal to $425,000,000 to
finance Project Costs; and
I. WHEREAS, LVSI, Phase I LLC, certain guarantors named therein and
First Union National Bank as the Subordinated Notes Indenture Trustee have
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entered into a Subordinated Notes Indenture, dated as of November 14, 1997
pursuant to which LVSI and Phase I LLC will issue certain subordinated notes
(the "Senior Subordinated Notes") in an aggregate principal amount equal to
$97,500,000 to finance Project Costs; and
J. WHEREAS, Goldman Sachs Mortgage Company ("GSMC"), as lender,
Grand Canal Shops Mall, LLC, as borrower and Sheldon G. Adelson ("Adelson"), as
guarantor have entered into the Tranche A Commitment Letter whereby GSMC has,
subject to the terms, provisions and conditions thereof, agreed to make a loan
in an aggregate principal amount of up to $105,000,000 to finance, in part, the
acquisition of, among other things, the fee and/or leasehold estates in the Mall
I Space, the Phase I Mall and the Additional Billboard Space together with any
buildings and improvements constructed thereon pursuant to the Sale and
Contribution Agreement; and
K. WHEREAS, a wholly-owned subsidiary of Adelson as lender ("Junior
Lender"), and Grand Canal Shops Mall, LLC have entered into a commitment letter
(the "Tranche B Commitment"), whereby Junior Lender has agreed to make a loan in
the aggregate principal amount of up to $35,000,000 to finance, in part, the
acquisition of, among other things, the fee and/or leasehold estates in the Mall
I Space, the Phase I Mall and the Additional Billboard Space together with any
buildings and improvements constructed thereon pursuant to the Sale and
Contribution Agreement; and
L. WHEREAS, the Phase I Hotel/Casino will adjoin the SECC (the Phase
I Land and the airspace above it, less and except the Mall I Space, sometimes
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being referred to herein as the "H/C I Space"; provided that after the
consummation of the H/C I/ Mall I Lot Line Modifications in accordance with the
terms of this Agreement, the term "H/C I Space" shall refer to the Revised H/C I
Space and any area covered by any Permanent Buffer Zone Encroachment Easements
granted to the H/C I Owner); and
M. WHEREAS, in accordance with the FADAA, LVSI, Phase I LLC and
Interim Mall LLC intend to do a commercial subdivision of the Venetian in order
to cause a portion of the Venetian (consisting of (i) air rights with respect
to, among other things, the second and mezzanine floors of the Base Building as
more particularly described in Exhibit C-1 (the "Mall I Airspace"), and (ii) the
portion (the "Retail Annex Land") of the Phase I Land upon which a retail annex
will be constructed (as more particularly described in Exhibit C-2), to become
legal parcels which are separate and distinct from the remainder of the Phase I
Land and the Phase II Land capable of being conveyed in fee simple (the creation
of such separate legal parcels referred to herein as the "Subdivision"); and
N. WHEREAS, pursuant to a lease (the "Mall I Airspace/Ground
Lease"), dated as of November 14, 1997, a memorandum of which was recorded prior
to (but on the same day as) the recordation of this Agreement, (i) Phase I LLC,
as landlord, has leased to Interim Mall LLC, as tenant (a) the Mall I Airspace
and (b) the Retail Annex Land for a term of 99 years (or, if sooner, until the
date on or about which the Subdivision has been effected, at which time the Mall
I Airspace/ Ground Lease provides, among other things, that fee title in and to
the Mall I Airspace and the Retail Annex Land shall be granted by Phase I LLC to
Interim Mall
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LLC), and (ii) H/C I Owner acknowledges that Mall I Owner owns the Phase I Mall
during the term of such lease; and
O. WHEREAS, (1) pursuant to that certain lease (as amended,
assigned, modified, replaced or restated from time to time, the "Billboard
Operating Lease") dated June 26, 1997 by and between Phase I LLC, as landlord,
and B.L. International of Nevada, Inc. ("Billboard"), as tenant, Phase I LLC has
leased to Billboard (i) a portion of the Mall I Airspace described in the
Billboard Operating Lease and (ii) a portion of the Phase I Land described in
Exhibit C-3 attached hereto and the Phase I Hotel/Casino (the property described
in clause (ii) of this paragraph referred to herein as the "Additional Billboard
Space") and (2) Phase I LLC, with the consent of Billboard, has assigned all of
its right, title and interest under the Billboard Operating Lease to Interim
Mall LLC; and
P. WHEREAS, pursuant to a lease (the "Billboard Master Lease"),
dated as of November 14th, 1997, a memorandum of which was recorded immediately
prior to the recordation of this Agreement, Phase I LLC, as landlord, has leased
to Interim Mall LLC, as tenant, the Additional Billboard Space for the term of
the Billboard Operating Lease, as presently set forth in the Billboard Operating
Lease. The Mall I Airspace/Ground Lease and the Billboard Master Lease are,
collectively, the "Mall I Lease"; and
Q. WHEREAS, for purposes of this Agreement, (a) the term "Mall I
Space" shall mean, collectively, (i) the Mall I Airspace, (ii) the Retail Annex
Land, and (iii) during the term of the Billboard Master Lease, the Additional
Billboard Space (as any of the real property described in clauses (i)-(iii) may
be adjusted in
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accordance with this Agreement in connection with the H/C I/Mall I Lot Line
Modifications); and (iv) after the H/C I/Mall I Lot Line Modifications, any area
covered by a Permanent Buffer Zone Encroachment Easement granted to the Mall I
Owner; (b) the term "Phase I Mall" shall mean, collectively, any buildings or
other improvements constructed in or on the Mall I Airspace from time to time
and the Retail Annex Land together with any buildings or other improvements
constructed thereon from time to time; and (c) the term "Mall I Owner" shall
mean, at any given time, the person who then holds the right, title and interest
in and to the leasehold interest under the Mall I Airspace/Ground Lease or, if
the Subdivision has been effected and fee title transferred, fee title in and to
the Mall I Airspace and the Retail Annex Land and for so long as the Billboard
Master Lease shall be in effect, the leasehold estate in the Additional
Billboard Space pursuant to the Billboard Master Lease; and
R. WHEREAS, Phase I LLC and Interim Mall LLC intend for (i) the Mall
I Airspace/Ground Lease as an encumbrance and charge upon the Mall I Airspace
and the Retail Annex Land and (ii) the Billboard Master Lease as an encumbrance
and charge upon the Additional Billboard Space to be subject and subordinate in
all respects to the provisions of this Agreement, and Billboard further has
agreed that its rights under the Billboard Operating Lease shall be subject and
subordinate to the Mall I Lease; and
S. WHEREAS, the Mall I Airspace/Ground Lease provides, and Phase I
LLC and Interim Mall LLC have agreed, that at such time as the Subdivision has
been effected and the tenant under the Mall I Airspace/Ground Lease shall
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become the fee owner of the Mall I Airspace and the Retail Annex Land, the Mall
I Airspace/Ground Lease thereafter shall terminate as to the Mall I Airspace and
the Retail Annex Land; and
T. WHEREAS, the Billboard Operating Lease was subordinated to the
Billboard Master Lease and the Mall I Airspace/Ground Lease; and
U. WHEREAS, in accordance with the provisions of a Sale and
Contribution Agreement (the "Sale and Contribution Agreement"), dated as of
November 14th, 1997, among Phase I LLC and Interim Mall LLC, as Seller, and
Grand Canal Shops Mall, LLC, as Purchaser, Interim Mall LLC has agreed to convey
or assign, as the case may be (A) either (i) if the Subdivision shall have been
implemented prior to the Mall Release Date, its fee interest in and to the Mall
I Airspace, the Retail Annex Land and any buildings and improvements constructed
therein and thereon or (ii) if the Subdivision shall not have been implemented
prior to the Mall Release Date, all its right, title and interest in and to (x)
the Mall I Airspace/ Ground Lease and (y) any buildings and improvements
constructed in and on the Mall I Airspace and the Retail Annex Land, (B) all its
right, title and interest in and to the Billboard Master Lease, and (C) all its
right, title and interest in and to the Billboard Operating Lease and all other
Leases affecting the Mall I Space to Grand Canal Shops Mall, LLC on the Mall
Release Date; and
V. WHEREAS, subject to any limitation set forth in the FADAA and to
any rights of any Mortgagee under its loan documents, Phase I LLC may transfer
the Phase II Land to an affiliate ("Phase II LLC") for the construction and
operation of a complex (such complex shall include, without limitation, the
hotel, casino and
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retail facility to be located on the Phase II Land and the Phase II Automobile
Parking Area, collectively, the "Lido"); and
W. WHEREAS, Phase II LLC may transfer, lease, or lease and
subsequently transfer, any portion of the Lido to be used for retail and/or
restaurant uses (the "Mall II Space") to Mall II LLC, an affiliate, for the
construction and operation of a retail and/or restaurant facility located
therein (the "Phase II Mall"); and
X. WHEREAS, for purposes of this Agreement, the "H/C II Space"
shall mean the Phase II Land and any buildings and improvements located thereon;
and
Y. WHEREAS, for purposes of this Agreement (a) the term "SECC Owner"
shall mean, at any given time, the Person who then holds fee title to the SECC
Land, (b) the term "H/C I Owner" shall mean, at any given time, the Person who
then holds fee title to the H/C I Space, (c) the term "H/C II Owner" shall mean,
at any given time, the Person who then holds fee title to the H/C II Space, and
(d) the term "Mall II Owner" shall mean, at any given time, the Person who then
holds fee title to the Mall II Space; and
Z. WHEREAS, Phase I LLC (in its respective capacities as owner of
the Phase I Land and the Phase II Land), Interface (as owner of the SECC Land)
and Interim Mall LLC (as Mall I Owner) desire to amend and restate the Existing
REA and to grant to each other and their respective assignees (including,
without limitation, Grand Canal Shops Mall, LLC, Phase II LLC and Mall II LLC)
certain rights and easements in connection with the use and operation of the
Phase I Land,
10
the Phase II Land, the Mall I Space, the SECC Land, and any buildings and
improvements constructed on or in any of the foregoing from time to time, and to
make certain other covenants and agreements, all as hereinafter more
particularly set forth.
W I T N E S S E T H :
NOW THEREFORE, in consideration of the covenants and easements
herein made and granted, and other good and valuable consideration, the receipt
and legal sufficiency of which are hereby acknowledged, the parties hereto agree
that the Existing REA is amended and restated in its entirety to read as
follows:
ARTICLE I
CONSTRUCTION OF THE VENETIAN
1. Subdivision.
(a) H/C I Owner, H/C II Owner, Mall I Owner and Mall II Owner
agree, for the benefit of the others to cooperate in good faith and do all
things necessary in order to effect the Subdivision in accordance with Legal
Requirements as soon as reasonably possible following the date of this Agreement
(it being understood that this Agreement shall continue in full force and effect
even if such Subdivision does not occur).
(b) SECC Owner agrees, for the benefit of H/C I Owner and Mall
I Owner, that it shall cooperate with H/C I Owner and Mall I Owner to the extent
expressly set forth herein (or otherwise reasonably requested by H/C I Owner or
Mall I Owner) to effect the Subdivision; it being understood, however, that
11
(i) SECC Owner shall not be required to incur any expense (other than any de
minimis expense or other reasonable expense with respect to which reimbursement
arrangements satisfactory to SECC Owner will be agreed upon prior to such time
as SECC Owner will be required to incur such expense) in connection with any
such cooperative efforts and (ii) SECC Owner shall not be required to undertake
any action which reasonably could be expected to interfere with the operation of
its business at the SECC (other than to a de minimis extent).
2. Construction in accordance with FADAA.
(a) The FADAA provides for the construction in accordance with
the provisions contained therein of the Venetian, including without limitation,
the Base Building, the Limited Common Areas, all Pass-through Areas and H/C-Mall
Common Areas necessary for the use and operation of the Phase I Mall in
accordance with the provisions of this Agreement. Until such time as Final
Completion has occurred in accordance with the provisions of the FADAA, in the
event Final Completion has not been achieved as a consequence of a default by
H/C I Owner under the FADAA, Mall I Owner shall have the right to enter the
Phase I Land and any improvements constructed thereon and perform or cause to be
performed H/C I Owner's obligations under the FADAA to construct the Venetian,
including without limitation the Base Building, the Limited Common Areas, all
Pass-through Areas and H/C-Mall Common Areas; provided, however, that Mall I
Owner shall exercise its rights under this Section 2(a) in a manner which shall
not interfere (other than to a de minimis extent) with the use or operation of
the H/C I Space and/or any
12
improvements located thereon to any greater extent than if such construction was
accomplished by H/C I Owner.
(b) H/C I Owner agrees for the benefit of Mall I Owner that
Mall I Owner shall have the right to enter the H/C I Space in order to complete
and install the improvements contemplated by the FADAA to be constructed in the
Mall I Space. These rights shall be exercised in accordance with the provisions
of the FADAA in a manner which shall not interfere (except to a de minimis
extent) with the use or operation of the H/C I Space and/or any improvements
located thereon to any greater extent than if such construction were
accomplished by H/C I Owner.
(c) Mall I Owner agrees for the benefit of H/C I Owner that
H/C I Owner shall have the right to enter the Mall I Space and any improvements
located therein in order to complete and install the improvements contemplated
by the FADAA to be constructed in the H/C I Space and the Mall I Space. These
rights shall be exercised in accordance with the provisions of the FADAA in a
manner which shall not interfere (other than to a de minimis extent) with the
use or operation of the Mall I Space and/or any improvements located therein.
(d) SECC Owner agrees for the benefit of H/C I Owner and Mall
I Owner, that it shall cooperate with H/C I Owner and Mall I Owner to the extent
expressly set forth herein (or otherwise reasonably requested by H/C I Owner or
Mall I Owner) to effect the construction of the Venetian; it being understood,
however, that (i) SECC Owner shall not be required to incur any expense (other
than any de minimis expense or other reasonable expense with respect to which
reimbursement arrangements satisfactory to SECC Owner will be agreed upon prior
to
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such time as SECC Owner will be required to incur such expense) in connection
with any such cooperative efforts and (ii) SECC Owner shall not be required to
undertake any action which reasonably could be expected to interfere with the
operation of its business at the SECC (other than to a de minimis extent).
(e) The obligations of the Parties set forth in this Section 2
shall expire upon Final Completion (as defined in the FADAA); provided, however,
that the rights of any Party to reimbursement for costs incurred in exercising
its rights under this Section 2 prior to Final Completion pursuant to Section
9(a) of Article XIV and to impose a lien on the defaulting Party's Lot to secure
such costs pursuant to Section 9(b) of Article XIV shall survive the Final
Completion Date.
(f) Upon the reasonable request of H/C I Owner, SECC Owner
shall grant to H/C I Owner a temporary license to (a) use in connection with the
construction of the Venetian any vacant portions of the SECC Land and (b) erect
scaffolding at the SECC, in each case, provided that the exercise of such
license shall not result in any interference with the use, operation or
enjoyment of the SECC by SECC Owner (and the conduct by SECC Owner of its
business at the SECC), the Temporary Parking Facilities, the Utility Equipment
and the Existing HVAC Plant (other than to a de minimis extent).
3. Construction Buffer Zone; Post Modification Encroachments. H/C I
Owner and Mall I Owner further agree, for the benefit of the other, as follows:
(a) Notwithstanding the description of the Mall I Space set
forth on Exhibit D, H/C I Owner and Mall I Owner acknowledge that in
implementing the construction contemplated by the FADAA: (i) the Integral H/C I
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Improvements may encroach to some extent (and subject to the limitations set
forth in the FADAA) into that portion of the Mall I Space that is within the
areas (the "Buffer Zone") depicted on Exhibit E (any such encroachment referred
to herein as the "H/C I Improvements Buffer Zone Encroachment"); and (ii) the
Integral Mall I Improvements may encroach to some extent (and subject to the
limitations set forth in the FADAA) into that portion of the H/C I Space that is
within the Buffer Zone (any such encroachment referred to herein as the "Mall I
Improvements Buffer Zone Encroachment," and together with the H/C I Improvements
Buffer Zone Encroachments, the "Buffer Zone Encroachments"). H/C I Owner and
Mall I Owner agree and consent to the Buffer Zone Encroachments and grant to
each other easements ("Buffer Zone Encroachment Easements") over those portions
of the H/C I Space and the Mall I Space within the Buffer Zone for the purposes
of same. H/C I Owner and Mall I Owner shall each use their best efforts to, and
shall cooperate with each other to, effectuate, to the maximum extent permitted
in compliance with all Legal Requirements, the modification of the lot lines of
the H/C I Space and the Mall I Space, or, if the Subdivision shall not have been
implemented at such time, the modification of the description of the leased
premises under the Mall I Lease, so that, after giving effect to such
modification (i) the boundaries of the Mall I Space shall include all of the
Integral Mall I Improvements (the Mall I Space, as so modified, referred to
herein as the "Revised Mall I Space"), (ii) the boundaries of the H/C I Space
shall include all of the H/C I Integral Improvements (the H/C I Space, as so
revised, referred to herein as the "Revised H/C I Space"), (iii) if the
Subdivision shall have been implemented at such time, the Revised Mall I Space
shall
15
constitute one or more separate, legal parcels, which parcels shall also
constitute one or more tax parcels which shall not include, or comprise a
portion of, any other property, and (iv) if the Subdivision shall have been
implemented at such time, the Revised H/C I Space shall constitute one or more
separate, legal parcels, which parcels shall not include, or comprise a portion
of, any other property (the "H/C I/ Mall I Lot Line Modifications").
(b) In order to accomplish the H/C I/Mall I Lot Line
Modifications as aforesaid, the Parties hereto shall use the means (e.g.,
resubdivision, parcel map modification, lot line adjustment or, if the
Subdivision shall not have been implemented at such time, modification of the
description of the leased premises set forth in the Mall I Lease) that are
reasonably expedient under the circumstances. The costs of the H/C I/Mall I Lot
Line Modifications shall be equitably apportioned by the agreement of the
Parties hereto. H/C I Owner and Mall I Owner shall endeavor in good faith to
complete the H/C I/Mall I Lot Line Modifications prior to the Completion Date,
it being understood, however, that if H/C I/Mall I Lot Line Modifications do not
occur by such date, then the H/C I Owner and the Mall I Owner shall continue to
pursue the H/C I/Mall I Lot Line Modifications to the extent reasonably
requested by either such Owner or any Mortgagee of the Phase I Land or of the
Mall I Space. Additionally, promptly after the consummation of the H/C I/ Mall I
Lot Line Modifications, the Parties hereto shall execute and deliver to each
other, and record in the Recorder's Office, an amendment to this Agreement
reflecting the termination of the Buffer Zone Encroachment Easements, and the
other
16
rights, interests, agreements and obligations created or imposed by or under
this Section 3, except as provided in subsection 3(c) below.
(c) Until the H/C I/Mall I Lot Line Modifications are
effected, or if after the H/C I/Mall I Lot Line Modifications are effected
portions of the H/C I Integral Improvements continue to encroach into the Mall I
Space or portions of the Mall I Integral Improvements continue to encroach onto
the H/C I Space, then the following provisions shall apply:
(i) Mall I Owner agrees that the Buffer Zone Encroachment
Easements granted to the H/C I Owner shall continue to the extent of the
continuing H/C I Improvements Buffer Zone Encroachment, and, for so long
as such H/C I Improvements Buffer Zone Encroachment (or any replacement
thereof) shall continue;
(ii) H/C I Owner agrees that the Buffer Zone Encroachment
Easements granted to the Mall I Owner shall continue to the extent of the
continuing Mall I Improvements Buffer Zone Encroachment, and for so long
as such Mall I Improvements Buffer Zone Encroachment (or any replacement
thereof) shall exist;
(iii) The Buffer Zone Encroachment Easements which continue
to exist after implementation of the H/C I/Mall I Lot Line Modifications
in accordance with this Section 3(c) shall be referred to herein as the
"Permanent Buffer Zone Encroachment Easements";
(iv) H/C I Owner and Mall I Owner shall endeavor, as
expeditiously as reasonably possible following the H/C I/Mall I Lot Line
17
Modifications, to confirm the precise boundaries of said Permanent Buffer
Zone Encroachment Easements and to memorialize the same by a recorded
agreement executed by each such Owner;
(v (1) Mall I Owner hereby grants to H/C I Owner an
easement to enter on or into those portions of the Phase I Mall and
the Mall I Space burdened by the Buffer Zone Encroachment Easement
in each instance to the extent reasonably necessary (i) to gain
access to the H/C I Space and/or the Phase I Hotel/Casino and any
and all fixtures, fittings, equipment and building systems from time
to time located therein (including the New Electric Substation, the
New HVAC Plant and any improvements related thereto) for the
maintenance, repair or restoration of or to the same and (ii) to
perform maintenance obligations imposed upon H/C I Owner under this
Agreement, but for no other reason or purpose, except as otherwise
provided in this Agreement. H/C I Owner, in exercising its rights
under this Section 3(c), shall use commercially reasonable efforts
to minimize interference with the maintenance, use and operation of
the Phase I Mall and Mall I Owner's business at the same. Before H/C
I Owner undertakes any such maintenance, repairs or restoration that
requires H/C I Owner to enter upon any material portion of the Mall
I Space, H/C I Owner shall give reasonable prior notice to Mall I
Owner, except in any case where the giving of reasonable prior
notice is not practicable under the circumstances (but notice shall
nevertheless be
18
given as soon as practicable); provided that the failure to give any
such notice shall not constitute a default hereunder.
(2) H/C I Owner hereby grants to Mall I Owner an
easement to enter on or into those portions of the Phase I
Hotel/Casino and the H/C I Space burdened by the Buffer Zone
Encroachment Easement in each instance to the extent reasonably
necessary (i) to gain access to the Mall I Space, the Phase I Mall
and any and all fixtures, fittings, equipment and building systems
from time to time located therein or thereon for the maintenance,
repair or restoration of or to the same, and (ii) to perform any
maintenance obligations imposed upon Mall I Owner under this
Agreement, but for no other reason or purpose, except as otherwise
provided in this Agreement. Mall I Owner, in exercising its rights
under this Section 3(c), shall use commercially reasonable efforts
to minimize interference with the maintenance, use and operation of
the H/C I Space and the H/C I Owner's business at the same. Before
Mall I Owner undertakes any such maintenance, repairs or restoration
that requires Mall I Owner to enter upon any material portion of the
H/C I Space and/or the Phase I Hotel/Casino are effectuated, Mall I
Owner shall give reasonable prior notice to H/C I Owner, except in
any case where the giving of reasonable prior notice is not
practicable under the circumstances (but notice shall nevertheless
be given as soon as practicable); provided that failure to give any
such notice shall not constitute a default hereunder.
19
(vi) Each Owner of property encumbered by a Buffer Zone
Encroachment Easement under this Section 3 may relocate any such easement
on its parcel at its sole cost and expense provided that such relocation:
(1) does not cause any interruption in the utilization of the easement by
the Owner of the dominant tenement for the affected easement (except de
minimis interruptions, as to degree or time, which shall be scheduled by
agreement with the Owner of the dominant tenement for the affected
easement); (2) does not diminish the capacity or efficiency of such
easement (excepting de minimis effects); and (3) will not interfere
(except to a de minimis extent) with the maintenance, use or operation of
the dominant tenement or the conduct of its Owner's business thereat.
(d) To the extent the H/C I/Mall I Lot Line Modifications
shall affect space held in leasehold rather than fee, H/C I Owner and Mall I
Owner shall enter into such lease amendments as are reasonable and necessary to
implement the provisions of the foregoing Section 3(c).
(e) Prior to effecting the H/C I/Mall I Lot Line
Modifications, H/C I Owner and Mall I Owner shall engage, at their shared
expense, an Independent Expert who shall deliver a written statement to each of
the Mortgagees of the Mall I Space and the H/C I Space certifying that (A) (i)
the final boundaries of the Revised Mall I Space and the Revised H/C I Space,
(ii) the final boundaries of any Buffer Zone Encroachment Easements or Permanent
Buffer Zone Encroachment Easements effected pursuant to this Section 3, and
(iii) any other changes to the Mall I Space and/or the H/C I Space effected
pursuant to this Section 3
20
satisfy the requirements of this Section 3, and (B) the terms of any documents
to be entered into to memorialize the H/C I/Mall I Lot Line Modifications or to
terminate or memorialize any Buffer Zone Encroachment Easements or Permanent
Buffer Zone Encroachment Easements are commercially reasonable and satisfy the
requirements of this Section 3.
4. Temporary Parking.
(a) H/C I Owner hereby grants to SECC Owner an easement and
right to use parking areas and related facilities and improvements in connection
with the operation of the SECC and its business at the SECC at all times during
the period from the Commencement Date through the date (the "Phase I Garage
Opening Date") of completion, of construction of the Phase I Automobile Parking
Area and of all roadways, walkways and other facilities and improvements to be
constructed together with such Phase I Automobile Parking Area, in each case in
accordance with the provisions of Article VII hereof, including, without
limitation, the obtaining of all permits and approvals necessary in connection
with the use of such Phase I Automobile Parking Area and such facilities and
improvements. The parking areas and related facilities and improvements which
the SECC Owner shall have the right to use during such period shall (i) provide
SECC Owner the exclusive right to use, for the parking of motor vehicles, at
least 800 parking spaces (the "Temporary Parking Spaces") on the Phase I Land;
and (ii) be generally comparable (or more beneficial to SECC Owner), in location
and all other material respects, to the parking serving the SECC on or about
April 1, 1997 (the "Test Date") as depicted on Exhibit F. Without limiting the
generality of the foregoing, all of the parking areas described in the
21
immediately preceding sentence shall contain, or H/C I Owner shall otherwise
make available to SECC Owner, and, in either case, H/C I Owner hereby grants to
SECC Owner (or in the case of off-site parking spaces, shall cause to be granted
to SECC Owner), a non-exclusive easement, lease or license and right to use,
such paving, curbing, walkways, roadways, traffic control devices, barriers,
signage, lighting and other facilities and improvements as are reasonably
necessary or desirable in connection with the use of such parking areas in
connection with the operation of SECC Owner's business at the SECC, including,
without limitation, such of the foregoing as are reasonably necessary or
desirable in order to provide pedestrian and vehicular access (i) between the
parking areas and the SECC and (ii) between the parking areas and any streets or
roads (public or private) adjoining, directly or indirectly, such parking areas.
Notwithstanding anything herein to the contrary, if on the earlier to occur of
(i) June 26, 2000 and (ii) the first date on which H/C I Owner is no longer
diligently pursuing the financing, design, planning or completion of the
construction of the Phase I Automobile Parking Area, H/C I Owner shall supply to
SECC Owner, located on the Phase I Land, parking spaces and ancillary
improvements and facilities and rights which are necessary with respect thereto,
that are sufficient, in all respects, to permit SECC Owner and the SECC to
comply with all applicable Legal Requirements relating to parking or parking
spaces. The Temporary Parking Spaces and other rights, easements, interests,
improvements and facilities described in this Section 4(a) shall be collectively
referred to as the "Temporary Parking Facilities."
22
(b) If, at any time, the provision of the Temporary Parking
Facilities then being provided by H/C I Owner becomes impractical in light of
the requirements of H/C I Owner's contractors or otherwise in connection with
the construction or operation of or Alterations to the Venetian, the Lido and/or
any improvements related thereto, then H/C I Owner shall be entitled to relocate
and/or modify such Temporary Parking Facilities provided that (i) after giving
effect to such relocation and/or modification, as applicable, H/C I Owner shall
remain in compliance with its obligations under Sections 4(a) and 4(c) and (ii)
such modification and/or relocation, as applicable, shall not cause any
interruption or interference (other than a de minimis interruption or
interference) with the operation of SECC Owner's business at the SECC.
(c) The Temporary Parking Facilities shall be provided and
maintained at the sole cost and expense of H/C I Owner, without charge to the
SECC, or SECC Owner; provided, however, that, during such period of time (the
"Temporary Parking Facilities Term") that SECC Owner shall be entitled to use
any such Temporary Parking Facilities, SECC Owner shall pay to H/C I Owner on or
before the first (1st) day of each month a monthly fee of Twelve Thousand Five
Hundred Dollars ($12,500.00) ("SECC Owner's Parking Expense Share") as
reimbursement to H/C I Owner for the cost of the ordinary maintenance, security
and repair of such Temporary Parking Facilities. Maintenance, security and
repairs at the Temporary Parking Facilities shall be provided by H/C I Owner.
Subject to the provisions of Section 3 of Article V hereof, during the Temporary
Parking Facilities Term, H/C I Owner shall pay, prior to delinquency thereof,
all Taxes relating to the
23
Temporary Parking Facilities and shall maintain the Temporary Parking Facilities
in good condition and repair. During the Temporary Parking Facilities Term, SECC
Owner shall be permitted, at its option, to charge its Permittees a fee or other
charge for the use of the Temporary Parking Facilities and retain such fees and
other charges for SECC Owner's own account and in no event shall H/C I Owner be
entitled to any portion of any such fees or other charges.
5. Third Party Warranties/Liquidated Damages; Recoveries on Adelson
Completion Guaranty.
(a) The Owners acknowledge and agree that all Third Party
Warranties shall, to the extent separately enforceable by a particular Owner
with respect to improvements within its Lot, belong to such Owner and shall be
enforceable by that Owner. To the extent that a particular Third Party Warranty
pertains to improvements in more than one Lot, and cannot be separately
assigned, the Owner possessing rights to enforce such Third Party Warranty (the
"Third Party Warranty Owner") shall take such steps as any other Owner whose
property is benefitted by such Third Party Warranty (a "Requesting Warranty
Owner") from time to time reasonably may request in order to permit the
Requesting Warranty Owner to receive the benefits thereof, so long as the
Requesting Warranty Owner reimburses the Third Party Warranty Owner for all
reasonable costs associated therewith (to the extent fairly allocable to the
requests made by the Requesting Warranty Owner) and otherwise takes steps
reasonably requested by the Third Party Warranty Owner to assure that the Third
Party Warranty Owner shall not be exposed to unreimbursed
24
liability as a consequence of taking the steps requested by the Requesting
Warranty Owner.
(b) Notwithstanding the provisions of clause (a) above, until
Final Completion, the Third Party Warranties shall be enforced, and Liquidated
Damages shall be applied, in accordance with the terms of the FADAA.
(c) Following Final Completion, Liquidated Damages shall be
collected by Trustee, who shall apply such amounts as follows:
(i) First, to pay the costs of repair, restoration or
upgrade, as the case may be, of the affected portion of the Phase I
Hotel/Casino and/or the Phase I Mall, as the case may be, which gave rise
to the Liquidated Damages, to the extent not previously paid. Any payments
pursuant to this clause (i) shall be subject to satisfaction of conditions
substantially equivalent to those applicable to disbursements of insurance
proceeds collected after Final Completion, as set forth in Section 12
Article X.
(ii) Thereafter, any additional amounts shall be paid to
the H/C I Owner until such time as any amounts owed on the Adelson
Completion Guaranty Loan as of Final Completion have been paid in full
(which amounts shall be applied in accordance with the terms of the
FADAA); and
(iii) Thereafter, such funds shall be apportioned between
the Owners in an equitable manner.
(d) If H/C I Owner and Mall I Owner shall be unable to agree
on the equitable apportionment of such Liquidated Damages, then the Owners
25
shall engage an Independent Expert to determine such apportionment pursuant to
the provisions of Section 15 of Article XIV.
(e) Unless otherwise agreed in writing by each Mortgagee, all
payments and other recoveries on the Adelson Completion Guaranty shall be
handled in accordance with the FADAA.
ARTICLE II
HVAC; ACCESS/UTILITY EASEMENTS; COMMON AREAS
A. Central Utility Plants and New Electric Substation.
1. Existing HVAC Plant.
(a) A central utility plant owned by SECC Owner (the "Existing
HVAC Plant"), which currently provides heating, ventilation and air-conditioning
to the SECC, is currently located on a portion of the Phase I Land, as depicted
on Exhibit G.
(b) H/C I Owner hereby grants to SECC Owner such easements and
rights as are reasonably necessary to permit the continued maintenance and
existence, repair, removal, replacement, use and operation of the Existing HVAC
Plant and the related ducts, conduits, pipes, cables, utility lines and other
equipment (collectively, the "HVAC Easement"). H/C I Owner shall conduct its
construction activities with respect to the Venetian and any other improvements
on the Phase I Land and any use and operation of any of the foregoing after
completion of construction of the same, in such a manner as not to interfere
(other than to a de minimis extent) with such existence, repair, maintenance,
removal, replacement, use
26
or operation. Before any such maintenance, repair, replacement or removal of the
Existing HVAC Plant is effectuated, SECC Owner shall give reasonable prior
notice to H/C I Owner, except in any case where the giving of reasonable prior
notice is not practicable under the circumstances (but notice shall nevertheless
be given as soon as practicable), and SECC Owner shall, in performing any such
work, use commercially reasonable efforts to minimize interference with the
Phase I Land or any improvements constructed thereupon; provided that the
failure to give any such notice shall not constitute a default hereunder or
require SECC Owner to demolish or remove any portion of the Existing HVAC Plant.
Notwithstanding anything to the contrary contained herein, nothing contained in
this Agreement shall prohibit or restrict, or shall be deemed to prohibit or
restrict, SECC Owner from using, maintaining and operating the Existing HVAC
Plant as used, maintained and operated on or about the Test Date.
(c) H/C I Owner and SECC Owner agree that the easements and
rights granted under this Part A Section 1 of this Article II shall terminate
and be revoked on the later to occur (such later date, the "Existing HVAC Plant
Termination Date") of (i) the completion of the construction of the New HVAC
Plant to be constructed on a portion of the Phase I Land as depicted on Exhibit
H and the related ducts, conduits, pipes, cables, utility lines and other
equipment in accordance with Legal Requirements, the Initial ESA's and the FADAA
(provided that, without SECC Owner's consent, no changes to the plans and
specifications relating to the New HVAC Plant shall be made that would have an
adverse impact (other than to a de minimis extent) on the heating, ventilating
and air conditioning service to be provided
27
to SECC Owner (or that would increase (other than to a de minimis extent) the
cost thereof to SECC Owner)), (ii) the connection of the New HVAC Plant to the
SECC, and (iii) the commencement of the operation of the same in accordance with
the Initial ESA entered into between the SECC and APJV. On or after the Existing
HVAC Plant Termination Date, the Existing HVAC Plant may be dismantled and
demolished by H/C I Owner at its sole cost and expense; provided, however, that
at the time such dismantling and demolition, H/C I Owner shall remove and
dispose of any and all asbestos, whether friable or non-friable, and/or
asbestos-containing material in accordance with all applicable Legal
Requirements, including, without limitation, environmental laws.
(d) Notwithstanding anything to the contrary contained herein,
H/C I Owner shall not be obligated to SECC Owner to construct the New HVAC Plant
so long as (x) H/C I Owner continues to make the HVAC Easements available to
SECC Owner for the use and operation of the Existing HVAC Plant as provided in
this Agreement and (y) the provisions of Part A.1. of this Article II shall
otherwise be in full force and effect.
2. New Electric Substation.
(a) The FADAA contemplates the construction on the Phase I
Land of a new electric substation (the "New Electric Substation"), which plant
would distribute electric service to the Venetian (including the Phase I Mall),
the Lido (including the Phase II Mall) and the SECC (provided that without SECC
Owner's Consent, no changes to the plans and specifications relating to the New
Electric Substation shall be made that would have an adverse impact (other than
to a
28
de minimis extent) on the electric service to be provided to the SECC (or that
would increase (other than to a de minimis extent) the cost thereof to the SECC
Owner)).
(b) H/C I Owner hereby grants to SECC Owner and Mall I Owner
such easements in, on, over, under, across and through the Phase I Land and the
Phase II Land and any improvements constructed or to be constructed thereon as
are necessary or commercially appropriate for the SECC and the Phase I Mall to
receive electricity from the New Electric Substation and all of its related
ducts, conduits, pipes, cables, utility lines and other equipment. In utilizing
such easement rights, SECC Owner and Mall I Owner shall not interfere (other
than to a de minimis extent) with the use and/or operation of the H/C I Space
and any improvements constructed thereon or therein. H/C I Owner hereby grants
to Mall I Owner and/or SECC Owner such easements in, on, over, under, across and
through the Phase I Land and the Phase II Land and any improvements constructed
or to be constructed thereon as shall be necessary or commercially appropriate
from time to time to allow any public utility or any reasonably experienced and
competent electricity provider to distribute electricity to such Owner.
(c) SECC Owner hereby grants to H/C I Owner and Mall I Owner
such easements in, on, over, under, across and through the SECC Land and any
improvements constructed or to be constructed thereon as are necessary or
commercially appropriate to (i) in the case of H/C I Owner, construct and
operate and (ii) in the case of Mall I Owner, to receive electricity from the
New Electric Substation and all of its related ducts, conduits, pipes, cables,
utility lines and other equipment. H/C I Owner and Mall I Owner shall utilize
their easement rights in such
29
a manner as not to interfere (other than to a de minimis extent) with the use
and/or operation of the SECC Land and any improvements thereon.
