ENERGY SERVICE AGREEMENT
ENERGY SERVICE AGREEMENT, dated as of September 24, 1998,
between Aladdin Gaming, LLC, a Nevada limited-liability company (the
"Customer"), and Northwind Aladdin, LLC, a Nevada limited-liability company
(the "Supplier").
W I T N E S S E T H:
WHEREAS, Customer, in conjunction with the Aladdin Bazaar, LLC
("Bazaar") and Aladdin Music, LLC ("Music") (Customer and Music collectively
are referred to as the "Parties" and each individually as a "Party"), are
developing a resort, casino, shopping and entertainment complex in Clark
County, Nevada to be comprised of the Aladdin Hotel and Casino, the Desert
Passage Mall and a music-themed hotel and casino and certain related
facilities (collectively, the "Complex"); and
WHEREAS, concurrently with the execution of this Agreement, Music
and Bazaar also are executing Energy Service Agreements with the Supplier
(such Energy Service Agreements, together with this Agreement, as any of them
may be amended, restated, modified or supplemented and in effect from time to
time, are collectively referred to herein as the "Complex Energy Service
Agreements"); and
WHEREAS, the Customer is developing a luxury themed hotel of
approximately 2,600 rooms (the "Hotel"), a 116,000 square foot casino (the
"Casino"), a 1,400-seat production showroom, seven restaurants and a newly
renovated 7,000-seat Theatre of the Performing Arts (the "Theatre" and
together with the Hotel and Casino, the "Premises") which will be part of the
Complex; and
WHEREAS, the Customer has entered into an agreement with the
Supplier dated as of December 3, 1997 (the "Development Agreement") to
develop and construct an energy facility (such facility, together with the
Supplier Interconnection Equipment, the "Northwind Facilities") on a 0.64
acre portion of the Complex site to supply hot water, chilled water and
electricity to the Complex, including supplying hot water, chilled water and
electricity to the Premises;
WHEREAS, the Customer intends to purchase its chilled water, hot
water and electricity needs for the premises from the Supplier; and
WHEREAS, the Customer is the beneficiary of a guaranty of Unicom
Corporation (the "Guarantor"), a parent company of the Supplier, dated as of
December 3, 1997 (the "Guaranty") pursuant to which the Guarantor
unconditionally and irrevocably guaranties to the Customer the performance of
the obligations and duties of the Supplier under the Development Agreement
and this Agreement to construct and demonstrate "Final Completion" of the
Plant, subject to a limitation of the lesser of (i) $30 million or (ii) the
"Guaranteed Maximum Price" as finally determined and agreed upon pursuant to
the Development Agreement, plus interim operating costs up to the
"Substantial Completion Date"; and
WHEREAS, the Customer has entered into a lease with the Supplier
dated as of December 3, 1997 (the "Lease") to lease a site (the "Site") to
the Supplier on which the Supplier will construct and operate the Plant
pursuant to the Development Agreement and this Agreement;
NOW, THEREFORE, in consideration of the mutual covenants and
agreements hereinafter set forth, it is hereby agreed between the Supplier
and the Customer as follows:
ARTICLE 1
DEFINITIONS
1.1 DEFINITIONS. As used herein, the terms set forth in Annex A
hereto shall have the meanings specified or referred to in Annex A.
ARTICLE 2
ENERGY SERVICE
2.1 SERVICES; EXCLUSIVITY; RIGHT OF FIRST REFUSAL; PERFORMANCE;
CUSTOMER AGREEMENTS.
(a) PROJECT SCOPE; CUSTOMER ENERGY REQUIREMENTS. The Northwind
Facilities will be engineered, designed and constructed under the terms of
the Development Agreement and in accordance with the design and equipment
parameters set forth in Exhibit A hereto (such Exhibit, as it may be amended,
restated, modified or supplemented and in effect from time to time, is
referred to as the "Project Scope"), to generate and provide to the Complex:
(a) chilled water ("Chilled Water Services"), (b) hot water ("Hot Water
Services"), and (c) primary and secondary AC electricity (up to and including
the initial transformation) generated both by the Northwind Facilities and
third party sources of electricity
("Electricity Services", and together with Chilled Water Services and Hot
Water Services, the "Services"), in capacities which are set forth in Exhibit
A. The characteristics and capacities of the Northwind Facilities have been
agreed upon by the Parties pursuant to the statement of projected energy
requirements for the Complex under the heading "Contracted Demand" set forth
in Exhibit B hereto. (The definitive specifications of the Plant Energy
Requirements are set forth in Exhibit B.1 and the Customer Energy
Requirements are set forth in Exhibit B.2. Exhibit B.1, as it may be
amended, restated, modified or supplemented and in effect from time to time,
is referred to as the "Energy Requirements.")
(b) SERVICES. Subject to the provisions of the Development
Agreement, which govern the Supplier's obligation to engineer, design and
construct the Northwind Facilities, the Supplier agrees that it will provide
Initial Services up to the Initial Energy Requirements to the Customer on the
Initial Services Date and Services to the Customer on the Substantial
Completion Date up to the Energy Requirements.
With respect to Electricity Services, the Northwind Facilities
shall be capable of generating 4.9 megawatts. The Supplier shall have the
sole responsibility for procuring from third party electricity sources, and
providing to the Customer up to the Specified Demand Amount in effect from
time to time, the Electricity Services whether or not generated by the
Northwind Facilities.
(c) EXCLUSIVITY; RIGHT OF FIRST REFUSAL. The Supplier agrees
that, so long as the Customer is not in default hereunder and subject to the
provisions of the following paragraphs of this Section 2.1(c), the Customer
shall have first call on that portion of the Services produced and procured
by the Northwind Facilities necessary to serve the Customer Energy
Requirements set forth in Exhibit B.1. The Customer agrees that, for the
term of this Agreement and thereafter so long as this Agreement remains in
effect, it shall purchase all of its requirements for Services from the
Supplier, except to the extent that, (i) the Customer's requirements for
Services exceed its allocated portion of Services as set forth in Exhibit B.1
and the Supplier does not agree to supply such excess in accordance with this
Section 2.1, or (ii) the Supplier does not supply such Services for any
reason.
If the Northwind Facilities are being operated to meet the Energy
Requirements and the Customer determines that its requirements for one or
more Services exceed those set forth in Exhibit B.1, and if the Northwind
Facilities are then able to supply such additional requirements of Services
(the "Additional Services") and the Supplier has not entered into commitments
to sell such Services to
anyone else other than the Complex Energy Service Agreements, which, while
this Agreement is in effect, the Supplier shall not do without the prior
written consent of the Customer, then the Customer shall have the obligation
to purchase all the Additional Services from the Supplier except as otherwise
permitted by this Section 2.1 and Section 6.1(c) and Section 6.3, and the
Supplier shall be obligated to supply the Additional Services.
In the event that the Customer shall determine that its Services
requirements exceed those set forth in Exhibit B.1 hereto and the provision
of such Services would not require the Plant to exceed the capacities set
forth on Exhibit A hereto and the Supplier has not entered into commitments
to sell such Services to third parties, in accordance with the terms hereof,
then the Supplier shall provide such Services to the Customer at the existing
rates comprising the Consumption Charges applicable to such Services, and
without any increase in the Capacity Charges payable hereunder.
In the event that the Customer shall determine that its Services
requirements exceeds those set forth in Exhibit B.1 hereto and such Services
requirements would cause the Plant to exceed the capacities set forth in
Exhibit A hereto, then the Customer will negotiate in good faith with the
Supplier to reach agreement as to the terms and conditions upon which the
Supplier will provide Additional Services, in accordance with Section
2.1(c)(i)-(v) of this Agreement. Customer may simultaneously solicit bids
from other sources of energy services. Supplier shall have the right to
match the terms and conditions of the lowest tender or proposal within the
bid process set forth below. The terms and conditions of the bid process
shall be as follows:
(i) the Customer shall prepare a statement (the
"Additional Services Request") setting forth specifics of the amount and type
of the Additional Services which the Customer desires to obtain, the period
for which the Additional Services are to be obtained, the date (or dates)
upon which such Services are to commence, any changes to the Customer's
equipment which are contemplated or intended to be made in connection
therewith and such other information as may be relevant, and shall provide a
copy of the Additional Services Request to the Supplier and request the
Supplier to consider providing the Additional Services in accordance with the
Additional Services Request. In the event that the Supplier shall desire
additional information or specifications concerning the matter, the Supplier
shall request such information or specifications in writing and the Customer
shall thereafter provide such additional information or specifications to the
Supplier as
soon as reasonably possible following such request and the Additional
Services Request shall be deemed modified or supplemented to include the same;
(ii) if the Supplier determines that it will offer to
provide the Additional Services requested, then the parties shall negotiate
in good faith the terms upon which the Additional Services shall be provided,
including the amount of additional Contract Capacity Charges payable as a
result of changes to the Plant and increased operations expenses only and
additional Consumption Charges which will be payable by the Customer in
respect thereof and upon reaching agreement with respect thereto the parties
shall thereupon take all actions which are necessary to implement and carry
out such agreement, including negotiating and executing any relevant
documents or agreements (or amendments to existing documents and agreements)
including an appropriate amendment to the Project Scope and to the Contract
Capacity Charge and the Consumption Charges;
(iii) in addition to the above paragraphs (i) and (ii), the
Customer may simultaneously provide the Additional Services Request to any
other Person or Persons and solicit offers to provide the Additional Services
from such other Person or Persons and if any of such other Persons responds
with an offer to provide the Additional Services and the Customer determines
that it intends to accept such an offer, then the Customer shall give written
notice thereof to the Supplier which notice shall include a summary of the
terms and conditions of the offer which the Customer intends to accept (the
"Offer"). In the event that the Supplier desires additional information or
clarification concerning the Offer, the Supplier shall request the same in
writing within four (4) days of the date upon which it receives the
notification and the Customer shall thereafter provide such additional
information or clarification to the Supplier as permitted under the terms of
the Offer as soon as reasonably possible following such request and the Offer
shall be deemed modified or supplemented to include the same;
(iv) the Supplier shall have ten (10) days from the date
upon which it receives the notification (or ten (10) days from the date upon
which it receives any additional information or clarification requested)
under clause (iii) above that the Customer intends to accept the Offer to
determine if the Supplier is willing to provide the Additional Services on
the terms of the Offer and, if it is so willing, to so indicate to the
Customer by written notice thereof to the Customer (the "Notice of Exercise")
given within such ten (10) day period stating that the Supplier will provide
the Additional Services on the terms and conditions set forth in the Offer,
whereupon the Supplier shall be deemed to have made an offer to the Customer
to provide the Additional Services on the terms and conditions set forth in
the Notice of Exercise and the Offer and the Customer shall be deemed to have
accepted such offer by the Supplier. Notwithstanding anything to the contrary
contained herein, if the Supplier is unwilling or unable to match the Offer,
the Customer shall have the right to purchase the Additional Services from
such other Person or Persons;
(v) the Customer and the Supplier shall thereupon take
all actions which are necessary to implement and carry out the arrangements
and undertakings contemplated by the Notice of Exercise and the Offer,
including negotiating and executing any relevant documents or agreements (or
amendments to existing documents and agreements), including an appropriate
amendment to the Project Scope and to the Contract Capacity Charge and the
Consumption Charges.
In the event that any Additional Services Request contemplates
increasing services in two or more phases, then, unless the Supplier and the
Customer shall then agree otherwise, each such phase shall be deemed to be
subject to a distinct right of first refusal hereunder and the Customer shall
be required to comply with the procedures set forth herein with respect to
each such phase.
(d) PERFORMANCE. At all times while this Agreement is in
force, but subject to the terms hereof, the Supplier will operate the
Northwind Facilities to comply with the Project Scope and all applicable
federal, state and local codes, laws, rules and regulations. The Supplier's
obligations will include, but not be limited to, (i) performing all
day-to-day operations, routine testing, normal maintenance, service and
repair of the Northwind Facilities; (ii) the estimating, scheduling,
coordinating and monitoring the performance of any extraordinary service,
maintenance, repair, improvement or modification to the Northwind Facilities;
(iii) carrying out such performance tests of equipment as is required under
this Agreement or otherwise reasonably requested by the Customer; (iv)
coordinating maintenance and power deliveries with the Customer and (v)
providing for the handling and disposal of chemicals and hazardous materials
at and from the Site; and (vi) subject to Section 5.7, obtaining and
maintaining all required licenses, permits, approvals and clearances to
provide the Services and operate the Northwind Facilities. The Supplier
shall at all times maintain the appropriate operating personnel at the
Northwind Facilities, twenty four (24) hours per day, seven (7) days per
week. The Supplier agrees to coordinate matters with those parties designated
by the Customer to be the Customer's representative with respect to this
Agreement or portions thereof.
The Customer shall have the right, upon at least twenty four (24)
hours' advance notice, or no notice in the event of an emergency, to inspect
the operation of the Northwind Facilities during normal business hours and to
review the Supplier's maintenance and operating records to assure compliance
with this Section 2.1(d).
