-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PvYTS4x5c4OwG6cZk03IAnSnXNKrlSvtOflkJAVCyS9A4K+zva0XccvjiyEjFpcC R3M8iwHHZJMxql1s0I0m7g== 0001047469-99-032387.txt : 19990817 0001047469-99-032387.hdr.sgml : 19990817 ACCESSION NUMBER: 0001047469-99-032387 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 8 CONFORMED PERIOD OF REPORT: 19990630 FILED AS OF DATE: 19990816 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ALADDIN GAMING ENTERPRISES INC CENTRAL INDEX KEY: 0001059128 STANDARD INDUSTRIAL CLASSIFICATION: HOTELS & MOTELS [7011] IRS NUMBER: 880379695 STATE OF INCORPORATION: NV FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 333-49715 FILM NUMBER: 99692131 BUSINESS ADDRESS: STREET 1: 831 PILOT ROAD CITY: LAS VEGAS STATE: NV ZIP: 89119 BUSINESS PHONE: 7027367114 MAIL ADDRESS: STREET 1: 831 PILOT ROAD CITY: LAS VEGAS STATE: NV ZIP: 89119 10-Q 1 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q (Mark One) ( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: June 30, 1999 ------------------------------------ OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from: to ------------- ------------------ Commission file number: 333-49715 ------------------------------------------ ALADDIN GAMING ENTERPRISES, INC. - -------------------------------------------------------------------------------- (Exact name of registrant as specified in its charter) Nevada 88-0379695 - ---------------------------------- ----------------------------------------- (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 831 Pilot Road, Las Vegas, Nevada 89119 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (702) 736-7114 - -------------------------------------------------------------------------------- (Registrant's telephone number, including area code) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --------- ------- Indicate the number of shares outstanding of the issuer's classes of common stock, as of June 30, 1999. Class A Common Stock, no par value, 2,000,000 shares authorized 1,107,500 issued Class B Common Stock, no par value, Non-voting, 8,000,000 shares authorized 2,215,000 issued
ALADDIN GAMING ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) INDEX
PAGE NO. --------- PART I FINANCIAL INFORMATION Item 1. Financial Statements Balance Sheets June 30, 1999 and December 31, 1998.................................. 1 Statement of Operations For the three and six months ended June 30, 1999 and 1998 and for the period from inception (December 3, 1997) through June 30, 1999... 2 Statement of Stockholders' Equity For the period from inception (December 3, 1997) through June 30, 1999................................................................. 3 Statement of Cash Flows For the six months ended June 30, 1999 and 1998 and for the period from inception (December 3, 1997) through June 30, 1999....... 4 Notes to the Consolidated Financial Statements......................... 5-6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations................................................ 7-12 Item 3. Quantitative and Qualitative Disclosures About Market Risk............. 13 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K....................................... 14 Signatures ....................................................................... 15 Exhibit Index ....................................................................... 16
i PART I...FINANCIAL INFORMATION ITEM 1............FINANCIAL STATEMENTS ALADDIN GAMING ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) BALANCE SHEETS AS OF JUNE 30, 1999 AND DECEMBER 31, 1998 (IN THOUSANDS)
June 30, 1999 December 31, 1998 ---------------------- ---------------------- (unaudited) ASSETS Cash $ 1 $ 1 Investment in unconsolidated affiliate 13,201 17,049 ---------------------- ---------------------- 13,202 17,050 ====================== ====================== LIABILITIES AND MEMBERS' EQUITY Payable to related party $ 4 $ 3 Common Stock: Class A, no par value, 2,000,000 shares authorized, 1,107,500 shares issued and outstanding as of June 30, 1999 and December 31, 1998. Class B, no par value and non-voting 8,000,000 shares authorized, 2,215,000 shares issued and outstanding, and 2,215,000 shares reserved pursuant to the warrant agreement as of June 30, 1999 and December 31, 1998. 13,247 13,247 Additional paid-in capital 14,420 14,420 Deficit accumulated during the development stage (14,469) (10,620) ---------------------- ---------------------- 13,202 17,050 ====================== ======================
The accompanying notes are an integral part of these financial statements. 1 ALADDIN GAMING ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF OPERATIONS FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 1999 AND 1998 AND FOR THE PERIOD FROM INCEPTION (DECEMBER 3, 1997) THROUGH JUNE 30, 1999 (IN THOUSANDS, EXCEPT PER SHARE DATA)
For the period December 3, 1997 For the three For the three For the six For the six (inception) months ended months ended months ended months ended through June 30, 1999 June 30, 1998 June 30, 1999 June 30, 1998 June 30, 1999 (unaudited) (unaudited) (unaudited) (unaudited) (unaudited) ------------------ ---------------- ----------------- ---------------- ------------------ Other (income) expense $ - $ 1 $ 1 $ 1 $ 5 Equity in loss of unconsolidated affiliate 1,879 1,993 3,848 5,423 14,464 Income tax expense - - - - - ------------------ ---------------- ----------------- ---------------- ------------------ Net loss accumulated during the development stage 1,879 1,994 3,849 5,424 14,469 ------------------ ---------------- ----------------- ---------------- ------------------ Basic and dilutive loss per share $(.57) $(.60) $(1.16) $(2.24) $(5.03) Shares used in per share calculation 3,322,500 3,322,500 3,322,500 2,423,040 2,876,799
The accompanying notes are an integral part of these financial statements. 2 ALADDIN GAMING ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF STOCKHOLDERS' EQUITY FOR THE PERIOD FROM INCEPTION (DECEMBER 3, 1997) THROUGH JUNE 30, 1999 (IN THOUSANDS) (UNAUDITED)
Common Stock Additional Class A Paid-in Retained and Class B Capital Earnings Total ------------ ------------ ----------- ----------- BALANCE, DECEMBER 3, 1997 $ - $ - $ - $ - Issuance of Class A common stock, 1 share issued - 1 - 1 ------------ ------------ ----------- ----------- BALANCE, DECEMBER 31, 1997 - 1 - 1 Net loss for the period - - (10,620) (10,620) Issuance of Class A common stock, 1,107,499 shares issued, and Class B common stock, 2,215,000 shares issued 13,247 - - 13,247 Issuance of Warrants to purchase Class B common stock, 2,215,000 Warrants issued - 15,000 - 15,000 Equity costs from unconsolidated affiliate - (581) - (581) ------------ ------------ ----------- ----------- BALANCE, DECEMBER 31, 1998 13,247 14,420 (10,620) 17,047 Net loss for the period - - (3,849) (3,849) ------------ ------------ ----------- ----------- BALANCE, JUNE 30, 1999 $ 13,247 $ 14,420 $ (14,469) $13,198 ============ ============ =========== ===========
