EXHIBIT 10.23
LEASE
THIS LEASE (as amended, restated, modified, and supplemented and in
effect from time to time, this "Lease") is made as of the 3rd day of December,
1997, by and between ALADDIN GAMING, LLC, a Nevada limited-liability company
("Landlord"), and NORTHWIND ALADDIN, LLC, a Nevada limited-liability company
("Tenant").
RECITALS:
A. Landlord is constructing a casino, hotel, theater, shopping and
parking complex in Las Vegas, Nevada (the "Aladdin Complex"), and has selected
Tenant to develop, construct, own and operate an energy production facility to
supply hot water, chilled water and electricity to said complex.
B. The site on which the aforementioned energy facility shall be
constructed shall be leased by Landlord to Tenant pursuant to the terms and
conditions of this Lease. Additionally, Landlord and Tenant are executing
concurrently herewith a certain Development Agreement of even date herewith (as
amended, restated, modified, or supplemented and in effect from time to time,
the "Development Agreement") regarding the construction of such facility and
have agreed in substance to the form of an Energy Service Agreement (which form
is attached to the Development Agreement, such Energy Service Agreement, in the
form in which it shall finally be executed and delivered, and as it may
thereafter be amended, restated, modified, or supplemented and in effect from
time to time, being herein referred to as the "ESA") regarding the terms and
conditions of the sale by Tenant to Landlord of hot water, chilled water and
electricity.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
hereinafter set forth, it is hereby agreed between Tenant and Landlord as
follows:
Article 1. REPRESENTATIONS AND WARRANTIES.
1.1 Landlord hereby represents and warrants to Tenant as
follows:
1.1.1 Landlord is a limited-liability company duly
organized and existing in good standing under the laws of the
State of Nevada;
1.1.2 Landlord possesses all requisite limited
liability company power and authority to enter into
and perform this Lease and to carry out the
transaction contemplated herein;
1.1.3 Landlord's execution, delivery and performance of
this Lease have been duly authorized by, or are in
accordance with, its organic instruments; this Lease
has been duly executed and delivered for it by the
signatories so authorized; this Lease constitutes
Landlord's legal, valid and binding obligation;
Landlord's execution, delivery and performance of
this Lease will not result in a breach or violation
of, or constitute a default under, any agreement,
lease, or instrument to which it is a party or by
which it or its properties may be bound or affected;
and
1.1.4 No suit, action or arbitration, or legal,
administrative or other proceedings is pending or has
been threatened against Landlord that would affect
the validity or enforceability of this Lease or the
ability of Landlord to fulfill its commitments
hereunder, or that could result in any material
adverse change in the business or financial condition
of Landlord.
1.2 Tenant hereby represents and warrants to Landlord as
follows:
1.2.1 Tenant is a limited liability company duly
organized and existing in good standing under the
laws of the State of Nevada;
1.2.2 Tenant possesses all requisite limited liability
company power and authority to enter into and perform
this Lease and to carry out the transaction
contemplated herein;
1.2.3 Tenant's execution, delivery and performance of
this Lease have been duly authorized by, or are in
accordance with, its organic instruments; this Lease
has been duly executed and delivered for it by the
signatories so authorized; this Lease constitutes
Tenant's legal, valid and binding obligation;
Tenant's execution, delivery and performance of this
Lease will not result in a breach or violation of, or
constitute a default under, any agreement, lease, or
instrument to which it is a party or by which it or
its properties may be bound or affected;
1.2.4 No suit, action or arbitration, or legal,
administrative or other proceedings is pending or has
been threatened against Tenant that would affect the
validity or enforceability of this Lease or the
ability of Tenant to fulfill its commitments
hereunder, or that could result in any material
adverse change in the business or financial condition
of Tenant; and
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1.2.5 Tenant agrees not to permit any transfer of any
membership interest in Tenant by the sole member of
Tenant as of the date of this Lease, and not to issue
any new membership interest in Tenant, without the
prior written consent of Landlord, such consent not
to be unreasonably withheld; provided, however, that
upon prior notice to Landlord and without Landlord's
prior consent, Tenant shall be permitted to allow
Nevada Electric Investment Company (which is a
wholly-owned subsidiary of Nevada Power Company),
Boston Edison, Ontario Hydro or Houston Industries to
own a membership interest in Tenant, such interest to
be less than or equal to the interest retained by UTT
Las Vegas Inc., a Nevada corporation and a
wholly-owned, indirect subsidiary of Unicom
Corporation, that, as of the date of execution of
this Lease, owns a 100% interest in Tenant.
Article 2. GRANT AND TERM.
2.1 GRANT. For and in consideration of the rents herein
reserved and of the covenants and agreements herein contained on the part of
Tenant to be performed:
2.1.1 Landlord hereby leases to Tenant, and Tenant
hereby leases from Landlord, the real property
located in Clark County, Nevada that is legally
described on Exhibit A (the "Project Site"), which
exhibit shall be attached hereto by Landlord no later
than ten (10) days after Notice to Proceed is
received by Northwind pursuant to the Development
Agreement.
2.1.2 Landlord hereby grants to Tenant and its
successors and assigns a non-exclusive easement in
the real property described on Exhibit B (the
"Landlord's Property"), which exhibit shall be
attached hereto by Landlord no later than ten (10)
days after Notice to Proceed is received by Northwind
pursuant to the Development Agreement (i) for the
purpose of providing access to the Project Site, and
the other property of Tenant located on, in or under
the Landlord's Property, and (ii) to permit access
for, such access not to be unreasonably denied, and
the installation, maintenance, repair, security and
replacement of, pipes, ducts, cables, conduit and
other equipment and apparatus (including the energy
transfer stations) used or to be used by Tenant in
the operation of the Project (as defined in Article 4
below) and the provision of Services (as defined in
Article 4 below) to users, distributors and/or
vendors.
Any such use by Tenant of the Landlord's Property shall be in
accordance with all safety and security rules, regulations and policies then in
effect on Landlord's Property or such other reasonable rules or requirements
which Landlord imposes, and provided further that such use by Tenant shall in no
way have an adverse effect on
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Landlord's other activities. Landlord agrees that Landlord's activities shall
not have an adverse effect on Tenant's activities. For the purposes of this
paragraph, "adverse effect" means a materially detrimental effect on the
ownership, construction, maintenance, repair, or operation of the Project, in
the case of Tenant, or the Aladdin Complex, in the case of Landlord. The
easements granted in this Section shall continue so long as this Lease remains
in effect and shall expire and be of no further force or effect upon the earlier
of the execution of the Reciprocal Easement Agreement (as defined in the
Development Agreement) or the expiration or termination of this Lease. Each
easement granted under this Lease shall exist by virtue of this Lease, without
the necessity of or confirmation by any other document, and shall run with the
Landlord's Property. Upon the expiration, termination (in whole or in part) or
the release of any such easement in accordance with the provisions of this
Lease, the same shall be deemed to have expired, or have been terminated or
released without the necessity of confirmation by any other document.
2.2 TERM. The terms and conditions of this Lease shall
be effective as of the date of this Lease. The initial term of this Lease (the
"Initial Term") shall commence on the earlier of March 1, 2000 or the date upon
which the Aladdin Complex is first opened for business to the public (the
"Commencement Date"). Except as otherwise provided in this Lease to the
contrary, the Initial Term of this Lease shall end on the day immediately
preceding the twentieth anniversary of the Commencement Date and the Initial
Term shall be subject to extension and renewal as provided for in Section 2.3
below. The term of this Lease, as the same may be extended or renewed is
referred to herein as the "Term".
2.3 RENEWAL TERMS.
2.3.1 The Initial Term of this Lease shall be
automatically extended for a period of five years
commencing on the twentieth anniversary of the
Commencement Date and expiring on the day immediately
preceding the twenty-fifth anniversary of the
Commencement Date unless either party gives the other
party written notice not later than twelve (12)
months before the twentieth anniversary of the
Commencement Date that such party is terminating the
Lease as of the twentieth anniversary of the
Commencement Date. The five year renewal period
for in this Section 2.3.1 and each
subsequent five year renewal period provided for in
Section 2.3.2 below are hereinafter referred to as
"Renewal Terms".
2.3.2 The first Renewal Term shall be automatically
extended and renewed for a five year period
commencing upon the expiration of the first Renewal
Term, and each subsequent Renewal Term shall be
automatically extended for an additional five year
renewal period commencing upon the
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expiration of the then existing Renewal Term and expiring
on the day preceding the fifth anniversary thereof, unless
either party gives the other party written notice not
later than twelve (12) months prior to the scheduled
expiration of the then existing Renewal Term that
such party is terminating this Lease as of the
scheduled expiration of such then existing Renewal Term.
2.3.3. Notwithstanding anything herein to the
contrary, the Term shall automatically continue or be extended
for so long as the ESA (as defined in Section 2.4 hereof)
shall continue in effect.