2.2 CHILLED WATER.
(a) Commencing on the Commencement Date, the Supplier agrees to
supply at the Chilled Water Delivery Point and the Customer agrees to
purchase the Customer's requirements of Chilled Water Service up to the
capacity or capacities described in Exhibit B.2 under the heading "Contracted
Demand". Chilled water the Supplier provides under this Agreement shall not
be intermixed by the Customer with any other water or other substances
without the prior written consent of the Supplier, which consent shall not be
unreasonably withheld.
(b) The Supplier shall ensure that the chilled water is
delivered to the Chilled Water Delivery Point at a design temperature of not
more than 36 degrees Fahrenheit, measured at the Chilled Water Delivery Point.
(c) Provided that the Supplier is in compliance with Section
2.2(b) above, the Customer will ensure that all chilled water supplied
hereunder is returned to the Supplier at the Chilled Water Return Point at a
temperature not less than 20 degrees Fahrenheit in excess of the temperature
at which such chilled water was supplied and otherwise uncontaminated in any
material respect and in the condition in which it was received. In the event
Customer fails to comply with this Section 2.2(c), the Supplier may elect, as
its sole remedy (other than as set forth in Section 6.2(a) and Section 6.3(a)
with respect to a Payment Default), to determine the actual cost(s) to the
Supplier of such failure and invoice the Customer on the next monthly invoice
under Section 2.7 for such amount(s) as additional Consumption Charges
hereunder. In such event, the Supplier shall notify the Customer of such
action and such invoice(s) shall be accompanied by detailed calculations
demonstrating the manner in which such additional Consumption Charges have
been determined, and such additional Consumption Charges shall thereupon be
payable in accordance with Section 2.8.
2.3 HOT WATER.
(a) Commencing on the Commencement Date, the Supplier agrees to
supply at the Hot Water Delivery Point and the Customer agrees to
purchase the Customer's requirements of Hot Water Services up to the capacity
or capacities described in Exhibit B under the heading "Customer Energy
Requirements." Hot water the Supplier provides under this Agreement shall
not be intermixed by the Customer with any other water or other substances
without the prior written consent of the Supplier, which consent shall not be
unreasonably withheld.
(b) The Supplier will ensure that the hot water is delivered to
the Hot Water Delivery Point at a design temperature of not less than 180
degrees Fahrenheit, measured at the Hot Water Delivery Point.
(c) Provided that the Supplier is in compliance with Section
2.3(b) above, the Customer will ensure that all hot water supplied hereunder
is returned to the Supplier at the Hot Water Return Point at a temperature at
least 35 degrees Fahrenheit less than the temperature at which it was
delivered and otherwise uncontaminated in any material respect and in the
condition in which it was received. In the event Customer fails to comply
with this Section 2.3(c), the Supplier may elect to determine the actual
cost(s) to the Supplier of such failure and invoice the Customer on the next
monthly invoice under Section 2.7 for such amount(s) as additional
Consumption Charges hereunder. In such event, the Supplier shall notify the
Customer of such action and such invoice(s) shall be accompanied by detailed
calculations demonstrating the manner in which such additional Consumption
Charges have been determined, and such additional Consumption Charges shall
thereupon be payable in accordance with Section 2.8.
2.4 ELECTRICITY. Commencing on the Commencement Date, the Supplier
shall make available at the Electricity Delivery Points electricity to meet
all of the Customer's primary and secondary AC electricity (up to and
including the initial transformation -- i.e., immediately prior to the
Customer Interconnection Equipment) needs for the Premises, up to the
Specified Demand Amount then in effect.
2.5 CHARGES. In consideration of the Supplier's undertakings
hereunder, the Customer shall pay to the Supplier, when and in the manner
required by Section 2.8, the following charges, as the same may be adjusted
from time to time pursuant to Section 2.6 and any other applicable provisions
of this Agreement:
(a) CONTRACT CAPACITY CHARGE - a monthly Contract Capacity
Charge for Customer's share of the capital cost of the Plant determined in
accordance with Exhibit C hereto, as the same may be amended, restated,
modified or supplemented and in effect from time to time, for each month or
portion thereof
occurring after the Commencement Date, whether or not any Services are taken
by the Customer during such month; and
(b) CONSUMPTION CHARGE - a monthly Consumption Charge for
Services actually taken by the Customer during each month or portion thereof
occurring after the Substantial Completion Date, determined in accordance
with Exhibit C hereto, as the same may be amended, restated, modified or
supplemented and in effect from time to time, for each month or portion
thereof occurring after the Substantial Completion Date.
The Contract Capacity Charge shall be paid by the Customer monthly in
accordance with Section 2.8 so long as this Agreement remains in force and
has not been terminated, whether or not the Customer actually takes or uses
any Services and, except as provided for in Section 6.1(c), whether or not
there shall exist a default by the Supplier in any of its obligations
hereunder.
2.6 ADJUSTMENTS.
(a) On each annual anniversary of the Commencement Date, the
Contract Capacity Charge and the Consumption Charges for the Contract Year
then beginning shall be adjusted as set forth in Section 2.6 (b) and in
accordance with Exhibit C.
(b) The Supplier shall adjust the Contract Capacity Charge
payable during the remaining term hereof then in effect and the Consumption
Charges to reflect any changes in Supplier's costs of providing any Service
that results directly from the adoption or modification of any applicable
laws, rules or regulations of any governmental authority, or from any change
in the interpretation by any court, tribunal or regulatory agency of any such
applicable laws, rules or regulations or any other Force Majeure Event, after
the date of this Agreement, and such adjustment shall become effective
immediately upon notice of the adjustment to Customer.
2.7 SERVICE INVOICES. On or about the first day of each month,
beginning with the first month which commences after the Substantial
Completion Date, the Supplier shall deliver to the Customer a monthly invoice
which reflects any Consumption Charges for the prior month just ended.
Beginning with the first invoice delivered following the Commencement Date,
such invoice shall also reflect the Contract Capacity Charge for the month
then beginning and any other amounts then owing by the Customer under this
Agreement. In the event that the
Commencement Date is a date other than the first day of a calender month,
then the first invoice for Contract Capacity Charges shall also include a
prorated Contract Capacity Charge for the portion of the immediately
preceding month occurring after the Commencement Date. In the event that the
term of this Agreement ends on a date other than the first day of a calender
month, then the Contract Capacity Charge for the final month shall be
prorated accordingly.
2.8 PAYMENT. Payment of each invoice shall be due in full, on or
before the thirtieth (30th) day following the date each invoice is received
by the Customer (each a "Due Date"). The Customer shall make each payment
invoiced by the Supplier when due without any further notice or demand,
without offset of any kind, and irrespective of dispute to the amount of such
invoice or otherwise, except as provided for in Section 6.1(b). In addition
to any actions which the Supplier may take during the continuance of a
Customer Default, whether at law or in equity or otherwise, a service charge
shall be imposed if payment of an invoice is not received within thirty (30)
days after such invoice is delivered to the Customer equal to one and
one-half percent (1.50%) per month, or the maximum legal rate, whichever is
less, on the unpaid balance of such invoice for the period from the fifteenth
(15th) day after such invoice was delivered through and including the date of
payment thereof (calculated using actual days elapsed and a year of 365 or
366 days, as applicable).
2.9 TAXES. In addition to the Contract Capacity Charges and the
Consumption Charges payable hereunder, the Customer will pay all Taxes,
including, without limitation, any Taxes which the Supplier is required to
collect, except to the extent that such Taxes have been included in
determining the Contract Capacity Charges then payable.
ARTICLE 3
MAINTENANCE OF EQUIPMENT, SYSTEMS AND METERS
3.1 MAINTENANCE OF SUPPLIER INTERCONNECTION EQUIPMENT.
(a) At all times while this Agreement is in force, the Supplier
shall operate and maintain the Supplier Interconnection Equipment, in
accordance with the O&M Specifications. If any of the Supplier
Interconnection Equipment is damaged or destroyed as a direct result of the
acts of the Customer or its agents, employees, tenants, customers,
contractors or other Persons for whom the Customer is responsible, then the
Customer shall be liable for the cost of the required repair or replacement.
(b) The Supplier, its agents and employees will not authorize
or knowingly permit any Person, except a duly authorized employee or agent of
the Supplier or the Customer, to operate, maintain, alter or otherwise affect
the Supplier Interconnection Equipment or any component thereof or any
equipment of the Customer, to break or replace any seal or lock of the
Supplier or the Customer, or to alter or interfere with the operation of any
item of equipment installed by the Customer.
(c) The Supplier will not modify the Supplier Interconnection
Equipment in any material respect without the prior written consent of the
Customer, which consent shall not be unreasonably withheld. The Supplier's
operations or equipment shall not adversely affect the Customer's ability to
receive the Services in accordance with the provisions hereof and the
Exhibits attached hereto and, in the event they do, the Supplier shall, at
its own expense, except as set forth in Section 3.2, make such reasonable
changes in its operations or equipment as are necessary to restore capacity
in respect of the Services.
3.2 CUSTOMER'S EQUIPMENT.
The Customer will notify the Supplier of substantial
modifications it makes to the operating equipment and systems of the Premises
and will be responsible for the maintenance of such equipment and systems.
The Customer will not modify its equipment so as to adversely affect the
Supplier's ability to deliver or the Customer's ability to receive the
Services, or, if it does, the Customer shall, at its own expense, make such
reasonable changes in its equipment as are necessary to permit the Supplier
to deliver, and the Customer to receive, the Services in the capacities
required hereby.
3.3 METERING.
(a) The Supplier will provide metering equipment to measure the
delivery of electricity to the Customer, the quantity of chilled water and
hot water delivered to the Customer and the temperature at the Chilled Water
Delivery Points and the Hot Water Delivery Points, respectively, of the
chilled water and hot water being delivered to, and returned by, the
Customer. Electrical meters shall be placed on the secondary site of each
transformer, and the results of the electrical metering shall be based on
coincidental demand. All metering equipment will be furnished, paid for,
owned and maintained by the Supplier. All such metering equipment shall be
of the type which provides, and preserves a continuous flow of the relevant
data
twenty four (24) hours per day; all parties shall have full right of access
to all such data and printouts thereof at all times and without reference to
the other parties. The Supplier will regularly test its metering equipment
in accordance with the manufacturer's recommendations but not less than two
(2) times per year and, if requested by the Customer, will conduct such tests
in the presence of a representative of the Customer. All testing shall
include recalibration. If requested by the Customer, the Supplier will
conduct such testing on additional occasions; PROVIDED, that unless such
testing indicates that the tested equipment provides metering results which
are inaccurate by three percent (3%) or more with respect to water or by
one-half of one percent (0.5%) or more with respect to electricity in a
manner which is adverse to the Customer, the Customer will pay all
out-of-pocket costs and expenses incurred by the Supplier in conducting such
additional tests. The Supplier will maintain an accurate log or record of
all tests, whether initiated by the Supplier or the Customer, and will make
the results of such tests available in a comprehensible manner to the
Customer promptly upon request.
(b) If any test of the metering equipment reveals equipment
that has failed to accurately record consumption of the Services metered
thereby, the Supplier shall restore such metering equipment to a condition of
accuracy or replace it. If the metering equipment is in error by three
percent (3%) or more with respect to water or by one-half of one percent
(0.5%) or more with respect to electricity, then the Supplier will repair or
replace such defective metering equipment within a reasonable period after
receiving notice or becoming aware thereof and an adjustment shall be made in
respect of the Consumption Charges for such Service in accordance with clause
(d) below.
(c) The regular meter reading and billing period will be
monthly. If more than one meter is installed on the Premises, the readings of
all meters will be used in calculating the invoice with respect thereto.
(d) If the Supplier's metering record is interrupted at any
time for any reason, or is found to be inaccurate and in need of repair or
replacement under Section 3.3(b), the measurement of Services to be billed
for such period of interruption, or for the period from the last test of the
affected meters which shows them to have been operating within the acceptable
limits of error under Section 3.3(b) through the date upon which such meters
are corrected, will be estimated by the Supplier, acting reasonably, based
upon past Customer usage during a similar period and under similar conditions
if such information is available (and if such information is not available,
based upon fuels consumed during such period and any other relevant
information and/or bases which may reasonably be used for such
purpose in the circumstances), and the Customer will pay invoices during such
period based on the estimated measurement; subject to the Customer's right to
withhold up to $12,500 in the aggregate from invoices based on estimates in
any such period and dispute the same in good faith if the Customer reasonably
disagrees with such estimated measurement.
(e) The Customer will provide to Supplier, without charge,
adequate space, power and access on the Premises for the housing and
maintenance of all metering and related equipment and other equipment related
to the delivery of Energy which the Supplier provides to comply with its
obligations hereunder; PROVIDED, however, that the Supplier shall act in
accordance with all reasonable safety and security rules, regulations and
policies then in effect on the Customer's property or other reasonable rules
or requirements which the Customer may impose, and the Supplier's use shall
in no way materially adversely affect the Customer's other activities at the
Premises.