The accompanying notes are an integral part of these financial statements. 3 ALADDIN GAMING ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) STATEMENT OF CASH FLOW FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND 1998 AND FOR THE PERIOD FROM INCEPTION (DECEMBER 3, 1997) THROUGH JUNE 30, 1999 (IN THOUSANDS)
For the period December 3, 1997 For the six (inception) Months ended For the six months through June 30, June 30, 1999 ended June 30, 1998 1999 (unaudited) (unaudited) (unaudited) ------------------- ---------------------- -------------------- Cash flows used for investing activities: Investment in unconsolidated affiliate - (15,000) (15,000) Cash flows from financing activities: Proceeds from the issuance of stock - - 1 Proceeds from the issuance of warrants - 15,000 15,000 ------------------- ---------------------- -------------------- Increase in cash and cash equivalents - - 1 Cash and cash equivalents at beginning of period 1 1 - ------------------- ---------------------- -------------------- Cash and cash equivalents at end of period $ 1 $ 1 $ 1 =================== ====================== ==================== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Non-cash investing and financing activities: Equity contributions - non-cash - $ 13,247 $ 13,247
The accompanying notes are an integral part of these financial statements. 4 ALADDIN GAMING ENTERPRISES, INC. (A DEVELOPMENT STAGE COMPANY) NOTES TO CONSOLIDATED FINANCIAL STATEMENTS JUNE 30, 1999 1. ORGANIZATION AND BUSINESS Aladdin Gaming Enterprises, Inc., a Nevada corporation ("Enterprises"), was formed on December 3, 1997. Enterprises owns a 25% interest in Aladdin Gaming Holdings, LLC ("Gaming Holdings"). Enterprises is wholly owned by Sommer Enterprises, LLC, a Nevada limited liability company ("Sommer Enterprises"). Aladdin Holdings, LLC, a Delaware limited liability company ("Holdings"), holds a majority interest in Sommer Enterprises. The members of Holdings are the Trust Under Article Sixth u/w/o Sigmund Sommer ("Sommer Trust") which holds a 95% interest in Holdings, and GW Vegas, LLC, a Nevada limited liability company ("GW"), a wholly owned subsidiary of Trust Company of the West ("TCW"), which holds a 5% interest in Holdings. Enterprises' interest in Gaming Holdings has been accounted for under the equity method. Enterprises has no other business or activities other than its investment in Gaming Holdings, which is a development stage company. Gaming Holdings, through its wholly-owned subsidiary, Aladdin Gaming, LLC ("Gaming"), is developing, constructing and will operate a new hotel and casino, the Aladdin Resort and Casino as the centerpiece of an approximately 35-acre resort, casino and entertainment complex in Las Vegas, Nevada. Gaming Holdings, through its subsidiaries, also owns 100% of Aladdin Music, LLC ("Aladdin Music"). Aladdin Music plans to construct a second hotel and casino with a music and entertainment theme ("Aladdin Music Project") on the southeast corner of the 35-acre parcel. Aladdin Music is currently seeking a joint venture partner and financing for the Aladdin Music Project. This information should be read in conjunction with the financial statements set forth in Enterprises' Annual Report on Form 10-K for the year ended December 31, 1998, the Form 8-K, dated April 27, 1999, and the Form 10-Q for the quarter ended March 31, 1999. Accounting policies utilized in the preparation of the financial information herein presented are the same as set forth in Enterprises' annual financial statements except as modified for interim accounting policies. The interim consolidated financial information is unaudited. In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair presentation of the results for the interim periods have been included. Interim results of operations are not necessarily indicative of the results of operations for the full year. Certain prior period amounts have been reclassified to conform with the current period's presentation. 2. INCOME TAXES Enterprises accounts for income taxes using the liability method as set forth in the Statement of Financial Accounting Standards No. 109, ACCOUNTING FOR INCOME TAXES. Under the liability method, deferred taxes are provided based on the temporary differences between the financial reporting basis and the tax basis of Enterprises' assets and liabilities. 5 There was no income tax expense or benefit recorded for the period from inception (December 3, 1997) through June 30, 1999 as Enterprises is a development stage company and the realization of any deferred tax asset is uncertain. 3. IMPACT OF RECENTLY ISSUED ACCOUNTING STANDARDS In June 1998, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative Instruments and Hedging Activities." SFAS No. 133 requires that entities record all derivatives as assets or liabilities measured at fair value, with the change in fair value recognized in earnings or in other comprehensive income, depending on the use of the derivative and whether it qualifies for hedge accounting. SFAS 133 amends or supercedes several current accounting statements. In July, 1999, the FASB issued SFAS No. 137 which delays the effective date of SFAS No. 133 from fiscal year 2000 to fiscal year 2001. Enterprises is in the process of analyzing SFAS No. 133 and the impact on its consolidated financial position and results of operations. 6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion should be read in conjunction with, and is qualified in its entirety by, the various other reports which have been previously filed with the United States Securities and Exchange Commission ("SEC"), which may be inspected, without charge, at the Public Reference Section of the SEC located at 450 Fifth Street, N.W., Washington, D.C. 20549 or the SEC internet site address: http://www.sec.gov. DEVELOPMENT ACTIVITIES Aladdin Gaming Enterprises, Inc., a Nevada corporation ("Enterprises"), was formed on December 3, 1997. Enterprises owns a 25% interest in Aladdin Gaming Holdings, LLC ("Gaming Holdings"). Enterprise is wholly owned by Sommer Enterprises, LLC, a Nevada limited liability company ("Sommer Enterprises"). Aladdin Holdings, LLC, a Delaware limited liability company ("Holdings") holds a majority interest in Sommer Enterprises. The members of Holdings are the Trust Under Article Sixth u/w/o Sigmund Sommer ("Sommer Trust") which holds a 95% interest in Holdings, and GW Vegas, LLC, a Nevada limited liability company ("GW"), a wholly-owned subsidiary of Trust Company of the West ("TCW"), which holds a 5% interest in Holdings. Enterprises has no business or activities other than its investment in Gaming Holdings, which is a development stage company. Gaming Holdings is a holding company, the material assets of which are 100% of the outstanding common membership interests and 100% of the outstanding Series A preferred membership interests of Aladdin Gaming, LLC ("Gaming"). Aladdin Capital Corp. ("Capital") is a wholly-owned subsidiary of Gaming Holdings and was incorporated solely for the purpose of serving as a co-issuer of the Gaming Holdings 13 1/2% Senior Discount Notes ("Notes"). Capital does not have any material operations or assets and does not have