(d) Mall I Owner hereby grants to H/C I Owner and SECC Owner
such easements in, on, across and through the Mall I Space and any improvements
constructed or to be constructed thereon as are necessary or commercially
appropriate to (i) in the case of H/C I Owner, construct and operate and (ii) in
the case of Mall I Owner, receive electricity from the New Electric Substation
and all of its related ducts, conduits, pipes, cables, utility lines and other
equipment. H/C I Owner and SECC Owner shall utilize their easement rights in
such a manner as not to interfere (other than to a de minimis extent) with the
use and/or operation of the Mall I Space and any improvements therein or
thereon.
(e) H/C I Owner agrees for the benefit of Mall I Owner and
SECC Owner to cause the maintenance, repair and restoration of the New Electric
Substation; provided, however, that H/C I Owner can satisfy its obligations
under this Section 2(e) by (i) engaging an appropriately experienced and
competent third party operator to maintain, repair and restore the New Electric
Substation and (ii) using commercially reasonable efforts to enforce such
operator's obligations so to maintain, repair and restore (and replacing such
operator with another appropriately experienced and competent third party
operator if any such operator fails to perform its obligations) in which event
H/C I Owner shall not be liable to Mall I Owner or to SECC Owner for
consequential damages arising out of such third party's repair, maintenance
and/or restoration of the New Electric Substation except to the extent such
damages result from H/C I Owner's negligence or willful misconduct.
30
(f) The cost of maintaining, repairing and restoring the New
Electric Substation shall be shared by each Owner in accordance with the
provisions of Section 3 of Article V.
(g) H/C I Owner agrees for the benefit of Mall I Owner and
SECC Owner that, if H/C I Owner shall fail to perform its obligations under the
preceding Section 2(e), each of Mall I Owner and SECC Owner shall have the right
to enter the Phase I Land and any improvements constructed thereon and perform
or cause to be performed H/C I Owner's obligations under Section 2(e).
(h) Each Owner of a servient tenement may relocate any of the
easements granted in the preceding subsections (b), (c) and (d) at its sole cost
and expense; provided that such relocation: (1) does not cause any interruption
in the utilization of the easement by the Owner of the dominant tenement for the
affected easement (except de minimis interruptions, as to degree or time, which
shall be scheduled by agreement with the Owner of the dominant tenement for the
affected easement); (2) does not diminish the capacity or efficiency of such
utility easement (excepting de minimis effects); and (3) will not make it more
difficult or more expensive for the Owner of the dominant tenement with respect
to the easement to use, maintain, repair, or replace the utility lines or
equipment in question, unless, in the case of increased expense, the Owner of a
servient tenement, at the time of such adverse relocation, agrees to bear any
future additional costs arising from such relocation.
(i) The exact location of the easements granted in the
preceding subsections (b), (c) and (d) shall be agreed upon by the Parties and
the
31
Electricity Provider in good faith; provided that, in any event, each such
easement shall be located in such a commercially appropriate location on the
burdened property as to minimize, to the extent reasonably possible,
interference with the construction, use and operation of such property and the
buildings and other improvements from time to time located thereon. The Parties
shall endeavor, as expeditiously as reasonably possible following the Completion
Date, to confirm the precise boundaries of such easements and to memorialize the
same by a recorded agreement executed by each such Owner of a burdened property
and the Electricity Provider.
(j) Mall I Owner and SECC Owner agree for the benefit of H/C I
Owner that H/C I Owner may grant easement rights to H/C II Owner and Mall II
Owner comparable to those rights granted in the preceding subsection (b);
provided, that no such grant shall adversely affect (except to a de minimis
extent) the electricity service that is otherwise required to be provided to
Mall I Owner or SECC Owner or increase (except to a de minimis extent) the cost
of the same.
(k) H/C I Owner, Mall I Owner and SECC Owner each agree for
the benefit of the other to (a) enter into commercially reasonable and
appropriate agreements with and (b) grant necessary and appropriate easements to
Electricity Provider in order to implement the provisions of this Section 2.
B. HVAC.
1. HVAC Ground Lease. H/C I covenants to SECC Owner, Mall I Owner,
H/C II Owner and Mall II Owner that it shall enter into a ground lease (the
"HVAC Ground Lease") whereby H/C I Owner, as lessor shall lease to APJV as
lessee the real property (the "HVAC Space") together with any buildings and
32
improvements constructed thereon more particularly described on Exhibit I for
the APJV Term to be used exclusively for the operation, maintenance and repair
by APJV of the New HVAC Plant and the HVAC Facilities; provided however that:
(a) H/C I Owner shall have the right to relocate the New HVAC
Plant, subject to the requirement that, without a Serviced Owner's consent, the
relocation shall not interfere with or affect the heating, ventilating and air
conditioning service required to be provided to such Serviced Owner pursuant to
its ESA (except to a de minimis extent) or result in any additional cost or
expense to such Serviced Owner; and
(b) During the APJV Term, APJV shall maintain, repair and
restore the New HVAC Plant in accordance with the provisions of the Initial
ESA's. From and after the expiration of the APJV Term, the Substitute HVAC
Operator shall (i) maintain, repair and restore the New HVAC Plant and the HVAC
Facilities, and (ii) to the extent not covered pursuant to the property damage
insurance required to be carried in accordance with the provisions of Article X,
shall procure replacement cost property damage insurance covering the New HVAC
Plant and the HVAC Facilities and any other insurance equivalent to that which
APJV was required to maintain under the initial ESA's
2. Admission of New Serviced Owners.
(a) Mall I Owner, SECC Owner, H/C I Owner, H/C II
Owner and Mall II Owner each agree that H/C I Owner shall have the right to
admit the H/C II Owner and/or the Mall II Owner as a Serviced Owner upon the
request of H/C II Owner and/or Mall II Owner, subject to the following
conditions:
33
(i) The proposed new Serviced Owner shall have delivered
to each then existing Serviced Owner the following:
(1) Evidence reasonably satisfactory to such existing
Serviced Owner that the admission of H/C II Owner or Mall II Owner,
as the case may be, as a Serviced Owner, and the provision of
heating, ventilating and air conditioning services to the new
Serviced Owner thereafter, shall not reduce or otherwise
detrimentally affect the heating, ventilating and air conditioning
service required to be provided to any existing Serviced Owner
pursuant to the provisions of its Initial ESA in any material
respect.
(2) A copy of a ESA executed by the proposed new
Serviced Owner and the HVAC Operator, which shall provide in
substance that:
(A) The existing Serviced Owners shall not be required
to bear any costs associated with servicing the proposed new Serviced
Owner in addition to the existing Serviced Owners (including without
limitation the cost of improving or upgrading the HVAC Facilities);
(B) The ESA entered into by the proposed new Serviced
Owner (each, a "New Serviced Owner ESA") shall have the same Scheduled
Termination Date as that applying under the ESA's executed between the
HVAC Operator and the then existing Serviced Owners.
34
(C) From and after admission of a Serviced Owner through
the Scheduled Termination Date, the proposed new Serviced Owner shall
bear:
(x) its "Proportionate Share" (as such term is
defined in the Owner's Qualifying ESA); and
(y) 100% of any "Other Facilities Capacity
Payment" (as such term is defined in the Owner's Qualifying ESA)
attributable to any Other Facilities (as such term is defined in the
Owner's Qualifying ESA) including any Metering Equipment installed
for the benefit of the New Serviced Owner.
(D) The New Serviced Owner's ESA shall not have any
terms which are materially different from those in the Qualifying ESA's
between the HVAC Operator and the then existing Serviced Owners, if the
same would interfere with or affect the heating, ventilating and air
conditioning service required to be provided to the existing Serviced
Owners pursuant to their ESA's (except to a de minimis extent) or result
in any additional cost or expense to such Serviced Owners.
(ii) The rights of H/C II Owner and Mall II Owner to become
Serviced Owners shall terminate on the fifth (5th) anniversary of the
Final Completion Date if not duly exercised on or before such date.
(b) Each Serviced Owner agrees that should H/C II Owner or
Mall II Owner elect to be admitted as a Serviced Owner as provided above, such
35
Serviced Owner shall permit the new Serviced Owner to lay utility lines
connecting the improvements on its Lot to the New HVAC Plant; provided that:
(i) Such utility lines shall be located within easements
to be granted in connection therewith and with the prior written approval
of the burdened Owner; provided that such burdened Owner shall not
unreasonably withhold, delay or condition any such approval to the extent
that the desired location of the easement in question does not (1)
interfere with the use or operation of the burdened lot and/or the
improvements therein (other than to a de minimis extent), (2) adversely
affect the value of such space and/or improvements (other than to a de
minimis extent) and/or (3) impose any material obligation on the burdened
Owner and/or the improvements located on the burdened lot, (other than the
granting of the easement in question); in each case, assuming that the
space and/or improvements, as applicable, in question are being used for
any applicable Permitted Use.
(ii) The rights of the burdened Serviced Owners and the
obligations of any new Serviced Owner in connection with the location,
maintenance and repair of such new Serviced Owner's utility lines shall be
as set forth in Section 6 of the following Part C of this Article II.
3. Extension/Termination of HVAC Operator.
(a) Extension/Termination on Scheduled Termination Date
Prior to Material Amortization Date. The Serviced Owners shall meet at least 180
days prior to any Scheduled Termination Date prior to the Material Amortization
Date to discuss whether to extend the Qualifying ESA's with the then existing
HVAC
36
Operator. Unless all of the Serviced Owners agree within the time period set
forth in the Qualifying ESA's (a) to terminate the Qualifying ESA's in
accordance with their terms and (b) to enter into new ESA's with a Substitute
HVAC Operator approved by each of the Serviced Owners, then each Serviced Owner
shall be deemed to have elected to extend its Qualifying ESA (and the Scheduled
Termination Date applying thereunder) in accordance with Section 2.5 of the
Qualifying ESA. Conversely, if all of the Serviced Owners timely elect prior to
such Scheduled Termination Date to terminate the Qualifying ESA's as of such
Scheduled Termination Date, and to enter into new ESA's with the new HVAC
Operator, then:
(i) Each Qualifying ESA with the existing HVAC Operator
shall terminate as of the Scheduled Termination Date set forth therein.
Unless otherwise agreed by each of the Serviced Owners,
(1) each Serviced Owner shall be responsible for
payment of any termination payments due to the existing HVAC
Operator under such Owner's Qualifying ESA, and each Serviced Owner
shall indemnify, protect, defend and hold harmless the other
Serviced Owners against any losses, claims, actions, liabilities,
costs or expenses (including attorneys' fees) arising out of any
failure to make any such payments;
(2) H/C I Owner shall succeed to the ownership of all of
the HVAC Facilities, except for (a) those HVAC Facilities already
owned by another Serviced Owner and (b) any other HVAC Facilities
installed for the benefit of a particular Serviced Owner alone,
37
ownership of which shall be transferred to the particular Serviced
Owner benefited.
(ii) Each Serviced Owner shall enter into a new ESA with
the Substitute HVAC Operator selected pursuant to this Section 3(a). The
new ESA shall be substantially in the form of the Qualifying ESA, which
the Serviced Owner had with the prior HVAC Operator except that:
(1) The required periodic payments to be made by each
Serviced Owner shall be calculated so as to cover only the
incremental expense of procuring the energy services and otherwise
shall be equitably allocated among the Serviced Owners taking into
account, inter alia, each Serviced Owner's New HVAC Plant
Percentage; and
(2) Each Owner shall grant appropriate access and other
rights to the Substitute HVAC Operator so as to permit the
Substitute HVAC Operator to utilize the utility easements granted
pursuant to the further provisions of this Agreement and otherwise
provide heating, ventilating and air conditioning service to the
Serviced Owners in accordance with the provisions of their
respective ESA's.
(iii) H/C I Owner shall provide appropriate and commercially
reasonable possessory and use rights to permit the Substitute HVAC
Operator to use and occupy the HVAC Space together with any buildings and
improvements constructed thereon.
38
(b) Termination in the Event of "Major Default". As more
particularly set forth in the Qualifying ESA's, each Owner has the right to
terminate its Qualifying ESA in the event of a material HVAC Operator Default.
In the event of any such termination, the terminating Serviced Owner shall
provide prior written notice of such termination to each of the other Serviced
Owners. The Owners further agree as follows with respect to any such
termination:
(i) Within fifteen (15) days after H/C I Owner's receipt
of any such termination notice (or, if the termination is contested by the
HVAC Operator, from the date that H/C I Owner receives confirmation that
any such contest has been resolved and that the termination shall be
effective as of a date stated (the "Material Default Termination Date"),
the Serviced Owners shall confer in good faith to agree on a Substitute
HVAC Operator reasonably acceptable to each of the Serviced Owners. If the
Serviced Owners shall be unable to agree on a Substitute HVAC Operator
within thirty (30) days, the Serviced Owners shall vote (with each vote
counted in proportion to each Serviced Owner's New HVAC Plant Percentage)
to select an Independent Expert who shall, within thirty (30) days after
conferring with each Serviced Owner regarding its economic and heating,
ventilating and air conditioning service objectives, select a Substitute
HVAC Operator who shall provide heating, ventilating and air conditioning
service that is comparable in all material respects to the service
required to be provided by the existing HVAC Operator under the existing
ESA's. Any increase in the cost of providing such level of service in
excess of the cost of providing such level of service by the
39
existing HVAC Operator shall be borne by the Serviced Owner(s) electing to
terminate the existing HVAC Operator pro rata based upon their respective
Serviced Owner's New HVAC Plant Percentages.
(ii) Effective upon the Material Default Termination Date,
each of the Qualifying ESA's shall terminate. Each Serviced Owner shall be
responsible for payment of any termination payments due to the terminated
HVAC Operator under its ESA, and each Serviced Owner shall indemnify,
protect, defend and hold harmless the other Serviced Owners against any
losses, claims, actions, liabilities, costs or expenses (including
attorneys' fees) arising out of any failure to make any such payments.
(iii) Effective upon the Material Default Termination Date,
each of the Serviced Owners shall enter into a new ESA with the Substitute
HVAC Operator selected in accordance with this Section 3(b) substantially
in the form of its Qualifying ESA with the prior HVAC Operator, except
that:
(1) The required periodic payments to be made by each
Serviced Owner shall be calculated so as to cover only the
incremental expense of procuring the energy services and otherwise
shall be equitably allocated among the Serviced Owners taking into
account, inter alia, each Serviced Owner's New HVAC Plant
Percentage; and
(2) Each Owner shall grant appropriate access and other
rights to the Substitute HVAC Operator so as to permit the
Substitute HVAC Operator to utilize the utility easements granted
40
pursuant to the further provisions of this Agreement and otherwise
provide heating, ventilating and air conditioning service to the
Serviced Owners in accordance with the provisions of their
respective ESA's.
(iv) If the ESA with APJV or any Substitute HVAC Operator
is terminated and the Serviced Owners enter into new ESA's with a
Substitute HVAC Operator in accordance with the terms of this Section 3,
then H/C I Owner shall provide appropriate and commercially reasonable
possessory and use rights to permit the Substitute HVAC Operator to use
and occupy the HVAC Space together with any buildings and improvements
constructed thereon so long as such Substitute HVAC Operator (a) enters
into agreements reasonably satisfactory to H/C I Owner indemnifying H/C I
Owner against all losses, claims, actions, liabilities, costs or expenses
(including attorney's fees) arising out of the actions or inactions of
such Substitute HVAC Operator, and (b) obtains insurance coverage
substantially similar to that required to be obtained by APJV under the
Initial ESA's.
4. Extension/Termination on or after the Material Amortization Date.
On or before the date which shall be eighteen (18) months prior to the Material
Amortization Date, the Serviced Owners shall confer in good faith to agree on a
plan (a "Replacement HVAC Plant Plan") for the refurbishment or replacement of
the New HVAC Plant reasonably acceptable to the Serviced Owners, which plan
shall provide for the furnishing of heating, ventilating and air conditioning
services for a commercially reasonable time period from and after the Material
Amortization Date which are at least equivalent in all material respects
(including, without limitation,
41
quantity and quality) to those services required to be provided by APJV or any
Substitute HVAC Operator, as applicable, immediately prior to such date on
financing and payment terms reasonably acceptable to the Serviced Owners, the
cost of which each Serviced Owner shall share in proportion to its New HVAC
Plant Percentage. If the Serviced Owners shall be unable to agree on such a
Replacement HVAC Plant Plan within thirty (30) days, the Serviced Owners shall
vote (with each vote counted in proportion to each Serviced Owner's New HVAC
Plant Percentage) to select an Independent Expert who shall, within sixty (60)
days after conferring with each Serviced Owner regarding its economic and
heating, ventilating and air conditioning service objectives, develop a
commercially reasonable Replacement HVAC Plant Plan consistent therewith. The
Serviced Owners shall commence the implementation of such Replacement HVAC Plant
Plan within thirty (30) days thereafter, unless any Serviced Owner shall have
delivered during such thirty (30) day period a written notice to each of the
other Serviced Owners and the Independent Expert asserting that the
implementation of the proposed Replacement HVAC Plant Plan will not permit such
Serviced Owner to operate its business for its Permitted Use or would unfairly
burden such Owner as compared to the other Owners or unfairly benefit any other
Owner, in which case the dispute shall be submitted to arbitration in accordance
with the terms hereof.
5. Termination Other than by an Owner. If the Qualifying ESA's shall
terminate for any reason other than those described in Sections B3 or B4 of this
Article II, as expeditiously as possible after the termination of the Qualifying
ESA's, the Serviced Owners shall confer and use good faith efforts to agree on a
42
Replacement HVAC Plant Plan. If the Serviced Owners shall be unable to agree on
such a Replacement HVAC Plant Plan within fifteen (15) days, the Serviced Owners
shall vote (with each vote counted in proportion to each Serviced Owner's New
HVAC Plant Percentage) to select an Independent Expert who shall, as soon as
possible but in no event later than sixty (60) days after conferring with each
Serviced Owner regarding its economic and heating, ventilating and air
conditioning service objectives, develop a commercially reasonable Replacement
HVAC Plant Plan consistent therewith. The Serviced Owners shall commence the
implementation of such Replacement HVAC Plant Plan as soon as possible but in no
event later than thirty (30) days thereafter, unless any Serviced Owner shall
have delivered a written notice during such thirty (30) day period to each of
the other Serviced Owners and the Independent Expert asserting that the
implementation of the proposed Replacement HVAC Plant Plan will not permit such
Serviced Owner to operate its business for its Permitted Use or would unfairly
burden such Owner as compared to the other Owners or unfairly benefit any other
Owner, in which case the dispute shall be submitted to arbitration in accordance
with the terms hereof.
6. Termination of HVAC Ground Lease. H/C I Owner agrees for the
benefit of each of the other Serviced Owners that it shall not terminate the
HVAC Ground Lease or any other possessory interest granted to the HVAC Operator
in accordance with the provisions of this Part B of Article II other than in
connection with an election to terminate all of the qualifying ESA's in
accordance with the provisions hereof.
43
7. Amendment of ESA's. No Serviced Owner shall enter into any
amendment, modification, restatement, substitution or replacement (each, a "ESA
Amendment") of its ESA with the HVAC Operator which ESA Amendment could
reasonably be expected to have a material adverse effect on the rights and/or
obligations of any other Serviced Owner unless each other Serviced Owner shall
enter into an equivalent ESA Amendment.
8. Obligations of Substitute HVAC Operator. The Substitute HVAC
Operator shall cause the maintenance, repair and restoration of the New HVAC
Plant; provided, however, that any such Substitute HVAC Operator that is an
Owner can satisfy its obligations under this Section 8 by (i) engaging an
appropriately experienced and competent third party operator to maintain, repair
and restore the New HVAC Plant and (ii) using commercially reasonable efforts to
enforce such operator's obligations so to maintain, repair and restore (and
replacing such operator with another appropriately experienced and competent
third party operator if any such operator fails to perform its obligations) in
which event such Substitute HVAC Operator shall not be liable to any Owner for
consequential damages arising out of such third party's repair, maintenance
and/or restoration of the New HVAC Plant except to the extent such damages
result from such Substitute HVAC Operator's negligence or willful misconduct.
C. Other Reciprocal Easements.
1. Utility Equipment. The Parties acknowledge that there will be
utilities installed during the construction of (a) the Venetian on the Phase I
Land in
44
accordance with the provisions of the FADAA, and (b) the Lido on the Phase II
Land.
2. Grant of H/C I Owner.
(a) In addition to the easements granted above but subject to
the other terms and conditions of this Article II, H/C I Owner hereby grants to
Mall I Owner and SECC Owner a non-exclusive easement in the H/C I Space and the
Phase I Hotel/Casino for the installation, operation, flow and passage, use,
maintenance, repair, replacement, relocation and removal (collectively, "Utility
Activity") of any of the following which lie, or, in accordance with the
provisions of this Article II, shall, in the future, lie, in, on, over, through,
upon, across or under the H/C I Space and/or the Phase I Hotel/Casino: sewers
(including, without limitation, storm and sanitary sewer systems), domestic
water systems, natural gas systems, electrical systems, telephone systems, fire
protection water systems, cable television systems, if any, and all other
utility systems and facilities now or in the future reasonably necessary for the
service of the Venetian (including without limitation the Phase I Mall) and/or
the SECC (collectively, "Utility Equipment", or to the extent that such Utility
Equipment currently exists in, on, over, through, upon or across the Phase I
Land, the Mall I Space, the Phase II Land or the SECC Land and/ or the
improvements located thereon as depicted on Exhibit J, as applicable, the
"Existing Utility Equipment"). Notwithstanding anything to the contrary in the
preceding sentence, Utility Equipment shall not include the New Electric
Substation.
(b) The location (and relocation) of all easements for Utility
Equipment that is to be installed in the H/C I Space and the Phase I
Hotel/Casino
45
after the date hereof (and the relocation of all easements for Existing Utility
Equipment) shall be subject to the prior written approval of H/C I Owner;
provided that H/C I Owner shall not unreasonably withhold, delay or condition
any such approval to the extent that the desired location or relocation of the
easement in question does not (1) interfere with the use or operation of the H/C
I Space and the Phase I Hotel/Casino (other than to a de minimis extent), (2)
adversely affect the value of such land and/or improvements (other than to a de
minimis extent) and/or (3) impose any material obligation on H/C I Owner and/or
the Phase I Hotel/Casino (other than the granting of the easement in question);
in each case, assuming that the space and/or improvements, as applicable, in
question are being used by H/C I Owner for their Permitted Use.
3. Grant of Mall I Owner.
(a) In addition to the easements granted above but subject to
the other terms and conditions of this Article II, Mall I Owner hereby grants to
H/C I Owner and SECC Owner a non-exclusive easement in the Mall I Space for
Utility Activity in connection with any Utility Equipment which lies, or, in
accordance with the provisions of this Article II, shall, in the future, lie,
in, on, through, upon or across the Mall I Space.
(b) The location (and relocation) of all easements for Utility
Equipment that is to be installed in the Mall I Space after the date hereof (and
the relocation of all easements for Existing Utility Equipment) shall be subject
to the prior written approval of Mall I Owner; provided that Mall I Owner shall
not unreasonably withhold, delay or condition any such approval to the extent
that the
46
desired location or relocation of the easement in question does not (1)
interfere with the use or operation of the Mall I Space and/or the improvements
therein (other than to a de minimis extent), (2) adversely affect the value of
such space and/or improvements (other than to a de minimis extent) and/or (3)
impose any material obligation on Mall I Owner and/or the improvements located
in the Mall I Space (other than the granting of the easement in question); in
each case, assuming that the space and/or improvements, as applicable, in
question are being used by Mall I Owner for their Permitted Use.
4. Grant of H/C II Owner.
(a) In addition to the easements granted above but subject to
the other terms and conditions of this Article II, H/C II Owner hereby grants to
Mall I Owner, H/C I Owner and SECC Owner a non-exclusive easement in the Phase
II Land for Utility Activity in connection with any Utility Equipment which lie,
or, in accordance with the provisions of this Article II, shall, in the future,
lie, in, on, over, through, upon, across or under the Phase II Land.
(b) The location (and relocation) of all easements for Utility
Equipment that is to be installed on the Phase II Land after the date hereof
(and the relocation of all easements for Existing Utility Equipment) shall be
subject to the prior written approval of H/C II Owner; provided that H/C II
Owner shall not unreasonably withhold, delay or condition any such approval to
the extent that the desired location or relocation of the easement in question
does not (1) interfere with the use or operation of the Phase II Land and/or the
improvements therein (other than to a de minimis extent), (2) adversely affect
the value of such space and/or
47
improvements (other than to a de minimis extent) and/or (3) impose any material
obligation on H/C II Owner and/or the improvements located on the Phase II Land,
or on such land and/or improvements (other than the granting of the easement in
question); in each case, assuming that the land and/or improvements, as
applicable, in question are being used by H/C II Owner for their Permitted Use.
5. Grant of SECC Owner.
(a) In addition to the easements granted above but subject to
the other terms and conditions of this Article II, SECC Owner hereby grants to
H/C I Owner and Mall I Owner a non-exclusive easement in the SECC Land for
Utility Activity in connection with any Utility Equipment which lie, or, in
accordance with the provisions of this Article II, shall, in the future, lie,
in, on, over, through, upon, across or under the SECC Land.
(b) The location (and relocation) of all easements for Utility
Equipment that is to be installed on the SECC Land after the date hereof (and
the relocation of all easements for Existing Utility Equipment) shall be subject
to the prior written approval of SECC Owner; provided that SECC Owner shall not
unreasonably withhold, delay or condition any such approval to the extent that
the desired location or relocation of the easement in question does not (1)
interfere with the use or operation of the SECC Land and/or the improvements
therein (other than to a de minimis extent), (2) adversely affect the value of
such space and/or improvements (other than to a de minimis extent) and/or (3)
impose any material obligation on SECC Owner and/or the improvements located on
the SECC Land (other than the granting of the easement in question); in each
case, assuming that the
48
land and/or improvements, as applicable, in question are being used by SECC
Owner for their Permitted Use.
6. Rights of Burdened Parties; Obligations of Benefitted Parties.
(a) Each Owner of a servient tenement may relocate any
utility easement on its parcel at its sole cost and expense provided that such
relocation: (1) does not cause any interruption in the utilization of the
utility easement by the Owner of the dominant tenement for the affected easement
(except de minimis interruptions, as to degree or time, which shall be scheduled
by agreement with the Owner of the dominant tenement for the affected easement);
(2) does not diminish the capacity or efficiency of such utility easement
(excepting de minimis effects); and (3) will not make it more difficult or more
expensive for the Owner of the dominant tenement with respect to the utility
easement to use, maintain, repair, or replace the utility lines, unless, in the
case of increased expense, the Owner of a servient tenement, at the time of such
adverse relocation, agrees to bear any future additional costs arising from such
relocation.
(b) The cost and expense of Utility Activity in connection
with Utility Equipment (to the extent not borne by a public or private utility
company) shall be borne entirely by the Party whose parcel benefits thereby or,
if more than one Party's parcel benefits thereby, such cost and expense shall be
allocated between the Parties so benefited in such manner as at the time shall
be equitable in the circumstances. Any costs borne by the burdened Party with
respect to any Utility Activity shall be reimbursed by the benefited Party.
Before any such Utility Activity (other than Utility Activity which is
operation, flow, passage or use) in connection
49
with any Utility Equipment is effectuated, the Party conducting the same shall
give reasonable prior notice to the other affected Parties, except in any case
where the giving of reasonable prior notice is not practicable under the
circumstances (but notice shall nevertheless be given as soon as practicable),
and the Party conducting the same shall have received the consent of such
affected Parties (except in any case where the giving of reasonable prior notice
was not practicable under the circumstances (but consent shall nevertheless be
confirmed as soon as practicable)). The Party conducting the same shall, in
performing any such work, use commercially reasonable efforts to minimize
interference with the Utility Equipment of the other Parties and the use,
enjoyment and operations of such other Parties' land and the improvement
thereon; provided that the failure to give any such notice or receive any such
consent shall not constitute a default hereunder or require the aforesaid Party
to demolish or remove any portion of its Utility Equipment.
(c) The Party whose parcel is benefited by a utility easement
shall maintain, repair, restore and replace all Utility Equipment related to the
easement that is located on the burdened Party's parcel.
(d) In the event a Party whose parcel is benefited by a
utility easement shall fail to maintain, repair, restore or replace any utility
lines located on a burdened Party's parcel in accordance with the provisions of
this Part C, Section 6 of Article II, such burdened Party may, after reasonable
notice to the defaulting benefited Party, except in any case where the giving of
reasonable prior notice is not practicable under the circumstances (but notice
shall nevertheless be given as soon as
50
practicable), cure such default at the defaulting Party's expense, in which
event the provisions of Sections 9(a) and 9(b) of Article XIV shall apply.
(e) The Parties shall cooperate with each other with respect
to all Utility Activity in connection with Utility Equipment including, without
limitation, the granting of easements in their respective parcels to public or
private utilities in order to permit such utilities to bring their services to
such parcels.
D. Common Areas; Access Rights to Affect Maintenance and Repair; Parking
Access; Emergency Access; Vertical and Lateral Support; Miscellaneous.
1. Easements for Pass-through Areas and Common Areas.
(a) As part of the construction of the Venetian, H/C I Owner
and Mall I Owner intend to construct certain H/C Pass-through Areas and Common
Areas, which areas will be made available for use by SECC Owner, H/C I Owner and
Mall I Owner as set forth in this Section II D.
(b) H/C I Owner hereby grants to each other Party a
non-exclusive right to use and easement in, on, over, upon, above, under,
through and across the H/C Pass-through Areas and the H/C-Mall Common Areas for
passage, ingress and egress and otherwise for the intended use thereof and for
access to and from its respective Destination Areas and public sidewalks and
public rights of ways. Such use of the H/C Pass-through Areas and the H/C-Mall
Common Areas shall be subject to reasonable rules and regulations established by
H/C I Owner from time to time; provided that no such rules or regulations shall
adversely affect (except to a de minimis extent) the conduct of any Owner's
business in accordance with its Permitted Use. Without limiting the generality
of the foregoing, each Party may use the H/C
51
Pass-through Areas for the purposes for which they were intended, and each of
H/C I Owner and Mall I Owner shall have the right to use the H/C-Mall Common
Areas and the Building Shell and Core for the purposes for which they were
intended.
(c) Mall I Owner hereby grants to each other Party a
non-exclusive right to use and easement in, on, over, upon, through and across
the Mall I Pass-through Areas for passage, ingress and egress and otherwise for
the intended use thereof and for access to and from its respective Destination
Areas and public sidewalks and public rights of ways. Such use of the Mall I
Pass-through Areas shall be subject to reasonable rules and regulations
established by Mall I Owner from time to time; provided that no such rules or
regulations shall adversely affect (except to a de minimis extent) the conduct
of any Owner's business in accordance with its Permitted Use. Without limiting
the generality of the foregoing, each Party may use the Mall I Pass-through
Areas for the purposes for which they were intended, and each of H/C I Owner and
Mall I Owner shall have the right to use the Building Shell and Core for the
purposes for which they were intended.
(d) SECC Owner hereby grants to each other Party a
non-exclusive right to use and easement in, on, over, upon, above, under,
through and across the SECC Pass-through Areas for passage, ingress and egress
and otherwise for the intended use thereof and for access to and from its
respective Destination Areas and public sidewalks and public rights of ways.
Such use of the SECC Pass-through Areas shall be subject to reasonable rules and
regulations established by SECC Owner from time to time; provided that no such
rules or regulations shall adversely affect (except to a de minimis extent) the
conduct of any Owner's business
52
in accordance with its Permitted Use. Without limiting the generality of the
foregoing, each Party may use the SECC Pass-through Areas for the purposes for
which they were intended.
(e) H/C I Owner hereby grants to Mall I Owner for its use and
the use of its Tenants and their respective employees, agents, contractors and
subcontractors of Mall I Owner and its Tenants only, and not for the use of the
general public, a non-exclusive right to use and easement over, upon, above,
under through and across all H/C Limited Common Areas for, among other things,
pedestrian passage, ingress and egress and other necessary or desirable uses in
connection with the business and operations of Mall I Owner. Such use of the H/C
Limited Common Areas shall be subject to rules and regulations established by
H/C I Owner from time to time; provided that no such rule or regulation shall
adversely affect (except to a de minimis extent) the conduct of Mall I Owner's
business in accordance with its Permitted Use.
(f) Mall I Owner hereby grants to H/C I Owner for its use and
the use of its Tenants and their respective employees, agents, contractors and
subcontractors of H/C I Owner and its Tenants only, and not for the use of the
general public, a non-exclusive right to use and easement over, upon, above,
under through and across all Mall I Limited Common Areas for, among other
things, pedestrian passage, ingress and egress and other necessary or desirable
uses in connection with the business and operations of H/C I Owner. Such use of
the Mall I Limited Common Areas shall be subject to rules and regulations
established by Mall I Owner from time to time; provided that no such rule or
regulation shall adversely
53
affect (except to a de minimis extent) the conduct of H/C I Owner's business in
accordance with its Permitted Use.
2. Right to Relocate, Increase or Decrease Pass-through Areas,
Limited Common Areas and H/C-Mall Common Areas; Owner Cooperation re:
Expansion of Pass-through Areas.
(a) H/C I Owner may relocate, increase or decrease all or any
part of the H/C Pass-through Areas and/or the H/C Limited Common Areas at its
sole cost and expense; provided that such relocation, increase or decrease does
not adversely affect (other than to a de minimis extent) any Party's reasonable
access to its Destination Areas.
(b) Mall I Owner may relocate, increase or decrease all or any
part of the Mall I Pass-through Areas and/or the Mall I Limited Common Areas at
its sole cost and expense; provided that such relocation, increase or decrease
does not adversely affect (other than to a de minimis extent) any Party's
reasonable access to its Destination Areas.
(c) H/C I Owner and/or Mall I Owner, subject to the other's
reasonable consent may relocate, increase or decrease (or, in the case of Mall I
Owner, cause H/C I Owner to relocate, increase or decrease) all or any part of
the H/C-Mall Common Areas which expense shall be borne by the Party requesting
such relocation, or, if both Parties desire such relocation, such expense shall
be shared equally; provided that such relocation, increase or decrease: (1) does
not cause any interruption in the utilization of the easement to use the
H/C-Mall Common Areas by the Owner of the dominant tenement for the affected
easement (except de minimis
54
interruptions, as to degree or time, which shall be scheduled by agreement with
the Owner of the dominant tenement for the affected easement); (2) does not
diminish the capacity or efficiency of such easement (excepting de minimis
effects); (3) will not make it more difficult or more expensive for the Owner of
the dominant tenement to use the H/C-Mall Common Areas, unless, in the case of
greater expense, the Owner requesting such relocation, increase or decrease, at
the time of such adverse relocation, increase or decrease, agrees to bear any
future additional costs arising from such relocation, increase or decrease; and
(4) will not interfere with or adversely affect the maintenance, use or
operation of the dominant tenement or the conduct of its Owner's business
thereat in accordance with its Permitted Use.
(d) SECC Owner may relocate, increase or decrease all or any
part of the SECC Pass-through Areas at its sole cost and expense; provided that
such relocation, increase or decrease does not adversely affect (other than to a
de minimis extent) any Party's reasonable access to its Destination Areas.
(e) H/C I Owner and Mall I Owner shall cooperate in good faith
as reasonably requested by the other from time to time to effect changes to the
Common Areas and other Owner's Pass-through Areas.
3. Access Rights to Effect Maintenance and Repair.
(a) SECC Owner and H/C I Owner each hereby grant to Mall I
Owner an easement to enter on or into as applicable (i) the SECC and the SECC
Land and (ii) the Phase I Hotel/Casino and the H/C I Space in each instance to
the extent reasonably necessary (A) to gain access to the Mall I Space, the
Phase I Mall and any and all fixtures, fittings, equipment and building systems
from time to
55
time located therein for the maintenance, repair or restoration of or to the
same or to any other fixtures, fittings, equipment or building systems that
serve the Phase I Mall, and (B) to perform any maintenance, repair, restoration
or other obligations imposed upon Mall I Owner under this Agreement or which
Mall I Owner shall otherwise desire to perform in the Mall I Space in accordance
with this Agreement, but for no other reason or purpose, except as otherwise
provided in this Agreement. Mall I Owner, in exercising its rights under this
Section 3(a), shall use commercially reasonable efforts to minimize interference
with the maintenance, use and operation of (x) the SECC and SECC Owner's
business at the same and (y) the H/C I Space and the H/C I Owner's business at
the same. Before any maintenance, repairs or restoration contemplated by this
Section 3(a) that requires Mall I Owner to enter upon any material portion of
(aa) the SECC Land and/or the SECC and/or (bb) the H/C I Space and/or the Phase
I Hotel/Casino are effectuated, Mall I Owner shall give reasonable prior notice
to SECC Owner and/or H/C I Owner, as the case may be, except in any case where
the giving of reasonable prior notice is not practicable under the circumstances
(but notice shall nevertheless be given as soon as practicable); provided that
failure to give any such notice shall not constitute a default hereunder.