ARTICLE 4
REPRESENTATIONS, WARRANTIES AND COVENANTS
4.1 MUTUAL REPRESENTATIONS.
(a) Each party represents and warrants to the other that it has
the requisite limited-liability company capacity to enter into this Agreement
and fulfill its obligations hereunder, that the execution and delivery by it
of this Agreement and the performance by it of its obligations hereunder have
been duly authorized by all requisite action of its members, and by its board
of directors or other governing body, and that, subject to compliance with
any applicable regulatory laws or regulations governing the sale or delivery
of the Services, the entering into of this Agreement and the fulfillment of
its obligations hereunder does not contravene any law, statute or contractual
obligation of the party giving the representation or warranty.
(b) Each party represents and warrants to the other that no
suit, action or arbitration, or legal administrative or other proceeding is
pending or has been threatened against the representing party that would
affect the validity or enforceability of this Agreement or the ability of the
representing party to fulfill its commitments hereunder, or that could result
in any material adverse change in the business or financial condition of the
representing party.
4.2 SUPPLIER REPRESENTATIONS. The Supplier hereby represents and
warrants to the Customer that, as of the date of this Agreement, the Supplier
is an indirect wholly-owned subsidiary of Unicom Corporation.
4.3 SUPPLIER COVENANTS.
(a) CONTINGENCY PLAN. The Supplier covenants that it shall be
responsible for developing a written contingency plan, with the technical
assistance of the Customer, setting forth an agreed upon process for dealing
with interruptions to Services, which contingency plan shall have as its goal
minimizing the duration and effect of such interruptions to Services.
Because the contingency plan may require the purchase or lease of equipment,
the parties shall use their best efforts to agree upon the contingency plan
on or before the date upon which the "Guaranteed Maximum Plant Price" is
fixed under the Development Agreement. If the parties are unable to agree
upon the contingency plan on or before such date, then the Supplier shall be
entitled to require an increase in the Guaranteed Maximum Plant Price with
respect to any items required by the final contingency plan agreed upon which
terms were not included in determining the Guaranteed Maximum Plant Price.
In order to facilitate the process of establishing the contingency plan,
within 120 days after the date of receipt of the Notice to Proceed by the
Supplier, the Supplier will prepare an initial draft thereof and provide the
same to the Customer, which, within fifteen (15) days of receipt thereof,
shall review the same and provide written comments with respect thereto to
the Supplier, or, if the Customer deems such plan to be satisfactory, then
the Customer shall provide written confirmation of such satisfaction to the
Supplier within such fifteen (15) day period. (In the absence of any written
comments from the Customer within such fifteen (15) day period, the Supplier
shall be entitled to presume that the Customer is satisfied with such plan as
provided.) In the event that the Customer provides comments, the parties
will meet to review the same and seek in good faith to incorporate such
comments into the agreed final plan.
(b) OWNERSHIP OF NORTHWIND. The Supplier covenants that it
shall not permit any transfer of any membership interest in the Supplier by
the sole member of the Supplier as of the date of this Agreement, and not to
issue any new membership interests in the Supplier, except as provided for in
Section 10.2, without the prior written consent of the Customer (such consent
not to be unreasonably withheld).
(c) THIRD PARTY ENERGY SERVICE AGREEMENTS. The Supplier
covenants that it shall not modify the Energy Service Agreement entered into
by the
Supplier with Music without Customer's prior written consent, provided such
consent is not unreasonably withheld (provided, however, that Customer's
consent shall not be required in the event of a Payment Default), and that
such Agreement is in force substantially identical to this Agreement.
ARTICLE 5
ADDITIONAL AGREEMENTS
5.1 CONDITIONS PRECEDENT TO EFFECTIVENESS.
(a) The Supplier and the Customer agree that this Agreement and
the obligations of the parties hereunder shall not become effective until
each of the following conditions has been satisfied:
(i) all exhibits to this Agreement shall have been agreed
upon in definitive form, initialed by the parties and attached hereto, it
being agreed and acknowledged that certain of the exhibits attached hereto on
the date of execution of this Agreement have been identified as "preliminary"
and are subject to further refinement as agreed by the parties, within
specified applicable time limits identified herein, in connection with
finalization of the plans and specifications for the Premises;
(ii) the Supplier shall have entered into a construction
agreement in form and terms reasonably satisfactory to the Supplier providing
for the construction of the Northwind Facilities; and
(iii) Financial Closing shall have occurred and the
Customer shall have become the fee owner of the "Aladdin Lands" (as such term
is defined in the Development Agreement), subject to any Customer
obligations to convey portions thereof to Bazaar and Music.
(b) In addition, it shall be a condition precedent to the
initial obligation of the Supplier to deliver any Service hereunder on the
date when such Service is first required to be provided by it hereunder that
(i) the Customer shall have complied in all material respects with all of its
covenants and Agreements contained herein to be complied with during the
period from the date hereof to the date upon which such Service is to be
delivered, and (ii) the Customer shall have provided to the Supplier evidence
reasonably satisfactory to the Supplier that the Customer has obtained or is
or will use all reasonable efforts to obtain all clearances, permits,
licenses and approvals which are necessary for the Customer to construct
and/or operate the Premises as contemplated hereby and receive such Services
from the Supplier as of such date.
(c) In addition, it shall be a condition precedent to the
initial obligation of the Customer to receive any Service hereunder on the
date when such Service is first required to be provided hereunder or to pay
Contract Capacity Charges or Consumption Charges otherwise required to be
received by it hereunder that: (i) the Supplier shall have complied in all
material respects with all of its covenants and Agreements contained herein
to be complied with during the period from the date hereof to the date when
such Service is to be delivered, and (ii) the Supplier shall have provided to
the Customer evidence reasonably satisfactory to the Customer that the
Supplier has obtained or will use all reasonable efforts to obtain all third
party clearances, permits, licenses and approvals which are necessary for the
Supplier to construct and/or operate the Northwind Facilities as contemplated
hereby.
5.2 INSURANCE. The respective insurance requirements for the
Supplier and the Customer are set forth in Exhibit E attached hereto, and
shall be maintained throughout the term of this Agreement. The liability of
each party under this Agreement to the other party shall not be diminished by
the insurance limitations set forth in said Exhibit E, except as set forth in
below in this Section 5.2. All insurance policies required by this Section
shall provide that such policies may not be cancelled or terminated without
thirty (30) days prior written notice to the Customer, Customer's lenders and
the Supplier. All liability insurance policies of Supplier and all insurance
policies of Customer shall name the Customer's lender as an additional
insured.
Each party hereto agrees that the insurance described above to be
provided by the other party may be provided through blanket coverages which
may be provided in whole or in part through a policy or policies covering
other liabilities and locations of the party obligated to provide such
insurance and its affiliates.
Each party hereby releases, to the extent legally possible for it
to do so without invalidating its insurance coverages, for itself and on
behalf of its insurer, the other party hereto and its respective officers,
directors, agents, members, partners, servants and employees from liability
for any loss or damage to any or all property located on the Aladdin Lands
which loss or damage is of the type and within the limits covered by the
"all-risk" property damage insurance and other property/casualty insurance
which the parties have agreed to obtain and maintain in effect pursuant to
this Section 5.2, irrespective of any negligence on the part of the
released party and its respective officers, directors, agents, members,
partners, servants or employees, which may have contributed to or caused such
loss or damage. Each party covenants that it will, if available, obtain for
the benefit of the other party and its officers, directors, agents, members,
partners, servants and employees, a waiver of any right of subrogation which
the insurer of such party may acquire against such 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 paragraph, then, during any period of
time when such waiver is unobtainable, said party shall not have been deemed
to have released any subrogated claim of its insurance carrier against such
party (or its respective officers, directors, agents, members, partners,
servants and employees), and during the same period of time, such other party
shall not have been deemed to have released the party which has been unable
to obtain such waiver (or such party's respective officers, directors,
agents, members, partners, servants, or employees) from any claims it or its
insurance carrier may assert which otherwise would have been released
pursuant to this Section 5.2.
5.3 CONFIDENTIAL INFORMATION. The Customer and the Supplier each
agree to treat in confidence all information regarding this Agreement and the
performance by the parties of their obligations hereunder and all information
which either the Customer or the Supplier will have obtained from the other
party in contemplation of entering into, or in the performance of, this
Agreement and not make any use of any of such information for any purpose
other than complying with its obligations under this Agreement and the
Related Agreements. Such information will not be communicated to any Person
other than the Customer, the Supplier, Aladdin Bazaar, LLC and Aladdin Music,
LLC and their respective officers, directors, employees, members, agents,
attorneys and professional consultants, except to the extent disclosure of
such information:
(a) is required by law or governmental authority;
(b) is made by a party pursuant to litigation in which such
party is a party;
(c) is made to any lender or prospective lender to such party
(PROVIDED such lender or prospective lender agrees in writing to keep such
information confidential on the terms set forth in this Section 5.3); or
(d) is made to a Person under contract with the disclosing party,
or to which the disclosing party wishes to sell or assign all or part of its
business or an equity interest in such Person in a transaction permitted hereby,
which Person has given a confidentiality undertaking which is substantially
similar to this one.
If either party is required to disclose confidential information pursuant to
clause (a) above, such party will take reasonable steps to limit the extent
of the disclosure and to make such disclosure confidential under the
circumstances and will, to the extent it reasonably can do so in the
circumstances, afford the other party hereto notice of such request for
disclosure so as to permit such other party to seek an appropriate protective
order or other means by which such information may be maintained in
confidence pursuant to such disclosure. Information provided by a party
hereunder will remain the sole property of the party providing such
information. The obligation of each party to treat in confidence, and not to
use, information which it will have obtained from the other party will not
apply to any information which (x) is or becomes available to such party from
a source not otherwise under obligations of confidentiality with respect
thereto, other than the party providing such information, or (y) is or
becomes available to the public other than as a result of disclosure by such
party or its agents in breach of this Section 5.3.
5.4 FINANCIAL INFORMATION. The Customer agrees to provide to the
Supplier from time to time the following financial information concerning the
Customer:
(a) copies of all definitive documentation governing
indebtedness incurred by the Customer to finance (or refinance) the
construction of the Premises;
(b) until such time, if ever, as the Customer becomes a
reporting company under the Securities Exchange Act of 1934, as amended (or
any successor statute thereto), copies of all monthly, quarterly and annual
financial statements and forecasts which the Customer is obligated to provide
to its lenders or to the trustee in respect of the 13.5% Senior Discount
Notes Due 2010 to be issued by certain Affiliates of the Customer, which
financial statements and forecasts will be provided concurrently or promptly
after they are provided to such lenders and/or such trustee;
(c) in the event that the Customer or its parent entity shall
file a registration statement under the Securities Act of 1933, as amended
(or any successor statute thereto), the Customer will provide a copy of such
registration statement (including any preliminary prospectus contained
therein) to the Supplier promptly after the same has been filed with the
United States Securities and Exchange Commission, or any successor entity
thereto (the "SEC"); and
(d) from and after the date, if ever, upon which the Customer
or its parent entity shall become a reporting company under the Securities
Exchange Act of 1934, as amended (or any successor statute thereto), in lieu
of the financial statements required by the preceding clause (b), the
Customer will provide to the Supplier, by hard copy or electronically,
promptly after filing of the same with the SEC, copies of all reports and
financial statements filed with the SEC, including, but not limited to, any
reports on any of Form S-K, Form 10-K or Form 10-Q and any annual reports to
shareholders.
All such financial information, other than information which is contained in
filings with the SEC, shall be received and held in confidence and shall not
be used or disclosed by the Supplier except as permitted by Section 5.3
hereof with respect to the confidential information provided by the Customer
to the Supplier.
5.5 TRANSFER OF INFORMATION TO CUSTOMER PURSUANT TO SALE. The
Supplier hereby agrees that in the event that the Customer acquires the
Northwind Facilities pursuant to Section 6.3, 6.4 or 9.3, the Supplier will
provide the Customer with copies of all specifications, manufacturers'
warranties, design drawings, operating manuals and maintenance records for
the Northwind Facilities, as well as other information concerning the design,
operation and maintenance of the Northwind Facilities which are in the
possession or control of the Supplier and which are relevant or reasonably
necessary to the Customer's ownership or operation of the Northwind
Facilities and will transfer to the Customer all of the Supplier's right,
title and interest in and to such materials and items, which transfer shall
be without recourse and without representation or warranty as to title to any
such materials or items.
5.6 FUEL AND ELECTRICITY ARRANGEMENTS. From time to time, as the
Customer may reasonably request, the Supplier shall provide the Customer with
information concerning the Supplier's arrangements then in effect with
respect to the purchase of fuels for use in providing Services hereunder and
with respect to obtaining electricity from third party providers. The
Supplier agrees that it shall use
best efforts to obtain economical and reliable sources of fuels and
electricity from third party providers.
5.7 REGULATORY COMPLIANCE RE ELECTRICITY.
(a) The provisions of this Section 5.7 shall not in any way
affect the obligation of the Supplier to construct and demonstrate "Final
Completion" (as such term is defined in the Development Agreement) of the
Northwind Facilities, or to provide Chilled Water Service or Hot Water
Service or to procure and provide to the Customer electricity up to the
Specified Demand Amount applicable from time to time under this Agreement.