any revenues. Gaming Holdings, through its subsidiaries, also owns 100% of Aladdin Music, LLC ("Aladdin Music"). The operations of Gaming Holdings and its subsidiaries have been limited to the design, development, financing and construction of a new Aladdin Resort and Casino ("Aladdin"). The Aladdin will be the centerpiece of an approximately 35-acre world-class resort, casino and entertainment complex ("Complex") located on the site of the former Aladdin hotel and casino in Las Vegas, Nevada, a premier location on Las Vegas Boulevard. The Aladdin has been designed to include a luxury themed hotel of approximately 2,600 rooms ("Hotel"), an approximately 116,000 square foot casino ("Casino") and six restaurants. The Casino's main gaming area will contain approximately 2,800 slot machines, 87 table games and a race and sports book facility. Included on a separate level of the Casino will be a 15,000 square foot luxurious gaming section ("The London Club") that is expected to contain an additional 20 to 30 high denomination table games and approximately 100 high denomination slot machines. The Complex, which has been designed to promote casino traffic and to provide customers with a wide variety of entertainment alternatives, will comprise: (i) the Aladdin; (ii) the themed entertainment shopping mall with approximately 496,000 square feet of retail space ("Desert Passage"); (iii) a planned second hotel and casino with a music and entertainment theme ("Aladdin Music Project"); (iv) the newly renovated 7,000-seat Theater of the Performing Arts ("Theater"); and (v) the approximately 4,800-space car parking facility ("Carpark" and, together with the Desert Passage, hereinafter, "Mall Project"). The Mall Project is separately owned in part by an affiliate of the Gaming Holdings and Aladdin Music is currently seeking a joint venture partner and financing for the Aladdin Music Project. Gaming Holdings believes that the completion of the Aladdin will occur during the second quarter of the year 2000. 7 RESULTS OF OPERATIONS Enterprises has no business or activities or material assets other than its investment in Gaming Holdings, which is a development stage company. Gaming Holdings has capitalized all qualifying construction costs. Accordingly, Gaming Holdings does not have any historical operating income. The capitalized costs consist primarily of land contributed by certain members of Gaming Holdings, design fees, financing and commitment fees, construction costs and interest on qualifying assets. Capitalized costs include approximately $2.2 million related to the Aladdin Music Project for necessary predevelopment costs and expenses of the Aladdin Music Project. Gaming Holdings' operating expenses primarily have consisted of interest, amortization costs, expenses related to the Notes and pre-opening costs. Gaming Holdings anticipates that its results of operations from inception to the opening of the Aladdin will be adversely affected by the expensing of pre-opening costs and interest not qualifying for capitalization and should not be indicative of future operations. Accordingly, historical results will not be indicative of future operating results. Future operating results of Gaming Holdings are subject to significant business, economic, regulatory and competitive uncertainties and contingencies, many of which are beyond Gaming Holdings' control. While Gaming Holdings believes that the Aladdin will be able to attract a sufficient number of patrons and achieve the level of activity necessary to permit Gaming Holdings to meet its debt payment obligations, including the Notes and other indebtedness, and its other obligations, there can be no assurance with respect thereto. Because Enterprises' only material asset is its 25% interest in Gaming Holdings, Enterprises records 25% of Gaming Holdings' losses and preferred dividends in arrears as equity in loss of unconsolidated affiliate. Enterprises recorded a net loss of approximately $1.9 million and $3.8 million for the three and six months ended June 30, 1999, respectively, as compared to approximately $2.0 million and $5.4 million for the three and six month period ended June 30, 1998, respectively. Enterprises' cumulative loss for the period of inception (December 3, 1997) to June 30, 1999 was approximately $16.4 million. Gaming Holdings' losses were due to the pre-opening costs, interest expense, amortization costs and expenses related to the Notes. MATERIAL CHANGES IN FINANCIAL CONDITION Through June 30, 1999, Gaming Holdings expended approximately $298.8 million primarily on the development of the Aladdin, of which approximately $74.5 million had been expended on repayment of debt associated with the land contribution to Gaming, approximately $161.2 million in construction, furniture, fixtures and equipment, and capitalized interest, approximately $39.5 million in debt issuance and member equity costs, and approximately $23.6 million in pre-opening costs, net interest expense, and other current assets. LIQUIDITY AND CAPITAL RESOURCES On February 26, 1998, Gaming Holdings and Capital issued $221.5 million aggregate principal amount of their 13 1/2% Senior Discount Notes due 2010 ("Notes"). The proceeds to Gaming Holdings from the Notes were approximately $115.0 million and all the proceeds have been utilized by Gaming Holdings for the development and construction of the Aladdin. For further details on the Notes, including the 8 covenants, restrictions and limitations on Gaming Holdings pursuant to the Notes Indenture, see Exhibit 10.1 to Enterprises' Form 10-K for the year ended December 31, 1998. Gaming has a $410 million Credit Agreement ("Bank Credit Facility" or "Credit Agreement") with various financial institutions and The Bank of Nova Scotia as the administrative agent for the lenders (collectively, "Lenders"). The Credit Agreement consists of three separate term loans. Term A Loan comprises a term loan of $136 million and matures seven years after the initial borrowing date. Term B Loan comprises a term loan of $114 million and matures eight and one-half years after the initial borrowing date. Term C Loan comprises a term loan of $160 million and matures ten years after the initial borrowing date. As of June 30, 1999, approximately $57.8 million of the Term B Loan proceeds, plus accrued interest, and approximately $103.8 million of the Term C Loan proceeds, plus accrued interest, is available. The Term A Loan has not been funded. For further details on the Bank Credit Facility, including the covenants, restrictions and limitations on Gaming pursuant to the Bank Credit Facility, see Exhibit 10.12 to Enterprises' Form 10-K for the year ended December 31, 1998 and Exhibit 10.01 to Enterprises' Form 8-K, dated April 27, 1999. On April 16, 1999, effective as of March 10, 1999, the Lenders approved the Second Amendment to the Credit Agreement ("Second Amendment to the Credit Agreement"). The Second Amendment to the Credit Agreement provides or acknowledges: (i) the indebtedness incurred in connection with the Aladdin Music Project has been paid by or on behalf of Aladdin Music