2.4 EARLY TERMINATION RIGHTS. Subject to the terms of
Article 18.2 below, if either the ESA or the Development Agreement is terminated
in accordance with the terms thereof, then each party hereto shall have the
right to terminate this Lease on the effective date of the termination of the
ESA or the Development Agreement, as applicable, by notifying the other party
hereto in writing of such termination, provided, however, that Landlord may not
terminate this Lease by reason of termination of the ESA or the Development
Agreement if such termination of the ESA or the Development Agreement was by the
Tenant pursuant to the Landlord's default thereunder and the Landlord did not
acquire the Project pursuant to such termination.
2.5 ACCEPTANCE OF PROJECT SITE. Tenant hereby acknowledges (a)
that it has been advised to satisfy itself with respect to the condition of the
Project Site (including but not limited to the environmental aspects, compliance
with Applicable Law, (as defined in Section 4.2), and the level of utilities and
services available to the Project Site), (b) that Tenant will make such
investigation as it deems necessary with reference to such matters and, subject
to the provisions of the Development Agreement and the Energy Service Agreement
governing the cost of the Project and the charges payable in respect of
Services, assumes all responsibility therefor as the same relate to Tenant's
occupancy of the Project Site and/or the Term of this Lease, except with respect
to any Hazardous Material located on the Project Site as of the date hereof or
any other conditions of the Project Site existing as of the date hereof which
violate any Environmental Requirements, as to which Landlord shall have
responsibility and from and against which Landlord agrees to indemnify, defend
and hold Tenant harmless, and (c) that neither Landlord, nor any of Landlord's
agents, has made any oral or written representations or warranties with respect
to said matters, other than as set forth in this Lease, and Landlord has no
obligation and has made no promises to alter, remodel, improve, repair or
renovate the Project Site or any part thereof, other than as expressly set forth
in this Lease, the ESA or the Development Agreement.
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Article 3. RENT.
3.1 BASE RENT. Tenant shall pay to Landlord a fixed
monthly base rent equal to $1.00 (the "Base Rent") per month throughout the
Term. Landlord hereby acknowledges receipt of $240 as prepayment of the Base
Rent for the entire Initial Term.
3.2 NET LEASE. Except as provided below, this Lease
shall be deemed to be a "net" lease, and Tenant shall pay, as provided herein,
all Impositions (as hereinafter defined). Tenant shall pay to Landlord,
absolutely net throughout the Term, the Base Rent and other payments hereunder,
free of any charges, assessments, impositions or deductions of any kind, and,
except as contemplated by the Development Agreement and the ESA with respect to
the cost of construction, maintenance, service, repair, ownership, and operation
of the energy production facility, under no circumstances or conditions, whether
now existing or hereafter arising, or whether beyond the present contemplation
of the parties, shall Landlord be expected or required to make any payment of
any kind whatsoever relating to the Project Site. As used herein, "Impositions"
shall mean all operating, maintenance, repair and improvement costs and
insurance premiums owing with respect to the improvements being constructed by
Tenant, in accordance with the terms of the Development Agreement and the ESA,
on the Project Site (collectively, the "Improvements") and the property being
installed by Tenant, in accordance with the terms of the Development Agreement
and the ESA, on, in or under the Landlord's Property (collectively, the
"Additional Property") and all taxes, levies and assessments; use and occupancy
taxes; water and water assessments, fees and use charges; charges for public
utilities; excises; levies; license and permit fees; transit taxes; real estate
taxes; taxes on rentals; intangible and other personal property taxes; business
and occupation taxes; gross sales taxes; occupational license taxes; and all
other governmental impositions and charges of every kind and nature whatsoever,
whether the same are extraordinary or ordinary, general or special, or
unforeseen or foreseen, which at any time from and after the date hereof shall
be or become due and payable, but shall not include any general income taxes or
franchise fees assessed against Landlord; provided, however, that
notwithstanding the foregoing, nothing herein is intended to require Tenant to
pay any charges, fees, costs or expenses that Landlord is required to pay under
the ESA or the Development Agreement, and the term "Impositions" shall not be
deemed to include any of such charges, fees, costs or expenses.
3.3 RENT. As used herein the term "Rent" shall mean
the sum of the Base Rent and any and all other amounts which are due from Tenant
pursuant to the provisions of this Lease. Rent which has not been prepaid as of
the date hereof shall be due and payable to Landlord on the last day of each
month and shall be paid to Landlord at Las Vegas, Nevada or at such other place
as Landlord may designate from time to time. All payments of Rent shall be made
in lawful money of the United States.
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3.4 NO PRESUMPTION. Wherever in this Lease it is
provided that an activity or obligation is at Tenant's cost or expense, such
provision shall not imply or be construed to imply or mean any limitation on any
right which Tenant may have under the ESA and/or the Development Agreement to
include such cost or expense (or some portion thereof) in charges payable to
Tenant thereunder.
Article 4. USE AND POSSESSION.
4.1 USE AND POSSESSION. In accordance with the terms
of the Development Agreement and the ESA, Tenant shall construct on, in and/or
under the Project Site, and shall operate and maintain thereon, an energy
facility (such facility, including the Improvements and the Additional Property,
is referred to herein as the "Project") that will provide hot water, cold water
and electricity (collectively, the "Services") for the Landlord's Property, as
described more fully in the ESA. The Project shall include fiber optic cable and
conduit and related equipment installed by Tenant for use in connection with
providing and monitoring the Services. In accordance with the terms of the
Development Agreement and the ESA, equipment and other improvements necessary to
control and monitor the Project may also be located at the Project Site and on,
in or under the Landlord's Property. Title to the Improvements and to all of the
personal property owned by Tenant and used in connection with the construction,
operation and maintenance of the Project is now and shall be and remain in
Tenant from and after the date hereof, subject to Landlord's potential future
interest in the Improvements, which shall become a possessory interest upon the
expiration or earlier termination of the Term and subject to the other terms and
conditions contained in this Lease.
4.2 LIMITATIONS ON USE. Tenant shall not use or occupy the Project
Site, or permit the use or occupancy of the Project Site, in any manner or for
any purpose which: (a) would violate any law, statute, ordinance or other
federal, state or local governmental rule, regulation or requirement
("Applicable Law") including, without limitation, those with respect to
hazardous or toxic materials, or the provisions of any applicable governmental
permit or document related to the Project Site; (b) would violate any safety,
security or other rule, regulation or policy of Landlord; (c) would in any way
cause an adverse effect on any of Landlord's activities or Landlord's use of
Landlord's property (provided that the handling of interruptions of Services is
exclusively addressed in the ESA); or (d) would cause the cancellation or
ineffectiveness of any fire or other insurance maintained or required hereunder
to be maintained by Tenant. Tenant shall not use the Project Site for any
purpose other than those intended by the Development Agreement and the ESA or as
otherwise permitted by this Lease.
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4.3 APPLICABLE LAW. Tenant shall not do anything or suffer anything to
be done in or about the Project Site which conflicts with or violates any
Applicable Law then in effect. At its sole cost and expense, Tenant shall
promptly comply with all requirements of Applicable Law relating to or arising
out of the use, occupancy, repair or alteration of the Project Site and the
improvements located thereon (provided that Tenant's compliance obligations in
respect of matters addressed by Section 5.7 of the ESA shall be governed thereby
and not hereby).
4.4 OTHER USES.
4.4.1 Tenant may not use the Project Site to provide services
other than the Services without obtaining the prior written consent of
Landlord, and provided that such consent, if granted, will result in an
equitable adjustment to the Base Rent and/or consumption and capacity
charges under the ESA and other reasonable modifications to this Lease
and/or the ESA. When Tenant presents Landlord with a proposal pursuant
to which Tenant would provide services other than the Services,
Landlord shall consider such proposal promptly (and with respect to a
proposal by Tenant to provide services to Bally's, Paris, and/or
Flamingo within seven (7) days of receipt of such proposal) and in good
faith.
4.4.2 Notwithstanding the foregoing, Landlord agrees that
Tenant may network the Project with another energy production facility
(or facilities) provided that: (i) Landlord determines, in its sole
discretion, that such networking will not adversely affect the ability
of the Project to provide the Services for the Landlord's Property and
(ii) the customer(s) of the energy production facility or facilities to
which the Project is networked are not charged rates for hot water,
cold water and/or electricity services provided by the Project which
are less than those charged for the Services pursuant to the terms of
the ESA; provided, that if Tenant disagrees with Landlord as to whether
the charges to third parties for services are less than those payable
by Landlord for Services under the ESA, then the matter shall be
referred to the "Independent Engineer" (as defined in the Development
Agreement) or another mutually acceptable arbitrator, whose decision
shall be final and binding on the parties, and provided further that
Tenant shall have the right to remedy any discrepancy in such charges
by decreasing the charges payable under the ESA and/or by agreeing to
increase the charges for services paid by third parties.