The parties acknowledge that the generation, distribution, transmission
and/or sale of Electricity Services by the Supplier hereunder may cause the
Supplier and/or its Affiliates to be subject to compliance with or obtaining
exemption from certain federal and Nevada laws and regulations. The Supplier
agrees, for itself and its Affiliates, subject to Section 5.7(b) hereof, to
comply with, or obtain the necessary exemption from, any applicable laws and
regulations affecting the Supplier's generation, distribution, transmission
and/or sale of Electricity Services hereunder such that, on the Substantial
Completion Date, the Supplier will lawfully be able to provide, or cause to
be provided, such Electricity Services to the Customer. The Customer, in
turn, agrees to comply with any request of the Supplier which the Customer,
in its good faith judgment, deems reasonable in connection with such
regulatory compliance, including, without limitation, a request to amend this
Agreement, the Lease or the Development Agreement in any way reasonably (in
the good faith judgment of the Customer) necessary in the circumstances, so
long as, as a result thereof, (i) the reliability of the Electric Services
provided to the Customer is not adversely affected, (ii) the Supplier's
responsibility to comply with its obligations in accordance with this
Agreement, the Development Agreement and the Lease remains in full force and
effect, (iii) the fees paid by the Customer pursuant to this Agreement are
not increased, and (iv) the Customer's costs and expenses of any such action
will be borne solely by the Supplier, providedthat this subsection (iv) shall
not apply to the extent such action becomes reasonably necessary, in whole or
in part, as a result of a change in the Customer's circumstances.
(b) The Customer agrees that, provided the Supplier uses best
efforts to comply or obtain any necessary exemption from any applicable
federal and Nevada laws and regulations, the Supplier need not become a
"public utility" under Nevada law in order to comply with its obligations
under this Agreement and Unicom Corporation need not, solely as a result of
Supplier's compliance with its obligations under this Agreement, become a
registered holding company pursuant to
the Public Utility Holding Company Act of 1935 ("PUHCA"), as amended.
Subject to the foregoing, the Customer and the Supplier agree to the
following:
(i) Notwithstanding any other provisions in this Agreement,
from the Substantial Completion Date to March 1, 2000, the Supplier shall
only be obligated to provide the Customer with electricity produced by the
Northwind Facilities;
(ii) The Supplier shall use best efforts to ensure that on or
before March 1, 2000 it will be able to provide to the Customer, pursuant
to the terms of this Agreement, the Electricity Services as defined in
Section 2.1; best efforts shall not include requiring the Supplier to
become a "public utility" under Nevada law, but shall include, if
necessary to meet the Supplier's obligations, certification of the
Northwind Facilities as a "Qualifying Facility" as defined in the Public
Utility Regulatory Policies Act of 1978, as amended, and the regulations
implementing such Act promulgated by the Federal Energy Regulatory
Commission, as amended; provided that in order to certify the Northwind
Facilities as a Qualifying Facility, the Supplier shall be permitted to
transfer a membership interest in the Supplier to a third party, provided
the Supplier obtains the Customer's prior written approval, such approval
not to be unreasonably withheld or delayed, and provided the Supplier
allows the Customer the right of first refusal to acquire the requisite
membership interest in the Supplier;
(iii) For so long as the Supplier is lawfully able to do so
without becoming a "public utility" under Nevada Law, after March 1, 2000,
the Supplier shall provide the Customer its Electricity Services, which
shall include both electricity generated by the Supplier and electricity
otherwise obtained by the Supplier for the Customer; provided, however
that such electricity not generated by the Supplier shall be provided by
the Supplier to the Customer pursuant to and as part of this Agreement; or
(iv) In the event the Supplier, despite its best efforts, is
unable to provide the Electricity Services without becoming a "public
utility" under Nevada Law or a registered holding company under PUHCA,
then after March 1, 2000:
1. the Supplier shall sell to the Customer and the
Customer shall purchase from the Supplier all electricity generated
by the Northwind Facilities;
2. the Supplier shall be required to obtain on its
own behalf, from a third party, electricity required to serve the
Northwind Facilities;
3. the Customer shall contract with a third party of
its choosing to supply the Customer with the electricity required by
the Customer not generated by the Supplier at the Northwind
Facilities. Such contract shall be of the shortest term practicable
to ensure that the rates, terms and conditions thereof are
commercially reasonable (and the Customer and the Supplier shall use
reasonable efforts to coordinate their purchases under clauses (iv)2
and (iv)3 to seek to obtain advantageous rates);
4. the Supplier guarantees to the Customer that the
blended rate paid by the Customer after March 1, 2000 for
electricity, such blended rate to include the rate paid by the
Customer to the Supplier and by the Customer to the third party
Supplier pursuant to the previous subparagraph 3, shall be lower
than the rate then charged by Nevada Power Company to customers with
a load comparable to the Customer's load (the "Rate Standard"). The
Customer shall provide the Supplier with yearly statements, if
applicable, establishing that the blended rate paid by the Customer
for such year was not lower than the Rate Standard for such year.
In such event, and within thirty (30) days of receipt of such
statement, the Supplier shall make a payment to the Customer
sufficient to give the Customer a blended rate which is lower than
the Rate Standard.
(v) The Customer agrees that in the event the Supplier
subsequently becomes able to provide the total Electric Services to the
Customer without being considered a "public utility" under Nevada law,
then the Customer shall purchase the total Electricity Services from the
Supplier in accordance with the terms of this Agreement upon the
expiration of any third party contract(s) described above in Section
5.7(b)(iv)(3) then in effect.
ARTICLE 6
DEFAULTS AND REMEDIES
6.1 SUPPLIER DEFAULTS.
(a) PERFORMANCE FAILURES.
(i) the occurrence of any of the following events shall
constitute a "Performance Failure":
1. if, at any time after the Substantial Completion
Date and for any reason other than a Force Majeure Event, chilled
water is not provided to the Supplier's side of the Chilled Water
Delivery Point at 13,905 gallons per minute and 42 degrees
Fahrenheit or lower;
2. if, at any time after the Substantial Completion
Date and for any reason other than a Force Majeure Event, hot water
is not provided to the Supplier's side of the Hot Water Delivery
Point at 2882 gallons per minute and 200 degrees Fahrenheit or
higher; or
3. if, at any time after the Initial Services Date
but prior to the Substantial Completion Date for any reason other
than a Force Majeure Event, chilled water is not provided to the
Supplier's side of a Chilled Water Delivery Point at 4800 gallons
per minute and 46 degrees Fahrenheit or lower.
(ii) ACTIONS TO BE TAKEN. Promptly upon becoming aware of a
Performance Failure (whether by notice thereof from the Customer or by the
Supplier's monitoring of its systems and the operation of the Northwind
Facilities or otherwise) the Supplier shall:
1. immediately seek to determine the cause of such
Performance Failure and shall apprise the Customer of the Supplier's
conclusion as to such cause as quickly as possible and provide the
Customer with a corrective action plan consistent with the
Contingency Plan, which the Supplier will implement at its sole cost
and expense where the Performance Failure is for any reason other
than a Force Majeure Event, except that such implementation with
respect to a Performance Failure described in Section 6.1(a)(i)3
will be at the Customer's expense, and use its best efforts to
accommodate any changes thereto which the Customer reasonably
requests;
2. commence implementation of such corrective action
plan, using all best efforts to correct or cure such Performance
Failure in the shortest period of time;
(iii) ADDITIONAL MEASURES. In addition to the above,
immediately upon becoming aware of a Performance Failure, Supplier shall allow
Customer or Customer's agents immediate access to the Northwind Facilities and
permit Customer full inspection rights of the Northwind Facilities.
(b) SERVICE FAILURES.
(i) the occurrence of any of the following events shall
constitute a "Service Failure":
1. if, at any time after the Substantial Completion
Date and for any reason other than a Force Majeure Event, chilled
water is not provided to the Supplier's side of the Chilled Water
Delivery Point at 13,905 gallons per minute and 44 degrees
Fahrenheit or lower;
2. if, at any time after the Substantial Completion
Date and for any reason other than a Force Majeure Event, hot water
is not provided to the Supplier's side of the Hot Water Delivery
Point at 2882 gallons per minute and 190 degrees Fahrenheit or
higher;
3. if, at any time after the Substantial Completion
Date and for any reason other than a Force Majeure Event, primary
and secondary AC electricity (up to and including the initial
transformation) delivered to an Electricity Delivery Point is less
than the Specified Demand Amount then in effect;
4. if, at any time after the Initial Services Date
but prior to the Substantial Completion Date for any reason other
than a Force Majeure Event, chilled water is not provided to the
Supplier's side of the Chilled Water Delivery Point at 4800 gallons
per minute and 48 degrees Fahrenheit or lower; or
5. if any Performance Failure exists for any seventy
two (72) hours of any ninety six (96) hour period.
(ii) ACTIONS TO BE TAKEN. Promptly upon becoming aware of a
Service Failure (whether by notice thereof from the Customer or by the
Supplier's monitoring of its systems and the operation of the Northwind
Facilities or otherwise) the Supplier shall:
1. immediately seek to determine the cause of such
Service Failure and shall apprise the Customer of the Supplier's
conclusion as to such cause as quickly as possible and provide the
Customer with a corrective action plan consistent with the
Contingency Plan, which the Supplier will implement at its sole cost
and expense where the Service Failure is for any reason other than a
Force Majeure Event, except that such implementation with respect to
a Performance Failure described in Section 6.1(b)(i)4 will be at the
Customer's expense, and use its best efforts to accommodate any
changes thereto which the Customer reasonably requests;
2. commence implementation of such corrective action
plan, using all best efforts to correct or cure such Service Failure
in the shortest period of time;
3. if the Supplier believes that correcting or curing
such Service Failure requires or can reasonably be anticipated to
require more than eight (8) hours from the time either party became
aware of the Service Failure, promptly notify the Customer of the
same and advise the Customer of the efforts which the Supplier
believes will be necessary to accomplish such correction or cure,
the probable timetable for doing so and any load management
adjustments which the Supplier believes will be helpful to
minimizing the impact of such Service Failure on the operation of
the Premises; and
4. if the Supplier believes that correcting or curing
such Service Failure requires or can reasonably be anticipated to
require more than twenty four (24) additional hours (thirty two (32)
hours from the time either party became aware of the Service
Failure), and the Customer believes that the Premises cannot be
operated in a reasonably normal manner due to such ongoing Service
Failure, Supplier shall procure, at its own expense (but without
reduction of the Contract Capacity Charges and Consumption Charges
hereunder except to the extent each reduction is mandated by Section
6.1(c)(ii)
below), substitute Services (meaning, for example, in the case of
Chilled Water Services or Hot Water Services, portable temporary
chillers or boilers) in accordance with the Contingency Plan to be
brought to the site and put into operation as quickly as possible.
(iii) ADDITIONAL MEASURES. In addition to the above,
immediately upon becoming aware of a Service Failure, Supplier shall allow
Customer or Customer's agents immediate access to the Northwind Facilities
and permit Customer full inspection rights of the Northwind Facilities. If
Customer identifies the cause of such Service Failure and requires corrective
action or cure, Supplier shall either promptly take such corrective action or
promptly make such cure, or permit the Customer to take any action reasonably
intended to correct or cure such Service Failure at the Supplier's sole cost
and expense (except that, other than as provided in Section 6.1(c)(ii) below,
the Customer shall remain liable for the Contract Capacity Charge) and/or
assume control of the Northwind Facilities and maintain such control until
the Service Failure has been cured or corrected.
(c) SERVICE DEFAULTS. If any Service Failure other than a
Service Failure under Section 6.1(b)(i)(4) continues for any thirty two (32)
hours of any forty eight (48) hour period, it shall be deemed a "Service
Default" and the following additional provisions shall apply:
(i) CONTROL OF NORTHWIND FACILITIES. The Customer shall
have the right to assume control of the Northwind Facilities and maintain
such control until such Service Default has been cured or corrected and take
any action reasonably intended to correct or cure such Service Default at the
Supplier's sole cost and expense (except that, other than as provided in
Section 6.1(c)(ii) below, the Customer shall remain liable for the Contract
Capacity Charge).
(ii) ABATEMENT. The Customer shall be entitled to an
abatement of the Contract Capacity Charge for the month during which such
Service Default has occurred in an amount equal to (A) the Contract Capacity
Charge then in effect for such month multiplied by a fraction, the numerator
of which shall be the number of days during which such Service Default has
occurred during such month and the denominator of which shall be the number
of days in such months, multiplied by (B) 70% if such Service Default was
with respect to Chilled Water Service, or 9% if such Service Failure was with
respect to Hot Water Service, or 21% if such Service Default was with respect
to Electricity Service. The amount of any applicable abatement of Contract
Capacity Charges under this Section 6.1(b) shall be due and payable on the
first day of the month following the month during which such
Service Default shall have occurred and may be off-set by the Customer
against the Contract Capacity Charge which is due and payable on such date
with respect to the month then beginning.