and this event of default has now been waived by the Lenders; (ii) a capital contribution in the amount of approximately $18.5 million has been made to bring the Main Project Budget "In Balance;" (iii) the approximately $6.5 million of letters of credit, which had been previously posted by London Clubs International, plc ("London Clubs") and the Sommer Trust to fund a prior increase in the Main Project Budget (and resulting imbalance), have been drawn and the proceeds deposited in Gaming's guaranty deposit account; (iv) amending certain definitions in the Credit Agreement, including, "Available Funds," "Indebtedness," and "Realized Savings;" (v) any costs in excess of $36 million for completing the Carpark will be funded by the Sommer Trust and London Clubs; (vi) Gaming will be required to maintain a minimum "Net Worth" at the close of each calendar month, until the end of the fiscal quarter during which the Project opens (and then reverting to the Credit Agreement's requirement to maintain the minimum Net Worth on a fiscal quarterly basis thereafter), of not less than $100 million plus 85% of positive Net Income (as defined in the Credit Agreement); and (vi) for other technical amendments to the Credit Agreement. The above summary should be read in conjunction with, and is qualified in its entirety by, the Second Amendment to the Credit Agreement previously filed as Exhibit 10.01 to Enterprises' Form 8-K, dated April 27, 1999. Gaming has been advised by its counsel that the Second Amendment to the Credit Agreement did not require the approval of either the FF&E Financing (as defined below) lenders or the holders of the Notes. Gaming has operating lease financing of up to $60 million and a term loan facility of $20 million to obtain gaming equipment and other specified equipment (collectively, "FF&E Financing"). For further details on the operating lease financing and term loan facility, including the covenants, restrictions and limitations on Gaming pursuant to the FF&E Financing, see Exhibit 10.40 to Enterprises' Form 10-K for the year ended December 31, 1998. Upon the later of (a) the transfer of the real property under the Mall Project by Gaming to Aladdin Bazaar, LLC ("Aladdin Bazaar") or (b) the commencement of Aladdin's operations, Aladdin Bazaar will execute a promissory note of approximately $16.7 million to Gaming. Principal and interest on the note is payable by Aladdin Bazaar to Gaming in the amount of $2 million per year. The required payments are subordinated to various restrictions under the Aladdin Bazaar operating agreement. Due to the restrictions upon the payments, there can be no assurances that Gaming will receive any payments under this note. 9 London Clubs, the Sommer Trust, and Aladdin Bazaar Holdings, LLC ("Bazaar Holdings"), which is owned 99% by the Sommer Trust, have entered into a completion guaranty ("Bank Completion Guaranty") for the benefit of the Lenders under the Bank Credit Facility, under which they have agreed to guarantee, among other things, the completion of the Aladdin. On April 5, 1999, effective as of March 10, 1999, the Sommer Trust, London Clubs, Bazaar Holdings and The Bank of Nova Scotia, as administrative agent for the Lenders, entered into the First Amendment to the Bank Completion Guaranty, which requires the Sommer Trust, London Clubs and Bazaar Holdings to guarantee Gaming's minimum Net Worth as required by the Second Amendment to the Credit Agreement discussed above. The Bank Completion Guaranty is not subject to any maximum dollar limitations. The holders of the Notes are not a party to the Bank Completion Guaranty, however, London Clubs, the Sommer Trust and Bazaar Holdings have entered into a limited completion guaranty for the benefit of the Noteholders ("Noteholder Completion Guaranty") under which they guarantee completion of the Aladdin, subject to certain important exceptions, limitations and qualifications. The Noteholder Completion Guaranty contains certain intercreditor provisions which significantly limit the rights of the Trustee under the Noteholder Completion Guaranty. In March, 1999, Gaming increased the Main Project Budget (as defined in the Credit Agreement) by approximately $18.5 million, which amount reflected an increase in construction costs of approximately $9.5 million and an increase in pre-opening costs of approximately $9 million. On April 2, 1999, pursuant to the Bank Completion Guaranty, which is a joint and several obligation of the Sommer Trust and London Clubs, London Clubs funded to Gaming all of the approximately $18.5 million March, 1999, increase in the Main Project Budget. In May and June, 1999, Gaming increased the Main Project Budget by approximately $11.4 million and $2.9 million, respectively. These amounts reflected an increase in construction costs of approximately $13.8 million and an increase in pre-opening costs of approximately $0.5 million. On June 15 and 18, 1999, pursuant to the Bank Completion Guaranty, London Clubs funded to Gaming approximately $11.4 million to fund the May, 1999, Main Project Budget increase and on July 19 and 27, 1999, also pursuant to the Bank Completion Guaranty, London Clubs funded to Gaming approximately $2.9 million to fund the June, 1999, Main Project Budget increase. As required by Gaming Holdings' Operating Agreement upon advances under the Bank Completion Guaranty, Gaming Holdings will issue, effective as of the dates of the respective fundings, Series A Preferred Shares in the names of Sommer Enterprises, LLC and London Clubs Nevada, Inc. in the amounts specified in Gaming Holdings' Operating Agreement. All said shares have been pledged in favor of the Lenders, and, on a subordinated basis, the shares issued in the name of Sommer Enterprises (as well as its Common Shares in Gaming Holdings) have been pledged in favor of London Clubs. In connection with the development of the Mall Project, Aladdin Bazaar will reimburse Gaming approximately $14.2 million for the construction of certain areas shared by the Aladdin and the Mall Project and the facade to the Aladdin. Additionally, Aladdin Bazaar is obligated to spend no more than $36 million for the Carpark. Therefore, any cost overruns associated with these items will be borne by Gaming. In addition, Gaming is obligated to pay to Aladdin Bazaar: (i) a $3.2 million fee per year for a term of 99 years, which is adjusted every fifth year pursuant to a consumer price index-based formula, for usage of the Carpark; and (ii) Gaming's proportionate share of the operating costs associated with the Carpark and other common areas. It was anticipated that Aladdin Music would carry out the renovation to the Theater. However, Gaming has an obligation to have the Theater renovated and operational by the opening 10 of the Aladdin and, because a joint venture partner and financing have not been secured for the Aladdin Music Project in time to meet this obligation, Gaming will renovate the Theater. Under the Credit Agreement, $15.0 million of the approximately $21.3 million which was designated for Gaming's investment in Aladdin Music will be allocated