4.4.3 Notwithstanding the foregoing, in the event Tenant
terminates the ESA in accordance with the terms thereof because of a
Landlord default under the ESA or the Development Agreement, and
Landlord does not acquire the energy production facility at Tenant's
request pursuant to such termination, then without Landlord's
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consent, Tenant may provide and sell to third parties services,
provided, however, that Tenant's provision of such services other than
the Services will result in an equitable adjustment to the Base Rent
and/or consumption and capacity charges under the ESA and other
reasonable modifications to this Lease and/or the ESA.
Article 5. POSSESSION AND CONSTRUCTION OF IMPROVEMENTS.
5.1 POSSESSION; ACCESS. In addition to the interests
and rights granted by Landlord to Tenant in Section 2.1 above, Landlord shall
deliver to Tenant, within five (5) days of Landlord's issuance of a Notice to
Proceed pursuant to the Development Agreement, possession of the Project Site
and reasonable and necessary access to the Landlord's Property as is necessary
to enable Tenant to construct the Project and install and secure Tenant's
equipment and fixtures and otherwise to make the Project Site ready for Tenant
use and occupancy in the manner described herein and in the ESA and the
Development Agreement. In addition, Landlord shall permit Tenant access to the
Project Site at all reasonable times after execution of this Lease for the
purposes of investigating surface and subsurface conditions on and around the
Project Site, including taking soil samples and borings. Such entry to the
Landlord's Property shall be subject to all the terms and conditions of this
Lease, excluding payment of Base Rent, during the period commencing on the date
of Tenant's entry and ending on the earlier of (i) the Commencement Date or (ii)
the commencement of operation of Tenant's business from the Project Site or any
part thereof.
5.2 TENANT'S WORK. For purposes of this Article 5, the
term "Tenant's Work" shall mean and refer to the construction and installation
of all aspects of the Project as set forth in detail in the Development
Agreement, including the Improvements, and all other equipment, fixtures, pipes,
wiring, mechanical systems and other property and systems necessary to the
operation of the Project. All of Tenant's work shall be done in the manner
required by the Development Agreement and shall be completely lien-free (except
as provided in Sections 11.1 and 11.2 hereof, and except as otherwise permitted
by the Development Agreement and the ESA). Tenant shall use commercially
reasonable efforts to obtain warranties for Tenant's Work from its contractors
and to enforce such warranties so that defects in Tenant's Work are corrected.
If any warranties are not assignable to Landlord, Tenant shall nevertheless use
reasonable diligence to keep such warranties in effect and to enforce the same.
Tenant further agrees that if it determines that any portion of the Tenant's
Work contains a material defect, it shall promptly notify Landlord of such
defect and of the action which Tenant proposes to take or requires its
contractors to take to remedy the same, provided that Tenant shall not take any
action that may prejudice Landlord's ability to assert its warranty rights (if
any) without Landlord's prior written consent. Without limiting the foregoing,
Tenant reserves the right to install its own security system on the
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Project Site and Landlord, notwithstanding any other provision of this Lease to
the contrary, understands and agrees that Tenant shall have the right to limit
or restrict Landlord's access to the Project Site for reasonable safety and
security purposes, but subject to Landlord's rights under Section 14.1 below and
as provided for in the ESA and the Development Agreement. Subject to the rights
of Tenant under Sections 11.1 and 11.2 hereof, and except as permitted by the
Development Agreement and the ESA, all of Tenant's Work shall be completed
lien-free and in accordance with all Applicable Law. At Landlord's election, all
Tenant's Work shall be coordinated with Landlord's construction manager (who
shall not unreasonably interfere with the rendition of Tenant's Work).
5.3 LANDLORD'S WORK. The work to be performed by
Landlord in connection with the construction and development of the Project is
described in detail in the Development Agreement (such work being referred to
herein as the "Landlord's Work"). The Landlord's Work shall be performed in
accordance with all Applicable Law and in accordance with the Development
Agreement. Landlord shall use commercially reasonable efforts to obtain
warranties for Landlord's Work from its contractors and to enforce such
warranties so that defects in Landlord's Work are corrected.
5.4 LAYDOWN AND STAGING AREAS. Landlord shall give
Tenant the right to use, at no cost to Tenant and at such times as reasonably
required by Tenant before or after the Commencement Date, such portion of the
property of Landlord reasonably needed by Tenant for staging of construction of
the Project, storing materials and parking for Tenant's contractors and
subcontractors and their respective employees, such portion of the property to
be designated by the Landlord.
5.5 MUTUAL COOPERATION. Landlord and Tenant, both
acting reasonably, agree to cooperate with each other so that the Landlord's
Work and Tenant's Work can be completed in a timely manner.
Article 6. INSURANCE AND WAIVER OF SUBROGATION.
6.1 INSURANCE.
(a) At all times from and after the date hereof, Tenant shall,
at its sole expense, purchase and maintain in full force and effect,
the following insurance coverages:
(i) Workers' compensation insurance, with limits of liability
at least equal to the statutory requirements therefor;
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(ii) Employer's liability insurance of not less than
$1,000,000;
(iii) Comprehensive general liability insurance against
liability for injury to or death of any person or damage
to property in connection with the use, operation or
condition of the Project of not less that $2,000,000
combined single limit per occurrence and annual
aggregate;
(iv) "All-risk" property insurance covering the Project to
the extent of the full replacement cost thereof and,
during construction of the Project, "all-risk builder's
risk" insurance covering the Project to the extent of
the full replacement thereof;
(v) During any and all periods of construction of the
Project, Tenant shall cause its general contractors
(including all contractors who contract directly with
Tenant) to obtain (i) commercial general liability
insurance with a minimum limit of liability of
$5,000,000 combined single limit for bodily injury,
personal injury and property damage and include Landlord
and Landlord's lenders as additional insureds and (ii)
workers' compensation insurance, with limits of
liability at least equal to the statutory requirements
therefor and employer's liability insurance of not less
than $1,000,000; and
(vi) Excess liability umbrella coverage of at least
$50,000,000.
(b) At all times from and after the date hereof, Landlord
shall, at its sole expense, purchase and maintain in full force and
effect, the following insurance coverages:
(i) Comprehensive general liability (including public
liability and property damage) insurance coverage
covering occurrences, accidents and incidents on the
Landlord's Property that (1) occur from and after the
date hereof (regardless of when the claim is filed) and
(2) result in bodily injury, personal injury or death to
any person or entity and/or damage or destruction of
property. Said insurance shall have a combined single
limit of liability per occurrence of not less than
$1,000,000 on a primary basis and not less than
$50,000,000 on an excess/umbrella basis, or such greater
amounts as are typical for similar casino-hotel projects
in Las Vegas; and
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(ii) "All-risk" property insurance covering the Landlord's
Property and improvements thereon to the extent of the
full replacement cost thereof.
(c) Each party hereto agrees that the insurance described
above to be provided by the other party may be provided by and through
blanket coverages which may be provided in whole or in part through a
policy or policies covering other liabilities and locations of the
party obligated to provide such insurance and its affiliates.
Except as otherwise set forth in Articles 13 and 15 hereof, Tenant shall be
liable for any deductible amount in the event of any loss under the policies
required by Section 6.1.
6.2 ADDITIONAL REQUIREMENTS. All insurance required to
be purchased by Tenant pursuant to this Article 6 shall be placed with reputable
companies licensed to do business in the State of Nevada and shall provide for
deductibles reasonably acceptable to Landlord. Prior to the Commencement Date,
Tenant shall deliver to Landlord certificates of insurance evidencing the
insurance required hereby. All such insurance will require not less than thirty
(30) days prior written notice to both parties in the event of modification or
cancellation of coverage.
6.3 WAIVER OF SUBROGATION RIGHTS; DEFAULT. Each party
hereby releases and waives, to the extent legally possible for it to do so
without invalidating its insurance coverages, for itself and on behalf of its
insurer, the other party hereto and its respective officers, directors, agents,
members, partners, servants, and employees from liability for any loss or damage
to any or all property located on the Aladdin Lands (as defined in the
Development Agreement) which loss or damage is of the type and within the limits
covered by the "all-risk" property damage insurance and other property /
casualty insurance which the parties have agreed to obtain and maintain in
effect pursuant to clauses (a) and (b) of Section 6.1, irrespective of any
negligence on the part of the released party and its respective officers,
directors, agents, partners, members, servants, or employees, which may have
contributed to or cause such loss or damage. Each party covenants that it will,
if available, obtain for the benefit of the other party and its officers,
directors, agents, members, partners, servants, and employees, a waiver of any
right of subrogation which the insurer of such party may acquire against such
party by virtue of the payment of any such loss covered by insurance. In the
event a party is by law, statute or governmental regulation unable to obtain a
waiver of the right of subrogation for the benefit of the other party (and its
respective, officers, directors, agents, members, partners, servants, and
employees) or its insurance carriers will not give such a waiver or its property
/ casualty insurance will be invalidated or terminated by the waiver and release
set forth in the first sentence of this Section 6.3, then, during any period of
time when such waiver is unobtainable, said party shall not have been deemed to
have released any subrogated claim of its insurance carrier against such other
party (or its respective officers, directors, agents, members, partners,
servants, or employees), and during the same period of time, such other party
shall not have been deemed to have released the party which has been
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unable to obtain such waiver (or such party's respective officers, directors,
agents, members, partners, servants, or employees) from any claims it or its
insurance carrier may assert which otherwise would have been released pursuant
to this Section 6.3.