(iii) RETAIN CONSULTANTS AND IMPLEMENT CONSULTANTS'
RECOMMENDATIONS. The Customer shall have the right to hire, at the expense
of the Supplier, an independent consultant to review the circumstances
involving the Service Default and make written recommendations as to
reasonable corrective action (the "Consultants' Recommendations"), which
shall be provided to the Supplier and promptly implemented by the Supplier at
its sole expense (or, if the Customer has assumed control of the Northwind
Facilities pursuant to Section 6.1(b)(i), may be implemented by the Customer
at the Supplier's sole expense).
(iv) TERMINATION OF AGREEMENT. In the event that the
Supplier fails to promptly implement the Consultants' Recommendations in
accordance with a reasonable timetable agreed upon by the consultant, or to
otherwise correct any Service Default (or provide substitute services
reasonably acceptable to the Customer for the Services which are the subject
of such Service Default) within the timetable reasonably recommended by such
independent consultants, the Customer shall have the right to terminate this
Agreement by not less than thirty (30) days' prior written notice to the
Supplier specifying the effective date of termination, which shall be the
date upon which Customer acquires the Northwind Facilities pursuant to
Section 6.4.
(d) OTHER DEFAULTS.
(i) In the event of failure, other than a Performance
Failure, a Service Failure or a Service Default, by the Supplier to comply
with or perform any agreement or obligation to be complied with or performed
by the Supplier in accordance with this Agreement, which failure is not the
result of actions or omissions of the Customer and which failure remains
uncorrected or uncured thirty (30) days after notice of such failure is given
to the Supplier by the Customer (or, if such failure is of such a nature that
it cannot reasonably and with due diligence be corrected or cured within such
thirty (30) day period and the Supplier commences action to correct or cure
such default within such thirty (30) day period and thereafter diligently and
without interruption or delay completes the correction or cure of such
failure, such longer time as is necessary to complete such correction or
cure, in no event to exceed one hundred eighty (180) days), the Customer
shall have the right: (1) at the Supplier's sole cost and expense (except
that, other than as provided in Section 6.1(c)(ii) below, the Customer shall
remain liable for the Contract Capacity
Charge), to take any action reasonably intended to correct or cure such
failure; or (2) to terminate this Agreement by not less than thirty (30)
days' prior written notice to the Supplier specifying the effective date of
termination.
(ii) TERMINATION WITHOUT PREJUDICE. Any election by the
Customer to terminate this Agreement under Section 6.1 shall be without
prejudice to the other rights and obligations of the parties hereunder and
shall not relieve the Supplier of its obligation to provide Services
hereunder until the effective date of termination, but any subsequent
correction by the Supplier of the event which is the basis for such notice of
termination shall not be effective to cause rescission of the effectiveness
of such termination unless the Customer shall otherwise agree at the time of
the subsequent correction, provided that the Customer acquires the Northwind
Facilities pursuant to Section 6.4.
6.2 CUSTOMER DEFAULTS. The occurrence at any time with respect to
the Customer of any of the following events constitutes a Customer Default:
(a) failure by the Customer to make, within twenty five (25)
days after the Due Date, any payment stated herein to be due from it
hereunder (each, a "Payment Default"); provided, however, that failure to
make a payment which results from the Customer's right of abatement pursuant
to Section 6.1 hereof shall not be a Payment Default;
(b) except as otherwise excused pursuant to Section 7.1 hereof,
failure, other than a Payment Default, by the Customer to comply with or
perform any agreement or obligation to be complied with or performed
exclusively by the Customer in accordance with this Agreement, which failure
is not the result of actions or omissions by the Supplier, or Music, if such
failure is not remedied on or before the 30th day after notice of such
failure is given to the Customer and Music by the Supplier, provided if such
default is of such a nature that it cannot reasonably and with due diligence
be cured within such thirty (30) day period and the Customer commences to
cure such default within such thirty (30) day period and thereafter
diligently and without interruption or delay completes the cure of such
default within a reasonable period of time, but in no event to exceed one
hundred eighty (180) days, it will not constitute a Customer Default.
6.3 REMEDIES UPON CUSTOMER DEFAULT.
(a) In addition to any other remedies available at law or in
equity, upon the occurrence of a Payment Default, the Supplier shall have the
right, upon
providing the Customer with an additional five (5) days' prior written notice
(sixty (60) days from when the invoice was received by the Customer), to
discontinue the supply of Services to the Customer until the Customer
remedies such Payment Default; PROVIDED that if such Payment Default
continues for a period of one hundred fifty (150) consecutive days (one
hundred eighty (180) days from when the invoice was received) or more the
Supplier, by written notice to the Customer, may terminate the Customer's
right to cure such Payment Default by terminating this Agreement, without
prejudice to the Supplier's claims in respect to such Payment Default and
other rights accruing hereunder prior to such termination.
(b) In the event of a Customer Default, other than a Payment
Default, which remains uncorrected or uncured thirty (30) days after notice
of such Customer Default is given to the Customer by the Supplier (or if such
Customer Default is of such a nature that it cannot reasonably and with due
diligence be corrected or cured within such thirty (30) day period and the
Customer commences action to cure or correct such Customer Default within
such thirty (30) day period and thereafter diligently and without
interruption or delay completes the correction or cure such Customer Default,
such longer time as is necessary to complete such connection or cure, in no
event to exceed one hundred eighty (180) days), the Supplier shall have the
right to require the Customer to purchase the Northwind Facilities for a
purchase price equal to the Make Whole Amount at such time.
6.4 CUSTOMER'S OBLIGATION TO PURCHASE UPON TERMINATION. If the
Supplier shall fail to comply with its obligations to correct any Service
Default which it is obligated to correct hereunder and the Customer has given
notice of termination of this Agreement pursuant to Section 6.1(b), Section
6.1(c) or Section 6.1(d), then the Supplier shall thereupon be obligated to
sell, assign and transfer, and the Customer shall thereby be obligated to
purchase and acquire possession and ownership of the Northwind Facilities
upon the effective date of termination for a purchase price (the "Payment
Amount") equal to (a) the Supplier's investment in the Northwind Facilities,
determined in accordance with Exhibit C, multiplied by a fraction the
numerator of which shall be the number of months remaining in the Initial
Term and the denominator of which shall be 240, minus (b) any costs incurred
by Customer for required repair and/or maintenance. The Payment Amount shall
not provide for any return on Supplier's project investment. (See 9.2)
In such event, on such date of termination or as soon as
reasonably possible, the Customer shall pay to the Supplier through escrow
and by wire transfer of immediately available funds, an amount equal to the
Payment Amount and shall, with respect to all contracts approved of by
Customer in advance of their execution
(which approval the Customer will consider in good faith) concurrently
assume, and agree to indemnify and hold the Supplier harmless from, as of the
date of such termination and for all periods thereafter, all obligations of
the Supplier accruing on or after the date of termination under any contracts
or Agreements with respect to the Northwind Facilities (excluding, however,
at the option of the Customer, any such contract or agreement entered into
with Nevada Power Company (or any wholly-owned subsidiary of Nevada Power
Company), Boston Edison, Ontario Hydro, Houston Industries or UTT or any of
their Affiliates which in Customer's sole discretion is deemed to be
materially more onerous to the Supplier than a third party arm's length
agreement for the same goods or services would be in the circumstances) under
a written assignment and assumption agreement in form and substance
reasonably satisfactory to the Supplier and its counsel, against delivery by
the Supplier of possession of the Northwind Facilities and an executed bill
of sale therefor in form and substance reasonably satisfactory to the
Customer and its counsel.
6.5 LENDERS' RIGHT TO CURE. Each party hereto hereby agrees that in
the event that the other party hereto shall make any assignment of its rights
hereunder to any lender or lenders to whom such party provides a security
interest in such party's right, title and interest in the Premises or the
Northwind Facilities, as applicable, in connection with financing (or
refinancing) the Premises or the Northwind Facilities, respectively, that
each party will provide such lenders or the entity identified to the parties
as having authority to act as the agent for such lenders with all notices
given pursuant to this Agreement and that such lender or lenders shall have
an additional ten (10) days to cure any failure by such party to comply with
its obligations hereunder. The Supplier agrees that it shall afford Music
and Bazaar, and their lenders, identical cure rights.
6.6 REMEDIES NOT EXCLUSIVE. The right of the Customer to terminate
this Agreement pursuant to Section 6.1 and to acquire the Northwind
Facilities pursuant to Section 6.4 and the rights of the Supplier to cease
providing Services and to terminate this Agreement and/or require the
Customer to purchase the Northwind Facilities pursuant to Section 6.3 shall
not be deemed to be exclusive and, except as expressly waived in Section 8.1
and Section 8.2, shall be in addition to any and all other rights either of
them may have at law or in equity for any default under Section 6.1(d) or any
Service Default or Customer Default (as applicable) hereunder after notice
and any opportunity to cure provided for herein. The remedies provided
herein for a Performance Failure or a Service Failure shall be the exclusive
remedies until such failure or failures become a Service Default.
ARTICLE 7
FORCE MAJEURE
7.1 FORCE MAJEURE.
(a) If either party hereto is prevented from or delayed in
performing any of its obligations hereunder by reason of a Force Majeure
Event, such party will notify the other party in writing as soon as
practicable and will be excused from its obligations hereunder to the extent
of such interference; PROVIDED, that no payment obligation hereunder will be
excused or delayed as the result of a Force Majeure Event.
(b) The party whose performance hereunder is prevented or
delayed as the result of a Force Majeure Event will use reasonable efforts to
remedy its inability to perform; PROVIDED, however, nothing in this Section
7.1(b) will be construed to require the settlement of any strike, walkout or
other labor dispute with its employees on terms which are contrary to its
interest. The Supplier agrees however, that in the event of a strike,
walkout or other labor dispute which may reasonably be expected to interrupt
the providing of Services due to the Supplier's employees participating in or
honoring such strike, walkout or dispute, (i) the Supplier, at Supplier's
sole cost and expense (but without reduction in Contract Capacity Charges),
shall use good faith efforts to operate the Northwind Facilities using
management or other personnel which will not participate in or honor such
strike, walkout or dispute, and (ii) if the Supplier will not be able to
operate the Northwind Facilities using such management or other personnel,
the Supplier will cooperate with the Customer to permit the Customer or its
duly authorized representative, at Supplier's sole cost and expense (without
reduction in Consumption Charges and Contract Capacity Charges), to operate
the Northwind Facilities in such circumstances, PROVIDED that such operation
is carried out by personnel which are, in the Supplier's reasonable judgment,
adequately trained and experienced to operate the Northwind Facilities.
(c) CONDEMNATION. In the event of a condemnation or eminent
domain taking of all or part of the site upon which the Plant is to be
located (a "Taking"), Supplier shall, as soon as practicable, determine
whether it is commercially reasonable and technically feasible in the
circumstances for Supplier to redesign, repair and/or restore the Northwind
Facilities such that the Supplier can meet its obligations to provide
Services to the Customer hereunder. In the event Supplier determines that it
is commercially reasonable and technically feasible, Supplier will so inform
Customer, this Agreement shall remain in force and, to the
extent set forth in Section 8.2 of the Northwind Lease, Supplier shall be
entitled to the award or awards from such Taking and the Contract Capacity
Charges payable hereunder thereafter shall be adjusted downward in an amount
corresponding to any such award paid to the Supplier. In the event that
Supplier determines that it is not commercially reasonable or technically
feasible in the circumstances to redesign, repair or restore the Northwind
Facilities, then Supplier shall so notify Customer and such notice shall also
constitute termination of this Agreement, effective on the date when such
Taking shall effectively prevent Supplier from complying with its obligations
to provide Services hereunder, and, to the extent set forth in Section 8.1 of
the Northwind Lease, Supplier shall be entitled to the award or awards from
such Taking. Notwithstanding the foregoing, in the event Supplier and
Customer disagree as to whether it is commercially reasonably and technically
feasible in the circumstances for Supplier to redesign, repair or restore the
Northwind Facilities, then Supplier and Customer shall promptly meet and use
their best efforts to resolve such dispute. If the Parties are unable to
resolve such dispute within ten (10) days, then the Parties shall refer such
dispute to the "Independent Engineer"(as defined in the Development
Agreement). The Independent Engineer's conclusion as to whether it is
commrcially reasonable and technically feasible in the circumstances for
Supplier to redesign, repair or restore the Northwind Facilities shall be
accepted by and binding upon the Parties.
(d) In the event of a Force Majeure Event of a nature such
that, by implementation of the Contingency Plan (or a part thereof), Services
may be provided to the Customer during the interruption caused by such Force
Majeure Event, then, upon the Customer's request and at the Customer's
expense, except as set forth in Section 7.1(b) above, the Supplier shall use
its best efforts to implement the Contingency Plan (or portion thereof which
is applicable) to mitigate the interruption of Services caused by such Force
Majeure Event.