(b) SECC Owner and Mall I Owner each hereby grant to H/C I
Owner an easement to enter on or into as applicable (i) the SECC and the SECC
Land and (ii) Phase I Mall and the Mall I Space in each instance to the extent
reasonably necessary (A) to gain access to the H/C I Space and/or the Phase I
Hotel/ Casino and any and all fixtures, fittings, equipment and building systems
from time to time located therein or to any other fixtures, fittings, equipment
or building systems
56
that serve the Phase I Hotel/Casino (including the New Electric Substation and
any improvements related thereto) for the maintenance, repair or restoration of
or to the same and (B) to perform maintenance, repair, restoration or other
obligations imposed upon H/C I Owner under this Agreement or which H/C I Owner
shall otherwise desire to perform in the H/C I Space or on the Phase I Land as
applicable in accordance with this Agreement, but for no other reason or
purpose, except as otherwise provided in this Agreement. H/C I Owner, in
exercising its rights under this Section 3(b), shall use commercially reasonable
efforts to minimize interference with the maintenance, use and operation of (x)
the SECC and SECC Owner's business at the same and (y) the Phase I Mall and Mall
I Owner's business at the same. Before any maintenance, repairs or restoration
contemplated by this Section 3(b) that requires H/C I Owner to enter upon any
material portion of (aa) the SECC Land and/ or the SECC and/or (bb) the Mall I
Space are effectuated, H/C I Owner shall give reasonable prior notice to SECC
Owner and/or Mall I Owner, as the case may be, except in any case where the
giving of reasonable prior notice is not practicable under the circumstances
(but notice shall nevertheless be given as soon as practicable); provided that
the failure to give any such notice shall not constitute a default hereunder.
(c) Mall I Owner and H/C I Owner each hereby grant to SECC
Owner an easement to enter on or into as applicable (i) the Phase I Mall and the
Mall I Space and (ii) the Phase I Hotel/Casino and the H/C I Space in each
instance to the extent reasonably necessary (A) to gain access to the SECC Land,
the SECC and any and all fixtures, fittings, equipment and building systems from
time to
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time located therein or thereon or to any other fixtures, fittings, equipment or
building systems that serve the SECC for the maintenance, repair or restoration
of or to the same, and (B) to perform any maintenance, repair, restoration or
other obligations imposed upon SECC Owner under this Agreement or which SECC
Owner shall otherwise desire to perform on the SECC Land in accordance with this
Agreement, but for no other reason or purpose, except as otherwise provided in
this Agreement. SECC Owner, in exercising its rights under this Section 3(c),
shall use commercially reasonable efforts to minimize interference with the
maintenance, use and operation of (x) the Phase I Mall and Mall I Owner's
business at the same and (y) the H/C I Space and the H/C I Owner's business at
the same. Before any maintenance, repairs or restoration contemplated by this
Section 3(c) that requires SECC Owner to enter upon any material portion of (aa)
the Mall I Space and/or the Phase I Mall and/or (bb) the H/C I Space and/or the
Phase I Hotel/Casino are effectuated, SECC Owner shall give reasonable prior
notice to Mall I Owner and/or H/C I Owner, as the case may be, except in any
case where the giving of reasonable prior notice is not practicable under the
circumstances (but notice shall nevertheless be given as soon as practicable);
provided that failure to give any such notice shall not constitute a default
hereunder.
4. Parking Access Easements.
(a) Each of SECC Owner and H/C I Owner hereby grants to each
other and to Mall I Owner a non-exclusive easement (each, a "Parking Access
Easement") and right to use from and after the Phase I Garage Opening Date, for
vehicular and pedestrian access to (and from) the Phase I Automobile Parking
Area,
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the roadways and walkways leading thereto, including, without limitation, the
road designated as the Koval Access Road and the sidewalks adjacent thereto, if
any, all as depicted on Exhibit Q annexed hereto and made a part hereof.
Effective automatic ally upon the Phase I Garage Opening Date, H/C I Owner shall
grant to SECC Owner and to Mall I Owner a non-exclusive easement and right to
use, for pedestrian ingress and egress and access to (and from) the Phase I
Automobile Parking Area from (and to) such other Owner's Lot and the public
areas of the Venetian.
(b) Notwithstanding any provision herein to the contrary, each
of H/C I Owner and SECC Owner, as applicable, shall have the right to relocate
each of the Parking Access Easement Areas located on their respective Lots;
provided that, other than temporary reasonable interference during relocation,
such relocation does not impair other Owners' rights to utilize Parking Access
Easements (other than to a de minimis extent), or interfere (other than to a de
minimis extent) with any other Owner's business at its Lot, or impose additional
obligations on any other Owner under this Agreement.
5. Emergency Access Rights. Each of H/C I Owner, Mall I Owner and
SECC Owner hereby grants to the other such easements in, on, across and through
(i) the H/C I Space and/or any improvements constructed upon the H/C I Space,
(ii) the Mall I Space and/or any improvements constructed in the Mall I Space,
or (iii) the SECC Land and/or any improvements constructed upon the SECC Land,
as each of them may reasonably require, and in such location as the grantor
thereof shall approve (which approval shall not be unreasonably withheld), in
order to provide access to emergency fire exit or service corridors or stairs
(to the extent
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required in order to comply with applicable building codes and in accordance
with applicable Legal Requirements); provided that the Party exercising its
rights under this Section C.5 shall reimburse the Party burdened by such
exercise for all reasonable costs and expenses incurred by such burdened Party
in connection therewith.
The Parties shall endeavor, as expeditiously as reasonably possible
following the Completion Date, to confirm the precise boundaries of such
easements and to memorialize the same by a recorded agreement executed by the
Owner of the burdened property and the Owner of the benefitted Property.
6. Easement for Vertical and Lateral Support. H/C I Owner and Mall I
Owner hereby grant to the other a right and easement for vertical and lateral
support of the Phase I Mall and the Phase I Hotel/Casino and an easement in and
to all structural members, footings, caissons, foundations, columns and beams
and any other supporting components located within or constituting a part of the
Phase I Hotel/Casino or the H/C I Space for the support of the Phase I Mall and
the Mall I Space and all Facilities located therein or thereon.
7. Miscellaneous.
(a) Except as otherwise expressly provided in this Article II,
each grantor of an easement under this Article II may relocate any easement on
its parcel at its sole cost and expense provided that such relocation: (1) does
not cause any interruption in the utilization of the easement by the Owner of
the dominant tenement for the affected easement (except de minimis
interruptions, as to degree or time, which shall be scheduled by agreement with
the Owner of the dominant
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tenement for the affected easement); (2) does not diminish the capacity or
efficiency of such easement (excepting de minimis effects); (3) will not make it
more difficult or more expensive for the Owner of the dominant tenement with
respect to any utility easement to use, maintain, repair, or replace the utility
lines, unless, in the case of increased expense, the relocating grantor, at the
time of such adverse relocation, agrees to bear any future additional costs
arising from such relocation; and (4) will not interfere with or adversely
affect (other than to a de minimis extent) the maintenance, use or operation of
the dominant tenement or the conduct of its Owner's business thereat.
(b) Except as otherwise provided herein with respect to
Limited Common Areas, each benefitted Owner of an easement hereunder may allow
its Tenants and Permittees from time to time to use such easement; provided that
the use by such Tenants and Permittees shall be consistent with the use rights
granted under this Article II.
ARTICLE III
COVENANTS REGARDING SECC LAND
1. SECC Operation and Maintenance. SECC Owner hereby
covenants in favor of H/C I Owner as follows:
(a) Operating Covenant. SECC Owner shall continuously operate
and exclusively use the SECC as a convention, trade show and exposition center
and ancillary uses in a manner and at a level that shall be no less than the
standards as of the date hereof of First-class convention, trade show and
exposition
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centers. The Parties acknowledge that SECC Owner's use and operation on the
date hereof satisfies such standards.
(b) SECC Maintenance and Repair. From and after the
Commencement Date, SECC Owner shall maintain, repair and restore the SECC (or
any buildings or other improvements constructed in replacement thereof)
including, without limitation, the SECC Pass-through Areas in a manner
consistent with First-class convention, trade show and exposition centers and in
accordance with the provisions of this Agreement. SECC Owner may place a
temporary construction, barricade, fence or other obstruction in SECC
Pass-through Areas if such are reasonably required by SECC Owner to perform work
and maintain the SECC Pass-through Areas in accordance with the terms hereof and
such barricades, fences or other obstructions do not interfere with the
permitted access of another Owner through such SECC Pass-through Areas.
(c) SECC Alterations. SECC Owner may make structural and
non-structural alterations, modifications and repairs ("SECC Alterations") to
the SECC and to any other buildings and improvements from time to time located
on the SECC Land; provided that all SECC Alterations shall be made with
commercially reasonable diligence and dispatch in a First-class manner with
First-class materials and workmanship, architecturally consistent in style with
the existing improvements comprising the SECC. All repairs and any restorations
or replacements required in connection herewith shall be of a quality and class
equal to the original work or installation and shall be done in a good and
workmanlike manner. In affecting such repairs, restorations or replacements,
SECC Owner shall use commercially reasonable
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efforts to minimize interference with the use, enjoyment and occupancy of, and
the conduct by H/C I Owner and Mall I Owner, respectively, of such Owner's
business at the H/C I Space and Phase I Hotel/Casino and/or the Mall I Space and
the Phase I Mall, as the case may be. SECC Owner's obligations under this
Article III are subject to Force Majeure Events.
2. Congress Facility; Construction of the Venetian. H/C I Owner and
SECC Owner each covenant in favor of the other as follows:
(a) It is the intention of the Parties hereto that a portion
of the Venetian (hereinafter referred to as the "Congress Facility") and the
SECC will share a building wall (the "SECC Party Wall"), which SECC Party Wall
is currently an exterior wall of the SECC and which H/C I Owner intends to use
as a wall for the Congress Facility. The Congress Facility and the approximate
location of the SECC Party Wall are depicted on Exhibit R.
(b) H/C I Owner and SECC Owner shall each have the right to
use its side of the SECC Party Wall without any restriction on such use, except
that such use shall not interfere with the use by the other Party of the SECC
Party Wall in any material respect or deprive the other Party of any structural
or other support now or in the future intended to be provided by the SECC Party
Wall. Notwithstanding anything to the contrary contained herein, nothing
contained in this Section 2(b) shall prohibit or restrict, or shall be deemed to
prohibit or restrict, SECC Owner from using, maintaining and operating the SECC
(and SECC Owner's business at the SECC) as used, maintained and operated on or
about the Test Date.
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(c) SECC Owner shall maintain, keep in good repair (including
structural repairs) and restore, at its sole expense, the SECC Party Wall. H/C I
Owner, promptly upon demand therefor, will reimburse SECC Owner for its
equitable share of the cost thereof. If SECC Owner shall fail to perform its
obligations under this Section 2(c), H/C I Owner shall be entitled to the
self-help, reimbursement and lien rights set forth in Sections 9(a) and 9(b) of
Article XIV.
(d) H/C I Owner covenants and agrees that in performing the
construction of the Congress Facility and the rest of the Venetian as
contemplated under the FADAA (including, without limitation, the Phase I Mall,
the New HVAC Plant, the New Electric Substation and the Phase I Automobile
Parking Area), and any other buildings or other improvements to be located upon
the Phase I Land (and in performing any ancillary activities), H/C I Owner shall
(i) use commercially reasonable efforts to minimize interference with the use,
enjoyment and occupancy of, and the conduct by SECC Owner of SECC Owner's
business at, the SECC, the Temporary Parking Facilities, the Utility Equipment
and the Existing HVAC Plant, (ii) terminate, as soon as reasonably practicable
in accordance with reasonably prudent construction practices, any such
interference and (iii) give SECC Owner a reasonably detailed schedule of all
construction contemplated under the FADAA (or related activities) and thereafter
from time to time, all material modifications and supplements thereto prior to
the commencement of any such construction (or related activities). If in
connection with any such interference, any Mortgagee of SECC Owner shall require
that SECC Owner post a letter of credit, bond or other security, then H/C I
Owner, upon demand therefore by SECC Owner, shall pay all reasonable
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costs of obtaining the same. SECC Owner shall have the right to approve the
plans and specifications relating to any openings in the SECC Party Wall,
interconnecting doors or other openings affecting the Congress Facility, or any
other portion of the Venetian (including, without limitation, the Phase I Mall)
that may directly connect with or adjoin the SECC (but only to the extent such
portion directly connects or adjoins the SECC and to the extent such portion
affects the structural integrity of, or is visible from the interior of, the
SECC), which approval shall not be unreasonably withheld, delayed or
conditioned. In the event that construction of the Congress Facility or such
other portion of the Venetian is permanently abandoned or such construction
ceases, in all material respects, for a period of twelve consecutive months,
then SECC Owner shall have the right after thirty (30) days' notice to H/C I
Owner and its Mortgagees to close off any openings in the SECC and take any
other action reasonably necessary to protect the integrity of the SECC as a
single, self-contained, economically viable facility, and H/C I Owner shall,
within ten (10) days of demand therefor, reimburse SECC Owner for the reasonable
costs and expenses incurred by SECC Owner in taking such actions, together with
interest thereon, at the Interest Rate, for the period commencing on such tenth
(10th) day and ending on the date upon which H/C I Owner so reimburses SECC
Owner.
3. Cooperative Marketing; Limitation on Secured Debt. H/C I Owner
and SECC Owner each covenant in favor of the other as follows:
(a) Marketing by H/C I Owner. H/C I Owner shall use
commercially reasonable efforts to promote the use and occupancy of the SECC for
trade shows and convention events by guests and customers of the Phase I Hotel/
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Casino, including cooperating with the marketing staff of the SECC to arrange
bookings of the SECC by guests and customers of the Phase I Hotel/Casino and to
develop promotional literature and other material regarding the SECC intended
for guests and customers of the Phase I Hotel/Casino.
(b) Marketing by SECC Owner. Prior to entering into any
license agreement with any person (a "User") for the use by such User of the
SECC for a trade show or convention event, SECC Owner shall consult with H/C I
Owner regarding the availability or projected availability of guest rooms at the
Phase I Hotel/ Casino for participants at such trade show or convention event.
If, following such consultation, H/C I Owner elects (a "Headquarters Election"),
by notice to SECC Owner within fifteen (15) days following such initial
consultation, to have the Phase I Hotel/Casino designated as the headquarters
hotel for such show or event (the "Headquarters Hotel"), SECC Owner will use
commercially reasonable efforts to cause the Phase I Hotel/Casino to be
designated as the Headquarters Hotel. Without limiting the foregoing, SECC Owner
agrees to use commercially reasonable efforts to include in SECC Owner's license
agreement for the use of the SECC by such User a provision designating the Phase
I Hotel/Casino as the Headquarters Hotel for such show or event if so requested
by H/C I Owner. Notwithstanding the foregoing, if, after using commercially
reasonable efforts, SECC Owner is unable to obtain the agreement of the User to
designate the Phase I Hotel/Casino as the Headquarters Hotel or to include in
the license agreement such designation, SECC Owner may enter into such license
agreement without such designation, without any further obligation or liability
of SECC Owner to H/C I Owner with respect thereto. SECC
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Owner will not enter into any other agreement with any casino, hotel or resort
to the effect set forth in the first three sentences of this subsection (b),
including, without limitation, any casino, hotel or resort located on the Phase
II Land (the "Phase II Resort") provided, however, that SECC Owner shall have
the right to enter into such an agreement with another casino, hotel or resort
if (i) H/C I Owner does not timely make a Headquarters Election or (ii)
notwithstanding the commercially reasonable efforts of SECC Owner, the trade
show in question declines to permit the Phase I Hotel/Casino to be designated as
its Headquarters Hotel. In the event SECC Owner can, pursuant to the foregoing
proviso, enter into such an agreement with another casino, hotel or resort, SECC
Owner will first use commercially reasonable efforts for a period of ten (10)
days to enter into such an agreement with a Phase II Resort prior to entering
into such an agreement with any other casino, hotel or resort.
(c) Limitation on Secured Debt. In order to induce the H/C I
Owner to enter into this Agreement, SECC Owner agrees that, until such time as
the indebtedness evidenced by the Mortgage Notes and the Senior Subordinated
Notes has been repaid, it shall not incur additional Secured Debt if such
additional Secured Debt will cause the aggregate Secured Debt to exceed the
greater of (i) eighty-five percent (85%) of the then fair market value of the
SECC and (ii) to the extent such additional Secured Debt may be incurred in
accordance with the provisions of each of the Senior Loan Agreement and the
Junior Loan Agreement, $140,000,000 plus any additional amounts permitted to be
advanced thereunder for equipment leases or equipment financings. For purposes
hereof, "Secured Debt" means all obligations with respect to indebtedness for
borrowed money of SECC
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Owner (as principal, guarantor or otherwise) to any Person to the extent such
indebtedness is secured by the SECC or any personal property owned or leased by
SECC Owner and used in connection with the SECC, which indebtedness is hereafter
created, owing or arising and however evidenced, created or incurred, direct,
contingent, fixed or otherwise including, without limitation, the amount of all
liabilities in respect of all capital leases that would at such time be required
to be capitalized on a balance sheet in accordance with generally accepted
accounting principles, but shall not include interest on any such indebtedness
that is payable solely in securities.
(d) Change of Control. SECC Owner will not permit any Transfer
of any interest in the SECC Land or in any stock, membership interests or other
ownership interests in SECC Owner, except (i) such that constitute a Permitted
Transfer, or (ii) a Transfer of all such stock, membership interests or other
ownership interests in SECC Owner to a Person who contemporaneously acquires all
of the stock, membership interests or other ownership interests of the Owner of
the H/C I Space and at least eighty percent (80%) of the stock, membership
interests or other ownership interests of the Owner of the Mall I Space, or all
or substantially all of the assets comprising the H/C I Space and the Mall I
Space; provided that nothing in this Section 3(d) shall be deemed to limit any
term, condition, covenant, agreement or provision of any Mortgagee's loan
documents (including, without limitation, any provision, term, condition,
covenant or agreement requiring any payment to such Mortgagee as a consequence
of any such Transfer). The terms "Transfer" and
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"Permitted Transfer" as used herein have the meanings ascribed thereto in the
Senior Loan Agreement as in effect on the date hereof.
(e) Fees and Expenses. Each of SECC Owner and H/C I Owner will
pay all expenses incurred by it in connection with the effectuation and
administration of this Section 3 and the transactions contemplated hereby (the
"Expenses"); provided, that, from time to time H/C I Owner and SECC Owner will
agree on a reallocation of Expenses if such a reallocation is necessary to
preserve an equitable distribution of such Expenses.
(f) Term. The provisions of this Section 3 shall survive until
December 31, 2010.
ARTICLE IV
CONTINUOUS OPERATION OF
PHASE I HOTEL/CASINO AND PHASE I MALL
1. Operating Covenants. H/C I Owner and Mall I Owner agree
for the benefit of each other as follows:
(a) From and after the earlier to occur of (i) the Opening
Date or (ii) the Mall Release Date, H/C I Owner shall continuously operate and
exclusively use the Phase I Hotel/Casino as a hotel and casino and ancillary
uses in a manner and at a level that shall be no less than the standards of
First-class Las Vegas Boulevard-style hotel/casinos, as such standards exist as
of the earlier of (i) the Opening Date and (ii) the Mall Release Date.
(b) From and after the earlier to occur of (i) the Opening
Date or (ii) the Mall Release Date, Mall I Owner shall continuously operate and
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exclusively use (or cause to be used) the Phase I Mall as a retail and
restaurant complex and ancillary uses in a manner and at a level that shall be
no less than the standards of First-class retail and restaurant complexes, as
such standards exist as of the earlier of (i) the Opening Date and (ii) the Mall
Release Date.
ARTICLE V
COVENANTS REGARDING PHASE I LAND OPERATIONS
H/C I Owner and SECC Owner and Mall I Owner agree for the benefit
of each other from and after the Completion Date as follows:
1. H/C-Mall Common Areas; H/C Pass-through Areas; H/C
Limited Common Areas; Building Shell and Core.
(a) At all times from and after the earlier of (i) the Opening
Date and (ii) the Mall Release Date, H/C I Owner agrees, in accordance with the
standards that obtain in First-class hotel/casinos as provided in this
Agreement, to maintain, repair and restore (including any necessary replacement
and capital improvement work required in connection therewith), and to keep in
operation, open to the public (except for portions thereof, such as service
areas, not generally open to the public) and available for the Permitted Uses,
except as may be required to maintain in the required condition, order and
repair (i) all H/C Pass-through Areas and the H/C Limited Common Areas at H/C I
Owner's sole cost and expense other than costs and expenses with respect to the
Phase I Automobile Parking Area which shall be shared in accordance with Section
3, and (ii) all H/C-Mall Common Areas, subject to the cost sharing provisions of
Section 3. The aforesaid maintenance of the
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H/C-Mall Common Areas, H/C Pass-through Areas and the H/C Limited Common Areas
shall include, without limitation, except to the extent provided hereinabove,
(i) patrolling with suitable and adequate uniformed and/or non-uniformed
security personnel in accordance with prevailing practice at properties of like
usage in Clark County, Nevada; (ii) maintaining suitable and adequate lighting
(including the expenses of power and of light bulb installation and replacement)
in all H/C-Mall Common Areas, H/C Pass-through Areas and the H/C Limited Common
Areas and keeping same lit during such times as First-class Las Vegas
Boulevard-style hotel/ casinos and/or First-class restaurant and retail
complexes are open to the public (or for the purpose of taking inventory or
maintenance or restoration or any other purpose not prohibited hereunder
(collectively, "Permitted Maintenance")), equivalent to not less than 10-foot
candles in portions generally open to the public when required to be lit to
service the opening of any building comprising the Venetian to the public, and
otherwise to the extent of such lesser standard as may be reasonably adequate
under the circumstances to service the opening of any building comprising the
Venetian for the purpose of Permitted Maintenance; (iii) cleaning,
window-washing (exclusive of any windows forming part of a separate space
tenant's premises), planting, replanting, landscaping, ventilating, heating and
air-cooling of the H/C-Mall Common Areas, the H/C Pass-through Areas and the H/C
Limited Common Areas; and (iv) cleaning and keeping in good order and repair,
and replacing when necessary, all fixtures and other installations in the
H/C-Mall Common Areas, the H/C Pass-through Areas and the H/C Limited Common
Areas including, but not limited to, pools, fountains, telephone booths, vending
machines, gaming machines and equipment, benches and the like.
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The H/C-Mall Common Areas and the H/C Pass-through Areas shall be open to the
general public and operated, and all public entrances thereto shall be open to
the general public and operated during such normal operating times as any
portion of either the SECC or the Phase I Mall are open for business to the
public, and in addition during such times as First-class Las Vegas
Boulevard-style hotel/casinos and/ or First-class restaurant and retail
complexes are open. If either the SECC or the Phase I Mall is not open to the
public but is in the process of Permitted Maintenance therein, and the other of
the SECC or the Mall I Space is not open for business to the public, then H/C I
Owner need not during such Permitted Maintenance keep the public entrances to
the H/C-Mall Common Areas or the H/C Pass-through Areas open to the general
public, but must keep such public entrances open to the employees, agents,
contractors and subcontractors of the Owner performing such Permitted
Maintenance. In addition to the foregoing, whenever any connecting level of the
SECC or the Phase I Mall is open for business, the doors connecting such level
of the SECC or the Phase I Mall, as the case may be, with the H/C I Space shall
be open and if either the SECC or Phase I Mall is in the process of Permitted
Maintenance the doors connecting such level of the SECC or the Phase I Mall, as
the case may be, with the H/C I Space, shall at the election of SECC Owner or
Mall I Owner, as the case may be, be open to SECC Owner or Mall I Owner,
respectively.
(b) Subject to Section 3 of this Article V, H/C I Owner shall,
except to the extent the same is located within the Mall I Space, at all times
from and after the earlier of (i) the Opening Date and (ii) the Mall Release
Date during the Term operate, maintain, restore, repair and replace and keep and
maintain
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in good order, condition, and repair, and in a neat and attractive condition,
consistent with the standards that obtain in First-class Las Vegas
Boulevard-style hotel/casinos and First-class retail and restaurant complexes as
provided in this Agreement the building systems, Facilities, foundation, floor
slabs, and other structural components of the Base Building (including, without
limitation, all components providing structural support for the Mall I Space and
the Phase I Mall), including, without limitation, the roof, exterior walls,
exterior wall systems, exterior wall fenestrations, interior and exterior
bearing walls, columns, slabs and members, plumbing, and sprinkler systems (or
other fire suppression systems, if any), heating, ventilating and air
conditioning systems, stairwells, elevators, escalators (if any) and any other
similar mechanical conveyancing devices or systems, electrical switchgear,
transformers and all other electrical systems (collectively, the "Building Shell
and Core"). All of said maintenance and repairs and any restorations or
replacements required in connection therewith shall be of First-class quality
and shall be done in a good and workmanlike manner. Mall I Owner shall give H/C
I Owner notice of any damage to the Phase I Mall or the Building Shell and Core
(whether or not caused by Mall I Owner) or of any defects in the Building Shell
and Core or any portion thereof or any fixtures or equipment therein promptly
after Mall I Owner first learns thereof.
(c) H/C I Owner's obligations under this Article V are subject
to Force Majeure Events and to the provisions of Article XI.
2. No Obstructions; No Dedication of Pass-through Areas.
(a) Except to the extent that temporary construction
barricades are reasonably required by H/C I Owner to perform work in and
maintain
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the H/C Pass-through Areas, the H/C-Mall Common Areas and the H/C Limited Common
Areas in accordance with the terms hereof and such barricades do not interfere
with the use of the H/C Pass-through Areas, H/C-Mall Common Areas and the H/C
Limited Common Areas or the Phase I Mall or the SECC except to the minimal
extent necessary to permit H/C I Owner to perform its obligations with respect
to such space, no fence, barricade or other obstruction shall be placed, kept,
permitted or maintained on the H/C Pass-through Areas, the H/C-Mall Common Areas
or the H/C Limited Common Areas which will interfere with the intended uses
thereof. H/C I Owner, in exercising its rights under this Section 2, shall use
commercially reasonable efforts to minimize interference with the maintenance,
use and operation of (i) the SECC and SECC Owner's business at the same and (ii)
the Phase I Mall and Mall I Owner's business at the same.
(b) No part of the H/C Pass-through Areas, the Common Areas or
the Mall I Pass-through Areas shall be dedicated to any governmental authority
or for any other public use without the prior consent of all of the Parties. The
affected Owners shall, to the extent required in order to avoid such dedication
or prevent the acquisition of any easement or other similar special rights, from
time to time close any or all portions of the H/C I Space and the Mall I Space,
erect private boundary marks or take such further actions as may be reasonably
appropriate for that purpose, but without unnecessary interference with the use
of all or any portion of the Venetian or the SECC.
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3. Cost Sharing.
(a) Subject to adjustment as set forth below, each of Mall I
Owner and SECC Owner shall pay to H/C I Owner its respective percentages and
other charges (collectively, "Mall I Owner's Share" or "SECC Owner's Share," as
applicable) to be set forth on Schedule II of the Hotel/Casino/Mall/SECC Common
Area Charges more particularly described on Schedule II as a contribution to the
cost of operating the Phase I Automobile Parking Area, the H/C-Mall Common Areas
and, in the case of Mall I Owner, for payment of other incidental costs agreed
to be shared as set forth on Schedule II from and after the Opening Date for
each year during the Term. On or before sixty (60) days before the Opening Date,
H/C I Owner, SECC Owner and Mall I Owner and their Mortgagees shall agree on an
Independent Expert reasonably acceptable to all of them who shall deliver a
certificate to each of Mall I Owner, SECC Owner and each of their, and H/C I
Owner's, respective Mortgagees setting forth the Independent Expert's
determination of (a) the actual categories of expenses; (b) the actual
percentages of cost categories attributable to each of H/C I Owner, Mall I Owner
and SECC Owner; and (c) any other charges attributable to H/C I Owner, Mall I
Owner and SECC Owner, all of which shall comprise each of H/C I Owner's Share,
Mall I Owner's Share and SECC Owner's Share to be set forth on Schedule II, and
certifying that (a), (b) and (c) would be agreed to by a Commercially Reasonable
Owner with respect to each Owner and its Lot and will not cause a Material
Adverse Effect with respect to each Owner and its Lot. Each of Mall I Owner's
Share and SECC Owner's Share and the categories of expenses set forth on
Schedule II shall be subject to further adjustment from time to
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time during the Term to the extent equitable by agreement of H/C I Owner, Mall I
Owner and SECC Owner after consultation with the Mortgagees of H/C I Owner, Mall
I Owner and SECC Owner; provided, that if any such Mortgagee shall believe that
such adjustment would (i) not be agreed to by a Commercially Reasonable Owner or
(ii) will cause a Material Adverse Effect, then such Owners and Mortgagees will
negotiate in good faith until they agree on adjustments acceptable to all such
parties; if the parties shall not agree within thirty (30) days, such Owners and
Mortgagees shall agree to an Independent Expert reasonably acceptable to all
such Owners and Mortgagees who shall deliver to SECC Owner, Mall I Owner and
each of their respective Mortgagees (as well as H/C I Owner's Mortgagee) a
written statement describing and certifying to an adjustment to Schedule II that
(i) would be agreed to by a Commercially Reasonable Owner, (ii) will not cause a
Material Adverse Effect and (iii) has appropriately allocated costs to reflect
relative benefits.
(b) Hotel/Casino/Mall/SECC Common Area Charges shall be
payable as follows: the first monthly installment thereof, reduced on a pro rata
basis to reflect the actual number of days during the calendar month in which
the Opening Date or Commencement Date, as applicable, shall occur, to be applied
to the period from the Opening Date or Commencement Date, as applicable, up to
and including the last day of such calendar month, and thereafter in monthly
installments on the first day of each month during the balance of the Term, the
last installment of which shall be reduced on a pro rata basis to reflect the
actual number of days in said month included within the Term.
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(c) Not less than thirty (30) days prior to the commencement
of each calendar year, H/C I Owner shall submit to each of SECC Owner and Mall I
Owner a statement setting forth (i) H/C I Owner's good faith estimate of the
amount of Hotel/Casino/Mall/SECC Common Area Charges for such calendar year,
(ii) Mall I Owner's Share thereof (the amount of such Mall I Owner's Share being
hereinafter referred to as "Mall I Owner's Common Area Charge Obligations") and
(iii) SECC Owner's Share thereof (the amount of such SECC Owner's Share being
hereinafter referred to as ("SECC Owner's Common Area Charge Obligations").
(d) Within ninety (90) days following the end of each calendar
year, H/C I Owner shall furnish to each of SECC Owner and Mall I Owner and each
of their Mortgagees a written statement (the "Operating Expense Statement")
certified by a nationally or regionally prominent accounting firm, who shall be
otherwise reasonably acceptable to Mall I Owner and SECC Owner, showing in
reasonable detail by categories (i) the total Hotel/Casino/Mall/SECC Common Area
Charges for such calendar year, (ii) Mall I Owner's Common Area Charge
Obligations for such calendar year and payments, if any, made by Mall I Owner
with respect thereto and (iii) SECC Owner's Common Area Charge Obligations for
such calendar year and payments, if any, made by SECC Owner with respect thereto
together, in each case, with copies of supporting invoices, receipts and such
other data necessary for SECC Owner and Mall I Owner to verify such charges
(collectively, "Supporting Documentation"). If SECC Owner's or Mall I Owner's
aggregate actual payments on account of Hotel/Casino/Mall/SECC Common Area
Charges for any calendar year shall be less than SECC Owner's or Mall I Owner's,
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as the case may be, actual Common Area Charge Obligations for such calendar
year, SECC Owner or Mall I Owner, as the case may be, shall pay such deficiency
within ten (10) days of receipt by such Party of the Operating Expense Statement
and Supporting Documentation from H/C I Owner. If SECC Owner's or Mall I Owner's
aggregate actual payments on account of Hotel/Casino/Mall/SECC Common Area
Charges for any calendar year exceed SECC Owner's actual Common Area Charge
Obligations or Mall I Owner's actual Common Area Charge Obligations, as the case
may be, as indicated by the Operating Expense Statement for such calendar year,
then H/C I Owner shall, within ten (10) days of receipt by H/C I Owner of the
Operating Expense Statement from H/C I Owner's accountant, refund the amount of
such excess payment to SECC Owner or Mall I Owner, as the case may be, in cash.
H/C I Owner shall keep complete and accurate books and records, in accordance
with generally accepted accounting principles consistently applied, of the
Hotel/Casino/ Mall/SECC Common Area Charges and shall retain those books and
records at its corporate offices. For a period of three (3) years after the end
of each calendar year, and for so long thereafter as any dispute exists with
respect thereto, H/C I Owner shall preserve all such books and records,
including any payroll and time records, vouchers, receipts, correspondence and
memos pertaining to the Hotel/Casino/Mall/ SECC Common Area Charges for such
calendar year. Each of SECC Owner or Mall I Owner may, within three (3) years
after the delivery of any Operating Expense Statement and Supporting
Documentation, examine, at such Owner's expense (unless otherwise provided
herein), H/C I Owner's books and records relating to the charges set forth on
such Operating Expense Statement. Such examination shall be conducted
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during ordinary business hours upon not less than five (5) Business Days'
Notice, in a manner so as to reasonably minimize any interference with H/C I
Owner's business. If such examination discloses that H/C I Owner has overstated
Mall I Owner's actual Common Area Charge Obligations or SECC Owner's actual
Common Area Charge Obligations, as the case may be, then H/C I Owner shall
promptly refund the overpayment to Mall I Owner or SECC Owner, as the case may
be, and if the overpayment is more than three percent (3%) of the amount such
Owner should have paid, H/C I Owner shall also pay the reasonable, out-of-pocket
costs of such Owner's examination and interest on the overpayment at the
Interest Rate from the date such Owner overpaid H/C I Owner until such Owner
receives such refund.
(e) With respect to Hotel/Casino/Mall/SECC Common Area
Charges, any dispute between H/C I Owner and SECC Owner or Mall I Owner shall be
resolved by determination of the Independent Expert in accordance with Section
15 of Article XIV, which shall be the exclusive and binding method for the
resolution of any such dispute. H/C I Owner, SECC Owner and Mall I Owner each
agree to execute and deliver, or cause to be executed and delivered, to the
other any instruments that may be required to effectuate or facilitate the
provisions of this Agreement relating to the matters set forth in this Section
3(e).
4. H/C I Space, Phase I Hotel/Casino Maintenance and Repair.
(a) From and after the earlier of (i) the Opening Date and
(ii) the Mall Release Date throughout the Term, H/C I Owner, at its sole cost
and expense, shall, consistent with First-class Las Vegas Boulevard-style
hotel/casinos and First-class retail and restaurant complexes as provided in
this Agreement (a) clean and
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maintain the H/C I Space, the Phase I Hotel/Casino and all parts thereof and
facilities therein, including, without limitation all portions of the interior
walls and floors and all improvements therein, (b) keep and maintain the same in
good order, condition and repair and in a neat, attractive and rentable
condition, and (c) make all necessary repairs and restorations thereto and/or
replacements of portions thereof, interior and exterior, structural and
non-structural, ordinary and extraordinary, including, without limitation, all
repairs and replacements necessitated by H/C I Owner's or any of H/C I Owner's
Tenant's moving property in or out of the H/C I Space or installation or removal
of furniture, fixtures or other property or by the performance by H/C I Owner or
any Tenant of any Alterations, or when necessitated by the negligence or willful
misconduct or improper conduct of H/C I Owner or H/C I Owner or the Permittees
of either of them. All of said repairs and any restorations or replacements
required in connection therewith shall be of a quality and class equal to the
original work or installation and shall be done in a good and workmanlike
manner. All work undertaken by H/C I Owner pursuant to this Section 4 shall be
performed in accordance with Sections 7 through 10.
(b) H/C I Owner's obligations under this Article V are subject
to Force Majeure Events and the provisions of Article XI.
5. Mall I Pass-through Areas, Mall I Space and Phase I Mall
Maintenance and Repair.
(a) Mall I Owner agrees in accordance with the standards that
obtain in First-class retail and restaurant complexes as provided in this
Agreement, to maintain and repair (including any necessary replacement and
capital
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improvement work required in connection therewith) at all times from and after
the earlier of (i) the Opening Date and (ii) the Mall Release Date, and to keep
in operation, open to the public (except for portions thereof, such as service
areas, not generally open to the public) and available for the Permitted Uses,
except as may be required to maintain in the required condition, order and
repair, at Mall I Owner's sole cost and expense, all Mall I Pass-through Areas
and Mall I Limited Common Areas. The aforesaid maintenance of the Mall I
Pass-through Areas and Mall I Limited Common Areas shall include, without
limitation, except to the extent provided hereinabove, (i) patrolling with
suitable and adequate uniformed and/or non-uniformed security personnel in
accordance with prevailing practice at properties of like usage in Clark County,
Nevada; (ii) maintaining suitable and adequate lighting (including the expenses
of power and of light bulb installation and replacement) in all Mall I
Pass-through Areas and Mall I Limited Common Areas and keeping same lit during
such times as First-class retail and restaurant complexes are open (to the
public or for Permitted Maintenance or restoration or any other purpose not
prohibited hereunder), equivalent to not less than 10-foot candles in portions
generally open to the public when required to be lit to service the opening of
any building comprising the Venetian to the public, and otherwise to the extent
of such lesser standard as may be reasonably adequate under the circumstances to
service the opening of any building comprising the Venetian for Permitted
Maintenance; (iii) cleaning, window-washing (exclusive of any windows forming
part of a separate space tenant's premises), planting, replanting, landscaping,
ventilating, heating and air-cooling of the Mall I Pass-through Areas and Mall I
Limited Common Areas; and (iv) cleaning and keeping
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in good order and repair, and replacing when necessary, all fixtures and other
installations in the Mall I Pass-through Areas and the Mall I Limited Common
Areas including, but not limited to, pools, fountains, telephone booths, vending
machines, benches and the like. The Mall I Pass-through Areas shall be open to
the general public and operated and all public entrances thereto shall be open
to the general public and operated during such times as First-class retail and
restaurant complexes are open. If either the SECC or the H/C I Space is not open
to the public but is in the process of having Permitted Maintenance therein, and
the other of the SECC or the Mall I Space is not open for business to the
public, then Mall I Owner need not during such Permitted Maintenance, keep the
public entrances to the Mall I Pass-through Areas open to the general public. In
addition to the foregoing, whenever any connecting level of the SECC or the H/C
I Space is open for business, the doors connecting such level of the SECC or the
H/C I Space, as the case may be, with the Mall I Space, shall be open and if
either the SECC or H/C I Space is in the process of having Permitted Maintenance
performed, the doors connecting such level of the SECC or the H/C I Space, as
the case may be, with the Mall I Space, shall at the election of SECC Owner or
H/C I Owner, as the case may be, be open to SECC Owner or H/C I Owner,
respectively.