If Tenant at any time fails to provide the insurance coverage
required by this Article 6, Landlord will be entitled to purchase such coverage,
after written notice of Landlord's intent, and to collect the cost of such
coverage from Tenant. Notwithstanding anything to the contrary in this Lease, in
no event shall Landlord or Tenant be liable to the other for any lost business,
loss of profits or other special and/or consequential damages, whether direct or
indirect, in respect of which each hereby excuses the other and waives any and
all such claims against the other, provided that the foregoing is not intended
to be a waiver of any rights or obligations of Tenant or Landlord under the ESA
or the Development Agreement.
Article 7. DAMAGE OR DESTRUCTION. In the event the Project or
any part thereof is damaged or destroyed by fire, explosion or other casualty,
except as otherwise provided below in this Article 7, Tenant shall repair,
restore or rebuild with due diligence the damaged portion of the Project. Said
damage and destruction shall not affect in any way the obligation of Tenant to
pay Rent or release Tenant of or from any obligation imposed on Tenant under
this Lease. Tenant shall commence the repair, restoration or rebuilding of the
Project as soon as is reasonably practicable after such damage or destruction
occurs and shall complete such repair, restoration or rebuilding as promptly as
is reasonably possible in order to comply with its obligations under the ESA,
and shall in the course thereof comply with the terms of the Development
Agreement and with Section 5.2 hereof, provided that Tenant may make such
revisions and changes to the Tenant's Work as Tenant deems appropriate under the
circumstances, after obtaining Landlord's prior approval, which shall not be
unreasonably withheld or delayed, to such revisions and changes; provided,
however, that any such changes are made in accordance with the terms of the
Development Agreement during the term thereof. In the event that the net
proceeds of insurance payable in respect of such casualty is not sufficient to
fully restore the damaged portion of the Project (and provided that such
shortfall is not attributable to any failure by Tenant to maintain the property
/ casualty insurance coverage required by this Lease), such that Tenant shall
have to provide additional funds in order to comply with its obligations under
this Article 7, then the "Investment in Northwind Facilities" under the ESA
shall be increased by the amount of such additional funds in excess of net
proceeds of insurance and Landlord's obligation to pay the Contract Capacity
Charge under the ESA during the balance of the term thereof then in effect shall
be modified in accordance therewith.
Article 8. CONDEMNATION.
8.1 COMPLETE TAKING. If, at any time during the Term,
title to all or substantially all of the Project Site shall be taken in
condemnation proceedings or by any right of eminent domain, this Lease shall
terminate and expire on the date of such taking and the Rent payable hereunder
shall be apportioned and paid to the date of such taking. For purposes of this
Article, substantially all of the Project Site shall be deemed to have been
taken if the untaken portion cannot be practically and economically used or
converted for use by Tenant for the Project in a manner permitting Tenant to
comply with its obligations under the ESA and the Development Agreement. Upon
the occurrence of any such taking and the
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termination of this Lease, Landlord and Tenant shall share any award or awards
as follows: (i) if the aggregate amount of such award or awards equals or
exceeds (x) the purchase price then payable under Section 9.3 of the ESA plus
(y) the fair value of the portion of the Project Site being taken, then Landlord
shall be entitled to receive an amount equal to the fair value of the Project
Site being taken and Tenant shall be entitled to receive an amount equal to the
purchase price which would then be payable under Section 9 of the ESA if the
Project were then purchased by Landlord from Tenant pursuant to such section,
and Landlord and Tenant shall each be entitled to receive an amount equal to
fifty (50) percent of the amount (if any) by which the aggregate awards exceeds
the amount described in clauses (x) and (y) immediately preceding; and (ii) if
the aggregate awards are less than an amount equal to the aggregate amount under
clauses (i)(x) and (i)(y) preceding, then Landlord shall be entitled to receive
an amount equal to the fair value of the portion of the Project Site being taken
multiplied by a fraction, the numerator of which is the aggregate awards and the
denominator of which is the aggregate of the amounts described in clauses (i)(x)
and (i)(y) preceding, and the Tenant shall be entitled to receive the balance of
the aggregate awards. In either case, Tenant shall be entitled to collect the
entire award and withhold therefrom the portion thereof to which Tenant is
entitled pursuant to this Section 8.1 and pay to Landlord the portion thereof to
which Landlord is entitled. Tenant shall execute any and all documents that may
be required in order to facilitate the collection and distribution of the award
in accordance with the terms of this section. In the event of a dispute between
Landlord and Tenant as to whether or not the untaken portion of the Project Site
can be practically and economically used or converted by Tenant as aforesaid,
and the parties cannot agree within thirty days after such taking, such dispute
shall be resolved in the manner provided in Section 7.1(c) of the ESA.
8.2 PARTIAL TAKING. Upon any such taking of less than
the whole or substantially all of the Project Site, as promptly as possible a
determination under the ESA shall be made as to whether the ESA shall be
terminated pursuant to Section 7.1(c) thereof. (a) If the ESA is terminated as a
result of such partial taking, then this Lease shall be terminated concurrently
with the termination of the ESA and Landlord and Tenant shall share any award or
awards as follows: (i) if the aggregate amount of such awards equals or exceeds
(x) the purchase price then payable under Section 9.3 of the ESA plus (y) the
fair value of the portion of the Project Site being taken, then Landlord shall
be entitled to receive an amount equal to the fair value of the Project Site
being taken and Tenant shall be entitled to receive an amount equal to the
purchase price which would then be payable under Section 9 of the ESA if the
Project were then purchased by Landlord from Tenant pursuant to such section,
and Landlord and Tenant shall each be entitled to receive an amount equal to
fifty (50) percent of the amount (if any) by which the aggregate awards exceed
the amount described in clauses (x) and (y) immediately preceding; and (ii) if
the aggregate awards are less than an amount equal to the aggregate amount under
clauses (i)(x) and (i)(y) preceding,
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then Landlord shall be entitled to receive an amount equal to the fair value of
the portion of the Project Site being taken multiplied by a fraction, the
numerator of which is the aggregate awards and the denominator of which is the
aggregate of the amounts described in clauses (i)(x) and (i)(y) preceding, and
the Tenant shall be entitled to receive the balance of the aggregate awards. In
either case, Tenant shall be entitled to collect the entire award and withhold
therefrom the portion thereof to which Tenant is entitled pursuant to this
Section 8.2(a) and pay to Landlord the portion thereof to which Landlord is
entitled. Tenant shall execute any and all documents that may be required in
order to facilitate the collection and distribution of the award in accordance
with the terms of this section. (b) If the ESA is not terminated as a result of
such partial taking, then (i) Tenant, at its sole cost and expense, shall
complete Tenant's Work and comply with its obligations in respect of restoring
the Project set forth in Section 7.1(a) of the ESA; (ii) this Lease shall
continue and the Term shall not be reduced or affected in any way; and (iii) at
Tenant's election, the award or awards made in connection with such taking shall
be distributed to Tenant in whole or in part and the amount which Tenant
receives shall be applied to the cost and expense of restoring the Project, with
any excess deemed to be a payment in reduction of the "Investment in the
Northwind Facilities" under the ESA. In the event such excess is applied to
reduce the "Investment in the Northwind Facilities," the Contract Capacity
Charge payable by Landlord under the ESA shall be reduced to reflect such
payment (such reduction to be determined by assuming that such payment is
applied 60% in reduction of debt incurred to finance the Project and 40% as a
return of Tenant's capital). If the ESA is not terminated, then, to the extent
(if any) that the cost of restoring the Project exceeds any award or awards
which are received by Tenant, the "Investment in the Northwind Facilities" shall
be adjusted accordingly and Landlord's obligation to pay the Contract Capacity
Charge under the ESA during the balance of the term thereof then in effect shall
be modified in accordance therewith.
8.3 SETTLEMENT. Landlord and Tenant shall each be
entitled to participate at their own expense in the negotiation and settlement
of any amounts or other compensation resulting from or in connection with the
condemnation or other taking of the Project Site or any part thereof.