ARTICLE 8
INDEMNIFICATION
8.1 INDEMNIFICATION BY THE SUPPLIER. The Supplier agrees to protect,
indemnify and hold harmless the Customer Group Member from and against any
and all Loss and/or Expense, other than lost business, lost profits and other
special and/or consequential damages, whether direct or indirect (all claims
for which are hereby irrevocably waived), incurred by the Customer Group
Member in connection with or arising from:
(a) any breach by the Supplier of its obligations hereunder;
(b) the installation, maintenance, operation, repair, removal,
replacement or alteration of any portion of the Northwind Facilities or the
Supplier's metering and other equipment and piping on the Premises, including
the Supplier Interconnection Equipment, or any acts or omissions of the
Supplier or those Persons under its direction or control in connection
therewith; PROVIDED such Loss or Expense does not result from actions or
omissions of the Customer or those Persons under its direction or control
(including its agents and those which it has authorized or knowingly
permitted to act on its behalf);
(c) any unauthorized operation, maintenance or alteration of,
or action affecting, the Customer's equipment, or any component thereof, by
the Supplier or those Persons under its direction or control (including its
agents and those which it has authorized or knowingly permitted to act on its
behalf); or
(d) any claims, obligations, damages, expenses or liabilities
to third parties for personal injury or property damage to the extent they
arise out of any legally actionable action of the Supplier or its agents,
contractors or employees, or those Persons under its direction or control,
PROVIDED that this indemnity shall not apply to the extent that the claim,
obligation, damage, expense or liability arises from the negligence or
willful misconduct of, or a breach of the Customer's obligations under this
Agreement by, the Customer, its agents, contractors or employees, or those
Persons under its direction or control;
but excluding any Loss or Expense arising from interruption of Services
permitted by Section 6.3(a) or Section 7.1.
8.2 INDEMNIFICATION BY THE CUSTOMER. The Customer agrees to protect,
indemnify and hold harmless the Supplier Group Member from and against any
and all Loss and/or Expense incurred by the Supplier Group Member in
connection with or arising from:
(a) any breach by the Customer of its obligations hereunder;
(b) any acts or omissions of the Customer or those Persons
under its direction or control; PROVIDED such Loss or Expense does not result
from the acts or omissions of the Supplier or those Persons under its
direction or control (including its agents and those which it has authorized
or knowingly permitted to act on its behalf) or, other than as set forth in
clause (c) below, any third Persons; or
(c) any claims, obligations, damages, expenses or liabilities
to third parties for personal injury or property damage to the extent they
arise out of any legally actionable action of the Customer or its agents,
contractors or employees, or those Persons under its direction or control,
PROVIDED that this indemnity shall not apply to the extent that the claim,
obligation, damage, expense or liability arises from the negligence or
willful misconduct of, or a breach of the Supplier's obligations under this
Agreement by, the Supplier, its agents, contractors or employees, or those
Persons under its direction or control.
8.3 NOTICE OF CLAIMS.
(a) If a claim is asserted or action brought against an
Indemnified Party and the Indemnified Party believes that it is entitled to
indemnification under this Article 8, the Indemnified Party shall promptly
notify the Indemnitor, in writing, of such claim or action. Such notice
shall be provided in sufficient time to enable the Indemnitor to assert and
prosecute appropriate defenses to the claim or action; PROVIDED, that failure
to give such notice shall not relieve the Indemnitor of its obligations
hereunder except to the extent it will have been prejudiced by such failure.
Upon the receipt of such notice, the Indemnitor shall make a prompt
determination of whether it believes it is required to indemnify the
Indemnified Party, and shall promptly notify the Indemnified Party, in
writing, of its determination. If the Indemnitor determines that it is
required to indemnify, it shall assume the defense of the Indemnified Party,
including the employment of counsel, and shall thereafter pay all costs and
expenses relative to the defense of the claim or action. The Indemnified
Party shall cooperate with the Indemnitor in all reasonable aspect in this
defense. The Indemnified Party shall also have the right, at its own
expense, to employ separate counsel in any such action and to participate in
the defense thereof. The Indemnitor shall not be liable for any settlement
of any claim or action made without its consent.
(b) In calculating any Loss or Expense there will be deducted
(i) the amount of any insurance recovery by the Indemnified Party in respect
thereof (and no right or subrogation will accrue hereunder to any insurer)
or, in the event that the Indemnified Party has failed to maintain any
insurance coverage required by this Agreement to be maintained by such party
or fails to make a timely claim under any applicable insurance, the amount of
the insurance recovery which would reasonably be expected to have been
received had such insurance been maintained and/or such claim been timely
filed, and (ii) the amount of any tax benefit to the Indemnified Party (or
any of its Affiliates) with respect to such Loss or Expense (after giving
effect to the tax effect of receipt of the indemnification payments).
(c) After any Claim Notice has been given pursuant hereto, the
amount of indemnification to which an Indemnified Party will be entitled
under this Article 8 will be determined: (i) by the written agreement
between the Indemnified Party and the Indemnitor; (ii) by a final judgment or
decree of any court of competent jurisdiction; or (iii) by any other means to
which the Indemnified Party and the Indemnitor agree.
ARTICLE 9
TERM
9.1 TERM.
(a) Unless the Supplier has been given by Customer the Notice
to Proceed on or before May 1, 1998 and the conditions precedent set forth in
Section 5.1 hereof have been met to the Supplier's reasonable satisfaction on
or before such date (or, with respect to any condition which the Supplier is
willing to waive on or before such date, waived in a writing delivered to the
Customer on or before such date), at any time thereafter the Supplier may
terminate this Agreement and its obligations hereunder by written notice to
the Customer, such termination to be effective immediately; provided,
however, that upon Supplier's acceptance of the Notice to Proceed, Supplier's
right to terminate this Agreement pursuant to this section shall be null and
void, and no longer in effect. In the event that the Development Agreement
is terminated by Aladdin pursuant to Section 10(b) thereof, or by the
Supplier pursuant to Section 2(k), Section 10(d) or Section 10(c) thereof,
then this Agreement shall concurrently terminate and be of no further force
or effect.
(b) Unless sooner terminated pursuant to clause (a) above or
any of Section 6.1 or Section 6.4, Section 7.1(c) or Section 9.3, this
Agreement will remain in effect for the Initial Term, and will continue in
effect for each Renewal Term, if any; PROVIDED that there shall not be more
than three (3) Renewal Terms hereunder. Unless written notice that this
Agreement will terminate on the last day of the then current Initial Term or
Renewal Term is provided by either party at least twelve (12) months prior to
the end of the then current Initial Term or Renewal Term, this Agreement will
continue for an additional Renewal Term.
9.2 EFFECT OF TERMINATION. Upon the expiration or termination of this
Agreement:
(a) unless the Customer purchases the Northwind Facilities
pursuant to Section 9.3 or directs the Supplier to remove the Northwind
Facilities pursuant to Section 9.2(b) (in which case the Supplier shall so
disconnect and remove the Northwind Facilities), the Supplier shall abandon
the Northwind Facilities as is and where is and shall have no further
obligations under this Agreement or the Lease in respect thereof;
(b) if the Customer directs the Supplier to remove the
Northwind Facilities, then the Supplier, at the Customer's expense (less any
net proceeds of salvage or other disposition of the Northwind Facilities),
will remove the Northwind Facilities and all Supplier Interconnection
Equipment and any other property of the Supplier on the Premises in a prudent
and workmanlike manner, and will repair and restore in a manner reasonably
satisfactory to the Customer all damage to the Premises caused by such
removal (and pay for such damage where caused by Supplier's negligence or
wilful misconduct), and the Customer will provide the Supplier access to the
Premises reasonably requested by the Supplier to allow the Supplier to remove
such property in a timely fashion;
(c) the Customer will pay the Supplier all amounts then payable
to the Supplier hereunder (including costs of removal under clause (b) above
or, in the event the Customer is purchasing the Northwind Facilities under
any of Sections 6.3, 6.4, or 9.3, the purchase price payable); and
(d) the Customer and the Supplier will have no further
obligations hereunder other than (i) obligations accruing prior to the date
of such termination or expiration, (ii) Customer's obligations to provide
access rights pursuant to Section 9.2(b) and (iii) obligations under Section
5.3 and Article 8, all of which will survive the expiration or termination of
this Agreement.
9.3 THE CUSTOMER'S OPTION TO PURCHASE.
(a) Each of the Customer and the other Customer Group Members
shall have a continuing non-exclusive option to purchase the Northwind
Facilities at any time prior to termination of this Agreement, exercisable by
the Customer alone or together with one or both Customer Group Members by
written notice given to the Supplier not less than one (1) year prior to the
date upon which such purchase shall close as specified in such notice (the
"Closing Date"), which notice shall state that the option under this Section
9.3 is being exercised. The purchase price payable upon such exercise shall
equal the Make Whole Amount as of the date of such purchase. The option
granted hereby shall expire and be of no further force or effect
on the earliest of (i) the expiration of the Term hereof, or (ii) the date
upon which any other entity which has an option to purchase the Northwind
Facilities effectively exercises such option.
It shall be a condition to the Supplier's obligation to
consummate the sale hereunder that concurrently with closing the Customer
shall assume, and indemnify and hold the Supplier harmless from, all
obligations of the Supplier accruing after the Closing Date under all
contracts and Agreements with respect to the Northwind Facilities under which
any performance obligations will continue following such sale and at the
closing the Supplier shall assign and the Customer shall assume all such
contracts and Agreements under a written assignment and assumption agreement.
(b) In the event that the Customer gives notice that it is
exercising its option under this Section 9.3 to acquire the Northwind
Facilities, then:
(i) not less than ten (10) days nor more than six (6)
months prior to the Closing Date, the Supplier shall obtain and deliver to
the Customer payoff letters, in form and substance reasonably satisfactory to
the Customer, from the holders of any Facilities Debt or any trustee or agent
with power to act for such holders stating the principal amount of such
Facilities Debt as of the Closing Date, any accrued interest thereon through
such date, and any other amounts which shall be payable in respect thereof as
of the Closing Date;
(ii) not less than ten (10) days prior to the Closing
Date, the Supplier shall provide to the Customer a written statement of the
Make Whole Amount, determined as of the Closing Date, accompanied by
appropriate detail. The Customer and its advisors shall be deemed to have
accepted such statement unless written objection thereto is delivered to the
Supplier within three (3) days after the date of receipt thereof by the
Customer. Any such written objection shall specify in reasonable detail the
reasons therefor. In the event of such objection, the Supplier and the
Customer shall meet and try to reach agreement as to the Make Whole Amount,
but if such agreement is not reached within five (5) days after the date upon
which such written objections are received by the Supplier, then such matter
shall be submitted to three outside accounting firms, one of which shall be
the Customer's outside accounting firm, one of which shall be the Supplier's
outside accounting firm, and the third of which shall be chosen by the first
two firms, and such accounting firms shall each determine the Make Whole
Amount and the two determinations which are closest together shall then be
averaged and the average of such two determinations shall be the Make Whole
Amount;
(c) Closing of the purchase shall occur on the Closing Date
(or, if such day is not a business day, on the next following business day)
or such other date as the parties may agree upon through an escrow
established by the Parties. At the closing, the Supplier shall execute and
deliver to the Customer such bills of sale and instruments of assignment
(including the assignment and assumption agreement referred to in clause (a)
above) as are necessary or appropriate to transfer to the Customer all of the
Supplier's right, title and interest in and to the Northwind Facilities and
any contracts or Agreements to be assigned, on an "as is, where is" basis,
without representation or warranty other than as to the Supplier's due
authorization and legal capacity to execute and deliver such instruments,
documents and Agreements, and the Customer shall deliver to the Supplier the
purchase price, by wire transfer of immediately available funds or by other
payment means acceptable to the Supplier, and shall execute and deliver such
assignment and assumption agreement.
(d) In the event that the Customer exercises its option to
purchase under this Section 9.3, effective upon closing of the purchase, this
Agreement and the Lease shall automatically terminate.
(e) In the event that the Customer exercises the option granted
by this Section 9.3 but shall fail to consummate the purchase pursuant to
such option, such failure shall be a breach of the Customer's obligation to
purchase the Northwind Facilities arising pursuant to exercise of such option
and the Supplier shall be entitled to any remedies therefor which may be
available at law or in equity.
ARTICLE 10
GENERAL PROVISIONS
10.1 NOTICES. All notices or other communications required or
permitted hereunder shall be in writing addressed to the respective party as
set forth below and shall be personally served, telecopied or sent by
reputable overnight courier service and shall be deemed to have been given:
(a) if delivered in person, when delivered; (b) if delivered by telecopy, on
the date of transmission if transmitted on a Business Day before 4:00 p.m.
Chicago time, otherwise on the next Business Day (PROVIDED, in either case,
that receipt of such transmission is confirmed); and (c) if delivered by
overnight courier, one (1) day after delivery to courier properly addressed.
Notices and other communications shall be addressed to the applicable party
as follows:
If to the Customer, to:
Aladdin Gaming, LLC
c/o Aladdin Management Corporation
280 Park Avenue, 38th Floor
New York, New York 10017
Attention: Ronald Dictrow
Fax: (212) 661-0844
If to the Supplier, to:
Northwind Aladdin, LLC
c/o Unicom Thermal Technologies Inc.
30 West Monroe Street
Suite 500
Chicago, IL 60603
Attention: President
Fax: 312-346-3201
If to the Customer's Lender(s), to such addresses as Customer specifies to
Supplier in writing.