(b) Except to the extent H/C I Owner is specifically
responsible therefor under this Agreement, throughout the Term, Mall I Owner, at
its sole cost and expense, shall (a) clean and maintain the Mall I Space and the
Phase I Mall and all parts thereof and facilities therein, including, without
limitation all portions of the interior walls and floors and all improvements
therein, (b) keep and
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maintain the same in good order, condition and repair and in a neat, attractive
and rentable condition, consistent with First-class retail and restaurant
complexes as provided in this Agreement, and (c) make all necessary repairs
thereto and/or replacements of portions thereof, ordinary and extraordinary,
including, without limitation, all repairs and replacements necessitated by Mall
I Owner's or any Tenant's moving property in or out of the Mall I Space or
installation or removal of furniture, fixtures or other property or by the
performance by Mall I Owner or any Tenant of any Alterations, or when
necessitated by the negligence or willful misconduct or improper conduct of Mall
I Owner or any Tenant or the agents, employees, contractors or invitees of
either of them. All of said repairs and any restorations or replacements
required in connection therewith shall be of a quality and class equal to the
original work or installation and shall be done in a good and workmanlike
manner. All work undertaken by Mall I Owner pursuant to this Section 5, shall be
performed in accordance with Sections 7 through 10.
(c) Mall I Owner's obligations under this Article V are
subject to Force Majeure Events and the provisions of Article XI.
6. No Obstructions to Mall I Pass-through Areas. Except to the
extent that temporary construction barricades are reasonably required by Mall I
Owner to perform work in and maintain the Mall I Pass-through Areas and the Mall
I Limited Common Areas in accordance with the terms hereof and such barricades
do not interfere with the use of the H/C Pass-through Areas or the Phase I
Hotel/Casino or the SECC except to the minimal extent necessary to permit Mall I
Owner to perform its obligations with respect to such space, no fence, barricade
or other
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obstruction shall be placed, kept, permitted or maintained on the Mall I
Pass-through Areas and the Mall I Limited Common Areas which will interfere with
the intended uses thereof. Mall I Owner, in exercising its rights under this
Section 6, shall use commercially reasonable efforts to minimize interference
with the maintenance, use and operation of (i) the SECC and SECC Owner's
business at the same and (ii) the Phase I Hotel/Casino and H/C I Owner's
business at the same.
7. Alterations. H/C I Owner and Mall I Owner each agree for the
benefit of the other (except as otherwise expressly set forth herein) that from
and after the Completion Date:
(a) H/C I Owner and Mall I Owner may each make (or allow any
Tenant to make) Alterations to the improvements from time to time located within
or on their respective Lots in accordance with the further provisions of this
Article V from time to time during the Term.
(b) H/C I Owner may from time to time as it deems appropriate
in its absolute discretion, subject to the provisions of Section 8 and to the
other provisions of this Section 7, make Alterations to all portions of the
Phase I Hotel/Casino.
(c) Mall I Owner may from time to time as it deems appropriate
in its absolute discretion, subject to the provisions of Section 8 and to the
other provisions of this Section 7, make Alterations to all portions of the Mall
I Space and the Phase I Mall.
(d) Neither H/C I Owner nor Mall I Owner may make (or allow
any Person to make) any Alteration or restoration which affects in a material
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respect (i) the Building Shell and Core, (ii) the H/C-Mall Common Areas, (iii)
the H/C Limited Common Areas, (iv) the Mall I Limited Common Areas, (v) the New
Electric Substation, (vi) the New HVAC Plant or (vii) the Phase I Automobile
Parking Area (any such Alteration or restoration, a "Material Alteration"),
without in each instance obtaining the prior written consent thereto of (a) the
other Owner, (b) the Mortgagee of each of the H/C I Owner and the Mall I Owner,
and (c) with respect to a Material Alteration affecting the New Electric
Substation and/or the New HVAC Plant, SECC Owner and its Mortgagees, all of
which consents (other than the consent of the Mortgagee on whose Lot the
Alteration or restoration is being made) shall not be unreasonably withheld,
conditioned or delayed if a Commercially Reasonable Owner would grant its
consent and the same is not likely to have a Material Adverse Effect. Either
Owner may make (or allow any Tenant to make) any Alteration which singularly or
together with related work is not a Material Alteration without the other
Owner's or any Mortgagee's consent in accordance with the further provisions of
this Article V. Together with each request for approval of a Material
Alteration, the requesting Owner shall present to the non-requesting Owner and
the Mortgagee of each of H/C I Owner and Mall I Owner (and the Mortgagee of SECC
Owner with respect to a Material Alteration affecting the New Electric
Substation and/or the New HVAC Plant) for its approval plans and specifications
for such work prepared by an Architect. An Owner's or any Mortgagee's approval
of any Material Alteration shall not constitute any assumption of any
responsibility or liability by such Owner or Mortgagee for the accuracy or
sufficiency of the applicable plans and specifications and the requesting Owner
shall be solely responsible for such items and
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shall be liable for any damage resulting therefrom. The requesting Owner shall
reimburse its Mortgagees, the non-requesting Owner and its Mortgagee upon
receipt of invoices for the non-requesting Owner's and its Mortgagee's actual
out-of-pocket costs incurred in connection with any review of any plans and
specifications in accordance with this Section 7(d), including architect's and
engineer's fees and costs. Upon reasonable prior notice and during mutually
convenient hours, the non-requesting Owner and/or the Mortgagee of each of the
H/C I Owner and the Mall I Owner (and the Mortgagee of SECC Owner with respect
to a Material Alteration affecting the New Electric Substation and/or the New
HVAC Plant) may inspect Material Alterations from time to time in order to
assure itself that such work is being carried on in accordance with the
requirements of this Agreement, provided that such inspection does not
unreasonably interfere with the continuance and completion of the Material
Alterations, and provided further that the failure of an Owner or any Mortgagee
to inspect such work (or, if such work is inspected, the results or findings of
such inspection) shall not in and of itself be considered a waiver of any right
accruing to such Owner or Mortgagee upon any failure of the requesting Owner to
perform such work in accordance with this Agreement. In undertaking any
activities described in, and performing its obligations under, this Article V,
each Owner shall use all commercially reasonable efforts to minimize
interference (including, without limitation, interference due to closure) with
the maintenance, use and operation of the Phase I Mall, the Phase I
Hotel/Casino, and the SECC.
8. Alteration Requirements. H/C I Owner and Mall I Owner each
covenants and agrees for the benefit of the other that no Alterations to their
respective
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Lots and/or any buildings or improvements located thereon or therein will be
made except in compliance with this Article V, and hereby covenants that it will
comply with each and all of the following provisions:
(a) All Alterations shall be made with commercially reasonable
diligence and dispatch in a First-class manner with First-class materials and
workmanship, architecturally consistent in style with the existing improvements
and in such a manner as will not interfere (other than to a de minimis extent)
with the use, occupancy, maintenance or operation of the Base Building, the
Phase I Hotel/ Casino or the Phase I Mall or any of the businesses conducted
thereat.
(b) Before any Alterations are begun, the Owner performing or
causing such Alteration to be performed shall obtain, at its own sole cost and
expense, all licenses, permits, approvals and authorizations in connection with
any such Alterations required by any Governmental Authorities and shall, on
demand, deliver photocopies thereof to the other Owner. Upon any Owner's
request, the other Owner shall join in the application for such licenses,
permits, approvals and authorizations whenever such action is necessary, and the
requesting Owner covenants that the non-requesting Owner will not suffer,
sustain or incur any cost, expense or liability by reason thereof. All Material
Alterations shall be made under the supervision of an Architect.
(c) All Alterations shall be made in compliance and conformity
with all applicable Legal Requirements.
(d) In making any Alteration, the Owner performing or causing
such Alteration to be performed shall not violate (a) the terms or conditions
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of any insurance policy affecting or relating to the Venetian (including,
without limitation, any insurance policy in respect of the entire Base
Building), or (b) the terms of any covenants, restrictions or easements
affecting the Venetian.
(e) No Alterations shall create any encroachment upon any
street or upon any other portion of the Venetian.
(f) H/C I Owner and Mall I Owner shall cooperate in good faith
to effect any Alteration necessary or desirable to the other.
(g) No Alteration will be made that will affect the structural
integrity and support of the Mall I Space or the Phase I Mall.
9. Contractor Insurance. The Owner performing or causing a Material
Alteration to be performed shall cause each of its general contractors to
obtain, prior to commencing any Material Alteration, and to keep in force, for
the benefit of Mall I Owner, H/C I Owner and each of their Mortgagees until the
applicable Material Alteration is completed:
(a) Commercial general liability insurance for the project on
an "occurrence" basis, including coverage for premises/operations, products/
completed operations, broad form property damage, blanket contractual liability,
independent contractor's and personal injury, with no exclusions for explosion,
collapse and underground perils, with primary coverage limits of no less than
$1,000,000 for injuries or death to one or more persons or damage to property
resulting from any one occurrence and a $2,000,000 aggregate limit. The
commercial general liability policy shall also include a severability of
interest clause;
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(b) Automobile liability insurance, including coverage for
owned, non-owned and hired automobiles for both bodily injury and property
damage and containing appropriate no-fault insurance provisions or other
endorsements in accordance with state legal requirements, with limits of no less
than $1,000,000 per accident with respect to bodily injury, property damage or
death;
(c) Workers compensation insurance and employer's liability or
stop gap liability, with a limit of not less than $1,000,000, and such other
forms of insurance which are required by law, providing statutory benefits and
covering loss resulting from injury, sickness, disability or death of the
employees of such Owner;
(d) Umbrella Excess Liability Insurance of not less than
$10,000,000 per occurrence and in the aggregate; and
(e) All such insurance shall be written by companies
reasonably approved by H/C I Owner, Mall I Owner and each of their Mortgagees
and shall be on terms reasonably satisfactory to H/C I Owner and Mall I Owner.
Certificates for such insurance shall be delivered to H/C I Owner and Mall I
Owner at least three (3) Business Days before any work on such Material
Alteration begins at the Venetian. H/C I Owner or Mall I Owner, as the case may
be, shall also maintain such additional insurance as the other shall reasonably
request from time to time, provided such insurance coverage is maintained by
tenants or owners of facilities or portions of facilities similar to the
Venetian.
10. Payment of Other Owner's Expenses. In connection with the making
of any Material Alterations, the Owner performing such Material Alterations
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shall pay the other Owner's reasonable actual out-of-pocket costs and expenses
incurred in connection therewith.
11. Trade Fixtures and Personal Property. Notwithstanding anything
to the contrary set forth in this Article V, H/C I Owner and Mall I Owner and
its Tenants may, without the other Owner's consent, install in their respective
Lots trade fixtures and personal property, provided that no such installation
shall interfere with or damage the Building Shell and Core; provided that any
such installations located in any Pass-through Area or in the H/C-Mall Common
Areas or on any wall fronting on any Pass-through Area or any H/C-Mall Common
Area must comply with the requirements for Alterations set forth in this Article
V. Such trade fixtures and personal property may be removed from time to time so
long as any damage caused to any part of the Venetian caused by such removal
shall be promptly restored at the removing Owner's sole cost and expense.
12. Negative Covenants With Respect to Floor Loads. Neither Mall I
Owner nor H/C I Owner shall suffer or permit any part of the Venetian to be used
in any manner, or anything to be done therein, or suffer or permit anything to
be brought into or kept in any part of the Venetian, which would in any way
place weight on any floor area in excess of its maximum floor load.
ARTICLE VI
TAXES AND INSURANCE PREMIUMS
1. H/C I Owner and Mall I Owner each agree for the benefit of the
other as follows:
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(a) H/C I Owner Taxes. Until the Assessment Date, on the first
Business Day of each December, March, June and September, H/C I Owner shall
deposit into an escrow account (the "Tax Escrow Account") to be held and
maintained by the Trustee for the benefit of each of the Mortgagees of the H/C I
Space and the Mall I Space, H/C I Owner's Tax and Insurance Share (as defined
below) of one-quarter of the following amounts during the following periods:
(i) from and after the Commencement Date until the day
before the first anniversary thereof, $600,000;
(ii) from and after the first anniversary of the
Commencement Date until the day before the second anniversary thereof,
$1,400,000; and
(iii) from and after the second anniversary of the
Commencement Date, and thereafter until the Subdivision Date, one hundred
five percent (105%) of the aggregate amount of Taxes that were payable
with respect to the Venetian and the Phase I Land during the immediately
preceding Tax Year (or such greater amount as shall be payable during the
following three (3) month period as reflected on a Tax Bill).
(b) Mall I Owner Taxes. Until the Assessment Date, on the
first day of each December 1st, March 1st, June 1st and September 1st Mall I
Owner shall deposit into the Tax Escrow Account Mall I Owner's Tax and Insurance
Share (as defined below) one-quarter of the following amounts during the
following periods:
(i) from and after the Commencement Date until the day
before the first anniversary thereof, $600,000;
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(ii) from and after the first anniversary of the
Commencement Date until the day before the second anniversary thereof,
$1,400,000; and
(iii) from and after the second anniversary of the
Commencement Date, and thereafter until the Subdivision Date, one hundred
five percent (105%) of the aggregate amount of Taxes that were payable
with respect to the Venetian and the Phase I Land during the immediately
preceding Tax Year (or such greater amount as shall be payable during the
following three (3) month period as reflected on a Tax Bill).
(c) Tax and Insurance Share. H/C I Owner's Tax and Insurance
Share shall be 85%, and Mall I Owner's Tax and Insurance Share shall be 15%.
Each such Share shall be subject to adjustment to the extent equitable no less
frequently than one (1) time during any three (3) year period based on a then
current appraisal of an Independent real estate appraiser, prepared at the
request of either H/C I Owner or Mall I Owner or any of their Mortgagees, the
cost of which shall be shared by each Owner (proportionate to each Owner's Tax
and Insurance Share). Copies of all Tax Bills shall be delivered to the Trustee,
H/C I Owner and its Mortgagee and Mall I Owner and its Mortgagee by a tax
reporting service engaged by and paid for by H/C I Owner. If any Owner shall
receive a Tax Bill that it does not receive from such tax reporting service it
shall promptly send a copy thereof to all other Owners and the Trustee. Within
ninety (90) days after the end of each Tax Year, Trustee shall submit to each of
H/C I Owner and Mall I Owner a statement ("Final Tax Statement") indicating
whether and by how much each Owner has
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overpaid or underpaid its share of the actual amount of Taxes. If any Final Tax
Statement indicates that any amount is due to an Owner, such refund shall
accompany such Final Tax Statement. Within fifteen (15) days after receipt of
any Final Tax Statement, the applicable Owner shall pay to Trustee the amount of
any deficiency shown on such Final Tax Statement.
(d) H/C I Owner Insurance. On the first day of each calendar
month, from and after the Commencement Date, H/C I Owner shall deposit into an
escrow account (the "Insurance Escrow Account") to be held and maintained by
Trustee for the benefit of the Mortgagees of the H/C I Space and the Mall I
Space H/C I Owner's Tax and Insurance Share of one-twelfth of one hundred and
five percent (105%) of the premiums actually payable during the preceding twelve
(12) month period with respect to the insurance policies required to be
maintained pursuant to Article X (but in no event less than the amount that the
Trustee, in good faith, determines shall be necessary in order to accumulate in
the Insurance Escrow Account sufficient funds to pay all such insurance premiums
at least fifteen (15) Business Days prior to the expiration of such insurance
policies).
(e) Mall I Owner Insurance. On the first day of each calendar
month from and after the Commencement Date, Mall I Owner shall deposit into the
Insurance Escrow Account Mall I Owner's Tax and Insurance Share of one-twelfth
of one hundred and five percent (105%) of the premiums actually payable during
the preceding twelve (12) month period with respect to the insurance policies
required to be maintained pursuant to Article X (but in no event less than the
amount that the Trustee, in good faith, determines shall be necessary in order
to accumulate
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in the Insurance Escrow Account sufficient funds to pay all such insurance
premiums at least fifteen (15) Business Days prior to the expiration of such
property insurance policies). If at the end of any twelve (12) month period, H/C
I Owner's and/or Mall I Owner's aggregate actual payments on account of
insurance premiums for such period shall exceed the amount of H/C I Owner's
and/or Mall I Owner's actual insurance premium obligations for such period, then
Trustee shall promptly refund the amount of such excess payment to H/C I Owner
and/or Mall I Owner, as the case may be, in cash. Copies of all Bills with
respect to property insurance premiums shall be delivered to the Trustee and the
other Owner by H/C I Owner and/or Mall I Owner promptly after receipt thereof.
(f) Trustee. "Trustee" shall mean any of the following: a
savings bank, savings and loan association, commercial bank, trust company
(whether acting individually or in a fiduciary capacity) or insurance company
(whether acting individually or in a fiduciary capacity) that has a combined
capital and surplus of $500,000,000 or above, reasonably acceptable to Mall I
Owner and H/C I Owner, and, in each case, reasonably acceptable to each of their
Mortgagees and who is not affiliated with any of the Borrower or Adelson (or any
Affiliate of either). The initial Trustee shall be The Bank of Nova Scotia. H/C
I Owner shall pay the annual fee of the Trustee which payment shall be subject
to the cost sharing provisions of Section 3 of Article V with respect to Mall I
Owner's share of such fee. To the extent SECC Owner shall elect to obtain
insurance coverage for the SECC under a blanket policy with H/C I Owner and Mall
I Owner in accordance with the provisions of Article X, SECC Owner shall pay its
proportionate share of applicable insurance premiums
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pursuant to the cost sharing provisions of Section 3 of Article V. Either H/C I
Owner or Mall I Owner can replace the existing Trustee at any time and from time
to time; provided that any replacement Trustee shall be selected in accordance
with the foregoing provisions of this subsection (f). If H/C I Owner or Mall I
Owner or SECC Owner (if SECC Owner shall have elected to maintain insurance
coverage under a blanket policy with H/C I Owner and Mall I Owner) shall fail to
make any payment required to be made in accordance with the provisions of this
Article VI, the Trustee shall promptly give notice to the non-defaulting Owners
and to each Mortgagee, and any non-defaulting Owner and/or any Mortgagee may
(but shall not be required to) pay all or any portion of such payment to the
Trustee and the non-paying Owner shall reimburse the paying non-defaulting Owner
or Mortgagee, as applicable on demand therefor by the paying Owner or Mortgagee,
for the sums so expended with interest thereon for the period from such demand
to such reimbursement, at the Interest Rate. The Trustee shall have no
responsibility to any Owner as a consequence of performance by the Trustee
hereunder except for any bad faith, fraud, gross negligence or willful
misconduct of the Trustee. The Trustee shall have no duties or obligations
hereunder except as expressly set forth herein or in that certain Trustee
Disbursement and Administration Agreement, dated as of November 14th, 1997, by
and among VCR, Mall I Owner, The Bank of Nova Scotia and the Existing
Mortgagees, shall be responsible only for the performance of such duties and
obligations and shall not be required to take any action otherwise than in
accordance with the terms hereof or thereof.
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(g) Owners to Pay Taxes. SECC Owner, H/C I Owner and Mall I
Owner each agree for the benefit of the other that (i) all taxes, assessments
and other charges (including, without limitation, real property taxes and
assessments), and all interest and penalties with respect thereto (all of the
foregoing, collectively, "Taxes") levied or assessed, or which (if unpaid) may
result in the imposition of a lien, against all or any portion of the SECC Land
and all buildings and other improvements from time to time located on the SECC
Land (or against SECC Owner, H/C I Owner or Mall I Owner with respect to the
same) shall be paid, prior to delinquency thereof, by SECC Owner, (ii) all Taxes
levied or assessed, or which (if unpaid) may result in the imposition of a lien,
against all or any portion of the Phase I Land (excluding the Mall I Space from
and after the Subdivision Date) and all buildings and other improvements from
time to time located on the Phase I Land (excluding the Mall I Space from and
after the Subdivision Date) (or against H/C I Owner, Mall I Owner or SECC Owner
with respect to the same) shall be paid, prior to delinquency thereof, by H/C I
Owner, and (iii) all Taxes levied or assessed, or which (if unpaid) may result
in the imposition of a lien, against all or any portion of the Mall I Space and
all improvements from time to time located thereon (or against H/C I Owner, Mall
I Owner or SECC Owner with respect to the same) shall be paid, prior to
delinquency thereof, by Mall I Owner.
(h) Right to Contest. Each Party shall have the right to
contest, in good faith and at its own cost and expense, the validity or amount
of any Taxes that, in the absence of such contest, it would be required to pay
hereunder; provided, however, that if at any time payment of the whole or any
part thereof shall
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be necessary in order to prevent the sale, under applicable law, of any property
with respect to which any easement, right or interest has been granted pursuant
to this Agreement, then the contesting party shall pay or cause same to be paid
in time to prevent such sale. Any such payment may be made under protest. Prior
to the Subdivision Date, H/C I Owner and Mall I Owner shall consult in good
faith with respect to any proposed contest of the validity or amount of any
Taxes regarding all or any part of each such Owner's Lot and/or the buildings or
other improvements located thereon or therein and neither Party shall prosecute,
defend, settle or compromise any such contest without the prior written consent
of the other Party, which consent shall not be unreasonably withheld,
conditioned or delayed.
(i) Bills. In the event that any Party shall receive a bill,
invoice or similar writing (each of the foregoing, a "Bill") in respect of any
Taxes that any other Party is required to pay hereunder, then the Party in
receipt of such bill shall (i) pay, prior to delinquency, the portion, if any,
of the Taxes referenced in such Bill for which such Party is responsible and
(ii) promptly deliver the same to the other Party, whereupon such other Party
shall pay, prior to delinquency, the portion of the Taxes referenced in such
Bill for which such other Party is responsible. Additionally, if any Party
hereto shall receive a notice or other official writing relating to any Taxes
that the other Party hereto is required to pay under this Agreement (other than
a Bill), then such receiving Party shall promptly furnish a copy of the same to
the other Party hereto. Each Party shall, promptly upon the request of any other
Party, exhibit to such other Party for examination, receipts for the Taxes
required to be paid by such Party pursuant to this Article VI.
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(j) Failure to Pay Taxes. In the event any Party shall fail to
pay any Taxes that it is required to pay hereunder, any other Party or its
Mortgagee may (but shall not be required to) pay all or any portion of such
Taxes and the non-paying Party shall reimburse the paying Party or its
Mortgagee, as applicable, on demand therefor by the paying Party or its
Mortgagee, for the sums so expended, with interest thereon, for the period from
such demand to such reimbursement, at an annual rate equal to four (4%) percent
per annum in excess of the rate announced from time to time by LaSalle National
Bank, or any successor thereto, as its prime rate at its main office in Chicago,
IL (the "Interest Rate"); provided, however, that with respect to a Mortgagee,
"Interest Rate" shall mean the rate which is the greater of (i) the Interest
Rate (as defined above) and (ii) the default interest rate applicable to similar
defaults as set forth in such Mortgagee's loan documents. The provisions of
Sections 9(a) and (b) of Article XIV shall apply to this Section 1(j).
(k) Trustee to Pay Taxes and Insurance Premiums. Provided H/C
I Owner and Mall I Owner shall have made the payments to Trustee required under
this Article VI, (i) from and after the Commencement Date until the Assessment
Date, Trustee shall pay all Taxes with respect to the Venetian and the Phase I
Land prior to delinquency thereof based on Tax Bills presented to Trustee, (ii)
from and after the Commencement Date, Trustee shall pay all insurance premiums
with respect to the insurance policies required to be maintained under Article X
prior to the expiration thereof based on bills with respect to insurance
premiums presented to Trustee, and (iii) to the extent there shall not be
sufficient monies in the Tax Escrow Account and/or in the Insurance Escrow
Account, as the case may be, to
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enable Trustee to make the payments described in the preceding (i) and (ii), H/C
I Owner and Mall I Owner shall pay Trustee the amount of any such deficiency
promptly after demand therefor based on their respective Tax and Insurance
Shares.
(l) Pledge of Collateral. All amounts held by the Trustee
shall be held by the Trustee in accounts for the benefit of the Mortgagees of
the Lots affected. The Trustee shall establish separate accounts for the
proceeds allocable to each respective Lot. At the request of the Owner of a
particular Lot, the account established with respect to that Lot will permit the
investment of the funds therein in investments identified by said Owner subject
to the reasonable approval of the Mortgagee of the affected Lot. Notwithstanding
the foregoing:
(i) the account established for a particular Lot and all
funds and investments therein and all proceeds thereof are hereby pledged,
assigned, transferred and delivered by the respective Owners to the
Trustee for the benefit of the Mortgagees of said Lot, and the Owners
hereby grant to the Trustee for the benefit of said Mortgagees a
continuing lien on and security interest in all of the foregoing as
collateral security for the obligations under their respective loan
documents, in the same priorities as apply to the liens which they hold
with respect to the Lots; and
(ii) said Owners shall take all steps reasonably requested
by the Trustee or said Mortgagees in order to perfect said security
interests.
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ARTICLE VII
PERMANENT PARKING
1. Automobile Parking Areas. As part of the construction of the
Venetian, H/C I Owner intends to construct the Phase I Automobile Parking Area,
which structure shall be constructed at H/C I Owner's sole cost and expense and
will be made available for use by H/C I Owner, SECC Owner and Mall I Owner in
accordance with the provisions of this Article VII. H/C I Owner shall, however,
notwithstanding anything to the contrary contained in this Article VII, have no
obligation to SECC Owner to construct the Automobile Parking Areas, so long as
the Temporary Parking Facilities described in Section 4 of Article I continue to
be provided in accordance, and H/C I Owner otherwise complies, with the terms of
Section 4 of Article I.
2. Preliminary Parking Plan. The Parties hereby agree that the Phase
I Automobile Parking Area and the roadways, walkways and related facilities and
improvements described below shall be constructed generally in accordance with
the conceptual plans and drawings attached hereto and made a part hereof as
Exhibit S (the "Preliminary Parking Plan") and applicable Legal Requirements. No
material changes in or refinements to the location, capacity or design of the
Phase I Automobile Parking Area, or the roadways, walkways, and related
facilities and improvements associated with the same, all as shown on the
Preliminary Parking Plan, shall be made without each Owner's prior written
consent thereto, which consent shall not be unreasonably withheld, delayed or
conditioned; provided that, with respect to the design of the Phase I Automobile
Parking Area, each Owner's
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right of approval shall be limited to those aspects of the design that affect
the Phase I Automobile Parking Area's structural integrity, its utility to such
Owner and its compliance with applicable Legal Requirements affecting each
Owner. In addition, H/C I Owner shall keep the other Owners informed on a
current basis of all proposed material changes to the plans and specifications
for the Phase I Automobile Parking Area and the general status of the
construction of the Phase I Automobile Parking Area, and each Owner shall have
the right (either itself or through an authorized representative) to inspect the
Phase I Automobile Parking Area and discuss the construction of the same with
the architect and construction manager retained by H/C I Owner.
3. Parking Spaces.
(a) Effective automatically upon the Phase I Garage Opening
Date, H/C I Owner grants to each other Owner the non-exclusive right to use all
the Parking Spaces in the Phase I Automobile Parking Area on a "first come,
first served" basis, subject to the provisions of this Agreement; provided that
such Owner is using its Lot for its Permitted Use. In no event shall any Owner's
rights and easements relating to parking comprise less than the minimum number
of Parking Spaces which shall be in such a location as shall be necessary for
such Owner (i) to be in compliance with all applicable Legal Requirements with
respect to Parking Spaces and (ii) to conduct its business on or in its Lot in
accordance with its Permitted Use (collectively, the "Minimum Parking
Standards"); provided, however, that H/C I Owner shall have no obligation to
alter or expand the Phase I Automobile Parking Area in order to accommodate
increased parking needs imposed upon any
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other Owner as a consequence of a change in the applicable Legal Requirements
applicable to such Owner or a change in the intended use of such Owner's Lot
after the Commencement Date;
(b) If H/C II Owner shall construct a new and separate parking
structure (the "Phase II Automobile Parking Area") on the Phase II Land for the
use by H/C II Owner, Mall II Owner, H/C I Owner, Mall I Owner and SECC Owner, of
all the parking spaces in the Phase II Automobile Parking Area on a
non-exclusive "first come, first served" basis, then H/C I Owner shall grant to
H/C II Owner the non-exclusive right to use all the Parking Spaces in the Phase
I Automobile Parking Area on a "first come, first served" basis, from and after
the date the Phase II Automobile Parking Area shall be made available for such
use to all Owners; provided that (i) such use of the Phase I Automobile Parking
Area and of the Phase II Automobile Parking Area shall satisfy the Minimum
Parking Standards with respect to each of H/C I Owner, Mall I Owner and SECC
Owner, and (ii) a Commercially Reasonable Owner of each of the Phase I
Hotel/Casino, the Phase I Mall and the SECC would consent to such use by H/C II
Owner and the same is not likely to have a Material Adverse Effect as determined
with respect to each such Owner, its property and its Mortgagee. If H/C II Owner
shall construct the Phase II Automobile Parking Area to be used in accordance
with the provisions of this subsection (b), (i) H/C I Owner and H/C II Owner
shall agree on a commercially reasonable plan to share the costs of operating
and maintaining the Automobile Parking Areas which, in the case of each of SECC
Owner and Mall I Owner and their respective properties and Mortgagees, a
Commercially Reasonable Owner would agree to and which is not
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likely to have a Material Adverse Effect, and (ii) H/C II Owner shall commence
and continue to maintain the Phase II Automobile Parking Area in a First-class
manner.
4. Construction. The Phase I Automobile Parking Area shall be
constructed by H/C I Owner at its sole cost and expense. The manner in which the
Phase I Automobile Parking Area shall be operated and maintained shall be as set
forth in this Article VII.
5. Capital Improvements/Maintenance. H/C I Owner shall have the
right to make capital improvements and the obligation to perform Maintenance on
the Parking Access Easement Area located on the Phase I Land, which rights shall
be exercised at its sole cost and expense, subject to the cost sharing
provisions of Section 3 of Article V. SECC Owner shall have the right to make
capital improvements and the obligation to perform Maintenance on the Parking
Access Easement Area located on the SECC Land, which right and obligation shall
be exercised at its sole cost and expense.
6. Rights of Others to Use Parking Spaces. Nothing herein shall be
construed as precluding H/C I Owner from granting from time to time to other
Persons (including without limitation other Owners) rights to use Parking
Spaces. Such grants may be on terms determined by H/C I Owner in its sole
discretion. Notwithstanding the foregoing, a particular grant shall not be
permitted if usage of the rights granted will either (i) result in any Owner not
being afforded its Minimum Parking Standards or (ii) otherwise adversely affect
the conduct of another Owner's business in accordance with the terms hereof
(except to a de minimis extent), unless such Owner first consents to such grant.
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7. Parking Rules and Regulations.
(a) Only H/C I Owner with respect to the Phase I
Automobile Parking Area shall have the right to establish, revise and replace,
from time to time, reasonable rules and regulations ("Parking Rules and
Regulations") for use of the Phase I Automobile Parking Area subject to the
approval of each other Owner, which approval shall not be unreasonably withheld,
delayed or conditioned; provided that no such rules or regulations or revisions
thereto shall (i) deprive any Owner of its Minimum Parking Standards, (ii)
adversely affect the conduct of any Owner's business in accordance with the
terms of this Agreement (except to a de minimis extent) or (iii) be enforced in
a manner which discriminates against an Owner or its Permittees. A copy of the
Parking Rules and Regulations shall be provided to each Owner. Each Owner shall
comply with the Parking Rules and Regulations. The power to enforce the Parking
Rules and Regulations shall be vested exclusively in H/C I Owner. In this
regard, the Parties acknowledge and agree that the Parking Rules and Regulations
to be adopted from time to time by H/C I Owner are intended to facilitate the
orderly administration of the Phase I Automobile Parking Area and the use of the
rights therein granted, and no Owner shall have any claim against H/C I Owner
with respect to the Phase I Automobile Parking Area for failure to enforce the
Parking Rules and Regulations against any other Owner, person or entity so long
as such rules and regulations do not deprive any Owner of its Minimum Parking
Standards or adversely affect the conduct of any Owner's business in accordance
with the terms of this Agreement or are enforced in a discriminatory manner.
Rules and regulations initially applicable to the use of the Automobile
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Parking Areas pursuant to this Agreement are set forth in Schedule III attached
hereto.
(b) In the event of any dispute between the Owners regarding
the establishment, revision or enforcement of Parking Rules and Regulations
pursuant to this Section 7, the affected Owners shall submit the matter for
determination by the Independent Expert pursuant to the provisions of Section 15
of Article XIV.
8. Parking Fees; Maintenance Charges. H/C I Owner shall have the
right, subject to the approval of each other Owner, which approval shall not be
unreasonably withheld, delayed or conditioned, to require the payment of parking
fees for the benefit of the Owners. Such fees shall be equitably apportioned
among the Owners as the Owners shall agree (and, absent such agreement, as an
Independent Expert shall decide).
9. Additional Parking to Comply With Legal Requirements. If, at any
time, the parking rights, easements and interests granted to Mall I Owner, H/C I
Owner and/or SECC Owner under this REA shall not be sufficient in order for the
Phase I Mall, Mall I Space, SECC, SECC Land, Phase I Hotel/Casino and/or the H/C
I Space to comply with all applicable Legal Requirements pertaining to parking,
then H/C II Owner shall immediately provide and make available to Mall I Owner,
H/C I Owner and/or SECC Owner, as applicable, and H/C I Owner (on behalf of
itself and H/C II Owner) hereby grants, such easements, rights and interests in,
to and under such additional parking spaces and facilities on the Phase II Land
as are necessary in order for the Phase I Mall, the Mall I Space, the SECC, the
SECC
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Land, the Phase I Hotel/Casino and the H/C I Space to comply with all Legal
Requirements pertaining to parking. Additionally, as a condition precedent to
any development activity upon the Phase II Land, the H/C II Owner shall deliver
to the H/C I Owner, the Mall I Owner, the SECC Owner and their respective
Mortgagees an opinion of counsel or a certificate from an appropriate official
of the applicable Governmental Authority, in either case, in form and substance
(and, in the case of a legal opinion, from counsel reasonably satisfactory)
reasonably satisfactory to said Mortgagees to the effect that the Phase I Mall,
Mall I Space, SECC, SECC Land, Phase I Hotel/Casino and the H/C I Space will
continue, after and during such proposed development activity, to comply with
all applicable Legal Requirements pertaining to parking.
ARTICLE VIII
THE VENETIAN AND THE LIDO
A. Construction. Until such time as all obligations under the Mortgage
Notes and the Mortgage Notes Indenture have been paid in full, H/C II Owner
agrees, for the benefit of H/C I Owner, that no new construction shall be
undertaken on the Phase II Land unless such construction is permitted by the
terms of the indenture pertaining to the Mortgage Notes or otherwise approved by
the Mortgage Notes Indenture Trustee. H/C I Owner, H/C II Owner, Mall I Owner,
Mall II Owner and SECC Owner each further agree for the benefit of the others as
follows:
1. In connection with the construction of the Lido, the Parties
shall cooperate and continuously consult in good faith with each other in
connection with
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such simultaneous construction, such cooperation to include, without limitation,
(a) diligent efforts by each to minimize interference with the construction
activities of the others; (b) the termination by each, as soon as reasonably
practicable in accordance with reasonably prudent construction practices, of any
such interference; (c) the giving by each to the others of a reasonably detailed
schedule of all construction-related activities, such schedule to be updated not
less frequently than monthly; (d) H/C I Owner endeavoring to provide to H/C II
Owner the benefit of any construction, interior finish, FF&E, insurance and
other discounts obtained by H/C I Owner (but at no direct or indirect expense to
H/C I Owner); (e) appropriate joint use, on an equitable, arm's-length basis, of
architects, construction managers, trade contractors, and consultants (with
payments to such third parties to be equitably allocated between H/C I Owner and
H/C II Owner at no direct or indirect expense to H/C I Owner, Mall I Owner or
SECC Owner) and, when appropriate, joint actions with respect thereto; and (f)
appropriate sharing of construction staff, on an equitable arm's-length basis
(with the wages, salaries and other benefits of such staff to be equitably
allocated between H/C I Owner and H/C II Owner at no direct or indirect expense
to H/C I Owner, Mall I Owner or SECC Owner). Notwithstanding the foregoing, if,
in the good faith judgment of H/C I Owner or Mall I Owner, any
construction-related activity in connection with the Lido is reasonably likely
to cause H/C I Owner or Mall I Owner to breach any covenant or agreement either
has made to or with any of its Mortgagees (including, without limitation, any
covenant relating to when construction of the Venetian will be completed), H/C
II Owner or Mall II Owner will, promptly upon the request of H/C I Owner, stop
such activity, in which
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event H/C I Owner or Mall I Owner shall notify H/C II Owner when such activity
can be resumed.