to the Theater renovation, and the remaining $6.3 million will reduce the Term A Loan. Notwithstanding the allocation of such funds to the Theater renovation, the Company continues to seek a joint venture partner and financing for the development of the Aladdin Music Project. Gaming Holdings believes that the funds provided by the Notes, Bank Credit Facility, FF&E Financing, London Clubs' equity contribution and contributions pursuant to the Bank Completion Guaranty (collectively, "Funding Transactions") will be sufficient to develop, complete and commence operation of the Aladdin. As of June 30, 1999, Gaming has utilized approximately $19.1 million of the $31.8 million contingency. However, there can be no assurance that the Funding Transactions will be sufficient for the development, construction and commencement of the Aladdin. Following the commencement of operations of the Aladdin, Gaming expects to fund its operating, debt service and capital needs, as currently contemplated, with $15 million of working capital from the Funding Transactions and operating cash flows. In addition, upon the opening of the Aladdin, Gaming is expected to have an aggregate of $10.0 million available under a working capital facility; however, there can be no assurance such facility will be available to Gaming, or that, if available, the facility will be on terms favorable to Gaming. Although no additional financing is contemplated, Gaming will seek, if necessary and to the extent permitted under the Notes Indenture and the terms of the Bank Credit Facility and the FF&E Financing, additional financing through additional bank borrowings or debt or equity financings. There can be no assurance that additional financing, if needed, will be available to Gaming, or that, if available, the financing will be on terms favorable to Gaming. There can also be no assurance that estimates by Gaming of its reasonably anticipated liquidity needs are accurate or that new business developments or other unforeseen events will not occur, resulting in the need to raise additional funds. YEAR 2000 The Company and its subsidiaries are development stage companies that are developing, constructing, and upon completion, will operate a hotel casino. The selection of software applications, hardware and other technology currently in use principally occurred within the last twelve months. The only computer systems in place at the current time are several financial applications, word processing and an internal email system that are Year 2000 compliant. Accordingly, it is not expected that the Company will incur significant amounts, if any, to modify its systems for Year 2000 compliance. Further, the Company has requested representation for software applications, hardware or other technology regarding 11 the Year 2000 compliance by the vendors from whom the Company has purchased or will purchase such products. The Company has requested representations regarding the Year 2000 compliance from Fluor Corporation and/or its subsidiary, Fluor Daniel, the design/builder for the Aladdin ("Design/Builder"), and through Design/Builder will seek similar representations of the other contractors and subcontractors for the construction of the Aladdin (collectively, "Contractors") to assess the impact of Year 2000 noncompliance on the construction of the Aladdin. Construction delays will have a significant impact on the financial results of the Company. There can be no assurance that the systems of the Contractors or other companies on which the company may rely, such as vendors, will be properly converted before the Year 2000 and that failure to convert by another company will not have an adverse effect on the Company's operations. CERTAIN FORWARD LOOKING STATEMENTS Certain information included in this Form 10-Q and other materials filed or to be filed by Enterprises with the SEC (as well as information included in oral statements or other written statements made, or to be made, by the Company) contain statements that are forward-looking within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements include, without limitation, those relating to plans for future operations, current construction and development activities (including completion dates, budgets and cost estimates), other business development activities, capital spending, financing sources, the Year 2000 compliance, the effect of regulation (including gaming and tax regulations) and competition. Such forward-looking information involves important risks and uncertainties that could significantly affect anticipated results in the future and, accordingly, such results may differ from those expressed in any forward-looking statements made by, or on behalf of, Enterprises. These risks and uncertainties include, but are not limited to, those relating to the current development and construction activities and costs and timing thereof, the sources and extent of financing for the project, dependence on existing management, leverage and debt service (including sensitivity to fluctuations in interest rates), domestic or international economic conditions (including sensitivity to fluctuations in foreign currencies), changes in federal or state tax laws or the administration of such laws, changes in gaming laws or regulations (including the legalization of gaming in certain jurisdictions) and application for licenses and approvals under applicable jurisdictional laws and regulations (including gaming laws and regulations). 12 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Effective June 30, 1999, Gaming restructured its interest rate swap arrangements in an effort to reduce future expenditures for interest. Gaming has entered into these agreements to manage interest expense, which is subject to fluctuations due to the variable nature of the London Interbank Offered Rate ("LIBOR"). In exchange for entering into the transaction, Gaming received $500,000 from the counterparty in July, 1999. Beginning June 30, 1999, Gaming has the following interest rate swaps, interest rate ceilings and floor caps, and related notional amounts in effect: (i) an interest rate swap with an original notional amount of $114 million increasing to a maximum of $222.5 million whereby interest is fixed at 5.50% through March 31, 2000; (ii) after March 31, 2000, an interest rate collar with a notional amount of $250 million, a maximum and minimum interest rate of 7.5% and 5.15%, respectively, will go into effect and mature on September 30, 2006; and (iii) an interest rate collar with a notional amount of $160 million, a maximum rate of 8.00%, a minimum rate of 5.15% and a maturity date of March 31, 2003. All rates noted above are LIBOR equivalents only and do not include the impact of the basis point additions to LIBOR that are used in calculating interest expense on Gaming's term loans. The LIBOR applicable to these agreements is adjusted every three months and on June 30, 1999 was set at 5.33%. The fair market value of the Gaming's interest rate swaps, interest rate ceilings and floor caps as provided by the counterparty, is a net receivable of approximately $1 million at July 21, 1999. The notional amounts do not represent amounts exchanged by the parties, and thus are not a measure of exposure of Gaming. The amounts exchanged are normally based on the notional amounts and other terms of the swaps. The variable rates are subject to change over time as LIBOR fluctuates. Neither Gaming nor the counterparty, which is a prominent financial institution, is required to collateralize their respective obligations under these swaps. Gaming is exposed to loss if the counterparty defaults. Gaming does not hold or issue rate agreements for trading purposes. 