If to the Supplier's Lender(s), to such addresses as Supplier specifies to
Customer in writing.
Any party hereto may change its address for notices and other communications
hereunder by a notice delivered to the other party hereto in accordance with
this Section 10.1 as then in effect.
10.2 SUCCESSORS AND ASSIGNS.
(a) Neither party shall assign its interest or delegate its
duties under this Agreement without the prior written consent of the other
party, (which consent shall not be unreasonably withheld), except:
(i) the Supplier may assign its right, title and interest
under this Agreement, or any part thereof, to any wholly-owned subsidiary of
Unicom Corporation;
(ii) the Customer may assign its right, title and interest
under this Agreement, or any part thereof, to any Affiliate, or to Music.
Upon any such assignment by the Customer, the Supplier will provide any such
assignee with all Notices given by the Supplier pursuant to this Agreement
and such assignee (and its lenders) shall have the same respective rights to
cure any failure by the Customer to comply with its obligations hereunder
that the Customer and its lenders have hereunder. In addition, if such
assignee (or its lenders) assumes the Customer's rights and obligations
hereunder, unconditionally and in a writing delivered to the Supplier, then,
upon a request in writing from all such assignees stating that they desire
the Supplier to sell some or all of the Services to third parties and
specifying the portions of Services which they wish to have the Supplier sell
to third parties and expressly and unconditionally committing to relinquish
back to the Supplier such portions of the Services to effect such sale (the
"Relinquished Services") as of a date specified in such request (but without
any reduction in Contract Capacity Charges or Consumption Charges payable
hereunder), and provided that such assignees pay all reasonable costs and
expenses thereof, then the Supplier will use commercially reasonable efforts
to sell any or all of the Relinquished Services to third parties on terms and
conditions acceptable to such assignees, and any amounts which the Supplier
receives from third parties in respect of Relinquished Services (if any)
shall be applied to the Contract Capacity Charges and Consumption Charges
payable hereunder (such application to be determined by the Supplier
reasonably and in good faith and consistent with the concepts reflected in
Exhibit C hereto and subject to such assignees' approval, not to be
unreasonably withheld).
(iii) the Customer may assign its right, title and interest
in this Agreement to any lender or lenders to whom the Customer provides a
security interest in the Customer's right, title and interest in the Premises
in connection with financing (or refinancing) the Premises;
(iv) the Customer may assign, without the Supplier's
consent, the Customers's right, title and interest in this Agreement to any
purchaser of the Premises or all of the interests in the Customer; and
(v) the Supplier may assign its right, title and interest
in this Agreement to any lender or lenders to whom the Supplier provides a
security interest in the Supplier's right, title and interest in the
Northwind Facilities in connection with financing (or refinancing) the
Northwind Facilities.
In connection with any such financing or refinancing, from time to time, upon
request, each party will provide one or more estoppel certificates in form
and
substance reasonably satisfactory to the other or such lender. No consent by
either party to any assignment or delegation by the other party shall be
deemed to be a novation or otherwise to relieve the transferring party of its
obligations hereunder unless otherwise expressly so stated in such consent.
(b) The Supplier agrees not to permit any transfer of any
membership interest in the Supplier, and not to issue any new membership
interests in the Supplier without the prior written consent of the Customer
(such consent not to be unreasonably withheld); provided, however that the
Customer hereby agrees to any such transfer or issuance to Nevada Power
Company (or any wholly-owned subsidiary of Nevada Power Company), Boston
Edison, Ontario Hydro, Houston Industries, or to any entity which is
beneficially owned solely by Unicom Corporation and one of Nevada Power
Company, Boston Edison, Ontario Hydro or Houston Industries (or any wholly
owned subsidiary of Unicom Corporation); provided further that Unicom
Corporation (or any wholly-owned subsidiary of Unicom Corporation) at all
times holds at least a 51% share in the Supplier, unless such percentage
requirement needs to be modified in order for Supplier to comply with Section
5.7 hereof.
(c) This Agreement will be binding upon and inure to the
benefit of the parties hereto and their successors and permitted assigns.
Nothing in this Agreement, expressed or implied, is intended or will be
construed to confer upon any Person (other than the parties and successors
and assigns permitted by this Section 10.2 and Persons expressly benefitted
by the provisions of Sections 8.1 and 8.2) any right, remedy or claim under
or by reason of this Agreement.
10.3 ENTIRE AGREEMENT; AMENDMENTS. This Agreement, the Annex, the
Exhibits and Schedules referred to herein, the Development Agreement, the
Guaranty the Lease and the Energy Services Coordination Agreement and the
documents delivered pursuant hereto and thereto contain the entire
understanding of the parties hereto with regard to the subject matter
contained herein or therein, and supersede all prior Agreements or
understandings between or among any of the parties hereto. This Agreement
will not be amended, restated, modified or supplemented except by a written
instrument signed by an authorized representative of each of the parties
hereto.
10.4 INTERPRETATION. Article titles and headings to sections herein
are inserted for convenience of reference only and are not intended to be a
part of or to affect the meaning or interpretation of this Agreement.
10.5 WAIVERS. Any term or provision of this Agreement may be waived,
or the time for its performance may be extended, by the party or parties
entitled to the benefit thereof. Any such waiver will be validly and
sufficiently authorized for the purposes of this Agreement if, as to any
party, it is authorized in writing by an authorized representative of such
party. The failure of any hereto to enforce at any time any provision of
this Agreement will not be construed to be a waiver of such provision, nor in
any way to affect the validity of this Agreement or any part hereof or the
right of any party thereafter to enforce each and every such provision. No
waiver of any breach of this Agreement will be held to constitute a waiver of
any other or subsequent breach.
10.6 EXPENSES. Except as otherwise set forth herein, each party
hereto will pay all costs and expenses incident to its negotiation and
preparation of this Agreement and to its performance and compliance with all
Agreements and conditions contained herein on its part to be performed or
complied with, including the fees, expenses and disbursements of its counsel
and accountants.
10.7 PARTIAL INVALIDITY. Wherever possible, each provision hereof
will be interpreted in such manner as to be effective and valid under
applicable law, but in case any one or more of the provisions contained
herein will, for any reason, be held to be invalid, illegal or unenforceable
in any respect, such provision will be ineffective to the extent, but only to
the extent, of such invalidity, illegality or unenforceability without
invalidating the remainder of such invalid, illegal or unenforceable
provision or provisions or any other provisions hereof, unless such a
construction would be unreasonable. Upon any such determination that any
term or other provision hereof is invalid, illegal or unenforceable, the
parties hereto shall negotiate in good faith to modify this Agreement so as
to effect the original intent of the parties as closely as possible in an
acceptable manner, to the end that the transactions contemplated hereby are
fulfilled to the extent possible in the circumstances.
10.8 EXECUTION IN COUNTERPARTS. This Agreement may be executed in one
or more counterparts, each of which will be considered an original
instrument, but all of which will be considered one and the same agreement,
and will become binding when one or more counterparts have been signed by
each of the parties hereto and delivered to the Supplier and the Customer.
10.9 GOVERNING LAW. This Agreement will be governed by and construed
in accordance with the internal laws and decisions of the State of Nevada.
10.10 TIME. Time is of the essence hereof.
10.11 NO PARTNERSHIP. This Agreement does not and shall not be
construed to create or establish a partnership, agency, joint venture, lease,
license or any other relationship between the parties hereto, nor constitute
either party as an agent of the other. Neither party hereto shall hold
itself out to others, by act or omission, contrary to the terms of this
Section 10.11.
10.12 ARBITRATION. In the event of any dispute hereunder between the
parties, either party may at any time refer the dispute to be settled by
binding arbitration pursuant to the Commercial Arbitration Rules of the
American Arbitration Association.
[Balance of page intentionally left blank; signature page follows.]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed the day and year first written above.
ALADDIN GAMING, LLC
By: /s/ Ronald Dictrow
Name: Ronald Dictrow
Title: Executive Vice President
NORTHWIND ALADDIN, LLC
By: /s/ John Mitola
Name: John Mitola
Title: Vice President & General Manager
ANNEX A
DEFINITIONS
The following terms shall have the meanings specified or referred
to herein:
"ADDITIONAL PROJECT INVESTMENT" means capital expenditures,
finance costs and other related costs and expenses incurred by the Supplier
for the purposes of the Northwind Facilities at any time after original
completion thereof, determined on an "all costs" basis and inclusive of all
financing costs through the date of determination, but shall not include
Development Expenses or Total Project Investment.
"ADDITIONAL SERVICES" shall have the meaning set forth in Section
2.1(c).
"ADDITIONAL SERVICES REQUEST" shall have the meaning set forth in
Section 2.1(c).
"AFFILIATE" means (i) Bazaar and Music and (ii) with respect to
any Person, any other Person which directly or indirectly controls, is
controlled by or is under common control with such Person.
"BUSINESS DAY" means a weekday which is not a statutory legal
holiday in the city of Las Vegas, Nevada.
"CHILLED WATER DELIVERY POINT" means the Delivery Point for
chilled water, as further set forth in Exhibit A.
"CHILLED WATER INTERCONNECTION EQUIPMENT" means Supplier
Interconnection Equipment used for the transfer of Energy from chilled water.
"CHILLED WATER RETURN POINT" means a Return Point for chilled
water after it has passed through the Chilled Water Interconnection Equipment
for return to the Northwind Facilities.
"CHILLED WATER SERVICES" has the meaning set forth in Section
2.1(a).
"CLAIM NOTICE" means a notice by a Customer Group Member or a
Supplier Group Member seeking indemnification pursuant to Article 8.
"COMMENCEMENT DATE" means the earlier of (a) the date upon which
the Premises is first opened for business to the public, or (b) March 1,
2000.
"COMPLEX" is defined in the Recitals hereto.
"CONSULTANT'S RECOMMENDATIONS" has the meaning set forth in
Section 6.1.
"CONSUMER PRICE INDEX" means the U.S. City Average Consumer Price
Index, all items other than food and Energy, not seasonably adjusted, as it
appears in the "News" as published monthly by the United States Department of
Labor, Bureau of Labor Statistics; PROVIDED, however, that if said Consumer
Price Index shall cease to exist or is changed, then the term "Consumer Price
Index" shall mean such other or similar index or formula as Supplier
reasonably selects to measure change in the purchasing power of the U.S.
dollar.
"CONSUMPTION CHARGE" has the meaning set forth in Section 2.5(b).
"CONTRACT CAPACITY CHARGE" has the meaning set forth in Section
2.5(a).
"CONTRACT YEAR" means a one year period to time beginning on the
Commencement Date or any anniversary thereof and ending one day less than one
year later.
"CUSTOMER" means the Person identified as the "Customer" in the
first paragraph of this Agreement, and the successors and permitted assigns
of such Person.
"CUSTOMER AGREEMENT" means each agreement under which the
Customer agrees to provide to any third Person any Services to be obtained
from the Supplier hereunder, as any such agreement may be in effect from time
to time.
"CUSTOMER DEFAULT" means the events described in Section 6.2.
"CUSTOMER ENERGY REQUIREMENTS" means those energy requirements of
the Customer as set forth in Exhibit B.2.
"CUSTOMER GROUP MEMBER" means the Customer, its successors and
permitted assigns, its officers, directors, employees and agents, and its
Affiliates and their respective successors and permitted assigns.
"CUSTOMER INDEMNIFIABLE EVENT" means the events described in
Section 8.2.
"CUSTOMER INTERCONNECTION EQUIPMENT" means that equipment owned
and operated by the Customer to receive Services, as shown on EXHIBIT D
hereto.
"DELIVERY POINT" means a point at which the Supplier delivers
Services, as shown on EXHIBIT A hereto.
"DEVELOPMENT AGREEMENT" means that certain Development Agreement
dated as of December 3, 1997, between the Customer and the Supplier, as the
same may be amended, restated, modified or supplemented and in effect from
time to time.
"DEVELOPMENT COSTS" means the aggregate of: (a) all costs and
expenses of the Supplier, the Customer, and Music incurred prior to December
3, 1997 for outside engineering work in connection with the design and
construction of the Northwind Facilities and the matters set forth in this
Agreement and the Related Agreements and the documentation thereof; (b) all
costs and expenses of the Supplier incurred on or after December 3, 1997 in
connection with the design and construction of the Northwind Facilities and
the matters set forth in this Agreement and the Related Agreements and the
documentation thereof, provided that internal legal and engineering costs and
expenses shall only be included to the extent that the same do not exceed, in
the aggregate, $375,000; and (c) all costs and expenses of the Customer, and
Music incurred on or after December 3, 1997 for outside engineering work in
connection with the design and construction of the Northwind Facilities and
the matters set forth in this Agreement and the Related Agreements and the
documentation thereof; but only to the extent that the same, when aggregated
with all of the costs and expenses of Customer and Music for outside
engineering work prior to December 3, 1997, in the aggregate do not exceed an
amount reasonably agreed to, in writing, by Customer and Supplier.
"DUE DATE has the meaning set forth in Section 2.8.