2. H/C II Owner and Mall II Owner covenant and agree that in
performing the construction of the Lido (including, without limitation, the
Phase II Mall and the Phase II Automobile Parking Area) and any other buildings
or other improvements to be located upon the Phase II Land (and in performing
any ancillary activities) while the SECC and/or the Venetian or any portion
thereof is open to the general public, H/C II Owner shall (a) use commercially
reasonable efforts to minimize interference with the use, enjoyment and
occupancy of, and the conduct by SECC Owner (including, without limitation, SECC
Owner's parking rights, access to and from the SECC, rights to Existing Utility
Equipment and the Existing HVAC Plant and the New HVAC Plant under this
Agreement), H/C I Owner and Mall I Owner of their businesses at the Venetian and
the SECC, (b) terminate, as soon as reasonably practicable in accordance with
reasonably prudent construction practices, any such interference and (c) give
H/C I Owner, Mall I Owner and SECC Owner a reasonably detailed schedule of any
such construction-related activities prior to the commencement of any such
construction-related activities, such schedule to be updated not less frequently
than monthly. If in connection with any such interference, any Mortgagee of H/C
I Owner, Mall I Owner or SECC Owner shall require that any such Party post a
letter of credit, bond or other security, then H/C II Owner, upon demand
therefor by such Party, shall pay all reasonable costs of obtaining the same.
3. H/C I Owner shall have the right to approve the plans and
specifications for the casino portion of the Lido and any other portions of the
Lido
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that may directly connect with or adjoin the Venetian, which approval shall not
be unreasonably withheld, delayed or conditioned. All actions taken by or on
behalf of H/C II Owner during the construction of the Lido in connection with
the contemplated replacement, with temporary "construction walls," of the
Temporary Walls (as defined below), and then the permanent removal of such
temporary "construction walls," are subject to the prior written approval of H/C
I Owner and Mall I Owner, which approval shall not be unreasonably withheld,
delayed or conditioned. As used herein, "Temporary Walls" shall mean the
temporary walls that are to be installed by H/C I Owner during the construction
of the Venetian at the points where the Phase I Mall and the Phase II Mall are
to connect and the Phase I casino and the Phase II casino are to connect.
4. Notwithstanding anything to the contrary set forth in the
preceding Section 3, the rights of Mall I Owner to allow any retail and/or
restaurant complex or facility, mall or shopping center to be located on the
Phase II Land (or the air rights above it) to be connected to the Phase I Mall
shall be subject to the terms of (i) the Credit Agreement, dated November 14,
1997 between GMAC, as lender and Phase I LLC, LVSI and Interim Mall LLC, as
borrower and of any documents executed in connection therewith, and (ii) the
commitment letter (the "Tranche A Commitment Letter") , dated November 14, 1997,
among Goldman Sachs Mortgage Company, as lender, Grand Canal Shops Mall, LLC, as
borrower, and Sheldon G. Adelson, as guarantor and of any documents executed in
connection therewith.
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5. In the event that construction of the Lido is commenced and is
subsequently permanently abandoned or such construction ceases, in all material
respects, for a period of twelve (12) consecutive months, then H/C I Owner
and/or Mall I Owner shall have the right after thirty (30) days' notice to H/C
II Owner, Mall II LLC and their respective Mortgagees to close off any openings
in the Venetian and take any other action reasonably necessary to protect the
integrity of the Venetian (and/or the Phase I Mall) as a single, self-contained,
economically viable facility, and H/C II Owner shall, within ten (10) days of
demand therefor, reimburse H/C I Owner or Mall I Owner, as the case may be, for
the reasonable costs and expenses incurred by H/C I Owner or Mall I Owner, as
the case may be, in taking such actions, together with interest thereon, at the
Interest Rate, for the period commencing on such tenth (10th) day and ending on
the date upon which H/C II Owner so reimburses H/C I Owner or Mall I Owner, as
the case may be.
B. Venetian/Lido Inter-relationship
and Cooperation.
1. (a) As part of the construction of the Venetian, H/C I Owner is
including in the Venetian certain facilities (collectively, the "Shared
Facilities") that are intended to be shared with H/C II Owner during and upon
completion of the construction of the Lido; the Shared Facilities may be shared
with H/C II Owner provided that (i) a Commercially Reasonable Owner of each of
the Phase I Hotel/ Casino, the Phase I Mall and the SECC would agree to such
shared use of the Shared Facilities and the same is not likely to have a
Material Adverse Effect with reference to each of the Phase I Hotel/Casino, the
Phase I Mall and the SECC and (ii) no such
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use of the Shared Facilities by H/C II Owner shall adversely affect the conduct
of any Owner's business on its Lot in accordance with its Permitted Use. The
Shared Facilities will include without limitation: utility distribution systems
and sub-stations (including, without limitation, the New Electric Substation),
loading docks, storage space, warehouses, casino surveillance systems, a casino
counting room, certain offices, certain theaters and a health club.
(b) Notwithstanding anything to the contrary in this Section
B.1, no less than fifteen (15) days prior to the commencement of any shared use
by H/C II Owner of any casino surveillance systems and/or casino counting room,
H/C I Owner shall deliver to its Mortgagee a written plan (the "Shared Casino
Facilities Plan") describing such shared use together with a written statement
from an Independent Expert certifying that the Shared Casino Facilities Plan (A)
satisfies the requirements of this Section B.1, (B) appropriately allocates
costs to reflect the relative benefits derived from such shared use and (C)
complies with all applicable Legal Requirements. Additionally, the Independent
Expert shall certify that the terms of any documents to be entered into to
memorialize the Shared Casino Facilities Plan are commercially reasonable and
satisfy the requirements of this Section B.1. The Mortgagee of the H/C I Space
may confer with H/C I Owner regarding the Shared Casino Facilities Plan prior to
its implementation.
2. (a) Prior to commencement of construction of the Lido, H/C I
Owner and H/C II Owner shall agree in good faith, and upon commercially
reasonable terms, on the following aspects of the Phase I Hotel/Casino and the
Phase II Hotel/Casino operations: (i) appropriate mutual operating covenants,
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(ii) joint marketing and advertising, (iii) certain shared casino operations,
(iv) the sharing of customer information, (v) the joint purchasing of insurance,
(vi) shared security operations, and (vii) any other matters that would be of
mutual benefit in owning and operating the Phase I Hotel/Casino and the Phase II
Hotel/Casino (collectively, "Shared Operations").
(b) Notwithstanding anything to the contrary in this Section
B.2, no less than fifteen (15) days prior to the commencement of any Shared
Operations by H/C II Owner and H/C I Owner, H/C I Owner shall deliver to its
Mortgagee a written plan (the "Shared Operations Plan") describing such Shared
Operations together with a written statement from an Independent Expert
certifying that the Shared Operations Plan (A) satisfies the requirements of
this Section B.2, (B) appropriately allocates costs to reflect the relative
benefits derived from such Shared Operations and (C) complies with all
applicable Legal Requirements. Additionally, the Independent Expert shall
certify that the terms of any documents to be entered into to memorialize the
Shared Operations Plan are commercially reasonable and satisfy the requirements
of this Section B.2. The Mortgagee of the H/C I Space may confer with H/C I
Owner regarding the Shared Operations Plan prior to its implementation.
C. Other Covenants and Agreements.
1. H/C I Owner shall not take any action under that certain Sands
Resort Hotel & Casino Agreement dated as of February 18, 1997 by and between the
County of Clark and Las Vegas Sands, Inc., which agreement is commonly referred
to as the "Predevelopment Agreement," a copy of which is attached hereto and
made
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a part hereof as Exhibit T, that could have a material adverse effect on any of
the easements, rights or interests granted to SECC Owner or Mall I Owner
hereunder and/or on the use, operation or enjoyment by SECC Owner of the SECC
(or SECC Owner's business at the same) or Mall I Owner of the Phase I Mall (or
Mall I Owner's business at the same).
2. (a) In the event any mechanic's, materialmen's or similar lien is
filed against the H/C I Space or the Mall I Space, or any buildings or other
improvements from time to time located on or in the H/C I Space or the Mall I
Space and owned by H/C I Owner or Mall I Owner, as the case may be, which lien
relates to work claimed to have been done for, or materials claimed to have been
furnished to or for the benefit of SECC Owner, the SECC Land, the SECC and/or
any other improvements owned by SECC Owner, then SECC Owner shall take any and
all actions necessary to cancel, discharge or bond over such lien within thirty
(30) days after notice to SECC Owner that such lien has been filed, and SECC
Owner shall indemnify and hold H/C I Owner or Mall I Owner, as the case may be,
harmless from and against any and all costs, expenses, claims, losses or damages
(including, without limitation, reasonable attorneys' fees and expenses)
resulting therefrom by reason thereof. In the event any mechanic's,
materialmen's or similar lien is filed against the SECC Land, the SECC, any
other buildings or other improvements from time to time located on the SECC
Land, which lien relates to work claimed to have been done for, or materials
claimed to have been furnished to, or for the benefit of, H/C I Owner and/or
Mall I Owner, the H/C I Space and/or the Mall I Space and/or any buildings or
other improvements owned by H/C I Owner and/or Mall I Owner,
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then H/C I Owner and/or Mall I Owner, as the case may be, shall take any and all
actions necessary to cancel or discharge (by bonding or insuring over) such lien
within thirty (30) days after notice to H/C I Owner and/or Mall I Owner, as the
case may be, that such lien has been filed, and H/C I Owner and/or Mall I Owner,
as the case may be, shall indemnify and hold SECC Owner harmless from and
against any and all costs, expenses, claims, losses or damages (including,
without limitation, reasonable attorneys' fees and expenses) resulting therefrom
by reason thereof. In the event any mechanic's, materialmen's or similar lien is
filed against the H/C I Space, or any buildings or other improvements from time
to time located on or in the H/C I Space and owned by H/C I Owner, which lien
relates to work claimed to have been done for, or materials claimed to have been
furnished to or for the benefit of Mall I Owner, the Mall I Space, the Phase I
Mall and/or any other improvements owned by Mall I Owner, then Mall I Owner
shall take any and all actions necessary to cancel or discharge (by bonding or
insuring over) such lien within thirty (30) days after notice to Mall I Owner
that such lien has been filed, and Mall I Owner shall indemnify and hold H/C I
Owner harmless from and against any and all costs, expenses, claims, losses or
damages (including, without limitation, reasonable attorneys' fees and expenses)
resulting therefrom by reason thereof. In the event any mechanic's,
materialmen's or similar lien is filed against the Mall I Space, the Phase I
Mall, any other buildings or other improvements from time to time located in the
Mall I Space, which lien relates to work claimed to have been done for, or
materials claimed to have been furnished to, or for the benefit of, H/C I Owner,
the H/C I Space and/or any buildings or other improvements owned by H/C I Owner,
then H/C I Owner shall
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take any and all actions necessary to cancel, discharge or bond over such lien
within thirty (30) days after notice to H/C I Owner that such lien has been
filed, and H/C I Owner shall indemnify and hold Mall I Owner harmless from and
against any and all costs, expenses, claims, losses or damages (including,
without limitation, reasonable attorneys' fees and expenses) resulting therefrom
by reason thereof.
(b) If any of H/C I Owner, Mall I Owner or SECC Owner fails to
discharge any such lien within the aforesaid period, then, in addition to any
other right or remedy of the affected Party, the affected Party (the
"Discharging Party") may, but shall not be obligated to, discharge the same
either by paying the amount claimed to be due or by procuring the discharge of
such lien by deposit in court or bonding. Any amount paid by the Discharging
Party (including, without limitation, reasonable attorneys' fees, disbursements
and other expenses) incurred in defending any such action, discharging said lien
or in procuring the discharge of said lien, shall be repaid by the defaulting
Party upon demand therefor, and all amounts so repayable shall be repaid with
interest at the Interest Rate from the date of demand to the date of repayment.
ARTICLE IX
RESTRICTIVE COVENANTS
(a) H/C I Owner hereby agrees for the benefit of SECC Owner
that H/C I Owner shall not (and shall not permit any other Person to) own,
operate, lease, license or manage any building or other facility located in or
on the
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H/C I Space that provides space for or to shows or expositions of the type
generally held at the SECC (as such name may be changed from time to time).
(b) H/C II Owner hereby agrees for the benefit of SECC Owner
and H/C I Owner that H/C II Owner shall not (and shall not permit any other
Person to) own, operate, lease, license or manage any building or other facility
located in or on the H/C II Space that provides space for or to shows or
expositions of the type generally held at the SECC (as such name may be changed
from time to time).
(c) Mall I Owner hereby agrees for the benefit of SECC Owner,
H/C I Owner and H/C II Owner that Mall I Owner shall not (and shall not permit
any other Person to) own, operate, lease, license or manage any building or
other facility located in the Mall I Space that provides space for or to shows
or expositions of the type generally held at the SECC (as such name may be
changed from time to time).
(d) Mall II Owner hereby agrees for the benefit of SECC Owner,
H/C I Owner and H/C II Owner that Mall II Owner shall not (and shall not permit
any other Person to) own, operate, lease, license or manage any building or
other facility located in the Mall II Space that provides space for or to shows
or expositions of the type generally held at the SECC (as such name may be
changed from time to time).
(e) The restrictions set forth herein are considered by the
Parties to be reasonable for the purpose of protecting the respective owners of
the SECC, the Phase I Hotel/Casino, the Phase I Mall, and the Phase II
Hotel/Casino
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from time to time and its business thereat. However, if any such restriction is
found by a court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of activities or
in too broad a geographic area, it is the intention of the Parties that such
restriction shall be interpreted to extend only over the maximum period of time,
range of activities or geographic area as to which it may be enforceable.
ARTICLE X
INSURANCE
1. Obligations of SECC Owner; Adjustment of SECC Insurance Proceeds.
Except with respect to an election by SECC Owner to carry blanket liability
insurance in accordance with the provisions of Section 10, at all times during
the Term, SECC Owner shall obtain and maintain, and shall pay all premiums in
accordance with subsection 5.1(x) of the Senior Loan Agreement and the Junior
Loan Agreement for insurance for SECC Owner and the SECC providing at least the
coverages set forth therein. All property insurance proceeds (including proceeds
of business interruption insurance) with respect to the SECC shall be adjusted
in accordance with subsection 5.1(x) of the Senior Loan Agreement and the Junior
Loan Agreement.
2. Obligations of H/C I Owner and Mall I Owner. At all times during
the Term, H/C I Owner shall obtain and maintain for the benefit of itself and
Mall I Owner, and shall pay all premiums in accordance with Article VI for
insurance
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for H/C I Owner and the Phase I Hotel/Casino and Mall I Owner and the Phase I
Mall providing at least the following coverages:
(A) Through and including the Completion Date,
(i) Commercial general liability insurance for the
Venetian on an "occurrence" basis, including coverage for
premises/operations, products/completed operations, broad form property
damage, blanket contractual liability, independent contractor's and
personal injury, with no exclusions for explosion, collapse and
underground perils, with primary coverage limits of no less than
$1,000,000 for injuries or death to one or more persons or damage to
property resulting from any one occurrence and a $2,000,000 aggregate
limit. The commercial general liability policy shall also include a
severability of interest clause and will not exclude cross suits in the
event more than one entity is "named insured" under the liability policy.
Deductibles in excess of $250,000 shall be subject to review and approval
by Trustee. The foregoing policy shall also insure the interest of
contractors and subcontractors working on the Venetian.
(ii) Automobile liability insurance, including coverage for
owned, non-owned and hired automobiles for both bodily injury and property
damage and containing appropriate no-fault insurance provisions or other
endorsements in accordance with state legal requirements, with limits of
no less than $1,000,000 per accident with respect to bodily injury,
property damage or death.
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(iii) Workers compensation insurance and employer's
liability or stop gap liability, with a limit of not less than $1,000,000,
and such other forms of insurance which the Owners are required by law to
provide for the Venetian, providing statutory benefits and covering loss
resulting from injury, sickness, disability or death of the employees of
the Owners. The Owners may self insure, in accordance with Nevada law,
with a retention not greater than $1,000,000 per occurrence.
(iv) Until such time as coverage is placed under permanent
cover as set forth in B(v) below, builder's risk insurance on an "all risk
basis", as such term is used in the insurance industry, on a completed
value form with flood and earthquake (including sinkhole and subsidence)
and on an "agreed amount" basis and providing (a) coverage for the
Venetian, including removal of debris, insuring the buildings, structures,
machinery, equipment, facilities, fixtures and other properties
constituting a part of the Venetian in a minimum amount not less than 100%
of the full replacement value of the Venetian, and in any case subject to
an annual limit of $50,000,000, for flood coverage and for earthquake
coverage, but in no event an amount less than the limit necessary to
satisfy other applicable contracts executed in connection with the
Venetian; (b) off-site coverage with a per occurrence limit of $5,000,000
or such higher limit as is sufficient to cover the full insurable value of
assets exposed to loss, (c) transit coverage in the United States and
Canada with a per occurrence limit of not less than $5,000,000, (d)
coverage for operational testing and start-up with the same dollar
coverage and modifications as set out
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in (a) above. All such policies may have deductibles of not greater than
$250,000 per loss, and delay in opening coverage shall have a deductible
not greater than a thirty (30) day period.
(v) Commencing at least forty-five (45) days prior to the
shipment of equipment manufactured outside the United States, ocean cargo
coverage in an amount not less than the full replacement costs of the
value of equipment shipped. Such coverage shall apply to all equipment,
destined for the Venetian site, which is valued in excess of $500,000 and
has a lead time to replace exceeding five (5) months. The ocean cargo
policy shall attach coverage prior to equipment departing the premises of
the manufacturer and shall continue in force until the shipment arrives at
the Venetian site including sixty (60) days' storage, or is insured under
the builders risk policy. To the extent the lead time for any components
exceeds five (5) months, delay in opening (advanced loss of profits) shall
be insured in an amount to be agreed upon by Trustee subject to a
deductible of thirty (30) days.
(vi) Delay in opening or advanced loss of profits
insurance, on an "all risks" basis including machinery breakdown (boiler
and machinery) coverage, with limits of insurance equivalent to twelve
(12) months projected revenues less allowable insurance company deductions
of a non-continuing nature. Payment of proceeds under such cover shall not
be restricted by the policy expiration date or a monthly limitation. The
deductible or waiting period shall not exceed thirty (30) days.
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(vii) Umbrella Excess Liability Insurance of not less than
$100,000,000 per occurrence and in the aggregate during construction and
operations. Such coverages shall be on a per occurrence basis and over and
above coverage provided by the policies described in subsections (i), (ii)
and (iii) above whose limits shall apply toward the $100,000,000 limit set
forth in this subsection (vii). If the policy or policies provided under
this subsection (vii) contain(s) aggregate limits applying to operations
other than operations of H/C I Owner, Mall I Owner and SECC Owner (if the
provisions of Section 10 shall be applicable), and such limits are
diminished below $95,000,000 by any incident, occurrence, claim,
settlement or judgment against such other operations which has caused the
insurer to establish a reserve, H/C I Owner, Mall I Owner and SECC Owner
within five (5) business days after knowledge of such event shall inform
Trustee, and within ten (10) business days after request therefor by
Trustee, H/C I Owner, Mall I Owner and SECC Owner shall purchase an
additional umbrella/excess liability insurance policy satisfying the
requirements of this subsection (vii) in an amount reasonably determined
by Trustee (and the Mortgagee of the SECC if the blanket policy
contemplated in Section 10 shall be in effect); provided that in no event
shall the amount of such insurance with respect to Trustee (and the
Mortgagee of the SECC) exceed the maximum aggregate amount of such
insurance required pursuant to the first sentence of this subsection
(vii).
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(viii) Aircraft liability, to the extent exposure exists, in
an amount not less than $25,000,000 for all owned, non-owned and hired
aircraft, fixed wing or rotary, used in connection with the operation of
the Venetian.
(ix) Such other or additional insurance (as to risks
covered, policy amounts, policy provisions or otherwise) as Trustee may
reasonably request provided that such insurance and such amounts are then
commonly insured against with respect to similar properties in Las Vegas,
Nevada.
(x) All contractors and subcontractors not included in the
Owner controlled insurance program described above shall, prior to
performing work in connection with the construction of the Venetian,
supply proper evidence of insurance as set forth in subsections (i), (ii)
and (iii) above. In addition, excess liability or umbrella liability
limits of not less than $10,000,000 shall be certified. Such insurance,
with the exception of workers compensation, supplied by such contractors
and subcontractors shall:
(a) add H/C I Owner, Mall I Owner and Trustee, as
additional insureds;
(b) be primary as respects insurance provided by H/C I
Owner, Mall I Owner and Trustee;
(c) waive rights of subrogation against H/C I Owner,
Mall I Owner and Trustee; and
(d) continue in full force and effect until
obligations of contractor and subcontractor are
fulfilled.
(B) From and after the earlier of (x) the Opening Date and (y) the Mall
Release Date,
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(i) Commercial general liability insurance for the
Venetian on an "occurrence" basis, including coverage for premises/
operations, products/completed operations, broad form property damage,
blanket contractual liability, independent contractor's and personal
injury, with no exclusions for explosion, collapse and underground perils,
with primary coverage limits of no less than $1,000,000 for injuries or
death to one or more persons or damage to property resulting from any one
occurrence and a $2,000,000 aggregate limit. The commercial general
liability policy shall also include a severability of interest clause and
will not exclude cross suits in the event more than one entity is a "named
insured" under the liability policy. Deductibles in excess of $250,000
shall be subject to review and approval by the Mortgagees of H/C I Owner
and Mall I Owner, which approval shall not be unreasonably withheld,
conditional or delayed; provided a Commercially Reasonable Owner of the
Phase I Hotel/Casino or the Phase I Mall, as applicable, would so approve
and same would not have a Material Adverse Effect on such property, Owner
or Mortgagee.
(ii) Automobile liability insurance, including coverage for
owned, non-owned and hired automobiles for both bodily injury and property
damage and containing appropriate no-fault insurance provisions or other
endorsements in accordance with state legal requirements, with limits of
no less than $1,000,000 per accident with respect to bodily injury,
property damage or death.
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(iii) Workers compensation insurance and employer's
liability or stop gap liability, with a limit of not less than $1,000,000,
and such other forms of insurance which H/C I Owner and Mall I Owner are
required by law to provide for the Venetian, providing statutory benefits
and covering loss resulting from injury, sickness, disability or death of
the employees of H/C I Owner and Mall I Owner. The Owners may self insure,
in accordance with Nevada law, with a retention not greater than
$1,000,000 per occurrence.
(iv) "All risk" property insurance, as such term is used in
the insurance industry, with flood and earthquake (including sinkhole and
subsidence) and on an "agreed amount" basis and providing coverage for the
Venetian, including removal of debris, insuring the buildings, structures,
machinery, equipment, fixtures and other properties constituting a part of
the Venetian in a minimum amount not less than the full replacement value
of the Venetian, and in any case subject to an annual limit of $50,000,000
for flood coverage and for earthquake coverage (with the exception of
blanket coverage for the SECC in accordance with Section 10, in which case
the combined limit shall not be less than $50,000,000 for flood coverage
and $60,000,000 for earthquake coverage), but in no event in an amount
less than the limit necessary to satisfy other contracts executed in
connection with the Venetian. Such policy shall include a replacement cost
endorsement (no co-insurance) with no deduction for depreciation, and,
unless provided under the all risk policy, boiler and machinery coverage
on a "comprehensive" basis including
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breakdown and repair with limits not less than the full replacement cost
of the insured objects. The policy/policies shall include increased cost
of construction coverage, debris removal, and building ordinance coverage
to pay for loss of "undamaged" property which may be required to be
replaced due to enforcement of local, state, or federal ordinances subject
to a sublimit of $10,000,000. All such policies may have deductibles of
not greater than $1,000,000 per loss with the exception of earthquake (5%
of values at risk) and flood ($2,500,000 per loss).
(v) H/C I Owner shall also maintain or cause to be
maintained for the benefit of itself and Mall I Owner with respect to the
Venetian business interruption insurance on all "all risk" basis,
including boiler and machinery, in an amount equal to satisfy policy
coinsurance conditions, but with limits not less than the equivalent to
eighteen (18) months projected revenues less allowable insurance company
deductions on a non-continuing basis; provided, however, that so long as
H/C I Owner shall carry a combined property and business interruption
policy, the limit required shall not be less than the equivalent to twelve
(12) months projected revenues less allowable insurance company deductions
on a non-continuing basis. Such coverage shall include a six (6) month
indemnity period beyond the period covered by the business interruption
insurance. The deductible or waiting period shall not exceed thirty (30)
days. H/C I Owner and Mall I Owner shall also maintain or cause to be
maintained (a) expediting or extra expense coverage in an amount not less
than $2,500,000 and (b) with respect to the
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Venetian, contingent business interruption insurance, or equivalent cover
as respects the New HVAC Plant and the SECC (unless the SECC shall be
insured under the blanket policy contemplated in Section 10), in an amount
not less than three (3) months gross revenues.
(vi) Umbrella/excess liability insurance of not less than
$100,000,000 per occurrence and in the aggregate during construction and
operations. Such coverages shall be on a per occurrence basis and over and
above coverage provided by the policies described in subsections (i), (ii)
and (iii) with respect to stop gap liability insurance, above (whose
limits shall apply toward the $100,000,000 limit set forth in this
subsection (vi)). If the policy or policies provided under this subsection
(vi) contain(s) aggregate limits applying to operations other than
operations of H/C I Owner, Mall I Owner or SECC Owner (if the provisions
of Section 10 shall be applicable), and such limits are diminished below
$95,000,000 by any incident, occurrence, claim, settlement or judgment
against such other operations which has caused the insurer to establish a
reserve, H/C I Owner, Mall I Owner and SECC Owner (if the provisions of
Section 10 shall be applicable), within five (5) business days after
knowledge of such event, shall inform Trustee, and within ten (10)
business days after request therefor by Trustee, H/C I Owner (for the
benefit of itself and Mall I Owner) or SECC Owner (if the provisions of
Section 10 shall be applicable), shall purchase an additional
umbrella/excess liability insurance policy satisfying the requirements of
this subsection (vi) in an amount approved by the Mortgagees of H/C I
Owner and Mall I Owner and
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SECC Owner (if it elects to maintain insurance in accordance with the
provisions of Section 10(b) hereof), which approval shall not be
unreasonably withheld, conditioned or delayed; provided a Commercially
Reasonable Owner of the Phase I Hotel/Casino or the Phase I Mall or SECC
Owner (if it elects to maintain insurance in accordance with the
provisions of Section 10(b) hereof), as applicable, would so consent and
same would not have a Material Adverse Effect on such property, Owner or
Mortgagee (and the Mortgagee of the SECC if the blanket policy
contemplated in Section 10 shall be in effect); provided that in no event
shall the amount of such insurance with respect to Trustee (and the
Mortgagee of the SECC) exceed the maximum aggregate amount of such
insurance required pursuant to the first sentence of this subsection (vi).
In the event coverage is combined under one policy for H/C I Owner, Mall I
Owner and SECC Owner in accordance with the provisions of Section 10, the
umbrella/excess liability limit shall not be less than $125,000,000.
(vii) Aircraft liability, to the extent exposure exists, in
an amount not less than $25,000,000 for all owned, non-owned and hired
aircraft, fixed wing or rotary, used in connection with the operation of
the Venetian.
(viii) Such other or additional insurance (as to risks
covered, policy amounts, policy provisions or otherwise) as any Owner
and/or its Mortgagee may reasonably request provided that such insurance
and such amounts are then commonly insured against with respect to similar
properties in Clark County, Nevada.
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(ix) H/C I Owner and Mall I Owner shall require in their
Leases with Tenants, that all major Tenants leasing space from H/C Owner
or Mall I Owner in the Venetian procure and maintain during the terms of
their Leases the following insurance coverages:
(a) full replacement cost coverage for all
improvements and betterments installed by or on
behalf of any Tenant and full replacement cost
insurance for Tenants' personal property;
(b) business interruption insurance;
(c) $5,000,000 commercial general liability
insurance; and
(d) statutory workers compensation and employer's
liability insurance.
All such insurance, except for workers' compensation insurance, supplied by the
parties shall be primary as respects insurance provided by H/C I Owner and Mall
I Owner and shall waive rights of subrogation against H/C I Owner and Mall I
Owner. All third party liability coverage maintained by Tenants shall add
Trustee, H/C I Owner and Mall I Owner and SECC Owner (if it elects to maintain
insurance in accordance with the provisions of Section 10(b) hereof) and their
respective Mortgagees as additional insureds. Each Tenant shall supply
satisfactory evidence of insurance to H/C I Owner and Mall I Owner and Trustee
and SECC Owner (if it elects to maintain insurance in accordance with the
provisions of Section 10(b) hereof).
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3. General Conditions.
(a) All insurance required under this Agreement to be carried
by H/C I Owner, Mall I Owner and SECC Owner (if the provisions of Section 10
shall be applicable) shall be effected under valid and enforceable policies
acceptable in form and substance to Trustee; shall name Trustee, H/C I Owner,
Mall I Owner, SECC Owner (if the provisions of Section 10 shall be applicable)
and each of their respective Mortgagees as additional insureds, as their
interests may appear; and shall be issued by insurers rated "A-" or better with
a minimum size rating of "VIII" by Best's Insurance Guide and Key Ratings
("Best's") (or an equivalent rating by another nationally recognized insurance
rating agency of similar standing if Best's shall no longer be published).
(b) All property, cargo, boiler & machinery and business
interruption/delay in opening insurance coverage shall be on such form as shall
be approved by the Mortgagees of H/C I Owner, Mall I Owner and SECC Owner (if it
elects to maintain insurance in accordance with the provisions of Section 10(b)
hereof), which approval shall not be unreasonably withheld, conditioned or
delayed; provided a Commercially Reasonable Owner of the Phase I Hotel/Casino or
the Phase I Mall, as applicable, would so consent and same would not have a
Material Adverse Effect on such property, Owner or Mortgagee.
(c) H/C I Owner and/or Mall I Owner shall submit certified
copies of all polices received pursuant to the requirements of this Article X
for review and approval to the Mortgagees of H/C I Owner, Mall I Owner and SECC
Owner (if it elects to maintain insurance in accordance with the provisions of
Section 10(b)
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hereof), which approval shall not be unreasonably withheld, conditioned or
delayed; provided a Commercially Reasonable Owner of the Phase I Hotel/Casino,
the Phase I Mall or SECC, as applicable, would so approve and same would not
have a Material Adverse Effect on such property, Owner or Mortgagee.
(d) Notwithstanding anything herein contained, Mall I Owner
may elect by notice to H/C I Owner to obtain on its own behalf any of the
insurance coverages set forth in this Article X, in which event, each Owner
shall pay for its own such insurance and the cost thereof shall not be shared.
4. Named Insureds.
(a) All liability policies where Trustee and/or the Mortgagee
of the SECC have an insurable interest shall insure the interests of the
Mortgagees of the Phase I Hotel/Casino, the Phase I Mall and the SECC Owner (if
it elects to maintain insurance in accordance with the provisions of Section
10(b) hereof) as well as H/C I Owner, Mall I Owner and SECC Owner (if it elects
to maintain insurance in accordance with the provisions of Section 10(b) hereof)
and shall name Trustee and such Mortgagees and the Mortgagee of the SECC as
additional insureds (unless Trustee and the Mortgagee of the SECC are named
insureds under the policy). All policies covering real or personal property or
business interruption shall name Trustee with respect to the Phase I
Hotel/Casino and the Phase I Mall and the Mortgagee of the SECC with respect to
the SECC as additional insured and First Loss Payee/ Mortgagee in accordance
with CP12 18 (06/95) or equivalent Lender's Loss Payable Endorsement, and shall
provide that any payment thereunder for any loss or damage with respect to the
Venetian shall be made to Trustee or with respect to the SECC to
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the Mortgagee of the SECC as their interests may appear. In the event the
interests of more than one Owner are insured under a blanket policy, each of
Trustee and the Mortgagee of the SECC shall be named as Loss Payee/Mortgagee as
set forth above and shall be protected to the extent of its interest, having
available the values declared under the blanket policy for its security. In the
event the New HVAC Plant is insured under a blanket policy with the Phase I
Casino/Hotel and the Phase I Mall, such blanket policy may contain loss payee
provisions in favor of the owner of the New HVAC Plant.
(b) Each policy required to be maintained under this Article X
shall provide that such insurance may not be canceled, terminated or materially
changed for any reason whatsoever, unless the insurance carrier delivers thirty
(30) days (or ten (10) days in connection with a notice of nonpayment of
premium) notice of such cancellation, termination or material change to the
respective Mortgagees of the Phase I Hotel/Casino, the Phase I Mall and the SECC
as well as H/C I Owner, Mall I Owner, SECC Owner and Trustee.
5. Trustee's Rights to Adjust Losses. In case of any Casualty with
respect to the Phase I Hotel/Casino and/or Phase I Mall (or any portion
thereof), H/C I Owner, Mall I Owner and Trustee shall jointly settle, compromise
and adjust any claim; provided that, with respect to any loss not in excess of
$1,500,000 (as set forth in the applicable certificate prepared by an
Independent Expert), H/C I Owner and/or Mall I Owner, as the case may be, may
agree with the insurance company or companies on the amount to be paid upon the
loss without obtaining the consent of Trustee, Trustee shall pay over to H/C I
Owner and/or Mall I Owner, as the case
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may be, the applicable insurance proceeds upon receipt therefor by Trustee and
H/C I Owner and/or Mall I Owner, as applicable, shall use such insurance
proceeds to perform a restoration in accordance with the provisions of Article
XI; provided further that, if, at the time of any Casualty, or at any time
during the settlement, compromise or adjustment process with respect to any
Casualty, an event of default under any affected Mortgagee's loan documents
shall exist, then Trustee shall not be required to pay over the applicable
insurance proceeds to H/C I Owner and/or Mall I Owner, as the case may be,
Trustee (acting in accordance with the written directions of such affected
Mortgagee(s)) may settle, compromise and/or adjust any claim, as it sees fit in
its sole discretion, without the participation or consent of H/C I Owner and/or
Mall I Owner, as the case may be, and the insurance proceeds shall be applied in
accordance with the provisions of Article XI hereof. Furthermore, if any claim
shall not have been settled, compromised or adjusted or the applicable insurance
proceeds shall not have been paid to Trustee, in any case, within twelve (12)
months after the Casualty in question occurred or such additional time as may be
reasonably necessary given the circumstances, then Trustee (acting in accordance
with the written directions of any affected Mortgagee(s)), may settle,
compromise and/or adjust such claim, as it sees fit in its sole discretion,
without the participation or consent of H/C I Owner and/or Mall I Owner, as the
case may be, and the insurance proceeds shall be applied in accordance with the
provisions of Article XI hereof. Wherever this document refers to the Trustee
adjusting, settling or compromising, the Trustee shall do so at the direction of
the affected Mortgagee(s); if the affected Mortgagees cannot agree as to any
decision regarding any actual or proposed adjustment, settlement or
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compromise within sixty (60) days, then the decision in question shall be made
by an Independent Expert selected by such Mortgagees.
6. Mortgagee's Right to Cure. On or before December 30th of each
year during the Term, H/C I Owner shall furnish to Trustee and each other Owner,
with a copy for each Mortgagee, a certificate signed by an officer of H/C I
Owner or an authorized insurance representative of H/C I Owner, showing the
insurance then maintained by or on behalf of H/C I Owner under this Article X
and stating that such insurance complies in all material aspects with the terms
hereof, together with a statement of the premiums then due, if any. If at any
time the insurance required under this Article X shall be reduced or cease to be
maintained, then (without limiting the rights of Trustee and/or any Mortgagee
hereunder in respect of any event of default which arises as a result of such
failure), Trustee at the direction of the Mortgagees of the H/C I Space and the
Mall I Space and/or the Mortgagee of the SECC (if the SECC Owner elects to
maintain insurance in accordance with the provisions of Section 10(b) hereof)
may, but shall not be obligated to, maintain the insurance required hereby and,
in such event, H/C I Owner or SECC Owner, as the case may be, shall reimburse
the Mortgagee of the H/C I Space and/or the Mall I Space and/or the Mortgagee of
the SECC upon demand for the cost thereof together with interest thereon at the
Interest Rate.