13 PART II OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits 10.01 Amendment and Agreement to the Energy Service Agreement, dated September 25, 1998, between Northwind Aladdin, LLC and Aladdin Gaming, LLC. 10.02 Second Amendment and Agreement to the Energy Service Agreement, dated May 28, 1999, between Northwind Aladdin, LLC and Aladdin Gaming, LLC. 10.03 Third Amendment and Agreement to the Energy Service Agreement, dated May 28, 1999, between Northwind Aladdin, LLC and Aladdin Gaming, LLC. 10.04 Energy Services Coordination Agreement, dated May 28, 1999, between Aladdin Gaming, LLC and Aladdin Bazaar, LLC. 10.05 Consent and Ratification and Reaffirmation Agreement, dated May 27, 1999, between The Bank of Nova Scotia in its capacity as the Administrative Agent for the Lenders and Aladdin Gaming, LLC. 10.06 Subordination, Non-Disturbance and Attornment Agreement and Consent, dated June 7, 1999, between The Bank of Nova Scotia, as the administrative agent for the Aladdin Lenders, Northwind Aladdin, LLC, Aladdin Gaming, LLC and State Street Bank and Trust Company, as collateral agent for the Northwind Noteholders, Aladdin Music, LLC and Aladdin Music Gaming Holdings, LLC. 27.01 Financial Data Schedule (b) Reports on Form 8-K
On April 28, 1999, Enterprises filed a Form 8-K, dated April 27, 1999, with the United States Securities and Exchange Commission. The Form 8-K reported on certain amendments to Aladdin Gaming, LLC's credit agreement and attached revised financial statements for Aladdin Gaming Enterprises, Inc. and Aladdin Gaming Holdings, LLC. 14 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. ALADDIN GAMING ENTERPRISES, INC. August 16, 1999 By: /s/ Ronald Dictrow ----------------------------------- Ronald Dictrow, Secretary August 16, 1999 By: /s/ Cornelius T. Klerk ----------------------------------- Cornelius T. Klerk, Treasurer 15 EXHIBIT INDEX
Exhibit No. Description Page No. - ----------- ----------- -------- 10.01 Amendment and Agreement to the Energy Service Agreement, dated September 25, 1998, between Northwind Aladdin, LLC and Aladdin Gaming, LLC. 10.02 Second Amendment and Agreement to the Energy Service Agreement, dated May 28, 1999, between Northwind Aladdin, LLC and Aladdin Gaming, LLC. 10.03 Third Amendment and Agreement to the Energy Service Agreement, dated May 28, 1999, between Northwind Aladdin, LLC and Aladdin Gaming, LLC. 10.04 Energy Services Coordination Agreement, dated May 28, 1999, between Aladdin Gaming, LLC and Aladdin Bazaar, LLC. 10.05 Consent and Ratification and Reaffirmation Agreement, dated May 27, 1999, between The Bank of Nova Scotia in its capacity as the Administrative Agent for the Lenders and Aladdin Gaming, LLC. 10.06 Subordination, Non-Disturbance and Attornment Agreement and Consent, dated June 7, 1999, between The Bank of Nova Scotia, as the administrative agent for the Aladdin Lenders, Northwind Aladdin, LLC, Aladdin Gaming, LLC and State Street Bank and Trust Company, as collateral agent for the Northwind Noteholders, Aladdin Music, LLC and Aladdin Music Gaming Holdings, LLC. 27.01 Financial Data Schedule
16 EX-10.1 2 EXHIBIT 10.1 EXHIBIT 10.01 AMENDMENT AND AGREEMENT This Amendment and Agreement (hereinafter the "Amendment") is made and entered into as of the 25th day of September, 1998 between Northwind Aladdin, LLC, a Nevada limited-liability company ("Northwind") and Aladdin Gaming, LLC, a Nevada limited-liability company ("Aladdin"). W I T N E S S E T H: WHEREAS, Northwind and Aladdin are parties to (i) that certain Lease dated as of December 3, 1997 (the "Lease"), (ii) that certain Development Agreement dated as of December 3, 1997 (the "Development Agreement"), and (iii) that certain Energy Service Agreement dated as of September 25, 1998 (the "Energy Service Agreement", and, collectively with the Lease and the Development Agreement, the "Agreements"); and WHEREAS, the Agreements contemplate that Northwind will construct and operate the "Northwind Facilities" (as such term is defined in the Energy Service Agreement) to provide hot water, chilled water and electricity services to Aladdin, including construction and operation of certain facilities to generate electricity; and WHEREAS, the parties have determined that it shall not be necessary for the Northwind Facilities to include facilities for generating electricity and accordingly the parties desire to amend the Agreements to reflect such determination; NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, it is hereby agreed between Northwind and Aladdin as follows: 1. Any capitalized term in this Amendment that is not defined herein shall have the meaning specified or referred to in Annex A to the Energy Service Agreement. 2. Notwithstanding any provisions in the Lease which obligate Northwind to construct or operate facilities for the generation of electricity for the benefit of Aladdin or obligate Aladdin to compensate Northwind therefor, neither Northwind nor Aladdin shall have any such obligations nor shall Northwind or Aladdin be entitled to receive any such benefits and the Lease is amended accordingly, effective immediately. This Amendment shall be considered Amendment No. 1 to the Lease. Except as expressly amended herein, the Lease remains in force. 3. Notwithstanding any provisions in the Development Agreement which obligate Northwind to construct or operate facilities for the generation of electricity for the benefit of Aladdin or obligate Aladdin to compensate Northwind therefor, neither Northwind nor Aladdin shall have any such obligations nor shall Northwind or Aladdin be entitled to receive any such benefits and the Development Agreement is amended accordingly, effective immediately. This Amendment shall be considered Amendment No. 1 to the Development Agreement. Except as expressly amended herein, the Development Agreement remains in force. 1 4. Notwithstanding any provisions in the Energy Service Agreement which obligate Northwind to construct or operate facilities for the generation of electricity for the benefit of Aladdin or obligate Aladdin to compensate Northwind therefor, neither Northwind nor Aladdin shall have any such obligations nor shall Northwind or Aladdin be entitled to receive any such benefits and the Energy Service Agreement is amended accordingly, effective immediately. This Amendment shall be considered Amendment No. 1 to the Energy Service Agreement. Except as expressly amended herein, the Energy Service Agreement remains in force. 