"ELECTRICITY DELIVERY POINT" means any point in the Premises at
which electricity is to be received by the Customer, as shown on EXHIBIT A
hereto.
"ELECTRICITY SERVICES" has the meaning set forth in Section 2.1(a).
"ENERGY" means any or all of chilled water, hot water and/or
electricity, as the context may require.
"EXPENSES" means any and all expenses incurred in connection with
investigating, defending or asserting any claim, action, suit or proceeding
incident to any matter indemnified against hereunder (including, without
limitation, court filing fees, court costs, arbitration fees or costs,
witness fees, and reasonable fees and disbursements of legal counsel,
investigators, expert witnesses, consultants, accountants and other
professionals).
"FINANCIAL CLOSING" has the meaning given such term in the
Development Agreement.
"FORCE MAJEURE EVENT" means any act, event, cause or condition
that is beyond the control of the party hereto which is affected thereby,
that is not caused by such party's fault or negligence, to the extent by the
exercise of reasonable diligence such party is unable to overcome or prevent,
including, but not limited to: acts of God, war, civil commotion, embargoes,
epidemic, fires, cyclones, droughts or floods, emergencies (other than those
caused by the negligence or willful misconduct of the party claiming the
Force Majeure Event), change in applicable law and Takings under the terms of
this Agreement.
"HOT WATER DELIVERY POINT" means the Delivery Point for hot
water, as further described in Exhibit A.
"HOT WATER INTERCONNECTION EQUIPMENT" means Supplier
Interconnection Equipment used for the transfer of Energy from hot water.
"HOT WATER RETURN POINT" means a Return Point for hot water after
it has passed through the Hot Water Energy Transfer Stations for return to
the Northwind Facilities.
"HOT WATER SERVICES" has the meaning set forth in Section 2.1(a).
"INDEMNIFIED PARTY" means a Customer Group Member or a Supplier
Group Member seeking indemnification pursuant to Section 8.3.
"INDEMNITOR" means a Supplier Group Member or a Customer Group
Member from which indemnification is sought pursuant to Section 8.3.
"INITIAL CUSTOMER ENERGY REQUIREMENTS" shall have the meaning set
forth in Exhibit B.
"INITIAL SERVICES" means the delivery of chilled water from the
Initial Services Date to the Commencement Date at the capacity and
temperature specified in Exhibit B under the heading "Initial Services".
"INITIAL SERVICES DATE" means the date nine months from the date
on which the Notice to Proceed is received by the Supplier.
"INITIAL TERM" means the period of time beginning on and
including the Commencement Date and ending on and including the day
immediately prior to the twentieth (20th) anniversary of the Commencement
Date.
"O&M SPECIFICATIONS" means the Operation and Maintenance
Specifications to be agreed upon by the parties prior to Final Completion and
initialed by the parties and attached hereto as EXHIBIT F, as the same may be
amended, restated, modified or supplemented and in effect from time to time.
"LOSS" means any and all losses, costs, obligations, liabilities,
settlement payments, awards, judgments, fines, penalties, damages, expenses,
deficiencies or other charges, but excluding in any event any lost profits
and other special or consequential damages, which result from any Customer
Indemnifiable Event or Supplier Indemnifiable Event.
"MAKE WHOLE AMOUNT" means, as of any date of determination
thereof, an amount equal to the aggregate of (a) the Debt Amount, plus (b)
the Equity Amount.
For purposes of this definition of "Make Whole Amount":
(a) "Debt Amount" shall mean, as of any date of determination
thereof, the aggregate of:
(i) the then outstanding Debt Service Amount as finally
determined pursuant to Exhibit C; plus
(ii) any prepayment penalty, premium or other charge payable
in connection with the payment or prepayment of such indebtedness,
provided that, unless the Customer has approved the terms of the
indebtedness, the amount(s) under this clause (iii) shall be limited
to such prepayment penalty, premium or charge as would be payable in
a comparable financing negotiated at arm's length with unrelated
parties; provided, however, that if, in connection with the purchase
of the Northwind Facilities, the Customer is permitted by the
holders of such indebtedness to assume the Supplier's obligations in
respect thereof and the Supplier is released of its obligations in
respect thereof concurrently with such assumption, then the Debt
Amount shall be zero (0). (The Supplier agrees to use reasonable
efforts to obtain the consent of such holders to any such rights of
assumption.); and
(b) "Equity Amount" shall mean, as of any date of
determination thereof, an amount equal to "Return on Equity Amounts"
for all remaining Contract Years or portions thereof in the Initial
Term discounted by, for each monthly payment thereof, the interest
rate applicable to the U.S. Treasury bill, bond or note (as
applicable) having a maturity comparable (or as nearly comparable as
there may be) to the date when such payment is scheduled to be due,
plus (ii) 250 basis points.
"NORTHWIND FACILITIES" has the meaning given in the Recitals of
this Agreement.
"NORTHWIND LEASE" means that certain ground lease of the Site
dated as of December 3, 1997, between the Supplier, as lessee, and the
Customer as lessor, as the same may be amended, restated, modified or
supplemented and in effect from time to time.
"NOTICE OF EXERCISE" has the meaning set forth in Section 2.1(c).
"NOTICE TO PROCEED" means a written notice from the Customer to
the Supplier given in accordance with the Development Agreement and stating
that the
Supplier shall commence the design and construction of the Northwind
Facilities under the Development Agreement.
"OFFER" has the meaning set forth in Section 2.1(c).
"PAYMENT AMOUNT" has the meaning set forth in Section 6.4.
"PAYMENT DEFAULT" has the meaning set forth in Section 6.2(a).
"PERFORMANCE FAILURE" has the meaning set forth in Section 6.1.
"PERSON" means any individual, corporation, partnership, joint
venture, association, joint-stock company, trust, unincorporated organization
or governmental authority or regulatory body.
"PLANT ENERGY REQUIREMENTS" means the full requirements of the
Northwind Facilities as set forth in Exhibit B.1.
"PROJECT SCOPE" has the meaning set forth in Section 2.1(a).
"PREMISES" has the meaning set out in the Recitals to this
Agreement.
"PPI" means the Producer Price Index-Commodities for Western
South Central Region for commercial natural gas, as it appears in the
Producer Price Index published by the United States Department of Labor,
Bureau of Labor Statistics; PROVIDED, however, that if said Producer Price
Index shall cease to exist or is changed, then the term "PPI" shall mean such
other or similar index or formula as Supplier reasonably selects to measure
change in the price for commercial natural gas in the Southwestern United
States.
"RELATED AGREEMENTS" means collectively, the Northwind Lease and
the Development Agreement.
"RETURN POINT" means, with respect to Chilled Water Services, the
point at which chilled water returns to Supplier's pipes after it has passed
through an Energy transfer station, as shown on EXHIBIT A hereto, and, with
respect to Hot Water Services, the point at which hot water returns to
Supplier's pipes after it has passed through an Energy transfer station, as
shown on EXHIBIT A hereto.
"RENEWAL TERM" means, in the event that no party has given the
notice of termination described in Section 9.1 with respect to the Initial
Term or any
Renewal Term, the period of time beginning on and including the day
immediately after the last day of such Initial Term or Renewal Term and
ending on and including the day immediately prior to the fifth (5th)
anniversary of the last day of such Initial Term or Renewal Term.
"SEC" means the United States Securities Exchange Commission.
"SERVICE DEFAULT" has the meaning set forth in Section 6.1(b).
"SERVICE FAILURE" has the meaning set forth in Section 6.1(b).
"SERVICES" has the meaning set forth in Section 2.1(a).
"SITE" means the real property in Las Vegas, Nevada, which is
leased to the Supplier and is subject to the Northwind Lease and which is
described in EXHIBIT G hereto.
"SPECIFIED DEMAND AMOUNT" means, as of any date of determination,
the amount of Electricity Service which the Supplier is then obligated to
provide to the Customer under this Agreement, which amount shall be 4.9
megawatts (or 4.1 megawatts in the event one generating unit is shut down
during required maintenance) for the period from the Substantial Completion
Date to March 1, 2000, and thereafter shall be 20 megawatts but which amount
may, after March 1, 2000, be decreased from time to time by the Customer by
giving not less than thirty (30) days prior written notice thereof to the
Supplier; provided that if a reduction is requested, then such reduction can
only be made if notice is in accordance with notice required under any
applicable third party electricity supply Agreements and the Customer pays
any corresponding charges under such electricity contracts attributable to
such reduction.
"SUBSTANTIAL COMPLETION DATE" means the date of "Substantial
Completion" as such term is defined in the Development Agreement.
"SUPPLIER" means the Person identified as the "Supplier" in the
first paragraph of this Agreement, and the successors and permitted assigns
of such Person.
"SUPPLIER GROUP MEMBER" means Supplier, its successors and
permitted assigns, and its officers, directors, employees and agents, and its
Affiliates and their respective successors and permitted assigns.
"SUPPLIER INDEMNIFIABLE EVENT" means the events described in
Section 8.1.
"SUPPLIER INTERCONNECTION EQUIPMENT" means the equipment and
related piping and apparatus between the Supplier's distribution system and
the Customer's equipment, including, without limitation, a plate frame heat
exchanger assembly or equivalent device, piping, valves, metering equipment
and controls and additional equipment, if any, described in the O&M
Specifications, installed by the Supplier on the Premises pursuant to the
terms of this Agreement for use in providing the Services to the Customer,
and all replacements and additions thereto from time to time.
"TAKINGS" has the meaning set forth in Section 7.1(c).
"TAX" means any present or future tax (including all sales and
use taxes), levy, impost, duty, charge, assessment or fee of any nature
(including interest, penalties and additions thereto) that is imposed by any
federal, provincial or local taxing authority on Services provided by
Supplier or on the Northwind Facilities or the Supplier's operations in
respect thereof, or any payments made by Customer under this Agreement,
excluding taxes on the income of the Supplier.
"TOTAL PROJECT INVESTMENT" means the aggregate investment of the
Supplier in the Northwind Facilities and all related equipment and piping,
when completed, determined on an "all costs" basis and inclusive of all
financing costs and Development Costs through the date of determination,
including Pre-Commencement Capacity Charge, as defined in Exhibit C.
EXHIBIT A
PROJECT SCOPE
EXHIBIT B
ENERGY REQUIREMENTS
[Describe, including peak requirements and load profiles.]
EXHIBIT C
CONTRACT CAPACITY CHARGE AND CONSUMPTION CHARGE
EXHIBIT D
CUSTOMER INTERCONNECTION EQUIPMENT
EXHIBIT E
INSURANCE
EXHIBIT F
INSTALLATION, OPERATION AND MAINTENANCE SPECIFICATIONS
EXHIBIT G
LEGAL DESCRIPTION OF THE SITE
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS 2
1.1 Definitions 2
ARTICLE 2 ENERGY SERVICE 2
2.1 Services; Exclusivity; Right of First Refusal; Performance;
Customer Agreements 2
2.2 Chilled Water 7
2.3 Hot Water 8
2.4 Electricity 8
2.5 Charges 8
2.6 Adjustments 9
2.7 Service Invoices 9
2.8 Payment 10
2.9 Taxes 10
ARTICLE 3 MAINTENANCE OF EQUIPMENT, SYSTEMS AND METERS 10
3.1 Maintenance of Supplier Interconnection Equipment 10
3.2 Customer's Equipment 11
3.3 Metering 11
ARTICLE 4 REPRESENTATIONS, WARRANTIES AND COVENANTS 13
4.1 Mutual Representations 13
4.2 Supplier Representations 13
4.3 Supplier Covenants. 14
ARTICLE 5 ADDITIONAL AGREEMENTS 15
5.1 Conditions Precedent To Effectiveness 15
5.2 Insurance 16
5.3 Confidential Information 17
5.4 Financial Information 18
5.5 Transfer of Information to Customer Pursuant to Sale 19
5.6 Fuel and Electricity Arrangements 19
5.7 Regulatory Compliance Re Electricity 19
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ARTICLE 6 DEFAULTS AND REMEDIES 22
6.1 Supplier Defaults 22
6.2 Customer Defaults 28
6.3 Remedies Upon Customer Default. 28
6.4 Customer's Obligation to Purchase Upon Termination 29
6.5 Lenders' Right to Cure 30
6.6 Remedies Not Exclusive 30
ARTICLE 7 FORCE MAJEURE 31
7.1 Force Majeure 31
ARTICLE 8 INDEMNIFICATION 32
8.1 Indemnification by the Supplier 32
8.2 Indemnification by the Customer 33
8.3 Notice of Claims 34
ARTICLE 9 TERM 35
9.1 Term 35
9.2 Effect of Termination 35
9.3 The Customer's Option to Purchase 36
ARTICLE 10 GENERAL PROVISIONS 38
10.1 Notices 38
10.2 Successors and Assigns 40
10.3 Entire Agreement; Amendments 41
10.4 Interpretation 42
10.5 Waivers 42
10.6 Expenses 42
10.7 Partial Invalidity 42
10.8 Execution in Counterparts 43
10.9 Governing Law 43
10.10 Time 43
10.11 No Partnership 43
10.12 Arbitration 43
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