7. Insurance not Commercially Available. If any insurance (including
the limits, coverages, coinsurance waiver or deductibles thereof) required to be
maintained under this Article X by H/C I Owner and Mall I Owner, other than
insurance required to be maintained by law, shall not be Commercially Available,
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H/C I Owner, Mall I Owner and their respective Mortgagees shall not unreasonably
withhold their consent to waive such requirement to the extent maintenance
thereof is not so available; provided (i) H/C I Owner and/or Mall I Owner shall
first request any such waiver in writing, which request shall be accompanied by
written reports in form and content and prepared by an Independent insurance
advisor of recognized national standing reasonably acceptable to Trustee
certifying that such insurance is not reasonably available (e.g. obtainable in
the insurance marketplace at costs not to exceed 50% of prior premiums) and
commercially feasible in the commercial insurance market for property of a
similar type (collectively, "Commercially Available") (and, in any case where
the required amount is not so available, certifying as to the maximum amount
which is so available) and setting forth the basis for such conclusions, (ii) at
any time after the granting of any such waiver, H/C I Owner and/or Mall I Owner
shall furnish to Trustee within fifteen (15) days after Trustee's request,
updates of the prior reports reasonable acceptable to Trustee from such
insurance advisor reaffirming such conclusion, and (iii) any such waiver shall
be effective only so long as such insurance shall not be Commercially Available,
it being understood that the failure of H/C I Owner and/or Mall I Owner to
timely furnish any such updated report shall be conclusive evidence that such
waiver is no longer effective. Notwithstanding anything to the contrary set
forth in this Article X, any failure to maintain insurance coverage in
accordance with any provision of this Article X due to such insurance being
commercially unavailable shall not constitute a default hereunder and H/C I
Owner, Mall I Owner and SECC Owner (if the
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provisions of Section 10(b) shall apply) shall be in full compliance with such
provisions so long as such Owner has complied with the provisions of this
Section 7.
8. Policies on "claims-made" basis. If any policy is written on a
"claims-made" basis and such policy is not to be renewed or the retroactive date
of such policy is to be changed, H/C I Owner, Mall I Owner or SECC Owner, as the
case may be, shall obtain prior to the expiration date or date change of such
policy the broadest basic and supplemental extended reporting period coverage
reasonably available in the commercial insurance market for each such policy and
shall promptly provide Trustee and/or the Mortgagee of the SECC, as the case may
be, with proof that such coverage has been obtained.
9. Insurance Requirements Review. On or before the third (3rd)
anniversary of the Commencement Date and on each succeeding three (3) year
anniversary thereof, H/C I Owner, Mall I Owner and SECC Owner (if SECC Owner
shall elect to maintain insurance in accordance with the provisions of Section
10(b) hereof) (in consultation with the Trustee) shall designate an Independent
insurance consultant who shall review the insurance requirements of the Venetian
and prepare a report (the "Insurance Report") setting out its recommendations
relating to insurance overage for the Venetian for the following three (3)
years. H/C I Owner shall submit the Insurance Report to H/C I Owner's and Mall I
Owner's respective Mortgagees, which, upon approval by H/C I Owner, Mall I Owner
and SECC Owner (if SECC Owner shall elect to maintain insurance in accordance
with the provisions of Section 10(b) hereof) and their respective Mortgagees
(which approval shall not be unreasonably withheld, conditioned or delayed;
provided a Commercially Reasonable
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Owner of the Phase I Hotel/Casino or the Phase I Mall, as applicable, would so
consent and same would not have a Material Adverse Effect on such property,
Owner or Mortgagee) shall, to the extent the recommendations differ from the
requirements set forth in this Article X, amend and supersede the applicable
provisions of this Article X.
10. SECC Blanket Policy.
(a) From and after the Commencement Date, SECC Owner may
maintain liability insurance coverage with respect to the SECC under a combined
policy with H/C I Owner and Mall I Owner, and operations other than operations
of H/C I Owner and Mall I Owner, subject to the requirements of the Senior Loan
Agreement, the Junior Loan Agreement and this Article X.
(b) From and after the date SECC Owner shall have satisfied
all of its obligations under the Senior Loan Agreement and the Junior Loan
Agreement, SECC Owner may maintain property and liability insurance coverage
with respect to the SECC under a combined policy with H/C I Owner and Mall I
Owner subject to the requirements of this Article X.
11. Mutual Release; Waiver of Subrogation. Each Party hereby
releases and waives for itself, and to the extent legally possible for it to do
so, on behalf of its insurer, each of the other Parties and their officers,
directors, agents, members, partners, servants and employees from liability for
any loss or damage to any or all property (including any resulting loss of time
element including business interruption, rents or extra expense) located in or
on the H/C I Space, the H/C II Space, the Mall I Space, the Mall II Space, the
SECC Land and/or any improvements
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located in or on any of the foregoing, which loss or damage is of the type said
Party is required to insure against by this Article X, irrespective of any
negligence on the part of the released Party which may have contributed to or
caused such loss or damage. Each Party covenants that it will, if generally
available in the insurance industry, obtain for the benefit of each such
released Party a waiver of any right of subrogation which the insurer of such
Party may acquire against any such Party by virtue of the payment of any such
loss covered by such insurance.
12. Prior to Completion Date, Insurance Proceeds Held by
Disbursement Agent; Thereafter, Insurance Proceeds Held in Trust.
(a) H/C I Owner and Mall I Owner each covenant that with
respect to all property insurance required to be maintained under this Article X
(including without limitation under Sections 2(A)(iv), (v) or (vi) or 2(B)(iv)
or (v)), that each policy shall expressly provide that (i) from and after the
Commencement Date up to the earlier to occur of the Mall Release Date or the
Completion Date, all insurance proceeds shall be paid to the Disbursement Agent
to be held in trust for the benefit of the Mortgagees and applied in accordance
with the provisions of the FADAA, and (ii) from and after the earlier to occur
of the Mall Release Date or the Completion Date, all insurance proceeds shall be
paid to the Trustee to be held in trust for the benefit of the Mortgagees and,
subject to the provisions of Section 13 and Section 1 of Article XI, paid over
by Trustee to H/C I Owner and/or Mall I Owner, as the case may be, to be applied
to restoration of the Casualty in question in accordance with the provisions of
Article XI; provided that in case of any single loss which exceeds $1,500,000,
or losses which exceed $6,000,000 in the aggregate,
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during any consecutive twelve (12) month period, the amount of any such claim(s)
shall be jointly compromised, settled or adjusted by H/C I Owner, Mall I Owner
and the Trustee at the direction of the affected Mortgagee(s). If the affected
Mortgagees cannot agree on the amounts of such adjustment within sixty (60)
days, such amounts shall be determined by an Independent Expert in accordance
with the provisions of Section 15 of Article XIV.
(b) Subject to the provisions of Section 13, all proceeds of
such insurance (excluding the proceeds of any rental value, or use and occupancy
insurance) shall be used with all reasonable diligence by the Party entitled to
such proceeds under the provisions of this Agreement for rebuilding, repairing
or otherwise reconstructing the same, to the extent required pursuant to the
provisions of Article XI hereof.
(c) Payment of the proceeds shall be made by the Trustee to
the Party entitled to such proceeds, or, at such Party's direction, to its
contractor or contractors, as follows:
(i) At the end of each month, or from time to time, as
reasonably requested by H/C I Owner and/or Mall I Owner, against the
Party's Independent Architect's certificate in form and content reasonably
satisfactory or the affected Mortgagee, an amount which shall be that
proportion of the total amount held in trust which 90% (or such greater
amount as may be reasonably agreed to by the affected Owner(s) and their
Mortgagees) of the payments to be made to the contractors or materialmen
for work done, material supplied and services rendered during each month
or
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other period bears to the total contract price; provided that at the time
of any such progress payment (a) there are no liens against the property
by reason of such work which have not been bonded or insured over, and (b)
to the extent the aggregate amount of any insurance proceeds shall be less
than the amount necessary to restore the affected property, the Party
entitled to such proceeds has paid such deficiency out of other funds.
(ii) At the completion of the work, the balance of such
proceeds required to complete the payment of such work shall be paid to
the Party entitled to such proceeds, or its contractor or contractors,
provided that at the time of such payment (a) there are no liens against
the property by reason of such work which have not been bonded or insured
over, and with respect to the time of payment of any balance remaining to
be paid at the completion of the work the period within which a lien may
be filed has expired, or proof has been submitted that all costs of work
theretofore incurred have been paid, and (b) the Party's Independent
Architect shall certify in a certificate, the form and content of which is
reasonably satisfactory to the affected Mortgagee, that all required work
is completed and proper and of a quality and class of the original work
required by the FADAA and in accordance with the Plans.
(d) Any insurance proceeds not required to rebuild under
Article XI hereof, shall be paid by the Trustee to the Party entitled to such
excess proceeds, or its Mortgagee, as their interests may appear.
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13. Mortgagee Consent to Release of Proceeds. If all or any material
portion of the Phase I Hotel/Casino, the Phase I Mall or the SECC shall be
damaged or destroyed in whole or in part by fire or other casualty (each, a
"Casualty") the Owner of the property incurring the loss shall notify all
Mortgagee(s) within ten (10) Business Days of the occurrence of such Casualty.
Each affected Mortgagee shall permit insurance proceeds with respect to any
Casualty to be applied to restoration of buildings and/or other improvements on
or in the affected Lot in accordance with the provisions of this Article X;
provided that such affected Mortgagee shall have received on or before ninety
(90) days after the date of the Casualty in question a certificate from an
Independent Expert certifying that (x) such Casualty can be restored within one
(1) year after the date of delivery of such certificate and (y) the amount of
insurance proceeds payable in connection with such Casualty (together with any
other funds committed by the affected Owners to be applied to such restoration)
shall be sufficient to finance the anticipated cost (including scheduled debt
service payments through the anticipated date of completion of the restoration)
of such restoration as set forth in such certificate. If the conditions set
forth in the preceding (x) and (y) cannot be satisfied with respect to a
particular Lot, any affected Mortgagee shall be paid its equitable share as
determined by the Independent Expert of insurance proceeds to be applied in
accordance with the provisions of its Mortgage.
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ARTICLE XI
DAMAGE OR DESTRUCTION BY FIRE OR OTHER CASUALTY
1. H/C I Owner, Mall I Owner and SECC Owner agree for the
benefit of each other that, in case of loss or damage with respect to all or any
material portion of the Phase I Mall, the Phase I Hotel/Casino or the SECC or
any part thereof by Casualty, the owner of the affected space will promptly give
written notice thereof to the other Parties. In the event of such Casualty:
(a) Phase I Mall. Mall I Owner, whether or not the insurance
proceeds made available in connection therewith shall be sufficient for such
purpose, shall, in accordance with the further provisions of this Article XI,
repair the Phase I Mall with due diligence at its sole cost and expense as
nearly as reasonably possible to its condition and aesthetic appeal immediately
prior to such Casualty. Notwithstanding the foregoing, Mall I Owner may elect to
make changes in the Phase I Mall in connection with such repair. All repairs
undertaken by Mall I Owner pursuant to this subsection (a) (including any
changes Mall I Owner makes in connection with any such repairs) shall be
performed in accordance with Sections 7 through 10 of Article V, as well as the
further provisions of this Article XI. In the event of a Casualty affecting both
the Phase I Mall and the Phase I Hotel/Casino, Mall I Owner's obligations
hereunder shall be subject to completion by H/C I Owner of restoration of those
portions of the Building Core and Shell necessary to be restored in order for
Mall I Owner to fulfill its restoration obligations under this subsection (a).
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(b) Phase I Hotel/Casino. H/C I Owner, whether or not the
insurance proceeds made available in connection therewith shall be sufficient
for such purpose shall, in accordance with the further provisions of this
Article XI, repair the Phase I Hotel/Casino with due diligence at its sole cost
and expense as nearly as reasonably possible to its condition and aesthetic
appeal immediately prior to such Casualty. All repairs undertaken by H/C I Owner
pursuant to this subsection (b) (including any changes H/C I Owner makes in
connection with any such repairs) shall be performed in accordance with Sections
7 through 10 of Article V and the further provisions of this Article XI.
(c) Casualty Affecting Both the Phase I Hotel/Casino and the
Phase I Mall. If a Casualty shall damage all or any part of both the Phase I
Hotel/ Casino and the Phase I Mall, H/C I Owner and Mall I Owner shall consult
with each other and one or more Independent Experts and reasonably agree as to
(i) the cost, and property and business interruption insurance, allocation
between themselves and method of payment for the proposed restoration, (ii) the
time required to effect such restoration, and (iii) the Party who shall perform
such restoration. Notwithstanding the foregoing, with respect to any casualty
involving a loss of greater than $1,500,000 (or multiple losses in any
consecutive twelve (12) month period in excess of $6,000,000), such agreement
shall be made with the approval of the affected Mortgagee(s) which approval
shall not be unreasonably withheld, conditioned or delayed; and if all affected
parties and Mortgagee(s) do not agree within sixty (60) days after receipt of
insurance proceeds, as determined by an Independent Expert. If the Parties shall
be unable to reach agreement within thirty (30) days of the date of
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such Casualty, either Party may enforce its rights by arbitration pursuant to
Article XV. All repairs undertaken by either Party pursuant to this subsection
(c) (including any changes such Party makes in connection with any such repairs)
shall be performed in accordance with Sections 7 through 10 of Article V and the
further provisions of this Article XI. All business interruption insurance,
allocated as aforesaid as among the Owners, shall be paid over to the affected
Mortgagee(s) to be applied in accordance with the provisions of their Mortgages.
(d) H/C I Owner and Mall I Owner shall cooperate in good faith
to coordinate the work performed by or for each pursuant to the foregoing
subsections (a), (b) and (c).
(e) SECC. With respect to the SECC, SECC Owner shall comply
with the provisions of Subsection 5.1(X) of the Senior Loan Agreement and the
Parties hereby agree that such provisions shall govern.
2. Cost of Restoration; Uninsured Losses.
(a) The cost of restoration of any Casualty affecting the
Phase I Hotel/Casino or the Phase I Mall shall be paid first out of available
insurance proceeds with respect to such property. To the extent the amount of
such insurance proceeds shall be less than the amount necessary to restore the
affected Lot(s) (the "Insurance Proceeds Shortfall"), the Parties shall
reasonably agree on the amount of each Party's contribution (each, an "Insurance
Shortfall Contribution") towards the Insurance Proceeds Shortfall. If the
Parties shall be unable to reach agreement within thirty (30) days of the date
of such Casualty, any Party may enforce its rights to arbitration pursuant to
Article XV. Each Party's Insurance Shortfall Contribution
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shall be payable on demand to the Trustee and shall become a lien on the
applicable Owner's Lot, subject to the provisions of Section 9 of Article XIV.
(b) If a Casualty which is not covered by an insurance policy
required to be maintained in accordance with the provisions of Article X (each,
an "Uninsured Loss") shall occur, the affected Parties shall reasonably agree on
the amount of each such Party's contribution (each, an "Uninsured Loss
Contribution") towards the cost to restore the property affected by such
Uninsured Loss, subject to the following Mortgagee consent rights:
(i) With respect to an aggregate Uninsured Loss which is
less than $1,500,000.00, no Mortgagee's consent shall be required;
(ii) With respect to an aggregate Uninsured Loss which is
equal to or greater than $1,500,000.00 but less than $6,000,000.00, the
consent of the affected Mortgagees shall be required; provided, however,
that until such time as all obligations under the Mortgage Notes and the
Mortgage Notes Indenture have been paid in full, the consent of the
Mortgage Notes Indenture Trustee shall be deemed granted if (a)
immediately prior to the date of the Uninsured Loss, the Mortgage Notes
are rated by Standard & Poor's with a rating of at least CCC+ (or by an
equivalent rating from another prominent credit rating agency) and (b)
during the 45 days subsequent to the Uninsured Loss, the rating has not
been reduced. The condition set forth in clause (b) may be satisfied prior
to the end of said forty-five (45) day period through delivery of a
certificate from the applicable rating agency providing,
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in substance, that the rating applicable to the Mortgage Notes will not be
reduced after the Uninsured Loss.
(iii) With respect to an aggregate Uninsured Loss equal to or
greater than $6,000,000.00, the consent of all affected Mortgagees (other
than any Mortgagee that is an Affiliate of any Owner) shall be required.
Notwithstanding anything to the contrary contained herein, after the
occurrence of any Casualty or upon notice from a Taking Authority of a
contemplated Taking, if an event of default shall occur and be continuing under
any affected Mortgagee's loan documents, then such Mortgagee shall be entitled
to make all decisions and take all actions that the Owner that is a party to
such loan document would be entitled to make under this Article XI or under
Article XII (and such Owner shall not have the right to make any such decisions
or take such actions).
ARTICLE XII
CONDEMNATION
1. Taking of Mall I Space. If less than substantially all of the
Mall I Space and/or the Phase I Mall Is permanently taken by any public or
quasi-public authority, or private entity or individual (each, a "Taking
Authority") having the power of condemnation, under any statute or by right of
eminent domain or purchased under threat or in lieu of such taking
(collectively, a "Taking"), then Mall I Owner shall promptly restore the Phase I
Mall as nearly as reasonably possible to its condition and aesthetic appeal at
the time of the partial Taking less the portion lost in such Taking.
Notwithstanding the foregoing, Mall I Owner may elect to make
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changes in connection with such restoration, subject to the further provisions
of this Section 1. All restorations undertaken by Mall I Owner pursuant to the
foregoing shall be subject to the provisions of Sections 7 through 10 of Article
V. In the event of a Taking affecting both the Phase I Mall and the Phase I
Hotel/Casino, Mall I Owner's obligations hereunder shall be subject to
completion by H/C I Owner of restoration of those portions of the Building Core
and Shell necessary to be restored in order for Mall I Owner to fulfill its
restoration obligations under this subsection (a).
2. Taking of H/C I Space. If there is a Taking of less than
substantially all of the H/C I Space and/or the Phase I Hotel/Casino H/C I Owner
shall promptly restore the Phase I Hotel/Casino as nearly as reasonably possible
to its condition and aesthetic appeal at the time of the partial Taking less the
portion lost in such Taking. Notwithstanding the foregoing, H/C I Owner may
elect to make changes in connection with such restoration, subject to the
further provisions of this Section 2. All restorations undertaken by H/C I Owner
pursuant to the foregoing shall be subject to Sections 7 through 10 of Article
V.
3. Taking of H/C I Space and Mall I Space. If there is a Taking of
less than substantially all of (i) the H/C I Space and/or the Phase I
Hotel/Casino and (ii) the Mall I Space and/or the Phase I Mall, H/C I Owner and
Mall I Owner shall consult with each other and one or more Independent
Architects and reasonably agree as to (x) the cost allocation between themselves
and method of payment for the proposed restoration, (y) the time required to
effect such restoration, and (z) the Party who shall perform such restoration.
If the Parties shall be unable to reach agreement
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within thirty (30) days of the date either Party first receives notice from any
public or quasi-public authority, or private entity or individual having the
power of condemnation with respect to such Taking, either Party may cause an
equitable determination as to items (x), (y) and/or (z) by arbitration pursuant
to Article XV. All restorations undertaken by either Party pursuant to the
foregoing shall be subject to the provisions of Sections 7 through 10 of Article
V.
4. Taking of SECC. If there is a Taking of less than substantially
all of the SECC, SECC Owner shall comply with the provisions of Subsection
5.1(Y) of each of the Senior Loan Agreement and the Junior Loan Agreement, and
the Parties hereby agree that such provisions shall govern.
5. Division of Proceeds. Each Party shall promptly notify the other
Owners and each Owner's respective Mortgagee when it becomes aware of any
potential or threatened Taking of all or any part of any Lot and shall promptly
deliver to the others copies of all notices received in connection therewith.
H/C I Owner, Mall I Owner and SECC Owner shall each have the right to represent
its respective interest in each proceeding or negotiation with respect to a
Taking or intended Taking and to make full proof of its claims, and each
Mortgagee of such Owner to the extent permitted under such Mortgagee's loan
documents shall have the right to appear in and prosecute in its own or in such
Owner's name any proceeding or negotiation with respect to such Taking or
intended Taking. No agreement, settlement, sale, or transfer to or with the
condemning authority with respect to any Taking or intended Taking the aggregate
proceeds of which shall be in excess of $1,500,000 shall be made without the
consent of H/C I Owner and Mall I Owner and their respective
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Mortgagees, which consent shall not be unreasonably withheld, conditioned or
delayed; provided a Commercially Reasonable Owner of the Phase I Hotel/Casino or
the Phase I Mall, as applicable, would so consent and same would not have a
Material Adverse Effect on such property, Owner or Mortgagee. Notwithstanding
anything to the contrary in this Section 5, the proceeds of any aggregate
condemnation award (other than with respect to the SECC or the SECC Land) in
excess of $1,500,000 shall be paid to the Trustee to be held and disbursed in
accordance with the provisions of Section 12 of Article X. With respect to a
Taking of all or any part of either the Mall I Space and/or the Phase I Mall or
the H/C I Space and/or the Phase I Hotel/ Casino, if the condemning authority
does not, as part of the Taking proceeding, determine the amount of condemnation
proceeds payable to H/C I Owner, and the amount of condemnation proceeds payable
to Mall I Owner, but rather makes a determination only as to the aggregate
amount of proceeds payable to H/C I Owner and Mall I Owner in connection with
the Taking, each of H/C I Owner and Mall I Owner shall receive its appropriate
equitable share of such proceeds, as reasonably agreed to by H/C I Owner and
Mall I Owner. H/C I Owner and Mall I Owner shall, in all of their discussions
and negotiations with the condemning authority, argue for the awarding of
separate Taking proceeds payable to each in accordance with the foregoing.
6. Temporary Use or Occupancy. If the temporary use or occupancy of
all or any part of the Venetian or the SECC shall be condemned or taken for any
public or quasi-public use or purpose during the Term, this Agreement and the
Term shall be and remain unaffected by such condemnation or taking and
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each Party shall continue to be responsible for all of its obligations hereunder
(except to the extent prevented from so doing by reason of such condemnation or
taking). In such event, however, the affected Party shall be entitled to appear,
claim, prove and receive the entire award in connection with such temporary
taking. If such temporary use or occupancy terminates prior to the Expiration
Date, the affected Party, at its own expense, shall restore its premises as
nearly as possible to its condition prior to the condemnation or taking.
7. Disputes Between H/C I Owner and Mall I Owner. With respect to a
Taking of all or any part of the H/C I Space and/or any improvements located
thereon or therein or the Mall I Space and/or any improvements located thereon
or therein, any dispute between H/C I Owner and Mall I Owner as to the
appropriate sharing of any taking proceeds to be received by each in accordance
with the fourth sentence of Section 5 of this Article XI shall be resolved by
determination of the Independent Expert in accordance with Section 15 of Article
XIV, which shall be the exclusive and binding method for the resolution of any
such dispute. H/C I Owner and Mall I Owner each agree to execute and deliver, or
cause to be executed and delivered, to the other any instruments that may be
required to effectuate or facilitate the provisions of this Agreement relating
to the matters set forth in this Section 7.
8. Trustee's Rights to Participate in Proceedings, Jointly Settle or
Compromise. In case of any contemplated Taking with respect to the Phase I
Hotel/ Casino, H/C I Space, Phase I Mall, and/or Mall I Space (or any portion
thereof), H/C I Owner, Mall I Owner and Trustee shall jointly participate in any
relevant
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action or proceeding and jointly settle or compromise any award; provided that,
with respect to any potential award not in excess of $1,500,000 (as set forth in
the notice from the Taking Authority of the contemplated Taking or if the amount
of the contemplated award is not set forth therein, then the applicable
certificate prepared by an Independent Expert), H/C I Owner and/or Mall I Owner,
as the case may be, may agree with the Taking Authority on the amount to be paid
upon a Taking without obtaining the consent of Trustee, Trustee shall pay over
to H/C I Owner and/or Mall I Owner, as the case may be, the applicable proceeds
of the Taking upon receipt therefor by Trustee and H/C I Owner and/or Mall I
Owner, as applicable, shall use such proceeds to perform a restoration in
accordance with the provisions of Article XII; provided further that, if, at the
time of any Taking, or at any time during the relevant action or proceeding with
respect to any Taking, an event of default under any affected Mortgagee's loan
documents shall have occurred and be continuing, then Trustee shall not be
required to pay over the applicable proceeds of the Taking to H/C I Owner and/or
Mall I Owner, as the case may be, Trustee (acting in accordance with the written
directions of such affected Mortgagee(s)) may participate in, settle and/or
compromise any award for a Taking, as it sees fit in its sole discretion,
without the participation or consent of H/C I Owner and/or Mall I Owner, as the
case may be, and the proceeds of the Taking shall be applied in accordance with
the provisions of Article XII hereof. Furthermore, if any claim shall not have
been settled, compromised or adjusted or the applicable condemnation award
proceeds shall not have been paid to Trustee, in any case, within twelve (12)
months after the Taking in question occurred, then Trustee (acting in accordance
with the
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written directions of any affected Mortgagee(s)), may settle and/or compromise
such award, as it sees fit in its sole discretion, without the participation or
consent of H/C I Owner and/or Mall I Owner, as the case may be, and the proceeds
of the Taking shall be applied in accordance with the provisions of Article XII
hereof.
9. Mortgagee Consent to Release of Condemnation Award Proceeds. If
all or any material portion of the Phase I Hotel/Casino or the Phase I Mall
shall be taken pursuant to a Taking, the Owner of the property incurring the
loss shall notify all Mortgagee(s) within ten (10) Business Days after receipt
of notice of such Taking. Each affected Mortgagee shall permit condemnation
award proceeds with respect to any Taking to be applied to restoration of
buildings and/or other improvements on or in the affected Lot in accordance with
the provisions of this Article XII; provided that such affected Mortgagee shall
have received on or before ninety (90) days after the date such Mortgagee's
receipt of the notice described above a certificate from an Independent Expert
certifying that (x) any restoration of the affected property required as a
consequence of such Taking can be completed within one (1) year after the date
of delivery of such certificate and (y) the amount of insurance proceeds payable
in connection with such Taking (together with any other funds committed by the
affected Owner to be applied to such restoration) shall be sufficient to finance
the anticipated cost (including scheduled debt service payments through the
anticipated date of completion of the restoration) of such restoration as set
forth in such certificate. If the conditions set forth in the preceding (x) and
(y) cannot be satisfied with respect to a particular Lot, any affected Mortgagee
shall be paid its
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equitable share as determined by the Independent Expert of condemnation award
proceeds to be applied in accordance with the provisions of its Mortgage.
ARTICLE XIII
COMPLIANCE WITH LAWS
1. Legal Requirements. (a) Each Party, at its expense (but subject
to the provisions of Section 3 of Article V and Sections 3 and 5 of Article
VII), shall comply with all Legal Requirements applicable to its respective Lot.
Any Party may defer compliance with any such Legal Requirements if it shall
contest by appropriate proceedings in accordance with the provisions of
subsection (b) below, prosecuted diligently and in good faith, the legality or
applicability thereof, provided that such deference does not materially
adversely interfere with any other Party's use of its Lot as provided under this
Agreement. Each Party will also procure, pay for and maintain all permits,
licenses and other authorizations needed for the operation of its business.
(b) No Owner shall be in default for failure to comply with
any Legal Requirement if, and so long as, (i) such Owner shall diligently and in
good faith contest the same by appropriate legal proceedings which shall operate
to prevent the enforcement or collection of the same and the sale of its Lot or
any part thereof to satisfy the same; (ii) such Owner shall give its Mortgagee
and the other affected Owners and Mortgagees notice of the commencement of such
contest, (iii) unless funds are otherwise reserved or deposited with the
applicable Governmental Authority, such Owner shall furnish to Trustee a cash
deposit, or an indemnity bond
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reasonably satisfactory to all affected Mortgagees with a surety reasonably
satisfactory to such Mortgagees, in the amount of the cost of complying with the
applicable Legal Requirement, as applicable, plus, in any such case, a
reasonable additional sum to pay all costs, interest, fines and penalties that
may be imposed or incurred in connection therewith, to assure payment of the
matters under contest or to prevent any sale or forfeiture of such Owner's Lot
or any part thereof; (iv) such Owner shall timely upon final determination
thereof pay the amount of any such cost, together with all costs, interest,
fines and penalties which may be payable in connection therewith; (v) the
failure to pay such cost, as applicable, or any such interest, fine or penalty,
does not constitute a default under any other deed or trust, mortgage or
security interest covering or affecting any part of such Owner's Lot; and (vi)
notwithstanding the foregoing, such Owner shall immediately upon request of any
affected Mortgagee pay (and if such Owner shall fail so to do, any such
Mortgagee may, but shall not be required to, pay or cause to be discharged or
bonded against) any such cost, and all such interest, fines and penalties,
notwithstanding such contest, if in the reasonable opinion of any such Mortgagee
such Owner's Lot or any part thereof or interest therein, is in danger of being,
or is reasonably likely to be (regardless of whether the sale, forfeiture,
foreclosure, termination, cancellation or loss is imminent), sold, forfeited,
foreclosed, terminated, cancelled or lost.
2. Gaming Laws. All Parties and all Persons associated with such
Parties shall promptly and in all events within the applicable time limit,
furnish the Nevada Gaming Commission, any other agency or subdivision of the
State of Nevada, or any other agency or subdivision thereof, or of any other
Governmental Authority
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regulating gaming (collectively "Gaming Authorities") any information reasonably
requested thereby and shall otherwise reasonably cooperate with all Gaming
Authorities. A Person shall be deemed associated with a Party if that Person is
an Affiliate thereof, such Person is employed by such Party, is an officer,
director or agent of such Party or any Tenant, has any contractual relationship
with such Party, any Tenant or any Affiliate of such Party or any Tenant,
furnishes services or property to such Party, any Tenant or any Affiliate of
such Party or any Tenant, or has the power to exercise a significant influence
over such Party or an Affiliate of such Party. Without limiting the generality
of the foregoing, any Mortgagee and all Tenants shall be deemed associated with
such Party, and for purposes of this Article XIII the term Party shall be deemed
to mean a Party and any Affiliate thereof.
ARTICLE XIV
MISCELLANEOUS
1. Rights and Obligations Run With the Land. Except to the extent
otherwise provided herein, the easements, rights, interests, obligations,
duties, conditions, covenants and agreements granted hereby or otherwise
contained herein (collectively, the "Rights and Obligations") shall be
appurtenant to and run with the H/C I Space, the Mall I Space, the H/C II Space,
the Mall II Space and the SECC Land, shall bind H/C I Owner, Mall I Owner, H/C I
Owner, Mall II Owner and SECC Owner and their respective successors in interest
to the fee or leasehold title to the applicable Lot and the improvements thereon
and shall inure only to the benefit of H/C I Owner, Mall I Owner, H/C II Owner,
Mall II Owner and SECC Owner and
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their respective Mortgagees. Supplementing the foregoing, H/C I Owner is
executing and delivering this Agreement on behalf of itself, H/C II Owner and
Mall II Owner, which entities are or will be Affiliates of H/C I Owner and which
Affiliates shall be fully bound by the terms, conditions and covenants of this
Agreement as though signatories hereto immediately upon acquiring fee or
leasehold title to any portion of the Phase I Land or any improvements thereon
or the Phase II Land or any improvements thereon. Notwithstanding anything to
the contrary contained herein, no other Parties shall be construed as the
beneficiaries of the Rights and Obligations, none of which may be separated from
or conveyed, granted or encumbered separately from the Phase I Land, the Phase
II Land or the SECC Land, respectively. This Agreement, and the protective
covenants, conditions, restrictions, grants of easements, rights, rights-of-way,
liens, charges and equitable servitudes set forth herein, shall, except as
otherwise expressly provided herein, (a) be perpetual, (b) be binding upon all
successors and assigns, (c) inure to the benefit of all Persons having or
acquiring any right, title or interest therein or in any part thereof, their
heirs, successors and assigns, and (d) constitute covenants running with the
land pursuant to applicable law. The Owners agree that upon the first transfer
of fee title to any of the Lots, the deed evidencing such transfer shall be
expressly subject to the provisions of this Agreement which shall be
incorporated therein by reference.
2. No Merger. There shall be no merger of the easements, rights,
interests or estates burdening any property pursuant to this Agreement with the
fee estate of such property by reason of the fact that the same person may
acquire or hold, directly or indirectly, any such easements, rights, interests
or estates and such
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fee estate, and no merger shall occur unless and until all persons having an
interest in any such easements, rights, interests or estates and such fee estate
shall join in a written instrument effecting such merger.
3. Transfers.
(a) If any of H/C I Owner, H/C II Owner, Mall I Owner, Mall II
Owner or SECC Owner shall transfer to any individual, partnership, firm,
association, limited liability company, trust or corporation, or any other form
of business or government entity (in any case, a "Person" and, after such
transfer, an "Interest Holder") any of the following partial interests, such
Interest Holder shall be treated, together with all similar Interest Holders, as
a single Party for purposes of this Agreement:
(i) Any partial, subdivided interest (other than ownership
of a commercial condominium unit and related undivided interest in common
elements or a commercial subdivision) in the Phase I Land or the
improvements thereon (in the case of H/C I Owner, H/C II Owner, Mall I
Owner or Mall II Owner) or the SECC Land (in the case of SECC Owner) (a
"Subdivided Interest Holder"), provided that this clause (i) shall not
apply to any transfer of the Phase I Land and/or any improvements thereon
to H/C II Owner, Mall I Owner or Mall II Owner contemplated by this
Agreement;
(ii) Any partial, undivided interest in all of the land or
improvements owned by it, such as may be held by joint tenancy or
tenancy-in-common or as a life estate or partnership interests in a
partnership (or a
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membership interests in a limited liability company) holding all of the
interests in such property; or
(iii) Any partial, undivided interest, legal or equitable,
in the assets of any Party that is a Person other than an individual,
which interest is not an interest in land or improvements, such as a
beneficial interest in a Party which is a trust, or partnership interests
in a partnership (or membership interests in a limited liability company).
Notwithstanding the foregoing, Subdivided Interest Holders may be treated
as Separate Interest Holders provided that at no time shall there be more
than ten (10) such separate Subdivided Interest Holders with respect to
either the Phase I Land or the SECC Land, as applicable.
(b) A Mortgagee shall not be deemed to be an Interest Holder
unless such Mortgagee is also a Transferee.
(c) (i) All of the Interest Holders with respect to each of
the Phase I Land, the Phase II Land, the Phase I Mall, the Phase II Mall
and the SECC Land shall designate one of their number as their agent (an
"Agent") to act on their behalf so that other Parties shall not be
required with respect to the applicable land or improvements, as the case
may be, to obtain the action or agreement of, or to proceed against, more
than one individual or entity in carrying out or enforcing the terms,
covenants, provisions and conditions of this Agreement. The foregoing
requirements to designate an Agent shall not apply to stockholders and
bondholders of a corporate Party, the members of a limited liability
company or partners of a partnership.
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(ii) Where the transfer is of partial interests as
described above but the Persons owning such partial interests fail to
designate an Agent, the acts of the Person who was deemed to be the Party
to this Agreement prior to the transfer (whether or not such Party retains
any interest in the property in question) shall be binding on all Persons
having an interest or right in the applicable land or improvements until
such time as written notice of such designation is given and recorded in
the Recorder's Office and a copy thereof is served on the Parties hereto
as required by Section 14 of this Article XIV.
(iii) The exercise of any powers and rights of a Party by
such Party's Agent shall be binding upon all Persons having an ownership
or leasehold interest or right in the applicable land or improvements and
upon all Persons having an ownership interest in the Party in question, to
the same extent as if such exercise had been performed by such Party. The
other Parties shall have the right to deal with and rely solely upon the
acts and omissions of such Party's Agent in connection with their
performance of this Agreement, but such designation of an Agent shall not
relieve any Party from its obligations under this Agreement.
(iv) An Agent shall be the authorized agent of its
principals for service of any process, writ, summons, order or other
mandate of any nature of any court in any action, suit or proceeding
arising out of this Agreement. Service upon an Agent shall constitute due
and proper service of any such matter upon its principals. Until a
successor Agent has been appointed and notice of such appointment has been
given pursuant to the
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provisions of this Section 3, the designation of a Party's Agent shall
remain irrevocable.
4. Mortgages.
(a) Each Party shall have the right to collaterally assign and
encumber this Agreement as security to one or more of its Mortgagees holding a
Mortgage so long as such Mortgagee, in writing (i) subordinates such Mortgage
and the lien thereof to this Agreement and to the rights, interests,
obligations, duties, conditions, covenants and agreements granted pursuant to
this Agreement or otherwise contained herein (whether such Mortgage is recorded
on or after the date hereof) and (ii) agrees to be bound by the terms and
conditions of this Agreement upon its taking title to such property (subject to
the provisions of Section 5 below). Notwithstanding the foregoing, regardless of
whether any Mortgagee shall receive a collateral assignment of this Agreement,
each Mortgage (whether recorded on or after the date hereof) and the lien
thereof shall automatically be subject and subordinate to this Agreement and to
the rights, interests, obligations, duties, conditions, covenants and agreements
granted pursuant to this Agreement or otherwise contained herein.
(b) Further, notwithstanding anything to the contrary in this
Agreement, each of the Existing SECC Mortgages shall not be, and shall not be
deemed to be, subject and subordinate to the following Sections (collectively,
the "Enumerated Provisions") of this Agreement: Sections D.1 and D.2 of Article
II, Sections 1 through and including 3 of Article III; Article V (other than
Section 3); and Articles X, XI, XII and XIII and shall be subject and
subordinate to all other provisions of this Agreement. By way of explanation and
not limitation, if an
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Existing SECC Mortgage were to be foreclosed, the purchaser of the SECC at the
foreclosure sale (whether or not the holder of the Existing SECC Mortgage is
such purchaser) would not be bound by the Enumerated Provisions.