5. Notwithstanding any provision in this Amendment, as of the Substantial Completion Date, Northwind shall supply Services to Aladdin in an amount equal to the Customer Energy Requirements, including, but not limited to, the Specified Demand Amount. 6. This Amendment will be governed by and construed in accordance with the internal laws and decisions of the State of Nevada. 7. Time is of the essence hereof. 8. This Amendment may be executed in one or more counterparts, each of which will be considered an original instrument, but all of which will be considered one and the same agreement, and will become binding when one or more counterparts have been signed by each of the parties hereto and delivered to Northwind and to Aladdin. 9. Neither Northwind nor Aladdin shall assign its interest or delegate its duties under this Amendment except in accordance with Section 10.2 of the Energy Service Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above. NORTHWIND ALADDIN, LLC, ALADDIN GAMING, LLC, a Nevada limited-liability company a Nevada limited-liability company By: /s/ John Milota By: /s/ Richard Goeglein --------------------------------- ----------------------------- Name: John Milota Name: Richard Goeglein Title: Vice President & General Manager Title: President & Chief Executive Officer 2 EX-10.2 3 EXHIBIT 10.2 EXHIBIT 10.02 SECOND AMENDMENT AND AGREEMENT This Second Amendment and Agreement (hereinafter the "Amendment") is made and entered into as of the 28th day of May, 1999 between Northwind Aladdin, LLC, a Nevada limited-liability company ("Northwind") and Aladdin Gaming, LLC, a Nevada limited-liability company ("Aladdin"). WITNESSETH: WHEREAS, Northwind and Aladdin are parties to (i) that certain Lease dated as of December 3, 1997 ( the "Lease"), (ii) that certain Development Agreement dated as of December 3, 1997 (the "Development Agreement"), and (iii) that certain Energy Service Agreement dated as of September 24, 1998 (the "Energy Service Agreement", and, collectively with the Lease and the Development Agreement, the "Agreements"); and WHEREAS, the Agreements contemplate that Northwind will construct and operate the "Northwind Facilities" (as such term is defined in the Energy Service Agreement) to provide hot water, chilled water and electricity services to Aladdin, including construction and operation of certain facilities to generate electricity; and WHEREAS, the parties on September 25, 1998 executed an Amendment and Agreement to the Agreements ("Amendment No. 1") providing that is shall not be necessary for the Northwind Facilities to construct or operate facilities for generating electricity; and WHEREAS, the parties have determined that is shall be necessary for Northwind to construct and operate facilities for generating "Emergency Power" (as such term is defined herein below), and accordingly the parties desire to amend the Agreements to reflect such determination; WHEREAS, the parties also have determined that is shall be necessary to clarify the definition of "Investment in the Northwind Facilities," and accordingly the parties desire to amend the Energy Service Agreement accordingly. NOW, THEREFORE, in consideration of the mutual covenants and agreements hereinafter set forth, it is hereby agreed between Northwind and Aladdin as follows: 1. Any capitalized term in this Amendment that is not defined herein shall have the meaning specified or referred to in Annex A to the Energy Service Agreement. 2. The definition of "Development Costs" in Annex A to the Energy Service Agreement is hereby deleted and replaced with the following: "DEVELOPMENT COSTS" means the aggregate of: (a) all costs and expenses of the Supplier, the Customer and Music incurred prior to December 3, 1997 for outside engineering work in connection with the design and construction of the Northwind Facilities and the matters set forth in this Agreement and the Related Agreements and the documentation thereof; (b) all costs and expenses of the Supplier incurred on or after December 3, 1997 -1- in connection with the design and construction of the Northwind Facilities and the matters set forth in this Agreement and the Related Agreements and the documentation thereof, provided that internal legal and engineering costs and expenses shall only be included to the extent that the same do not exceed, in the aggregate, $375,000; and (c) all costs and expenses of the Customer incurred in connection with the matters set forth in this Agreement and the Related Agreements and the documentation thereof, and (d) all costs and expenses of the Customer incurred on or after December 3, 1997 for outside engineering work in connection with the design and construction of the Northwind Facilities and the matters set forth in this Agreement and the Related Agreements and the documentation thereof; but only to the extent that the same, when aggregated with all of the costs and expenses of Customer for outside engineering work prior to December 3, 1997, in the aggregate do not exceed an amount reasonably agreed to in writing, by Customer and Supplier. 3. Section I.D.(i) of Exhibit C to the Energy Service Agreement is hereby deleted and replaced with the following: ["]the 'Plant Price' (as defined in the Development Agreement[)]; PLUS" 4. Notwithstanding any provisions in Amendment No. 1 to the Lease, Northwind shall have the obligation to construct, operate and maintain facilities for the generation and delivery of Emergency Power, as defined below, for the benefit of Aladdin and shall deliver Emergency Power to Aladdin in accordance with Paragraph 7 hereof, and the Lease is amended accordingly, effective immediately. This Amendment shall be considered Amendment No. 2 to the Lease. Except as expressly amended herein, the Lease remains in force. 5. Notwithstanding any provisions in Amendment No. 1 to the Development Agreement, Northwind shall have the obligation to construct, operate and maintain facilities for the generation and delivery of Emergency Power, as defined below, for the benefit of Aladdin and shall deliver Emergency Power to Aladdin in accordance with Paragraph 7 hereof, and the Development Agreement is amended accordingly, effective immediately. This Amendment shall be considered Amendment No. 2 to the Development Agreement. Except as expressly amended herein, the Development Agreement remains in force. 6. Notwithstanding any provisions in Amendment No. 1 to the Energy Service Agreement, Northwind shall have the obligation to construct, operate and maintain facilities for the generation and delivery of Emergency Power, as defined below, for the benefit of Aladdin and shall deliver Emergency Power to Aladdin in accordance with paragraph 7 hereof, but only on a standby basis in the event that Aladdin's regular electricity supply has failed for whatsoever reason. The Energy Service Agreement is amended accordingly, effective immediately. 