Article 9. MAINTENANCE AND ALTERATIONS.
9.1 LANDLORD'S MAINTENANCE. During the Term, Landlord
shall keep and maintain, repair and replace the Landlord's Work and the
Landlord's Property in good working order and repair in compliance with all
Applicable Law and in the manner necessary to enable Tenant to perform its
obligations under the Development Agreement and the ESA.
9.2 TENANT'S MAINTENANCE. During the Term, Tenant
shall keep and maintain, repair and replace, at Tenant's sole cost and expense
(subject to the provisions of
15
the Development Agreement and the ESA governing the cost of the Project and the
charges payable in respect of Services), the Project and the Project Site in
good working order and repair in compliance with all Applicable Law.
9.3 ALTERATIONS. Tenant shall have the right to make
additions, improvements and alterations in and to the Project and the Project
Site (collectively, "Alterations") from time to time during the Term, provided
such Alterations comply with the terms of the Development Agreement, the ESA and
this Lease, and provided that for material Alterations Tenant first obtains
Landlord's consent, which consent may be withheld in Landlord's sole discretion,
except as otherwise provided in Section 4.4 hereof. Tenant agrees that any
Alterations made shall be made in a good and workmanlike manner and shall be
made in accordance with the terms of the Development Agreement, the ESA, all
Applicable Law, and the requirements of Section 5.2 herein and will be completed
on a lien-free basis (except as provided in Section 11.1 hereof.)
Article 10. ASSIGNMENT AND SUBLETTING.
10.1 ASSIGNMENT AND SUBLETTING. Except for a "Permitted
Transfer" (as such term is herein defined) or an assignment made in accordance
with the terms of Section 11.2 below, any of which shall be permitted at any
time without Landlord's consent, but only after prior written notice to
Landlord, Tenant shall not, either prior or subsequent to the commencement of
the Term, (i) assign this Lease or any interest under this Lease, or (ii) sublet
the Project Site or any part thereof, without Landlord's prior written consent,
which shall not be unreasonably withheld or delayed.
10.1.1 For purposes of this Article 10, the term
"Permitted Transfer" shall mean any transfer or
assignment of Tenant's interest in this Lease made in
connection with a transfer of Tenant's interest in
the ESA or the Development Agreement which is
permitted under the terms thereof.
Landlord acknowledges and agrees that the transferee under any assignment or
transfer to which Landlord has consented as aforesaid, as well as the transferee
or assignee under any Permitted Transfer, shall be deemed to be the "Tenant" for
purposes of this Lease and shall be afforded all of the rights, benefits and
obligations of Tenant hereunder (regardless of whether or not such assignment
occurs concurrently with a transfer, sale or assignment of all or a portion of
Tenant's right, title and interest in the Project). In the event of an
assignment, transfer or sublease, other than a Permitted Transfer, the
transferee shall expressly assume the obligations of Tenant in writing, and the
terms of this Lease shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns. Any assignment or
sublease in violation of this Article 10 shall be null and void.
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10.2 CONSENT NOT A RELEASE. Neither a Permitted
Transfer nor the consent by Landlord to any assignment or subletting shall
operate to relieve Tenant from any covenant or obligation hereunder except to
the extent, if any, expressly provided for in such consent and except, with
respect to a Permitted Transfer, to the extent that Tenant is relieved of its
obligations under the ESA and the Development Agreement, or be deemed to be a
consent to or relieve Tenant from obtaining Landlord's consent to any subsequent
assignment or subletting requiring consent under Section 10.1 above.
Article 11. LIENS AND ENCUMBRANCES.
11.1 ENCUMBERING LANDLORD'S TITLE. Tenant shall make
all payments and take all actions at its own cost and expense as may be
necessary to ensure that no lien, charge, or order for payment of money is
registered against Landlord's interest in and to the Project Site that results
from any work, services or materials supplied to Tenant or the Project Site or
any act or omission of Tenant and that is not discharged or vacated (or with
respect to which payment has not been secured by the placement of a bond in an
amount, form and content reasonably acceptable to Landlord) within ten (10)
business days after Tenant receives notice of such registration. Tenant shall
indemnify and save harmless Landlord against any and all costs, liabilities,
suits, penalties, claims and demands, including reasonable attorney's fees,
arising therefrom. Any claim to, or lien upon, the Project Site arising from the
acts or omissions of Tenant shall accrue only against the leasehold estate of
Tenant. If Tenant fails to cause such lien, charge or order to be discharged of
record or bonded within twenty (20) days after Tenant receives notice of such
registration, then Landlord shall have the right to cause the same to be
discharged. All amounts paid by Landlord to cause any such lien, charge or order
to be discharged shall constitute additional rent payable by Tenant to Landlord,
or, at Landlord's option, may be recovered from Tenant in an appropriate
proceeding.
11.2 COLLATERAL ASSIGNMENT AND LIENS. Landlord agrees
that Tenant shall have the right to grant to a lender a security interest in
Tenant's interest in this Lease for collateral purposes and to grant to such
lender security interests in and liens on the personal property, machinery and
equipment of Tenant located at the Project Site.
Article 12. UTILITIES; SERVICES. Tenant shall purchase the
water, gas and sewage services necessary for the operation of the Project
directly from the utility, authority or municipality providing such service, and
shall pay for such services when such payments are due. Tenant covenants to pay
all such charges for these utility services and any others required in the
operation of its business on or before their due date.
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Article 13. INDEMNITY.
13.1 GENERALLY. Subject to Section 13.2 below, each
party hereto shall protect, indemnify and save the other party and its agents
and employees harmless from and against all liabilities, obligations, claims,
damages (other than lost business, lost profits and other special and/or
consequential damages, whether direct or indirect, all claims for which are
hereby irrevocably waived, provided that this shall not be deemed to waive any
rights or obligations of Tenant or Landlord under the ESA or the Development
Agreement), penalties, causes of action, costs and expenses (including, without
limitation, reasonable attorneys' fees and expenses) imposed upon or asserted
against such other party by reason of any accident, physical injury to or death
of persons or physical loss of or physical damage to property arising (i) from
the indemnifying party's entry upon or occupancy of the Project Site or conduct
of such party's business in or from the Project Site; (ii) from any breach or
default on the part of the indemnifying party in the performance of any covenant
or agreement on the part of such party to be performed pursuant to the terms of
this Lease; (iii) any violation of Federal, state or local law, regulation or
action governing environmental or safety statutes applicable to the Project; or
(iv) due to any other legally actionable act or omission of the indemnifying
party or its agents, contractors or employees. In case any action, suit or
proceeding is brought against a party hereto by reason of any such occurrence,
the other party shall, at the indemnified party's option, at the indemnifying
party's expense, by counsel selected by the indemnifying party (which counsel
must be reasonably satisfactory to the indemnified party), defend such action,
suit or proceeding, or cause the same to be defended.
13.2 EFFECT OF WAIVER. The indemnities of either party
contained in this Lease shall not apply or pertain to liabilities, obligations,
claims, damages, penalties, causes of action, costs or expenses to the extent
such party has waived claims in respect thereto pursuant to Section 6.3 above.
13.3 SURVIVAL OF OBLIGATION. The duty to indemnify
under this Article will continue in full force and effect notwithstanding the
expiration or termination of this Lease, with respect to any loss, liability,
damage or other expense based on factors and conditions which occurred prior to
such termination.
Article 14. RIGHTS RESERVED TO LANDLORD; ADDITIONAL LANDLORD
REPRESENTATIONS, WARRANTIES AND COVENANTS.
14.1 INSPECTION. Landlord shall have the right, upon
reasonable advance written notice to Tenant, except in case of emergency, when
no notice shall be required, to inspect the operation of the Project during
normal business hours to determine whether it is being operated in compliance
with all Applicable Law and in the manner required under this
18
Lease and to enable Landlord to perform its obligations hereunder. Tenant or its
designated representative shall have the right to be present during any such
inspection.
14.2 REPRESENTATIONS AND WARRANTIES. Landlord hereby
represents and warrants to Tenant that:
14.2.1 There are no leasing or rental agreements in
effect demising the Project Site other than the
Lease, and there are no executory contracts, options
or agreements in existence which relate to the
purchase of all or any portion of the Project Site or
any interest therein.
14.2.2 Landlord has no knowledge of any outstanding
violations of any applicable pollution, zoning,
Environmental Protection Agency, health, safety,
OSHA, fire, environmental, sewerage and building
codes, statutes, ordinances and regulations
pertaining to the Project Site.
14.2.3 Landlord has no knowledge of any special taxes
or assessments against the Project Site, or any
portion thereof.
14.2.4 Landlord has no knowledge of any increase in
the real estate tax assessment of the Project Site or
any portion thereof.