(c) Each Party agrees for the benefit of the other Parties and
their respective Mortgagees, that wherever a Party has a right to grant or
withhold its consent or approval under this Agreement, or otherwise has
discretion to act or refrain from acting, such Party shall only grant its
consent or approval or act or refrain from acting, as the case may be, in such a
manner as a Commercially Reasonable Owner would do and so long as the same is
not likely to have a Material Adverse Effect.
(d) In any instance (other than Section 2(b) of Article XI)
where a Mortgagee's consent is required under this Agreement and such Mortgagee
shall be a trustee for publicly held debt under an indenture, such trustee shall
be deemed to have given its consent upon delivery to such trustee of a written
statement from an Independent Expert certifying that the matter proposed for
consent would be consented to by a Commercially Reasonable Owner of the Lot(s)
encumbered in favor of said Mortgagee and the same is not likely to have a
Material Adverse Effect; provided, however, that the foregoing consent procedure
shall not be construed as a means for satisfying any consents or approvals
required to be obtained with respect to matters under the terms of the
indenture, security documents and other loan documents pertaining to any such
Mortgagee, it being understood that said consent or approval requirements must
be satisfied in accordance with their terms.
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5. Transferee Liability.
(a) Subject to the further provisions of this Section 5, any
assignee or transferee (in either case, a "Transferee") of all or any portion of
the Phase I Land and/or any buildings or other improvements thereon or the SECC
Land and/or any buildings or other improvements thereon, including, without
limitation, any transferee by way of a foreclosure sale, shall be deemed to have
assumed the obligations and liabilities hereunder of the Party from whom such
Transferee received its interest in such portion of the Phase I Land or the SECC
Land or such buildings or other improvements (to the extent such obligations or
liabilities relate to such portion, as applicable); provided that, without
limiting the foregoing, within five (5) Business Days of written request
therefor by the non-transferring Party hereto, the Transferee shall execute a
writing, in form and substance reasonably satisfactory to such Transferee and to
such non-transferring Party, confirming such assumption. In the event of such a
transfer or assignment, the transferring Party (the "Transferor") shall be
released from any obligations arising after the effective date of the transfer
or assignment (but not any obligations of the Transferor that are outstanding
under this Agreement as of the effective date of the transfer or assignment, and
the Transferor and the Transferee shall be jointly and severally liable with
respect to such obligations). Each Transferor shall give the other Party hereto
at least five (5) Business Days' prior written notice of the transfer or
assignment in question and shall furnish a fully-executed copy of the instrument
of transfer or assignment, within five (5) Business Days of execution thereof,
to the other Party hereto.
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(b) Notwithstanding the foregoing, in the event of a transfer
to any Mortgagee (or its designee) resulting from (i) judicial or nonjudicial
foreclosure of the Mortgage held by such Mortgagee or (ii) the grant of a deed
in lieu of such foreclosure, then, in either event, (x) the Transferor shall be
released from any obligations arising after the effective date of the transfer;
provided, however, that the Transferor shall not be released from any
obligations which remain outstanding on the date of such transfer and (y) such
Mortgagee (or its designee) shall not be liable for any non-monetary defaults of
the Transferor arising under this Agreement prior to the effective date of the
transfer that are not susceptible to cure by the Transferee after obtaining
possession of the Lot in question.
6. As-Built Survey. Each Party, upon the request of any other Party,
shall enter into one or more separate agreements in recordable form setting
forth in legally sufficient detail the easements, rights-of-way and other rights
and interests provided for in, or granted (or required to be granted) pursuant
to, this Agreement. In addition, upon completion of construction of each of the
Venetian, the Lido, each Automobile Parking Area and the New HVAC Plant, H/C I
Owner or H/C II Owner, as applicable, shall, at its sole cost and expense, have
an as-built survey prepared by a reputable licensed surveyor of the applicable
portion of the Phase I Land, together will all improvements constructed thereon.
7. Estoppel Certificates. Each Party shall at any time and from time
to time during the Term (but not more often than once in each calendar quarter),
within fifteen (15) Business Days after request by any other Party, execute,
acknowledge and deliver to such other Party or to any existing or prospective
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purchaser, Mortgagee or lessee designated by such other Party, a certificate
stating: (a) that this Agreement is unmodified and in full force and effect, or
if there has been a modification or modifications, that this Agreement is in
full force and effect, as modified, and identifying the modification agreement
or agreements; (b) whether or not there is any existing default hereunder by
either Party in the payment of any sum of money owing to the Party executing
such certificate, whether or not there is any existing default by either Party
with respect to which a notice of default has been given or received by the
Party executing such certificate (and, to the best of the knowledge of the Party
executing such certificate, whether any other default exists under this
Agreement), and if there is any such default, specifying the nature and extent
thereof; (c) whether or not there are any outstanding claims, set-offs, defenses
or counterclaims which a Party has asserted against the other Party by notice to
the other Party; and (d) such other matters as may be reasonably requested.
8. Indemnification. Each of the Parties shall at all times indemnify
and hold harmless each of the other Parties, their Mortgagees, the Trustee and
their respective partners, principals, officers, directors, shareholders and
employees, from and against any and all losses, liabilities, expenses, costs,
demands, claims and judgments, including, without limitation, reasonable
attorneys' fees and expenses, incurred or suffered by any such indemnified Party
and arising from or as a result of the death of, or any accident, injury, loss
or damage whatsoever caused to any persons or property as shall occur on the
land or in any buildings or other improvements owned by such indemnifying Party
or in connection with the exercise of any rights or interests granted to, or
easements used by such indemnifying Party
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hereunder, except, in each case, to the extent such claims (i) result from the
gross negligence or willful misconduct of the indemnified Party, (ii) are
covered by any insurance referred to in Article X hereof that is obtained by any
Party or would have been covered, if any other Party had obtained the same, by
any such insurance that any other Party is required thereunder to obtain or
(iii) result from the exercise of any rights or interests granted to, or
easements used by, any other Party hereunder.
9. Rights to Cure Default; Payment of Default and Lien.
(a) In the event that any Party (a "Defaulting Party") shall
fail to fully, faithfully and punctually perform or cause to be performed any
obligation on the part of such Defaulting Party hereunder, then (i) if such
default shall continue for ten (10) days after notice thereof (except in the
event of an emergency where no notice shall be required) from any non-Defaulting
Party affected by such default to the Defaulting Party, such non-Defaulting
Party shall have the right (but not the obligation) to (x) enter upon the
property owned or leased by the Defaulting Party to the extent reasonably
required to perform or cause to be performed the obligations of the Defaulting
Party with respect to which the Defaulting Party is in default, (y) perform or
cause to be performed such obligations and (z) be reimbursed by such Defaulting
Party, upon demand by such non-Defaulting Party, for the cost thereof, together
with interest thereon at the Interest Rate from the date of demand to the date
of reimbursement by the Defaulting Party and (ii) if such failure shall continue
for thirty (30) days after notice from such non-Defaulting Party to the
Defaulting Party, then such non-Defaulting Party shall have all rights and
remedies available at law or in equity (other than any right to terminate this
Agreement); provided, however, that
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if such default is susceptible of cure but cannot reasonably be cured within
such thirty (30) day period and the Defaulting Party shall have commenced to
cure such default within such thirty (30) day period and thereafter diligently
and expeditiously proceeds to cure the same, such thirty (30) day period shall
be extended to the extent necessary so to cure such default (but in no event
beyond one hundred eighty (180) days in total (including the original thirty
(30) day period)); provided further, that any default that can be cured solely
by the payment of money shall be cured within ten (10) days after notice from
such non-Defaulting Party to the Defaulting Party.
(b) If pursuant to Section (a), a Party is compelled or elects
to pay any sum of money or do any acts which require the payment of money by
reason of another Party's failure or inability to perform any of the terms and
provisions in this Agreement to be performed by such other Party, the Defaulting
Party shall promptly upon demand, reimburse the paying Party for such sums, and
all such sums shall bear simple interest at the Interest Rate from the date of
demand for reimbursement until the date of such reimbursement. Any other sums
payable by any Party to any other Party pursuant to the terms and provisions of
this Agreement that shall not be paid when due shall bear simple interest at the
Interest Rate from the due date to the date of payment thereof. All such unpaid
sums shall constitute a valid and enforceable lien on the Defaulting Party's Lot
and each Party hereby consents to the filing by any other Party of any and all
documentation necessary or desirable to perfect and/or secure such lien. No
action shall be brought to foreclose such lien unless (x) thirty (30) days'
notice of claim of lien is given to the Defaulting Party, (y) such notice and
opportunity to cure is given to the holder of any Mortgage
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encumbering the Defaulting Party's Lot as is required under Section 14(c) of
this Article, and (z) no such Person shall cure the default in question within
the applicable cure period. Reasonable attorneys' fees and charges in connection
with collection of the debt secured by such lien or foreclosure thereof shall be
paid by the Party against whom such action is brought and secured by such lien.
Such lien shall be superior to any other lien and encumbrance on the affected
Lot created or arising after the date of this Agreement, including, without
limitation, the lien of any Mortgage. The liens provided for in this Section 9
shall only be effective when filed for record by the non-Defaulting Party as a
claim of lien against the defaulting Party in the Recorder's Office, signed and
acknowledged, which claim of lien shall contain at least:
(i) An itemized statement of all amounts due and payable
pursuant hereto;
(ii) A description sufficient for identification of that
portion of the real property of the Defaulting Party which is the subject
of the lien;
(iii) The name of the Owner or reputed Owner of the
property which is the subject of the lien; and
(iv) The name and address of the Party claiming the lien.
The lien shall attach from the date a claim is recorded and may be enforced
under the procedures set forth in Nev. Rev. Stat. ss.ss. 116.3116-116.31168,
except that the term "unit," as used in the foregoing provisions, shall be
deemed to refer to the Defaulting Party's interest in the real property which is
subject to the lien. The Party claiming the lien shall release the claim of lien
once the amounts secured by the lien have been paid in full.
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(c) If, at any time, H/C I Owner or any Person or any of their
successors or assigns shall acquire the interest of H/C I Owner as landlord
under the Billboard Master Lease through a foreclosure pursuant to the
provisions of Section 9(b) of this Agreement or the exercise of any other
remedies under or in connection with this Agreement (each, a "New Owner") so
long as (i) the Billboard Master Lease was, immediately prior to such
foreclosure or exercise of other remedies, then in full force and effect, and
(ii) no default (after giving of notice and expiration of the applicable cure
period) exists under the Billboard Master Lease, the Billboard Master Lease
shall continue in full force and effect as a direct lease between the New Owner
and such tenant thereunder, upon and subject to all of the terms, covenants and
conditions of the Billboard Master Lease for the balance of the term thereof.
(d) If, at any time, H/C I Owner or any Person or any of their
successors or assigns shall acquire the interest of H/C I Owner as landlord
under the Mall I Airspace/Ground Lease through a foreclosure pursuant to the
provisions of Section 9(b) of this Agreement or the exercise of any other
remedies under or in connection with this Agreement (each, a "New H/C I Owner")
so long as (i) the Mall I Airspace/Ground Lease was, immediately prior to
foreclosure or exercise of other remedies, then in full force and effect, and
(ii) no default (after giving of notice and expiration of the applicable cure
period) exists under the Mall I Airspace/Ground Lease, the Mall I
Airspace/Ground Lease shall continue in full force and effect as a direct lease
between the New H/C I Owner and such tenant thereunder, upon and
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subject to all of the terms, covenants and conditions of the Mall I
Airspace/Ground Lease for the balance of the term thereof.
10. Rights Perpetual. Except as otherwise expressly provided in this
Agreement, (i) the utility, parking, Existing HVAC Plant and encroachment
easements and related rights and interests granted herein shall be perpetual and
shall remain binding forever and (ii) the remainder of this Agreement shall
continue, and the remainder of the obligations hereunder shall remain binding,
from the Commencement Date until the Expiration Date. No Party shall have the
right to terminate this Agreement as a result of any default or alleged default
of any other Party, but such limitation shall not affect, in any manner, any
other rights or remedies which any Party may have hereunder, at law or in equity
by reason of any breach of this Agreement.
11. Further Assurances. Each Party upon the request of any other
Party and at the expense of such other Party at any time from time to time,
agrees to promptly execute, acknowledge where appropriate and deliver such
additional instruments and documents, in recordable form if appropriate, and to
take such other action, in each case, as may be reasonably requested by such
other Party in order to effectuate the agreements contained herein. The Parties
further agree to make such changes to this Agreement as shall be reasonably
required to make this Agreement consistent with all applicable Legal
Requirements.
12. Rights Irrevocable. The Parties hereby agree that, except as
otherwise expressly provided herein, (a) no fee or other charge is payable by
any person in connection with the use of any easement, right or interest granted
hereunder
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or pursuant to the terms hereof and (b) all easements, rights and interests
granted hereunder or pursuant to the terms hereof shall be irrevocable.
13. No Joint Venture. Nothing herein contained shall be deemed or
construed by the Parties hereto, or by any third Party, as creating the
relationship of principal and agent, or of partners or joint venturers, between
the Parties hereto.
14. Notices.
(a) All notices, demands, requests and other communications
given hereunder shall be in writing and shall be deemed to have been given: (i)
upon delivery if personally delivered; (ii) when delivered, postage prepaid, by
certified or registered mail, return receipt requested as evidenced by the
return receipt; or (iii) upon delivery if deposited with a nationally recognized
overnight delivery service marked for delivery on the next business day, in any
case, addressed to the Party for whom it is intended at its address hereinafter
set forth:
If to SECC Owner:
Interface Group-Nevada, Inc.
3355 Las Vegas Boulevard South
Room 1B
Las Vegas, Nevada 89109
Attn: General Counsel
If to H/C I Owner:
Venetian Casino Resort, LLC
3355 Las Vegas Boulevard South
Room 1C
Las Vegas, Nevada 89109
Attn: General Counsel
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If to Mall I Owner:
Grand Canal Shops
Mall Construction, LLC
3355 Las Vegas Boulevard South
Room 1G
Las Vegas, Nevada 89109
Attn: General Counsel
If to the Trustee:
The Bank of Nova Scotia
580 California Street
21st Floor
San Francisco, CA 94104
Attn: Corporate Banking Agency
San Francisco Station
Any Party may change its address for the purposes of this
section by giving notice of such change as aforesaid.
(b) The holders of the Existing Mortgages (as defined below)
and each other Mortgagee shall be entitled to receive notice of any default by
the Party hereto whose property is encumbered by the applicable Mortgage,
provided that each Mortgagee other than holders of the Existing Mortgages (who
shall not be required to deliver a Form Notice) shall have delivered a copy of a
notice in the form herein provided to each Party hereto (the "Form Notice"). The
form of such Form Notice shall be as follows:
The undersigned, whose address is
--------------------------------------------
does hereby certify that it is the beneficiary under a Deed Of Trust
upon the land described on Exhibit A attached hereto and/or the
buildings or other improvements thereon. In the event that any
notice shall be given of the default, under that certain Amended and
Restated Reciprocal Easement, Use and Operating Agreement dated as
of November 14, 1997 between Venetian Casino
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Resort, LLC and Interface Group - Nevada, Inc. (the "REA"), on the
part of the Party upon whose property is encumbered by such Deed of
Trust, a copy thereof shall be delivered to the undersigned who
shall have the right to cure such default as set forth in the REA.
Any such notice to a Mortgagee shall be given in the same manner as provided in
Section 14(a) of this Article XIV above. As used herein the term "Existing
Mortgages" shall mean the collective reference to (i) that certain Senior Deed
of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
dated as of June 26, 1997 from SECC Owner to Lawyers Title of Nevada, Inc. for
the benefit of LaSalle National Bank, as Collateral Agent for certain lenders,
recorded on July 3, 1997 in Book 970703 as Document Number 01057 in the
Recorder's Office, as the same may be further amended, supplemented, or
otherwise modified or assigned from time to time, (ii) that certain Junior Deed
of Trust, Assignment of Leases and Rents, Security Agreement and Fixture Filing
dated as of June 26, 1997 from SECC Owner to Lawyers Title of Nevada, Inc. for
the benefit of LaSalle National Bank, as Collateral Agent for certain lenders
recorded on July 3, 1997 in Book 970703 as Document Number 01061 in the
Recorder's Office, as the same may be further amended, supplemented, or
otherwise modified or assigned from time to time ((i) and (ii) are,
collectively, the "Existing SECC Mortgages"), (iii) Deed of Trust Assignment of
Rents and Leases, Security and Fixture Filing, dated as of the date hereof from
Phase I, LLC and LVSI to Lawyers Title of Nevada, Inc., as trustee, for the
benefit of The Bank of Nova Scotia, as agent, as the same may be further
amended, supplemented, or otherwise modified or assigned from time to time (iv)
Leasehold Deed of Trust, Assignment of Rents and Leases and Security
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Agreement, dated as of the date hereof from Interim Mall, LLC to Lawyers Title
of Nevada, Inc., as trustee, for the benefit of The Bank of Nova Scotia, as
agent, as the same may be further amended, supplemented, or otherwise modified
or assigned from time to time and shall include any fee deed of trust executed
after the Subdivision in lieu thereof ((iii) and (iv) are, collectively, the
"Existing Phase I Mortgages-Banks"). For purposes of all notices, demands,
requests and other communications hereunder, the address of the holder of each
Existing Mortgage is as follows:
with respect to the Existing SECC Mortgages:
LaSalle National Bank
135 South LaSalle Street
Chicago, Illinois 60603
Attention: Asset-Backed Securities Trust Group
with respect to the Existing Phase I Mortgages-Banks:
The Bank of Nova Scotia
580 California Street, 21st Floor
San Francisco, California 94104
Attention: Mr. Alan Pendergast
with a copy to:
The Bank of Nova Scotia
Loan Administration
600 Peachtree Street, N.E.
Atlanta, Georgia 30308
Attention: Ms. Marianne Velkar
(c) In the event that any notice shall be given of the default
hereunder of a Party hereto and such Defaulting Party shall fail to cure or
commence to cure such default (and such default shall continue after the giving
of the applicable notice and the expiration of the applicable cure period set
forth in this Agreement), then and in that event the holder of any Mortgage
affecting the property of the
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Defaulting Party shall be entitled to receive an additional notice given in the
manner provided herein, that the Defaulting Party has failed so to cure such
default, and such Mortgagee shall have thirty (30) days after the receipt of
said additional notice to cure any such default, or, if such default cannot be
cured within thirty (30) days, to diligently commence curing within such time
and diligently and expeditiously cure within a reasonable time thereafter
(including, without limitation, such time as shall be necessary to obtain
possession of the property where possession shall be necessary to effect a
cure).
15. Disputes/Independent Expert. Notwithstanding anything to the
contrary contained in this Agreement, in the event there is a dispute that this
Agreement provides will be resolved by an Independent Expert among any of the
Parties (the "Disputing Parties") arising out of or relating to this Agreement
and the Disputing Parties cannot, with respect to any such dispute, resolve such
dispute within sixty (60) days, then the matter(s) in question shall be resolved
in accordance with the further provisions of this Section. In the event of any
such disagreement, the Disputing Parties shall promptly notify the Independent
Expert (as defined below) of such disagreement and of their desire that such
disagreement be resolved by the Independent Expert. The Independent Expert shall
be instructed to render its decision within thirty (30) days (or any shorter
time reasonably agreed to by the Disputing Parties) after such notification.
Each of the Disputing Parties shall be entitled to present evidence and
arguments to the Independent Expert, which evidence and arguments may include
the relevant provisions hereof. During the pendency of such dispute-resolution
procedure, the Disputing Parties shall continue their performance
173
under this Agreement, including with respect to the matter that is the subject
of such procedure. The determination of the Independent Expert acting as above
provided (i) shall be conclusive and binding upon the Parties and (ii) shall in
no event modify, amend or supplement this Agreement in any manner. The
Independent Expert shall be required to give written notice to the Disputing
Parties stating its determination, and shall furnish to each Party a signed copy
of such determination. Each of the Disputing Parties shall pay its proportionate
share of the fees and expenses of the Independent Expert and all other expenses
of the above-described dispute resolution procedure (not including the
attorneys' fees, witness fees and similar expenses of the Disputing Parties,
which shall be borne separately by each of the Parties). As used herein, the
"Independent Expert" shall mean (a) with respect to any dispute pertaining to
architectural or engineering matters, an appropriately licensed and/or
registered (as applicable), reputable and independent architect or engineer; (b)
with respect to any dispute pertaining to hotel, casino, restaurant or retail
complex operation or management, a reputable and independent Person with
experience in commercial real estate operation and management; and (c) with
respect to any other dispute, a licensed, reputable and independent certified
public accountant, in each of (a), (b) or (c) reasonably acceptable to the
Disputing Parties. In all events, the Independent Expert shall (i) not be
affiliated with any Owner (or any Affiliate of any Owner) or any Mortgagee (or
any Affiliate of any Mortgagee) and (ii) have at least ten (10) years of
relevant experience and expertise with respect to large commercial real estate
projects in Las Vegas, Nevada and/or Clark County, Nevada. The holder of a
174
Mortgage may participate in any dispute involving an Independent Expert in
conjunction with the Party upon whose Lot it has a Mortgage.
16. Savings. If any provision of this Agreement or the application
thereof to any person or circumstance shall be invalid or unenforceable to any
extent, the remainder of this Agreement and the application of such provision to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
17. No Shared Ownership. The Parties hereto acknowledge and agree
that this Agreement is intended solely to regulate the rights and obligations of
the Parties hereto and to impose the easements and restrictions upon the
property specifically set forth herein, and except as set forth herein, each
Party retains full ownership and control over its own property.
18. Headings. The section headings are inserted for convenience only
and shall not affect construction of this Agreement.
19. Counterparts. This Agreement may be executed in any number of
counterparts, and each such counterpart will, for all purposes, be deemed an
original instrument, but all such counterparts together will constitute but one
and the same agreement.
20. Right to Injunction. In the event of any violation or threatened
violation by any person of any of the terms, restrictions, covenants and
conditions of this Agreement, any Party hereto shall have the right to enjoin
such violation or threatened violation in a court of competent jurisdiction.
175
21. Waiver of Jury Trial. EACH PARTY HEREBY WAIVES ALL RIGHT TO
TRIAL BY JURY IN ANY ACTION OR PROCEEDING ARISING OUT OF THIS AGREEMENT.
22. No Waiver. No delay or omission by any Party in exercising any
right or power accruing upon any default, non-compliance or failure of
performance of any of the provisions of this Agreement by any other Party shall
be construed to be a waiver thereof. A waiver by any Party of any of the
obligations of any Party shall not be construed to be a waiver of any subsequent
breach of any other term, covenant or agreement set forth in this Agreement.
23. Pronouns. All personal pronouns used in this Agreement, whether
in the masculine, feminine or neuter gender, shall be deemed to include, and to
refer also to, all other genders; all references in the singular shall be deemed
to include, and to refer also to, the plural, and vice versa.
24. Construction. The word "in" with respect to an easement granted
"in" a particular parcel of land or a portion thereof shall mean, as the context
may require, "in," "to," "on," "over," "through," "over," "upon," "across," and
"under," or any one or more of the foregoing.
25. Governing Law. This Agreement shall be governed and interpreted
in accordance with the laws of the State of Nevada.
26. Entire Agreement. This Agreement contains the entire agreement
of the Parties and this Agreement may only be amended, supplemented, changed,
terminated or modified by an agreement in writing signed by the Parties
176
hereto, consented to by the Mortgagees affected thereby and recorded in the
appropriate public records.
27. Recordation. This Agreement shall be recorded in the Land
Records of Clark County, Nevada, with the costs of such recording to be shared
equally by the Parties hereto.
28. Successors and Assigns. This Agreement shall be binding on the
Parties hereto and inure to the benefit of their respective heirs, legal
representatives, successors and assigns.
29. Binding and Enforceable Agreements; Independent Obligations.
(a) This Agreement is and is intended to be a fully binding
and enforceable contract between the Parties notwithstanding that the Parties
are currently indirectly owned by the same principal. Each Party expressly
acknowledges that certain third parties, including the separate creditors of
each Party, are relying upon (i) the binding and enforceable nature hereof by
each Party against the others and (ii) the separate assets and liabilities of
each Party. Each Party therefore agrees not to challenge or seek to set aside
this Agreement or the transactions contemplated hereby (whether in any
bankruptcy or insolvency proceeding or otherwise) based upon any assertion that
such transactions do not contain arm's-length terms or upon any direct or
indirect common ownership of the Parties.
(b) All obligations of any Party under this Agreement
constitute independent obligations of such Party and (except where expressly
stated to be conditions) are not conditioned in any way on performance by any
other Party. Accordingly, the breach by any Party under this Agreement shall not
excuse
177
performance by any other Party, except where this Agreement expressly states
that one Party's performance is conditioned upon performance by another Party.
Nothing in the preceding two sentences shall limit any right of any Party to
recover damages or to obtain equitable relief on account of any other Party's
breach of this Agreement. All Parties acknowledge that every Party will be
making a substantial monetary investment in reliance on the terms of this
Agreement and the independent obligations undertaken by each Party pursuant to
this Agreement. Without this Agreement, the Parties would not be able to achieve
a coordinated development of the real property burdened by this Agreement, which
coordinated development is intended and expected to produce substantial benefits
for all Parties. All Parties acknowledge that it would be inequitable for any
Party to be excused from any obligations under this Agreement while retaining
its interest in the property encumbered (and benefited) by this Agreement.
30. Funds Held by Trustee. Whenever Trustee is holding funds
pursuant to this Agreement, such funds shall be held in a segregated interest
bearing account for the benefit of the Mortgagees.
31. Shared Costs. Wherever it is contemplated in this Agreement that
Owners will share costs, the Owner who contracts for or incurs such costs on
behalf of all such Owners shall do so only pursuant to competitive, arms-length
agreements at market rates with unaffiliated third parties (or with an Affiliate
if consented to by the other Parties hereto); provided that the foregoing shall
not apply to an Owner who incurs expense to cure the default of another Owner.
178
32. No Duplication of Charges. Notwithstanding the fact that a fee,
expense or other charge may be referenced more than once in this Agreement, no
Party shall be required to pay such fee, expense or other charge more than once.
33. Section References. Wherever the word "Section" appears with no
reference to a corresponding "Article", the referenced Section shall be
construed to be within the Article wherein such reference is made.
ARTICLE XV
ARBITRATION
1. Disputes Covered. Any dispute including those arising from lack
of approval, controversies or disagreements between the Parties or arising from
the interpretation or application of any Article or Section, and any disputes in
this Agreement which by specific provisions are made subject to arbitration
shall be resolved by arbitration, as provided herein; provided, however, that
any Party hereto may seek prohibitory injunctive relief without first submitting
a controversy to arbitration.
2. Arbitration Procedures.
(a) If the Parties (the "Arbitrating Parties") that are
required to agree on an arbitrable dispute cannot reach an agreement within
thirty (30) days after notice of an arbitrable dispute is given by any
Arbitrating Party to the other Party or Parties, then any Arbitrating Party may
at any time after the end of said thirty (30) day period refer the dispute to
arbitration by notifying any other
179
Arbitrating Party thereof, and the Arbitrating Parties agree to cooperate in
obtaining such arbitration.
(b) Each Arbitrating Party shall within twenty (20) days of
its receipt of such notification designate one person, as hereinafter provided,
to represent it as an arbitrator. The arbitrators so appointed by the
Arbitrating Parties shall together designate one or two additional persons as
arbitrators to the end that the total number of arbitrators shall be an odd
number. The appointment of all additional arbitrators under this Section shall
be in writing and shall be submitted to the Arbitrating Parties within ten (10)
days following the selection of the last arbitrator selected by the Arbitrating
Parties. Any person designated as an arbitrator shall be knowledgeable and
experienced in the matters sought to be arbitrated, and shall in all events (i)
not be affiliated with any Owner (or any Affiliate of any Owner) or any
Mortgagee (or any affiliate of any Mortgagee) and (ii) have at least ten (10)
years of relevant experience and expertise with respect to large commercial real
estate projects in Las Vegas, Nevada and/or Clark County, Nevada. If the dispute
to be arbitrated deals with construction, the arbitrator so appointed shall be
experienced and knowledgeable in the construction industry as it relates to the
nature of the structure to which such arbitration applies. Similarly, any
arbitrator appointed in an architectural dispute shall be qualified as respects
architecture as it relates to the nature of the structure to which such
arbitration applies.
(c) The arbitrators shall meet or otherwise confer as deemed
necessary by the arbitrators to resolve the dispute and a decision of a majority
of the arbitrators will be binding upon the Arbitrating Parties. The decision of
the
180
arbitrators shall be in writing and shall be made as promptly as possible after
the designation of the last additional arbitrator, but in no event later than
thirty (30) days from the date of the designation of the last additional
arbitrator. A copy of the decision of the arbitrators shall be signed by at
least a majority of the arbitrators and given to each Arbitrating Party and its
Mortgagee in the manner provided in Section 14 of Article XIV of this Agreement
for the giving of notice.
(d) For each arbitrable dispute the cost and expense of the
arbitrators and arbitration proceeding (except for an Arbitrating Party's
attorney's fees) shall be paid and shared by the Arbitrating Parties, unless the
arbitrators assess such cost and expense unequally between the Arbitrating
Parties.
(e) The decision of the arbitrators (i) may be entered as a
judgment in a court of competent jurisdiction and (ii) shall in no event modify,
amend or supplement this Agreement in any manner. All arbitration conducted
under this Article XV shall be in accordance with the rules of the American
Arbitration Association, to the extent such rules do not conflict with the
procedures herein set forth. To the extent permitted by law, compliance with
this Article XV is a condition precedent to the commencement by any Party of a
judicial proceeding arising out of a dispute which is subject to arbitration
hereunder.
(f) The holder of a Mortgage may participate in any
arbitration proceedings in conjunction with the Party upon whose Lot it has a
Mortgage.
181
ARTICLE XVI
BILLBOARD SPACE
In the event the Billboard Operating Lease shall terminate or
expire, and from time to time thereafter, if the Additional Billboard Premises
shall not be physically separated from the remainder of the Billboard Premises,
at the request of Mall I Owner or H/C I Owner, Mall I Owner and H/C I Owner,
together with the Mortgagees of such Owners, shall negotiate, in good faith, in
order to attempt to reach agreement as to whether to physically separate the
Additional Billboard Premises from the remainder of the Billboard Premises, to
erect one or more floors in the Billboard Premises and/or to take any other
actions in connection with the Billboard Premises; provided that the Mortgagees
and such Owners shall not unreasonably withhold their consent to any agreement
between Mall I Owner and H/C I Owner with respect to any of the foregoing. The
cost of any such separation, erection or other action shall be equally divided
between Mall I Owner and H/C I Owner. If such Owners and Mortgagees shall not
agree as to how to proceed with respect to the Billboard Premises, then, the
Billboard Master Lease shall be terminated by the parties thereto and a physical
separation shall be constructed by Mall I Owner and H/C I Owner in the manner
noted above.
[signature page follows]
IN WITNESS WHEREOF, the Parties hereto have set their hands the day
and year first above written.
VENETIAN CASINO RESORT, LLC
By: Las Vegas Sands, Inc., as managing
member
By: /s/ William P. Weidner
----------------------------------------
Name: William P. Weidner
Title: President
INTERFACE GROUP-NEVADA, INC.
By: /s/ Sheldon G. Adelson
----------------------------------------
Name: Sheldon G. Adelson
Title: President
GRAND CANAL SHOPS MALL
CONSTRUCTION, LLC
By: Venetian Casino Resort, LLC, as sole
member
By: Las Vegas Sands, Inc., as
managing member
By: /s/ William P. Weidner
----------------------------------------
Name: William P. Weidner
Title: President
State of New York )
: ss.:
County of New York)
This instrument was acknowledged before me on November 14, 1997 by
Sheldon G. Adelson as President of INTERFACE GROUP-NEVADA, INC.
/s/ Caitlin A. Monck
----------------------------------------
(Signature of notarial officer)
(Seal, if any)
[Seal of Caitlin A. Monck]
My commission expires: October 6, 1999
State of New York )
: ss.:
County of New York)
This instrument was acknowledged before me on November 14, 1997 by
William P. Weidner, President of Las Vegas Sands, Inc., the
managing member of VENETIAN CASINO RESORT, LLC.
/s/ Caitlin A. Monck
----------------------------------------
(Signature of notarial officer)
(Seal, if any)
[Seal of Caitlin A. Monck]
My commission expires: October 6, 1999
State of New York )
: ss.:
County of New York)
This instrument was acknowledged before me on November 14, 1997 by
William P. Weidner, President of Las Vegas Sands, Inc., the managing
member of Venetian Casino Resort, LLC, the member of GRAND CANAL
SHOPS MALL CONSTRUCTION, LLC.
/s/ Dorcas Dawe
----------------------------------------
(Signature of notarial officer)
(Seal, if any)
[Seal of Dorcas Dawe]
My commission expires: February 2, 1999
SCHEDULE I
Definitions
The following terms shall have the meanings set forth in this
Schedule I:
1. "Accounting Period" shall mean any period commencing January 1
and ending on the next following December 31, except that the first Accounting
Period shall commence as to each Owner, respectively, as to its Lot on the
earlier to occur of (i) the Opening Date and (ii) the Mall Release Date, and
shall end on and include the next following December 31. Any portion or portions
of Hotel/Casino/Mall/SECC Common Area Charges relating to a period of time only
part of which is included within the first Accounting Period or the last
Accounting Period of an Owner shall be prorated on a daily basis as respects
such Owner.
2. "Additional Billboard Space" shall have the meaning set forth in
WHEREAS clause O.
3. "Adelson" shall have the meaning set forth in WHEREAS clause K.
4. "Adelson Completion Guaranty" shall have the meaning assigned to
such term in the FADAA.
5. "Affected Mortgagee" shall mean a Mortgagee who holds a Mortgage
encumbering the Lot affected by the event in question.
6. "Affiliate" when used with respect to a Person, shall mean (i) a
Person which, directly or indirectly, controls, is controlled by or is under
common control with such Person or (ii) a direct or indirect owner, officer,
director, employee or trustee
2
of, or a Person which serves in a similar capacity with respect to, such Person.
For the purpose of this definition, control of a Person which is not an
individual shall mean the power (through ownership of more than 50% of the
voting equity interests of such Person or through any other means) to direct the
management and policies of a Person.
7. "Agent" shall have the meaning set forth in Section 3(c)(i) of
Article IV.
8. "Agreement" shall have the meaning set forth in the introductory
clause.
9. "Alteration" shall mean any improvement, alteration, addition,
restoration, replacement, change or other work, or signage, to the interior or
exterior of the Venetian made by or for any Owner or any Tenant.
10. "APJV" means Atlantic-Pacific, Las Vegas, LLC, or a successor in
interest thereof under each of the Initial ESA's.
11. "APJV Term" means the period beginning on the "Service
Commencement Date" (as defined in the Initial ESA's) and continuing until the
expiration or earlier termination of the Initial ESA's.
12. "Architect" shall mean any professional architect licensed in
the State of Nevada selected and/or approved by both Mall I Owner and H/C I
Owner (which approval shall not be unreasonably withheld, conditioned or
delayed).
13. "Assessment Date" shall mean the first date upon which each of
the H/C I Space and the Mall I Space shall be separately assessed for real
estate tax purposes.
3
14. "Automobile Parking Area" shall mean each of the Phase I
Automobile Parking Area and the Phase II Automobile Parking Area.
15. "Bank Credit Agreement" shall have the meaning set forth in
WHEREAS clause F.
16. "Base Building" shall mean, collectively (i) the two-level
podium structure to be constructed by H/C I Owner on the Phase I Land in
accordance with the Plans and the provisions of the FADAA, the first floor of
which shall contain the Casino and the second and mezzanine floors of which
shall contain a portion of the Mall I Space and all of which shall be connected
to the Hotel, and (ii) the two level retail annex structure to be constructed by
H/C I Owner on the Retail Annex Land in accordance with the Plans and the
provisions of the FADAA, which shall contain a portion of the Mall I Space,
together with all improvements, systems, fixtures and other items of property
attached or appurtenant to such structures or used or necessary in the operation
thereof, other than Mall Property.
17. "Best's" shall have the meaning set forth in Section 3 of
Article X.
18. "Bill" shall have the meaning set forth in Section 1(i) of
Article VI.
19. "Billboard" shall have the meaning set forth in WHEREAS clause
O.
20. "Billboard Master Lease" shall have the meaning set forth in
WHEREAS clause P.
21. "Billboard Operating Lease" shall have the meaning set forth in
WHEREAS clause O.
4
22. "Billboard Premises" shall mean the premises demised under the
Billboard Operating Lease.
23. "Borrowers" shall have the meaning set forth in WHEREAS clause
E.
24. "Buffer Zone" shall have the meaning set forth in Section 3(a)
of Article I.
25. "Buffer Zone Encroachments" shall have the meaning set forth in
Section 3(a) of Article I.
26. "Buffer Zone Encroachment Easements" shall have the meaning set
forth in Section 3(a) of Article I.
27. "Building Shell and Core" shall have the meaning set forth in
Section 1(b) of Article V.
28. "Business Day" shall mean any day other than Saturday, Sunday, a
Federal holiday, a holiday recognized by the State of Nevada or any day on which
banks in Nevada are required or permitted to be closed.
29. "Casualty" shall have the meaning set forth in Section 13 of
Article X.
30. "Commencement Date" shall mean the date hereof.
31. "Commercially Available" shall have the meaning set forth in
Section 7 of Article X.
32. "Commercially Reasonable Owner" shall mean, with respect to a
given Owner and its Lot, a commercially reasonable and prudent owner of such Lot
together with any buildings and/or improvements located thereon or therein (and
of no
5
other property, rights or interests) (assuming that, at the time in question,
such owner, has equity in such Owner's Lot together with buildings and/or
improvements).
33. "Common Areas" shall mean the H/C Limited Common Areas, the Mall
I Limited Common Areas and the H/C-Mall Common Areas.
34. "Competitor" shall mean a Person that (i) owns or operates (or
is an Affiliate of an entity that owns or operates) a casino located in Nevada
or New Jersey or a shopping center or mall located in Nevada or a convention
center located in Clark County, Nevada, and/or (ii) is a union pension fund.
35. "Completion Date" shall mean the date of Completion (as defined
in the FADAA).
36. "Congress Facility" shall have the meaning set forth in Section
2(a) of Article III.
37. "Construction Buffer Zone" shall have the meaning set forth in
Section 2 of Article III.
38. "Construction Encroachment" shall have the meaning set forth in
Section 2 of Article III.
39. "Construction Walls" shall have the meaning set forth in Section
A, subsection 3 of Article VIII.
40. "Contracts" shall have the meaning set forth in the FADAA.
41. "Defaulting Party" shall have the meaning set forth in Section
9(a) of Article XIV.
42. "Destination Areas" shall mean with respect to any Owner (i) its
Lot, (ii) public sidewalks, streets, roads, rights of way and the like, (iii)
(with respect to
6
Owners other than SECC Owner) H/C Limited Common Areas and Mall I Limited Common
Areas, and (iv) H/C-Mall Common Areas.
43. "Discharging Party" shall have the meaning set forth in Section
C subsection 3(b) of Article VIII.
44. "Disputing Parties" shall have the meaning set forth in Section
15 of Article XIV.
45. "Electricity Provider" shall mean a reasonably experienced,
competent and legally qualified electricity provider.
46. "Enumerated Provisions" shall have the meaning set forth in
Section 4 of Article XIV.
47. "ESA" means an Energy Services Agreement between an Owner and
the HVAC Operator.
48. "ESA Amendment" shall have the meaning set forth in Section B,
subsection 6 of Article II.
49. "Existing HVAC Plant" shall have the meaning set forth in
Section A, subsection 1(a) of Article II.
50. "Existing HVAC Plant Termination Date" shall have the meaning
set forth in Section A, subsection 1(c) of Article II.
51. "Existing Mortgages" shall have the meaning set forth in Section
14(b) of Article XIV.
52. "Existing REA" shall have the meaning set forth in the first
WHEREAS clause.
7
53. "Existing SECC Mortgages" shall have the meaning set forth in
Section 14(b) of Article XIV.
54. "Existing Utility Equipment" shall have the meaning set forth in
Section C, subsection 2(a) of Article II.
55. "Expenses" shall have the meaning set forth in Section 3(e) of
Article III.
56. "Expiration Date" shall mean the one hundred and fiftieth
(150th) anniversary date of the Commencement Date.
57. "Facilities" means and includes annunciators, antennae, boxes,
brackets, cabinets, cables, coils, computers, conduits, controls, control
centers, cooling towers, couplers, devices, ducts, equipment (including, without
being limited to, heating, ventilating, air conditioning and plumbing
equipment), fans, fixtures, generators, hangers, heat traces, indicators,
junctions, lines, machines, meters, motors, outlets, panels, pipes, pumps,
radiators, risers, starters, switches, switchboards, systems, tanks,
transformers, valves, wiring and the like used in providing services from time
to time in any part of the Base Building, including, without being limited to,
air conditioning, alarm, antenna, circulation, cleaning, communication, cooling,
electric, elevator, exhaust, heating, natural gas, plumbing, radio, recording,
sanitary, security, sensing, telephone, television, transportation, ventilation
and water service.
58. "FADAA" shall have the meaning set forth in WHEREAS clause E.
59. "Final Completion" shall have the meaning set forth in the
FADAA.
8
60. "Final Completion Date" shall have the meaning set forth in the
FADAA.
61. "Final Tax Statement" shall have the meaning set forth in
Section 1(b) of Article VI.
62. "First-class" shall mean with the highest standards or of the
highest quality, or both, as applicable, in accordance with recognized standards
in the industry in question; provided, however, that wherever the foregoing
shall be used in connection with the Phase I Hotel/Casino and/or the Phase I
Mall, its meaning shall be with reference to such standards then prevailing in
Clark County, Nevada.
63. "Force Majeure Event" shall mean any of the following, which
shall render any Party unable to fulfill, or delays such Party in fulfilling,
any of its obligations under this Agreement: fire or other casualty; acts of
God; war; riot or other civil disturbance; accident; emergency; strike or other
labor trouble; governmental preemption of priorities or other controls in
connection with a national or other public emergency; shortages or material
defects in the quality of fuel, gas, steam, water, electricity, supplies or
labor; or any other event preventing or delaying a Party from fulfilling any
obligation, whether similar or dissimilar, beyond such Party's reasonable
control, as the case may be, provided that under no circumstances shall
financial inability of any Party or any Affiliate thereof be deemed a Force
Majeure Event.
64. "Form Notice" shall have the meaning set forth in Section 14(b)
of Article XIV.
65. "Full Replacement Cost" shall mean the actual replacement cost
of the property (real and/or personal) in question (as the cost may from time to
time increase
9
or decrease) determined from time to time (but not more frequently than once in
any twelve-month period) at the request of any Party by an engineer or appraiser
in the regular employ of the applicable insurance company.
66. "GMAC" shall have the meaning set forth in WHEREAS clause E.
67. "Gaming Authorities" shall have the meaning set forth in Section
2 of Article XIII.
68. "Governmental Authority(ies)" shall mean any and all federal,
state, city and county governments and quasi-governmental agencies, and all
departments, commissions, boards, bureaus and offices thereof, in each case
having or claiming jurisdiction over all or any portion of the Phase I Land, the
Mall I Space, the Phase II Land, the Mall II Space or the SECC Land.
69. "GSMC" shall have the meaning set forth in WHEREAS clause J.
70. "H/C I Improvements Buffer Zone Encroachment" shall have the
meaning set forth in Section 3(a) of Article I.
71. "H/C I/Mall I Lot Line Modifications" shall have the meaning set
forth in Section 3(a) of Article I.
72. "H/C I Owner" shall have the meaning as set forth in WHEREAS
clause Y.
73. "H/C I Owner's Tax and Insurance Share" shall have the meaning
set forth in Section 1(a) of Article VI.
74. "H/C I Space" shall have the meaning set forth in WHEREAS clause
L.
10
75. "H/C II Owner" shall have the meaning set forth in WHEREAS
clause Y.
76. "H/C II Space" shall have the meaning set forth in WHEREAS
clause X.
77. "H/C Limited Common Areas" shall mean the areas depicted on
Exhibit K.
78. "H/C-Mall Common Areas" shall mean the areas and all elevators,
escalators and similar mechanical conveyancing devices, loading docks,
truck/loading areas and all other buildings, structures, equipment and
facilities located thereon or therein, as depicted on Exhibit K.
79. "H/C Pass-through Areas" shall mean the areas and all buildings,
structures, equipment and facilities located thereon or therein as depicted in
Exhibit K.
80. "Headquarters Election" shall have the meaning set forth in
Section 3(b) of Article III.
81. "Headquarters Hotel" shall have the meaning set forth in Section
3(b) of Article III.
82. "Hotel" shall mean the "Venetian" theme hotel to be built within
and above the Base Building, as more particularly described in the Plans.
83. "Hotel/Casino/Mall/SECC Common Area Charges" shall mean the
total of all monies paid out during an Accounting Period by H/C I Owner for
reasonable costs and expenses directly relating to the maintenance, repair,
operation and management of the Phase I Automobile Parking Area and the H/C-Mall
Common Areas, as provided in Article V and itemized by category on Schedule II,
excluding wages or
11
salaries paid to management or supervisory personnel, except field supervisors
such as foremen. Hotel/Casino/Mall/SECC Common Area Charges shall include but
not be limited to: all rental charges for equipment and costs of small tools and
supplies; all acquisition costs of maintenance equipment; policing, security
protection, Maintenance, traffic direction, control and regulation of the Phase
I Automobile Parking Area; all costs of cleaning the Phase I Automobile Parking
Area and the H/C-Mall Common Areas and removal of rubbish, dirt and debris
therefrom; the cost of landscape maintenance and supplies for the Phase I
Automobile Parking Area and the H/C-Mall Common Areas including, without
limitation, perimeter sidewalks; all charges for utility services utilized in
connection with Phase I Automobile Parking Area and the H/C-Mall Common Areas
together with all costs of maintaining lighting fixtures therein and thereon;
and all premiums for fire and extended coverage insurance and for public
liability and property damage insurance required to be carried by H/C I Owner
pursuant to the provisions of Article X. No capital improvements to or
reconstruction of the Phase I Automobile Parking Area or the H/C-Mall Common
Areas shall be made except in accordance with the provisions of Article V. The
salvage value of any capital item, which was included in Hotel/ Casino/Mall/SECC
Common Area Charges, disposed of by H/C I Owner shall be credited against
Hotel/Casino/Mall/SECC Common Area Charges. No actual capital expenditure shall
be included in Hotel/Casino/Mall/SECC Common Area Charges if the amortization of
such capital expenditure has been or is to be included in Hotel/
Casino/Mall/SECC Common Area Charges. Depreciation applicable to all capital
expenditures shall be prorated between the Owners on the same basis as the
percentages set forth in Schedule II are computed.
12
84. "HVAC" and its accompanying definitions shall have the meanings
set forth in Section A, subsection 3 of Article II.
85. "HVAC Easement" shall have the meaning set forth in Section A,
subsection 1(b) of Article II.
86. "HVAC Facilities" shall mean all HVAC Equipment connected to or
associated with the New HVAC Plant.
87. "HVAC Ground Lease" shall have the meaning set forth in Section
B, subsection 1 of Article II.
88. "HVAC Operator" means APJV or a "Substitute HVAC Operator"
obtaining such status in accordance with Section 3 of Article II.
89. "HVAC Space" shall have the meaning set forth in Section B,
subsection 1 of Article II.
90. "Independent" means, when used with respect to any Person, a
Person who (i) does not have any direct or indirect financial interest in any
Lot or any improvements constructed or business operated thereon, in any Owner
or in any Affiliate of any Owner or in any constituent, shareholder, or
beneficiary of any Owner, and (ii) is not connected with any Owner or any
Affiliate of any Owner or any constituent, shareholder, or beneficiary of any
Owner as an officer, employee, promoter, underwriter, trustee, partner, director
or person performing similar functions.
91. "Independent Expert" shall have the meaning set forth in Section
15 of Article XIV.
92. "Initial ESA's" means the three (3) ESA's dated as of May 1,
1997 between APJV and, respectively, H/C I Owner, Mall I Owner and SECC Owner.
13
93. "Insurance Escrow Account" shall have the meaning set forth in
Section 1(d) of Article VI.
94. "Insurance Proceeds Shortfall" shall have the meaning set forth
in Section 2 of Article XI.
95. "Insurance Report" shall have the meaning set forth in Section 9
of Article X.
96. "Insurance Shortfall Contribution" shall have the meaning set
forth in Section 2 of Article XI.
97. "Integral H/C I Improvements" shall mean all improvements being
undertaken on the Phase I Land pursuant to the FADAA other than the Integral
Mall I Improvements.
98. "Integral Mall I Improvements" shall mean the improvements being
undertaken pursuant to the FADAA and in accordance with the requirements thereof
and that are intended to be incorporated within the Phase I Mall. This
definition is intended to define the improvements as actually built whether or
not they conform in all respects to the requirements of the FADAA. By way of
clarification, the Integral Mall I Improvements shall consist generally of the
following: (i) all buildings and other improvements that are from time to time
located at the midpoint of the floor and ceiling of slabs and of exterior walls
situated at the perimeter of the Mall I Airspace or in the portion of the Mall I
Airspace that is inward therefrom toward the interior of the Mall I Airspace,
and (ii) all buildings and other improvements that are from time to time located
on the Retail Annex Land.
14
99. "Interest Holder" shall have the meaning set forth in Section 3
of Article XIV.
100. "Interest Rate" shall have the meaning set forth in Section
1(j) of Article VI.
101. "Interface" shall have the meaning set forth in the
introductory clause.
102. "Interim Mall Credit Agreement" shall have the meaning set
forth in WHEREAS clause G.
103. "Interim Mall LLC" shall have the meaning set forth in the
introductory clause.
104. "Junior Lender" shall have the meaning set forth in WHEREAS
clause K.
105. "Junior Loan Agreement" shall mean the Junior Loan Agreement,
dated as of June 26, 1997 by and among the Lenders from time to time parties
thereto, as Lenders, LaSalle National Bank, as Administrative Agent for the
Lenders and Collateral Agent for the Lenders, and SECC Owner, as Borrower.
106. "Lease" shall mean any lease, sublease, license, sublicense,
concession, subconcession or other agreement granting the right to use or occupy
between Mall I Owner or H/C I Owner and any Tenant pursuant to which a portion
of the Tenant Space is demised, and all amendments, modifications and
supplements thereto.
107. "Legal Requirements" shall mean all present and future laws,
ordinances, orders, rules, regulations and requirements of all Governmental
Authorities, including, without limitation, all environmental requirements, and
all orders, rules and
15
regulations of the National and Local Boards of Fire Underwriters or any other
body or bodies exercising similar functions, foreseen or unforeseen, ordinary as
well as extraordinary.
108. "Lido" shall have the meaning set forth in WHEREAS clause V.
109. "Limited Common Areas" shall mean, collectively, the Mall I
Limited Common Areas and the H/C Limited Common Areas.
110. "Liquidated Damages" shall mean (a) all amounts collected
pursuant to Third Party Warranties and (b) to the extent not included in such
definition pursuant to clause (a) of this definition, any additional amounts
defined as Liquidated Damages in the Bank Credit Agreement (as in effect on the
date hereof).
111. "Lot" shall mean any of the H/C I Space, the Mall I Space, the
Phase II Land, the Mall II Space or the SECC Land.
112. "LVSI" shall have the meaning set forth in the introductory
clause.
113. "Maintenance" shall mean, with respect to a particular
Automobile Parking Area or Parking Access Easement Area, all general and
extraordinary maintenance and repairs, replacements and restoration necessary to
provide use and enjoyment of the same in accordance with the standards of
First-class hotel/casinos, First-class restaurant and retail complexes and all
applicable Legal Requirements as set forth in this Agreement. Maintenance shall
include, but shall not be limited to, cleaning, sweeping, providing janitorial
services, painting, re-striping, filling of chuckholes, repairing and
resurfacing of curbs, sidewalks and roadbeds, maintaining irrigation and
drainage systems, removing debris and trash, undesirable weeds and vegetation,
maintaining signs, markers, lighting and other utilities, maintaining fencing
and
16
landscaping, if any, and any other work reasonably necessary or proper to
maintain the easement in good, clean and sanitary condition and repair. In
addition, with respect to easement areas for roadway or vehicular access, such
maintenance shall meet all standards promulgated by Clark County applicable to
similar roadways or vehicular access ways held or controlled by Clark County.
114. "Mall I Airspace" shall have the meaning set forth in WHEREAS
clause M.
115. "Mall I Airspace/Ground Lease" shall have the meaning set forth
in WHEREAS clause N.
116. "Mall I Encroachment" shall have the meaning set forth in
Section 2 of Article III.
117. "Mall I Improvements Buffer Zone Encroachment" shall have the
meaning set forth in Section 3(a) of Article I.
118. "Mall I Lease" shall have the meaning set forth in WHEREAS
clause P.
119. "Mall I Limited Common Areas" shall mean the areas depicted on
Exhibit P.
120. "Mall I Owner" shall have the meaning set forth in WHEREAS
clause Q.
121. "Mall I Owner's Common Area Charge Obligations" shall have the
meaning set forth in Section 3(d) of Article V.
122. "Mall I Owner's Share" shall have the meaning set forth in
Section 3(a) of Article V.
17
123. "Mall I Owner's Tax and Insurance Share" shall have the meaning
set forth in Section 1(b) of Article VI.
124. "Mall I Pass-through Areas" shall mean the areas and all
buildings, structures, equipment and facilities located thereon or therein as
depicted on Exhibit K.
125. "Mall I Space" shall have the meaning set forth in WHEREAS
clause Q.
126. "Mall II Owner" shall have the meaning set forth in WHEREAS
clause Y.
127. "Mall II Space" shall have the meaning set forth in WHEREAS
clause W.
128. "Mall Property" shall mean all inventory, trade fixtures,
furniture, furnishings, equipment and signs which are installed or placed by H/C
I Owner at the Mall I Space or installed or placed by Mall I Owner or any Tenant
at the Mall I Space.
129. "Mall Release Date" shall have the meaning set forth in the
FADAA.
130. "Material Adverse Effect" means with respect to any given Owner
and its Lot any event or condition that has a material adverse effect upon (i)
the business operations of such Owner, taken as a whole, the Lot of such Owner
together with any improvements constructed therein or thereon, taken as a whole,
the assets of such Owner, taken as a whole, or the condition (financial or
otherwise) of such Owner, taken as a whole, (ii) the ability of such Owner to
perform any of its material obligations under any Mortgage encumbering its Lot
or any documents executed by such Owner in connection therewith, (iii) the
enforceability, validity, perfection or priority of the lien of any
18
Mortgage encumbering its Lot or any documents executed by such Owner in
connection therewith or (iv) the value of the Lot of such Owner together with
any improvements constructed therein or thereon (or of any Mortgagee's interest
therein) or the operation thereof.
131. "Material Alteration" shall have the meaning set forth in
Section 7(d) of Article V.
132. "Material Amortization Date" means the 20th anniversary of the
"Service Commencement Date" (as such term is defined in the Initial ESA's).
133. "Material Default Termination Date" shall have the meaning set
forth in Section B, subsection 3(b) of Article II.
134. "Metering Equipment" shall have the meaning set forth in the
Initial ESA's.
135. "Minimum Parking Standards" shall have the meaning set forth in
Section 3(a) of Article VII.
136. "Mortgage" shall mean each and every mortgage or deed of trust
which may now or hereafter be placed by or for the benefit of any Party to this
Agreement on its interest in the real property and improvements owned by such
Party and which is subject to this Agreement, and all increases, renewals,
modifications, consolidations, replacements and extensions thereof. In addition,
so long as the Tranche A Commitment Letter executed in connection therewith is
in effect, GSMC shall be deemed a Mortgagee of the Phase I Mall for all purposes
hereunder.
137. "Mortgage Notes" shall have the meaning set forth WHEREAS
clause H.
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138. "Mortgage Notes Indenture" means the indenture relating to the
Mortgage Notes.
139. "Mortgage Notes Indenture Trustee" shall mean First Trust
National Association or any successor entity serving as trustee thereunder.
140. "Mortgagee" shall mean, with respect to any Lot, the holder of
any Mortgage (or any agent or trustee acting on its behalf) encumbering that
Lot, which holder may not be a Competitor, but may be an Affiliate of an Owner;
provided, however, that no such Affiliate holding a Mortgage shall be entitled
to the benefit of any of the Mortgagee protection provisions set forth in this
Agreement, including without limitation Section 4 of Article XIV; and provided
further that, notwithstanding the foregoing, the Mortgage Notes Indenture
Trustee shall at all times constitute a Mortgagee with respect to any Lot then
encumbered by a Mortgage in favor of the Mortgage Notes Indenture Trustee.
141. "New Electric Substation" shall have the meaning set forth in
Section A, subsection 2(a) of Article II.
142. "New H/C I Owner" shall have the meaning set forth in Section 9
of Article XIV.
143. "New HVAC Plant" shall mean a new central utility plant on the
Phase I Land which plant would provide thermal energy (heating, ventilation and
air-conditioning) to the Venetian (including the Phase I Mall), the Lido
(including the Phase II Mall), and the SECC.
20
144. "New HVAC Plant Percentage" means, with respect to a Serviced
Owner, the "Proportionate Share," as such percentage is calculated in Section
4.1 and Schedules 4.1(A) and 4.1(B) of the respective Qualifying ESA.
145. "New Owner" shall have the meaning set forth in Section 9 of
Article XIV.
146. "New Serviced Owner ESA" shall have the meaning set forth in
Section B, subsection 2 of Article II.
147. "Opening Date" shall have the meaning set forth in the FADAA.
148. "Operating Expense Statement" shall have the meaning set forth
in Section 3(e) of Article V.
149. "Owner" means H/C I Owner, Mall I Owner and SECC Owner and
their respective successors and assigns.
150. "Parking Access Easement" shall have the meaning set forth in
Section D, subsection 4(a) of Article II.
151. "Parking Rules and Regulations" shall have the meaning set
forth in Section 7 of Article VII.
152. "Parking Spaces" shall mean parking spaces in the Phase I
Automobile Parking Area.
153. "Party" and "Parties" shall mean an Owner and Owners.
154. "Pass-through Areas" shall include without limitation (a) all
walkways, streets, rights of way, roads, entries, sidewalks, paths, alleyways,
bridges, pedestrian bridges, water features, plazas, parks, atrium service ways,
public restrooms, buildings, structures and Automobile Parking Areas located on
the Phase I Land or within
21
the Base Building and/or on the SECC Land or within the SECC and (b) all
elevators, escalators and similar mechanical conveyancing devices, and all other
equipment and facilities located in or on such areas, and shall comprise (i) H/C
Pass-through Areas, (ii) Mall I Pass-through Areas and (iii) SECC Pass-through
Areas.
155. "Permanent Buffer Zone Encroachment Easements" shall have the
meaning set forth in Section 3(c)(iii) of Article I.
156. "Permitted Maintenance" shall have the meaning set forth in
Section 1(a) of Article V.
157. "Permitted Use" shall mean each of the respective uses
specified in Section 1 of Article III and Sections 1 and 2 of Article IV.
158. "Permittee" shall mean, with respect to any Owner and each
Tenant of an Owner, their respective agents, licensees, invitees, employees,
customers, contractors, subcontractors, tenants, subtenants and concessionaires.
159. "Person" shall have the meaning set forth in Section 3(a) of
Article XIV.
160. "Phase I Automobile Parking Area" means the parking structure
to be located on the southern portion of the Phase I Land, in the general
location labeled as the "South Garage" on the Site Plan depicted on Exhibit U.
161. "Phase I Garage Opening Date" shall have the meaning set forth
in Section 4(a) of Article I.
162. "Phase I Hotel/Casino" shall mean any hotel/casino together
with any other buildings and improvements from time to time located on and/or in
the H/C I Space.
22
163. "Phase I Land" shall have the meaning set forth in the second
WHEREAS clause and as described in Exhibit A-1 attached hereto and made a part
hereof.
164. "Phase I LLC" shall have the meaning set forth in the
introductory clause.
165. "Phase I Mall" shall have the meaning set forth in WHEREAS
clause Q.
166. "Phase II Automobile Parking Area" shall have the meaning set
forth in Section 1 of Article VII.
167. "Phase II Hotel/Casino" shall mean any hotel/casino together
with any other buildings and improvements from time to time located on and/or in
the H/C II Space.
168. "Phase II Land" shall have the meaning set forth in the second
WHEREAS clause and as described in Exhibit A-2 attached hereto and made a part
hereof.
169. "Phase II LLC" shall have the meaning set forth in WHEREAS
clause V.
170. "Phase II Mall" shall have the meaning set forth in WHEREAS
clause W.
171. "Phase II Parking Opening Date" shall have the meaning set
forth in Section 3(a) of Article VII.
172. "Phase II Resort" shall have the meaning set forth in Section
3(b) of Article III.
23
173. "Plans" shall mean the plans and specifications for the entire
Venetian as more particularly described in the FADAA.
174. "Predevelopment Agreement" shall have the meaning set forth in
Section C, subsection 2 of Article VIII and in Exhibit T attached hereto and
made a part hereof.
175. "Preliminary Parking Plan" shall have the meaning set forth in
Section 2 of Article VII and as depicted in Exhibit S attached hereto and made a
part hereof.
176. "Qualifying ESA" means, with respect to an Owner, the ESA which
such Owner has entered into with the HVAC Operator in accordance with the terms
hereof. Each of the Initial ESA's shall constitute "Qualifying ESA's" for
purposes of this Agreement.
177. "REA" shall have the meaning set forth in Section 14 subsection
(b) of Article XVII.
178. "Recorder's Office" means the office of the County Recorder of
Clark County, Nevada.
179. "Replacement HVAC Plant Plan" shall have the meaning set forth
in Section B, subsection 4(a) of Article II.
180. "Requesting Warranty Owner" shall have the meaning set forth in
Section 5 of Article I.
181. "Retail Annex Land" shall have the meaning set forth in WHEREAS
clause M.
24
182. "Revised H/C I Space" shall have the meaning set forth in
Section 3(a) of Article I.
183. "Revised Mall I Space" shall have the meaning set forth in
Section 3(a) of Article I.
184. "Rights and Obligations" shall have the meaning set forth in
Section 1 of Article XIV.
185. "Sale and Contribution Agreement" shall have the meaning set
forth in WHEREAS clause U.
186. "Sands Exposition and Convention Center" or "SECC" shall have
the meaning set forth in WHEREAS clause D.
187. "Scheduled Termination Date" means, with respect to any HVAC
Operator, the scheduled last date of the term under the Qualifying ESA's, as
such date may be extended in accordance with the terms thereof and hereof.
188. "SECC Alterations" shall have the meaning set forth in Section
1(c) of Article III.
189. "SECC Pass-through Areas" shall mean the areas and all
buildings, structures, equipment and facilities located thereon or therein as
depicted on Exhibit K.
190. "SECC Land" shall have the meaning set forth in the second
WHEREAS clause C and as described in Exhibit B.
191. "SECC Owner" shall have the meaning set forth in WHEREAS clause
Y.
192. "SECC Owner Parking Maintenance and Repairs" shall have the
meaning set forth in Section 3 of Article IX.
25
193. "SECC Owner's Common Area Charge Obligations" shall have the
meaning set forth in Section 3(d) of Article V.
194. "SECC Owner's Share" shall have the meaning set forth in
Section 3(b) of Article V.
195. "SECC Party Wall" shall have the meaning set forth in Section
2(a) of Article III.
196. "Secured Debt" shall have the meaning set forth in Section 3(c)
of Article III.
197. "Senior Loan Agreement" shall mean the Senior Loan Agreement,
dated as of June 26, 1997 by and among the Lenders from time to time parties
thereto, as Lenders, LaSalle National Bank, as Administrative Agent for the
Lenders and Collateral Agent for the Lenders, and SECC Owner, as Borrower.
198. "Senior Subordinated Notes" shall have the meaning set forth in
WHEREAS clause I.
199. "Serviced Owner" means each of H/C I Owner, Mall I Owner and
SECC Owner. H/C II Owner and Mall II Owner also shall have the right to be
admitted as Serviced Owners in accordance with Section B, subsection 2 of
Article II.
200. "Shared Casino Facilities Plan" shall have the meaning set
forth in Section B, subsection 1 of Article VIII.
201. "Shared Facilities" shall have the meaning set forth in Section
B, subsection 1 of Article VIII.
202. "Shared Operations" shall have the meaning set forth in Part B,
Section 2 of Article VIII.
26
203. "Shared Operations Plan" shall have the meaning set forth in
Part B, Section 2 of Article VIII.
204. "Subdivided Interest Holder" shall have the meaning set forth
in Section 3(a)(i) of Article XIV.
205. "Subdivision" shall have the meaning set forth in WHEREAS
clause M.
206. "Subdivision Date" shall have the meaning set forth in Section
1(a) of Article VI.
207. "Substitute HVAC Operator" shall mean any HVAC Operator who
enters into a new ESA with each of the Serviced Owners in accordance with
Section 3 of Article II.
208. "Supporting Documentation" shall have the meaning set forth in
Section 3(e) of Article V.
209. "Taking Authority" shall have the meaning set forth in Section
1 of Article XII.
210. "Taking" shall have the meaning set forth in Section 1 of
Article XII.
211. "Tax Escrow Account" shall have the meaning set forth in
Section 1(a) of Article VI.
212. "Tax Year" shall mean each period from July 1 through June 30
(or such other fiscal period as may hereafter be adopted by Clark County, Nevada
as the fiscal year for any tax, levy or charge included in Taxes), any part or
all of which occurs during the Term.
27
213. "Taxes" shall have the meaning set forth in Section 1(g) of
Article VI.
214. "Temporary Parking Facilities" shall have the meaning set forth
in Section 4(a) of Article I.
215. "Temporary Parking Facilities Term" shall have the meaning set
forth in Section 4(c) of Article I.
216. "Temporary Parking Spaces" shall have the meaning set forth in
Section 4(a) of Article I.
217. "Temporary Walls" shall have the meaning set forth in Section
A, subsection 3 of Article VIII.
218. "Tenant" shall mean any Person who is a party to a Lease,
license, concession or other agreement granting the right to use or occupy space
from Mall I Owner within the Mall I Space or H/C I Owner within the H/C I Space,
as the case may be.
219. "Tenant Space" shall mean any portion of the Mall I Space or
the H/C I Space covered by a Lease or similar occupancy agreement.
220. "Term" shall mean the period commencing on the Commencement
Date through and including the Expiration Date or any earlier date on which the
Term terminates pursuant to the provisions hereof or pursuant to law.
221. "Test Date" shall have the meaning set forth in Section 4(a) of
Article I.
222. "Third Party Warranties" means all warranties, guaranties and
other claims arising out of breaches of contracts pertaining to the construction
of the
28
Venetian; provided, however, that the term Third Party Warranties shall not mean
claims arising out of the Adelson Completion Guaranty and arising out of claims
under the Direct Construction Guaranty and the Indirect Construction Guaranty
(as such terms are defined in the Bank Credit Agreement).
223. "Tranche A Commitment Letter" shall have the meaning set forth
in Section 4 of Article VIII.
224. "Tranche B Commitment" shall have the meaning set forth in
WHEREAS clause K.
225. "Transferee" shall have the meaning set forth in Section 5(a)
of Article XIV.
226. "Transferor" shall have the meaning set forth in Section 5(a)
of Article XIV.
227. "Tri-Party Agreement" shall have the meaning set forth in the
FADAA.
228. "Trustee" shall have the meaning set forth in Section 1(f) of
Article VI.
229. "Uninsured Loss" shall have the meaning set forth in Section 4
of Article XI.
230. "Uninsured Loss Contribution" shall have the meaning set forth
in Section 4 of Article XI.
231. "User" shall have the meaning set forth in Section 3(b) of
Article III.
29
232. "Utility Activity" shall have the meaning set forth in Section
C, subsection 2(a) of Article II.
233. "Utility Corridors" shall have the meaning set forth in Section
B, subsection 2 of Article II.
234. "Utility Equipment" shall have the meaning set forth in Section
C, subsection 2(a) of Article II.
235. "Venetian" shall have the meaning set forth in the fifth
"WHEREAS" clause.
236. "Warranty Owner" shall have the meaning set forth in the
Section 5 of Article I.
SCHEDULE III
Parking Rules and Regulations
1. Persons using either the Phase I Automobile Parking Area or the
Phase II Automobile Parking Area, as the case may be, for parking (each a
"User") pursuant to the easement created under the Amended and Restated
Reciprocal Easement, Use and Operating Agreement to which these rules and
regulations are attached (the "REA": capitalized terms used herein without
definition shall have the meanings assigned to them in the REA) shall comply
with any parking identification system established by H/C I Owner with respect
to the Phase I Automobile Parking Area or H/C II Owner with respect to the Phase
II Automobile Parking Area (each, an "Owner of the Parking Structure Site"), as
the case may be, or its parking operator; provided that in no event shall such
parking identification system deprive any Owner of its Minimum Parking Standards
nor shall the conduct of its business in accordance with the terms of the REA be
adversely affected. Such a system may include the validation of visitor parking,
at the validation rate applicable to visitor parking from time to time as set by
the Owner of the Parking Structure Site or its parking operator in accordance
with the provisions of the REA. Parking stickers, parking cards, or other
identification devices supplied by the Owner of the Parking Structure Site shall
remain the property of the Owner of the Parking Structure Site. Such devices
must be displayed as requested and may not be mutilated in any manner. Each User
shall pay a reasonable deposit to the Owner of the Parking Structure Site or its
parking operator for each such device issued to
2
it. Such deposit shall be paid at the time the device is issued and shall be
forfeited if the device is lost. Such deposit shall be returned without interest
at the time the User holding the device ceases to utilize the Parking Structure.
Such devices shall not be transferable, and any such device in the possession of
an unauthorized holder may be retained by the Owner of the Parking Structure
Site and declared void. Upon the suspension or the termination of parking
privileges, all parking identification devices supplied by the Owner of the
Parking Structure Site shall be returned to the Owner of the Parking Structure
Site.
2. The Owner of the Parking Structure Site or its parking operator
shall from time to time provide the Owners with the respective number of such
devices reasonably requested in writing by the respective Owners of such Site,
it being understood that the number of devices requested may exceed the
respective number of Parking Spaces which such Owner is authorized to use
pursuant to the REA; provided, however, that (a) if an Owner (and/or its
tenants, employees or invitees), without the prior written consent of the Owner
of the Parking Structure Site (or such Owner's parking operator), at any time
uses the devices to occupy more than the number of Parking Spaces then
authorized to be used by said Owner (and/or its tenants, employees or invitees)
pursuant to the REA, thereafter the Owner of the Parking Structure Site shall
have the right to confiscate from such Owner the number of devices equal to the
number of Parking Spaces by which such Owner's occupancy exceeded the number of
Parking Spaces then authorized to be used by the Owner (and/or its tenants,
employees or invitees) pursuant to the REA.
3
3. Loss or theft of parking identification devices must be reported
immediately to the Owner of the Parking Structure Site or its parking operator,
and a report of such loss or theft must be filed by the User at that time. Any
parking identification device reported lost or stolen that is found on any
unauthorized vehicle will be confiscated and the illegal holder will be subject
to prosecution.
4. User shall obey all signs and shall park only in areas designed
for vehicle parking within painted stall lines. Parking Spaces are for the
express purpose of parking one automobile per space. Parking Spaces shall be
used only for parking vehicles no longer than full-sized passenger automobiles.
All directional signs and arrows must be observed, and all posted speed limits
for the Parking Structure shall be observed. If no speed limit is posted for an
area of the Parking Structure, the speed limit shall be five (5) miles per hour.
Users shall not permit any vehicle that belongs to or is controlled by a User,
its agents, employees, invitees, licensees and visitors, to be loaded, unloaded
or parked in areas other than those designated by the Owner of the Parking
Structure Site or its parking operator for such activities. No maintenance,
washing, waxing or cleaning of vehicles shall be permitted in the Automobile
Parking Areas. The Automobile Parking Areas shall not be used for overnight or
other storage for vehicles of any type. Each User shall park and lock his or her
own vehicle.
5. Except as otherwise provided in the REA, the Owner of the Parking
Structure Site reserves the right to modify, redesign or redesignate uses
permitted in the Automobile Parking Areas or any portion thereof, to relocate
Parking Spaces from floor to floor, and to allocate Parking Spaces between
compact and standard sizes from time to time, as long as the same comply with
applicable Legal Requirements, do not
4
adversely impact any Owner or the conduct of its business, and do not deprive
any Owner of its Minimum Parking Standards. Reserved Parking Spaces shall be
clearly and prominently marked as such by the Owner of the Parking Structure
Site. Neither the Owner of the Parking Structure Site nor its parking operator
shall be liable or responsible for the failure of Users to observe such markings
or to obey other rules and regulations, agreements, laws or ordinances
applicable to the Automobile Parking Areas. Without limiting the generality of
the foregoing, the Owner of the Parking Structure Site shall not be obligated to
tow any violator's vehicle, or to take any other action on account of any such
failure.
6. The Owner of the Parking Structure Site shall be solely
responsible for the Maintenance (as such term is defined in the REA) and
operation of the applicable Automobile Parking Area. Without limiting the
generality of the foregoing, the Owner of the Parking Structure Site shall at
all times maintain all gates, elevators, lighting, electrical and exhaust
systems, alarms, and sprinklers in good working order.
7. The Automobile Parking Area shall be accessible 24 hours a day.
After normal business hours, the Automobile Parking Area may be protected by
security gates operated by access cards in order to maintain the security of the
Automobile Parking Area.
8. H/C I Owner and/or H/C II Owner, as the case may be, may enter
into agreements from time to time with the other Owners restricting the rights
of employees of Tenants of such other Owners to park in the Automobile Parking
Areas.
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9. Nothing set forth in these Parking Rules is intended to deprive
any Owner of its Minimum Parking Standards. Any conflict between any provision
of these Parking Rules and any provision of the REA shall be resolved in favor
of the REA.