14.2.5 To Landlord's knowledge, during Landlord's
ownership of the Project Site, (i) no "Hazardous
Materials" (as hereinafter defined) have been located
on the Project Site or have been released into the
environment, or discharged, placed or disposed of at,
on or under the Project Site; (ii) no underground
storage tanks have been located on the Project Site;
(iii) the Project Site has never been used as a dump
for waste material; (iv) no portion of the Project
Site is located in an area that has been designated a
wetlands or other environmental protection area; and
(v) the Project Site and its prior uses comply with
and at all times have complied with, any applicable
governmental law, regulation or requirement relating
to environmental and occupational health and safety
matters and Hazardous Materials.
14.2.6 Landlord believes it has not misstated any
material fact, or failed to disclose any material
fact, relating to the Project Site or Landlord's
Property.
14.3 SECURITY; NO OBSTRUCTION. Landlord, at its sole
expense, shall at all times from and after the date hereof provide reasonable
security for and protection of all
19
property of Tenant located on, in or under the Landlord's Property in accordance
with the terms of this Lease.
Article 15. ENVIRONMENTAL MATTERS.
15.1 DEFINITIONS. For the purposes of this Article 15,
the following terms shall have the following meanings: (i) the term "Hazardous
Material" shall mean any material or substance that, whether by its nature or
use, is now or hereafter defined as a hazardous waste, hazardous substance,
pollutant or contaminant under any Environmental Requirement, or which is toxic,
explosive, corrosive, flammable, infectious, radioactive, carcinogenic,
mutagenic or otherwise hazardous and which is now or hereafter regulated under
any Environmental Requirement, or which is or contains ammonia, petroleum,
gasoline, diesel fuel or any other petroleum hydrocarbon product or material,
(ii) the term "Environmental Requirements" shall collectively mean all present
and future laws, statutes, ordinances, rules, regulations, orders, codes,
licenses, permits, decrees, judgments, directives or the equivalent of or by any
Governmental Authority and relating to or addressing the protection of the
environment or human health or safety, and (iii) the term "Governmental
Authority" shall mean any of the following having jurisdiction over the Project
Site, the Project or any part of either thereof: the federal or state government
or any political subdivision thereof, or any agency, court or body of the
federal or state government or any political subdivision thereof, exercising
executive, legislative, judicial, regulatory or administrative functions.
15.2 COMPLIANCE WITH ENVIRONMENTAL REQUIREMENTS. Each
party to this Agreement agrees that it will not use, store or bring onto the
Project Site any Hazardous Material in violation of Environmental Requirements
without first obtaining the prior written consent of the other party. Each party
shall comply in all material respects with all Environmental Requirements, and
will not generate, store, handle, process, dispose of or otherwise use Hazardous
Materials at, in, on, under or about the Project Site in a manner that causes
the imposition on Tenant, Landlord, the Project Site or any part thereof of any
liability or lien of any nature whatsoever under any Environmental Requirement.
Each party shall notify the other party promptly in the event that such party
receives notice of any spill or other release of any Hazardous Material at, in,
on, under or about the Project Site which is required to be reported to a
Governmental Authority under any Environmental Requirement, will promptly
forward to the other party copies of any notices received by such party relating
to alleged violations by such party of any Environmental Requirement. If at any
time it is determined by a Governmental Authority that a party's operation or
use of the Project Site violates any applicable Environmental Requirement or
that as a consequence of such party's action or inaction there are Hazardous
Materials located at, in, on, under or about the Project Site which, under any
Environmental Requirement, require special handling in collection,
20
storage, treatment or disposal, or any other form of cleanup or corrective
action, such party shall, within thirty days after receipt of notice from any
Governmental Authority, or sooner if required by such notice, take, at the sole
cost and expense of such party (except as otherwise set forth in the ESA), such
actions as may be necessary to fully comply in all respects with all
Environmental Requirements; provided, however, that if such compliance cannot
reasonably be completed within such thirty day period, such party shall commence
such necessary action within such thirty-day period and shall thereafter
diligently and expeditiously proceed to fully comply in all respects and in a
timely fashion with all Environmental Requirements.
15.3 ENVIRONMENTAL INDEMNITY. Subject to the terms of
Article 13 above, each party (the "Indemnifying Party") shall defend, indemnify,
and hold harmless the other party, its members, employees, agents, officers, and
directors (the "Indemnified Parties"), from and against any and all claims,
demands, penalties, causes of action, fines, liabilities, settlements, damages
(other than lost business, lost profits and other special and/or consequential
damages, whether direct or indirect, all claims for which are hereby irrevocably
waived), costs, or expenses of whatever kind or nature, known or unknown,
foreseen or unforeseen, contingent or otherwise (including, without limitation,
reasonable counsel and consultant fees and expenses, investigation and
laboratory fees and expenses, court costs, and litigation expenses) arising out
of, or in any way related to, (i) any breach by the Indemnifying Party of the
provisions of Section 15.2 above or by Landlord of the representations and
warranties contained in Section 14.2.5 above, (ii) the presence, disposal,
spillage, discharge, emission, leakage, release, or threatened release of any
Hazardous Material which is at, in, on, under, about, from or affecting the
Project Site or any portion thereof, including, without limitation, any damage
or injury resulting from any such Hazardous Material to or affecting the Project
Site or the soil, water, air, vegetation, buildings, personal property, persons
or animals located on the Project Site or on any other property or otherwise,
which arose or occurred through the act or omission of the Indemnifying Party or
resulted from the Indemnifying Party's use or occupancy of the Project Site,
(iii) any personal injury (including wrongful death) or property damage (real or
personal) arising out of or related to the generation, storage, handling,
processing, disposal of or use of any such Hazardous Material by the
Indemnifying Party, (iv) any lawsuit brought, settlement reached, or order or
directive of or by any Governmental Authority relating to the Indemnifying
Party's use of such Hazardous Material, or (v) any violation by the Indemnifying
Party of any Environmental Requirement.
15.4 LIMITATION ON INDEMNITY. The aforesaid
indemnification shall not be applicable to any claim, demand, penalty, cause of
action, fine, liability, settlement, damage, cost or other expense of any type
whatsoever occasioned, arising and caused solely and directly as the result of
the negligence or willful misconduct of a party claiming a right to be
21
indemnified, or, with respect to Tenant's indemnification obligations, arising
in connection with (i) an environmental condition occurring prior to the date
upon which Tenant enters upon the Project Site, or (ii) an environmental
condition occurring subsequent to the date upon which Landlord acquires
possession of the Project Site if such claim, demand, penalty, cause of action,
fine, liability, settlement, damage, cost or other expense was not caused by an
act or omission of Tenant or an employee, agent or contractor of Tenant, and
Landlord shall be solely responsible for all claims and other expenses resulting
from the conditions described in the preceding clauses (i) and (ii).
15.5 SURVIVAL OF INDEMNITY. Except as hereinabove
specifically provided to the contrary in this Article 15, the obligations and
liabilities of Landlord and Tenant under this Article 15 in respect to a claim
which arises or accrues prior to the expiration or termination of the Term shall
survive and continue in full force and effect and shall not be terminated,
discharged or released, in whole or in part, irrespective of whether the Lease
has terminated pursuant to the provisions of this Lease or acceptance by
Landlord of possession of the Project Site.
Article 16. TITLE; SUBORDINATION. Landlord represents and
warrants to Tenant that prior to the date upon which the Notice to Proceed (as
defined in the Development Agreement) is received by Northwind, Landlord will
hold fee simple title to the Aladdin Lands and the Project Site. Landlord will
promptly notify Tenant in writing if any mortgage, trust deed or ground lease
encumbers the Project Site. If at any time the Project Site shall become subject
to any mortgage, trust deed or ground lease, then within thirty (30) days after
the creation of such lien or the commencement of the term of such ground lease,
as the case may be, Landlord shall deliver to Tenant a recordable
non-disturbance agreement (pursuant to which, among other things, the Lease, and
Tenant's right of possession of the Project Site and the Landlord's Property on
the terms and conditions set forth in the Lease, would be honored by any lender,
ground lessor or person or entity claiming by, through or under such lender or
ground lessor, in the event a foreclosure or deed-in-lieu of foreclosure
occurred or a ground lease was terminated and no Tenant Default then existed)
satisfactory in form and substance to Tenant acting in a commercially reasonable
manner (herein called a "Non-Disturbance Agreement") signed by such lender or
ground lessor, as the case may be. Without limiting the foregoing, if the
mortgagee or trustee in any first mortgage or first trust deed hereafter made
desires this Lease to be subject and subordinate to its first mortgage or first
trust deed, then all or a portion of the rights and interests of Tenant under
this Lease (other than rights in respect of any casualty loss of the Project or
under Sections 8.1 and 8.2 hereof) shall be subject and subordinate to such
first mortgage or first trust deed and to any and all advances to be made
thereunder, and to the interest thereon, and all renewals, replacements and
extensions
22
thereof, if and only if such mortgagee or trust deed holder or such
ground lessor, as the case may be, has theretofore delivered to Tenant a
Non-Disturbance Agreement signed by such lender or ground lessor, as the case
may be. Any mortgagee or trustee in any first mortgage or trust deed may elect
that, instead of making this Lease subject and subordinate to its first mortgage
or first trust deed, the rights and interest of Tenant under this Lease shall
have priority over the lien of its mortgage or trust deed. Tenant agrees that in
the event that any trustee or mortgagee or ground lessor elects to make this
Lease subordinate to its mortgage, trust deed or ground lease, and Tenant has
received from such lender or ground lessor a signed Non-Disturbance Agreement,
Tenant shall, upon the request thereof, attorn to any such trustee or mortgagee
who becomes owner of the Project Site through foreclosure or deed in lieu of
foreclosure or to any other purchaser of the Project Site at a foreclosure sale
or to such ground lessor, as the case may be.
Article 17. SURRENDER AND HOLDOVER.
17.1 SURRENDER AND REMOVAL OF IMPROVEMENTS. In the
event that Landlord requires Tenant to remove the "Northwind Facilities"
pursuant to Section 9.2 of the ESA, then no later than the 180th day following
the date on which this Lease expires or is terminated in accordance with the
terms hereof, Tenant shall surrender the Project Site and shall remove therefrom
any and all machinery, equipment and personal property at Landlord's expense,
except that in the event Tenant negligently performs such removal or willfully
causes any damage in the course of performing such removal, Tenant shall be
responsible at its sole expense for repairing all damage it negligently or
willfully caused. Otherwise Tenant shall surrender the Project Site immediately
following the date of expiration or termination and Tenant shall not remove such
property if Landlord or its assignee has exercised any rights it may have to
acquire the same under the terms and conditions of the Development Agreement or
the ESA. Tenant shall restore the Project Site to a condition approved by
Landlord, which approval shall not be unreasonably withheld or delayed, and
Tenant shall repair any damage to Landlord's Property which is due to Tenant's
use thereof. Tenant's interest in all improvements remaining on the Project Site
after the expiration or earlier termination of the Lease shall be vacated and
surrendered by Tenant to Landlord and shall automatically become the property of
Landlord except to the extent that Landlord requires Tenant to remove the same,
and Tenant agrees to execute and deliver to Landlord such deeds, bills of sale,
assignments or other instruments of conveyance as Landlord may deem reasonably
necessary to evidence such transfer of such improvements to Landlord.
17.2 HOLDING OVER. Except as necessary to comply with
its obligations under Section 17.1 hereof, Tenant shall have no right to occupy
the Project Site or any portion thereof after the expiration of the Term or
after termination of the Lease or of Tenant's right to possession. In the event
Tenant holds over, Landlord may exercise any and
23
all remedies available to it at law or in equity to recover possession of the
Project Site and for any damages resulting from such holdover.
Article 18. DEFAULT AND REMEDIES.
18.1 TENANT DEFAULTS. Tenant agrees that any one or more of the
following events shall be considered "Tenant Defaults" as said term is used
herein:
18.1.1 Tenant shall fail to pay any Rent or other
charge owing by Tenant pursuant to the terms of this
Lease within thirty days after receipt of written
notice from Landlord that such amount is due and
payable;
18.1.2 Tenant shall fail to keep, observe or perform
any of the other covenants or agreements herein
contained to be kept, observed and performed by
Tenant, and such failure shall continue for thirty
days (or such shorter period as is specifically
referred to in this Lease for any particular breach)
after notice thereof in writing to Tenant; PROVIDED,
however, in the event that such failure cannot
reasonably be cured within the aforesaid thirty day
period (or shorter period, if applicable), and Tenant
shall within said period commence to cure said
default and diligently thereafter prosecutes to
correction said failure, the period for completion
shall be extended for so long as is reasonably
required to cure said default;
18.1.3 The estate or interest of Tenant in the Project
Site or the Project is levied upon or attached in any
proceeding and such process is not stayed, vacated or
discharged within ninety (90) days after such levy or
attachment;
18.1.4 Any representation or warranty made by Tenant
to Landlord in connection with this Lease is false or
misleading in any material respect when made; or
18.1.5 Tenant is in default under the ESA or the
Development Agreement.
18.2 LANDLORD REMEDIES; TERMINATION EVENT. Upon the
occurrence of any one or more of such Tenant Defaults, Landlord shall be
entitled to recover as damages all past due Rent and other sums then due and
payable by Tenant including costs and expenses reasonably incurred in the
exercise of Landlord's remedy (including reasonable attorney's fees), to seek
appropriate equitable relief including the termination of this Lease (but only
if
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the Development Agreement and the ESA also are terminated in accordance with
their respective terms) and to pursue any and all remedies available at law, in
equity, in bankruptcy or in other appropriate proceedings and to seek
appropriate equitable relief. Upon the effective date of such termination (but
subject to the rights and obligations of Tenant under Section 17.1 above and to
Landlord's payment to Tenant of any amounts payable under the ESA and the
Development Agreement pursuant to termination thereof), Tenant shall surrender
possession of the Project Site to Landlord. If the Lease is terminated by
Landlord due to the occurrence of the events described in this Section, Landlord
shall be entitled to recover as damages all past due Rent and other sums due and
payable by Tenant on the date of termination including costs and expenses
reasonably incurred in the exercise of Landlord's remedy (including reasonable
attorney's fees). Subject to the foregoing, Landlord shall have such rights and
remedies for Tenant defaults as provided elsewhere in this Lease and at law and
in equity, and all remedies shall be cumulative such that Landlord's exercise or
failure to exercise of any remedy shall not limit or prevent Landlord from
exercising any other remedy available to Landlord.
18.3 PERFORMANCE BY TENANT'S LENDER. Landlord agrees
and acknowledges that in the event that Tenant grants a security interest in the
Project and/or Tenant's leasehold interest in or to the Project Site to a third
party lender, Landlord shall negotiate and enter into an agreement by which such
lender will be given notice and an opportunity to cure Tenant Defaults under
this Lease. Without limiting the foregoing, Landlord shall reasonably cooperate
with all commercially customary requests by such lender as such lender may
reasonably request.
18.4 LANDLORD DEFAULT; TENANT REMEDIES. In the event
Landlord shall fail to keep, observe or perform any of its covenants or
agreements contained in this Lease, and such failure shall continue for thirty
(30) days (if such failure is a monetary duty or obligation) or forty-five (45)
days (if such failure is a non-monetary duty or obligation) after written notice
from Tenant to Landlord, then Tenant shall have the right to exercise all
remedies available to Tenant at law and in equity (excluding the termination of
the Lease); provided, however, that Tenant may, at its election by written
notice to Landlord, terminate this Lease if and only if the ESA and/or
Development Agreement has been terminated or otherwise expires in accordance
with its terms. The effective date of such termination shall be the later of the
effective termination date of the ESA or Development Agreement. Subject to the
foregoing, Tenant shall have such rights and remedies for a breach by Landlord
of its obligations under this Lease as are set forth herein, and all remedies
shall be cumulative such that Tenant's exercise or failure to exercise of any
remedy shall not limit or prevent Tenant from exercising any other remedy
available to Tenant.
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Article 19. MISCELLANEOUS.
19.1 ESTOPPEL CERTIFICATES.
19.1.1 Tenant shall, at any time and from time to time
upon not less than thirty days' prior written request from
Landlord, execute, acknowledge and deliver to Landlord, in form
reasonably satisfactory to Landlord, a written statement
certifying (if true) that Tenant has accepted the Project Site,
that this Lease is unmodified and in full force and effect (or,
if there have been modifications, that the same is in full
force and effect as modified and stating the modifications),
that, to the best of Tenant's knowledge, Landlord is not in
default hereunder (or if there is a default, stating the nature
of said default), the date to which the rental and other
charges have been paid, and such other accurate certifications
as may reasonably be required by Landlord or Landlord's
mortgagee. Any statement delivered by Tenant pursuant to this
Section may be relied upon by Landlord and Landlord's lenders
and prospective lenders.
19.1.2 Landlord shall, at any time and from time to
time upon not less than thirty days' prior written request from
Tenant, execute, acknowledge and deliver to Tenant, in form
reasonably satisfactory to Tenant, a written statement
certifying (if true) that this Lease is unmodified and in full
force and effect (or, if there have been modifications, that
the same is in full force and effect as modified and stating
the modifications), that, to the best of Landlord's knowledge,
no Tenant Default then exists (or if there is a Tenant Default,
stating the nature thereof), the date to which the rental and
other charges have been paid and such other accurate
certifications as may reasonably be required by Tenant or by
such other person or entity, as the case may be. Any statement
delivered by Landlord pursuant to this Section may be relied
upon by Tenant and Tenant's lenders and prospective lenders.
19.2 AMENDMENTS MUST BE IN WRITING. None of the
covenants, terms or conditions of this Lease, to be kept and performed by either
party, shall in any manner be altered, waived, modified, changed or abandoned
except by a written instrument, duly signed by both parties and delivered.
19.3 NOTICES. All notices or other communications
required or permitted hereunder shall be in writing addressed to the respective
party as set forth below and shall be
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personally served, telecopied or sent by reputable overnight courier service and
shall be deemed to have been given: (a) if delivered in person, when delivered;
(b) if delivered by telecopy, on the date of transmission if transmitted on a
Business Day before 4:00 p.m. Chicago time, otherwise on the next Business Day
(provided, in either case, that receipt of such transmission is confirmed); and
(c) if delivered by overnight courier, one day after delivery to the courier
service properly addressed. Notices and other communications shall be addressed
to the applicable party as follows:
If to Landlord, then to:
Aladdin Gaming, LLC
c/o Aladdin Management Corporation
280 Park Avenue, 38th Floor
New York, New York 10017
Attention: Ronald Dictrow
Fax: 212-661-0844
If to Tenant, then to:
Northwind Aladdin, LLC
c/o Unicom Thermal Technologies Inc.
30 West Monroe Street, Suite 500
Chicago, IL 60603
Attention: President
Fax: 312-346-3201
Any party hereto may change its address for notices and other communications
hereunder by a notice delivered to the other party hereto in accordance with
this Section as then in effect.
19.4 TIME OF ESSENCE. Time is of the essence of this
Lease, and all provisions herein relating thereto shall be strictly construed.
19.5 RELATIONSHIP OF PARTIES. Nothing contained herein
shall be deemed or construed by the parties hereto, nor by any third party, as
creating the relationship of principal and agent or of partnership, or of joint
venture, between Landlord and Tenant, it being understood and agreed that no
provision in this Lease or any acts of the parties hereto shall be deemed to
create any relationship other than the relationship of landlord and tenant.
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19.6 CAPTIONS. The captions of this Lease are for
convenience only and are not to be construed as part of this Lease and shall not
be construed as defining or limiting in any way the scope or intent of the
provisions hereof.
19.7 SEVERABILITY. If any term or provision of this
Lease shall to any extent be held invalid or unenforceable, or shall be in
conflict with the requirements of any law, such term or provision shall be
deemed to be inapplicable and the remaining terms and provisions of this Lease
shall not be affected thereby, but each term and provision of this Lease shall
be valid and be enforced to the fullest extent permitted by law.
19.8 LAW APPLICABLE. This Lease shall be construed and enforced
in accordance with the law of the State of Nevada.
19.9 COVENANTS BINDING ON SUCCESSORS; NO THIRD PARTY
BENEFICIARIES. All of the covenants, agreements, conditions and undertakings
contained in this Lease shall extend and inure to and be binding upon the
successors and permitted assigns of the respective parties hereto, the same as
if they were in every case specifically named, and wherever in this Lease
reference is made to either of the parties hereto, it shall be held to include
and apply to, wherever applicable, the successors and permitted assigns of such
party. Nothing herein contained shall be construed to grant or confer upon any
person or persons, firm, corporation or governmental authority, other than the
parties hereto and their successors and permitted assigns, any right, claim or
privilege by virtue of any covenant, agreement, condition or undertaking in this
Lease contained.
19.10 RECORDING OF LEASE. A short form notice of this
Lease and the easements created hereby (but not the Lease itself) may be
recorded against the Project Site by either party hereto, provided the form
thereof has received the prior approval of Landlord, which approval shall not be
unreasonably delayed or withheld.
19.11 DEFAULT RATE OF INTEREST. Any amount owing by
either party under this Lease that is not paid on or before the 15th day after
the due date of such amount shall bear interest at a rate equal to one and
one-half percent (1.50%) per month, or the maximum legal rate, whichever is
less, from such date through and including the date of payment thereof
(calculated using actual days elapsed and a year of 365 or 366 days, as
applicable).
19.12 ARBITRATION. Landlord and Tenant shall negotiate
in good faith and attempt to resolve promptly any dispute between them which may
develop under this Lease; however, if Landlord and Tenant are unable to resolve
any such dispute, then Landlord and Tenant jointly may request that such dispute
be resolved by arbitration in accordance with the provisions of the Commercial
Arbitration Rules of the American Arbitration Association. If
28
Landlord and Tenant do not agree to submit such dispute to arbitration and are
not otherwise able to resolve such dispute, either Landlord or Tenant may bring
such dispute to any court of competent jurisdiction for resolution. The
provisions of this Section shall survive the termination or expiration of this
Lease.
19.13 SELF-HELP. Landlord may, but shall not be
obligated to, perform any duty or obligation of the Tenant under this Lease
(including, without limitation, the performance of maintenance, repairs and
replacements pursuant to Section 9) if and to the extent Tenant fails to perform
such duty or obligation and such failure continues for thirty days after written
notice thereof (which thirty day period shall not apply or pertain to any such
failure which creates an emergency situation). If Landlord so elects to cure or
attempt to cure such failure of the Tenant, then all reasonable costs and
expenses incurred by Landlord in curing or attempting to cure such failure,
including without limitation reasonable attorneys' fees and court costs (all
such costs and expenses being hereinafter referred to collectively as the
"Self-Help Expenses") shall be repaid by the Tenant within five business days
after a written request therefor (together with an invoice and reasonable
back-up therefor). The rights and remedies provided for in this Section are
non-exclusive, and nothing herein shall prevent Landlord from exercising any
other right or remedy available to it under this Lease or at law or in equity
(subject to the limitations set forth in this Lease).
19.14 NO MERGER. There shall be no merger of this Lease
nor of the leasehold estate created by this Lease with the fee estate in the
Project Site or any part thereof by reason of the fact that the same person may
own or acquire or hold, directly or indirectly (a) this Lease or the leasehold
estate created by this Lease or any interest in this Lease or in any such
leasehold estate and (b) the fee estate in the Project Site or any part thereof
or any interest in such fee estate and no such merger shall occur unless and
until Landlord, Tenant, each holder of a mortgage on the fee estate in the
Project Site and each holder of a mortgage on the leasehold estate created by
this Lease shall join in a written instrument effecting such merger.
19.15 NOTICE OF TRANSFER. This Lease shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and assigns. Neither party shall assign its interest or delegate its
duties under this Lease without the prior written consent of the other party
(which consent shall not be unreasonably withheld) except that either party may
assign its interest hereunder in connection with a concurrent assignment of its
interest in the ESA made in accordance with the provisions of the ESA, provided
that such assignment hereunder is being made to the same entity to which
assignment is being made under the ESA. In the event of such assignment by
Landlord, the assignee shall have the same notice, cure and assumption rights
under this Lease as is provided to such assignee under Section 10.2(a)(ii) of
the ESA. Subject to the foregoing, the term "Landlord" as used herein means the
owner of the Project Site, and in the event of the sale, assignment or transfer
by such owner of its interest in the Project Site, the Landlord shall promptly
give notice of the fact to Tenant setting forth the name and address of the
transferee, and thereupon, except as otherwise required in connection with any
concurrent assignment of the Landlord's interest in the ESA, the owner selling,
assigning or transferring its interest in the Project Site shall be released and
discharged as Landlord herein from all liabilities and obligations thereafter
accruing and thereupon all such liabilities and obligations shall be binding
upon the transferee.
19.16 NON-LIABILITY. Neither Landlord nor any partner,
joint venturer, director, officer, agent, servant or employee of Landlord shall
be liable to Tenant for any
29
loss, injury or damage to Tenant, or to its property, unless the cause of such
injury, damage or loss was the gross negligence or willful misconduct of
Landlord, its agents, contractors, shareholders, servants or employees.
Landlord's total liability under this Lease shall in all events be limited to
Landlord's interest in the Project Site, or, if applicable, net proceeds derived
from the sale thereof.
[Balance of page intentionally left blank; signature page follows.]
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IN WITNESS WHEREOF, Landlord and Tenant have executed and delivered
this Lease as of the day and year first above written.
ALADDIN GAMING LLC, a NORTHWIND ALADDIN, LLC, a
Nevada limited-liability company Nevada limited-liability company
By: /s/ Ronald Dictrow By: UTT Las Vegas Inc.,
------------------------------ a Nevada corporation, its manager
Ronald Dictrow
Title: Exec. Vice President By: /s/ Donald Petkus
-----------------------------------
Name: Donald Petkus
Title: President
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EXHIBIT A
Description of Project Site
32
EXHIBIT B
Description of Landlord's Property
33