7. Emergency Power shall mean the supply, installation, operation and servicing of three (3) 1,750 kilowatt diesel engine generators, with a total capacity of 5.25 megawatts. Two such generators shall start, synchronize and deliver power within ten (10) seconds or less from any loss of electric power. The third such generator shall start, synchronize and deliver power within fifteen (15) to twenty (20) seconds or less from any loss of electric power. All three -2- generators shall be operated using diesel fuel. Northwind shall maintain a fuel supply sufficient to run all three generators at full capacity for a minimum time of two (2) hours. Emergency Power shall be provided for the "Legally Required Load" to all Aladdin facilities served in ten (10) seconds or less from the loss of electric power. The Legally Required Load is defined as 1.9 MVA delivered to Aladdin and which shall provide electricity for egress lighting, smoke management, special egress control devices, required elevators, and cooling for associated machine rooms, fire pumps and emergency communication systems. Once power is delivered for the Legally Required Load, Emergency Power shall be provided for all designated "Optional Loads" in twenty (20) seconds or less from the loss of electric power. Optional Loads means 1.55 MVA delivered to Aladdin and which shall be segregated from the Legally Required Load pursuant to National Electric Code requirements, and shall have load and delay capabilities. The method of segregation shall be compatible with the Plant's paralleling switchgear master controls. Integration at the controls must be a coordinated effort between the CUP and user engineers. In the case where one (1) of the three (3) diesel generator sets is not operations or the Legally Required Load approaches the rating of two (2) of the three (3) diesel generator sets, delayed optional load transfer and/or load shedding shall be utilized to provide priority and capacity for the legally Required Load. 8. Notwithstanding any provision in this Amendment, as of the Initial Services Date, Northwind shall provide the Initial Services to Aladdin in an amount required by Aladdin which does not exceed the Initial Customer Energy Requirements and as of the Substantial Completion Date, and Northwind shall supply Services to Aladdin in an amount required by Aladdin which does not exceed the Customer Energy Requirement, including, but not limited to, the Specified Demand Amount. 9. This Amendment shall be considered Amendment No. 2 to the Energy Service Agreement. Except as expressly amended herein, the Energy Service Agreement remains in force. 10. This Amendment will be governed by and construed in accordance with the internal laws and decisions of the State of Nevada. 11. Time is of the essence hereof. 12. This Amendment may be executed in one or more counterparts, each of which will be considered an original instrument, but all of which will be considered one and the same agreement, and will become biding when one or more counterparts have been signed by each of the parties hereto and delivered to Northwind and to Aladdin. 13. Neither Northwind nor Aladdin shall assign its interest or delegate its duties under this Amendment except in accordance with Section 10.2 of the Energy Service Agreement. -3- IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above. NORTHWIND ALADDIN, LLC, ALADDIN GAMING, LLC, a Nevada limited-liability company a Nevada limited-liability company By: /s/ John Mitola By: /s/ Richard Goeglein ---------------------------------- ------------------------------- Name: John Mitola Name: Richard Goeglein Title: Vice President & General Manager Title: President & Chief Executive Officer -4- EX-10.3 4 EXHIBIT 10.3 EXHIBIT 10.03 THIRD AMENDMENT AND AGREEMENT This Third Amendment is made and entered into as of the 28th day of May, 1999 between Northwind Aladdin, LLC, a Nevada limited-liability company ("Northwind") and Aladdin Gaming, LLC, a Nevada limited-liability company ("Aladdin"). WITNESSETH: WHEREAS, Northwind and Aladdin are parties to (i) that certain Lease dated as of December 3, 1997 (the same, as previously amended and in effect on the date hereof, being herein referred to as the "Lease"), (ii) that certain Development Agreement dated as of December 3, 1997 (the same, as previously amended and in effect on the date hereof, being herein referred to as the "Development Agreement"), and (iii) that certain Energy Service Agreement dated as of September 24, 1998 (the same, as previously amended and in effect on the date hereof, being herein referred to as the "Energy Service Agreement"); and WHEREAS, the parties desire to further amend the Lease, the Development Agreement and the Energy Service Agreement in certain respects set forth herein; NOW, THEREFORE, the parties hereby agree as follows: 1. AMENDMENT OF LEASE. The Lease is hereby amended to provide that (i) notwithstanding anything in Article 12 of the Lease to the contrary, water for the operation of the Project shall be supplied by Landlord. Tenant shall, at its expense, install a submeter to measure the consumption of water by Tenant. Tenant shall reimburse Landlord, within 30 days after being billed therefor, for such water consumed by Tenant. The amount to be reimbursed by Tenant shall equal Tenant's pro rata share of Landlord's actual, total bill from the utility providing the water (and Tenant's pro rata share shall be determined based upon the consumption measured by the submeter); and (ii) Exhibit A and Exhibit B thereto shall be in the form of Exhibit I and II to this Amendment. 2. AMENDMENT OF DEVELOPMENT AGREEMENT. The Development Agreement is hereby amended to provide that Exhibit A thereto shall be in the form of Exhibit II to this Amendment, Exhibit B thereto shall be in the form of Exhibit III to this Amendment, Exhibit E thereto shall be in the form of Exhibit IV to this Amendment and Exhibit F thereto shall be in the form of Exhibit V to this Amendment. 3. AMENDMENT OF ENERGY SERVICE AGREEMENT. The Energy Service Agreement is hereby amended to provide that Exhibit A thereto shall be in the form of Exhibit VI to this Amendment, Exhibit B thereto shall be in the form of Exhibit VII to this Amendment, Exhibit D thereto is deleted in its entirety, and Exhibit G thereto shall be in the form of Exhibit I to this Amendment. The Energy Service Agreement is further amended to provide that: (i) the "Initial Services Date" shall be that date specified by Aladdin which date shall not be less than 45 days after receipt by Northwind Aladdin of such written specification; 1 (ii) the temperature at which chilled water shall be delivered by the Supplier to the customer at the Chilled Water Delivery Point shall be not higher than forty degrees Fahrenheit (40F). (iii) the temperature at which chilled water shall be returned to the Supplier by the Customer at the Chilled Water Return Point shall be not lower than fifty six degrees Fahrenheit (56F); (iv) the temperature at which hot water shall be delivered by the Supplier to the Customer at the Hot Water Delivery Point shall be not lower than two hundred ten degrees Fahrenheit (210F); and (v) the temperature at which hot water shall be returned tot he Supplier by the Customer at the Hot Water Delivery Point shall be not lower than one hundred seventy five degrees Fahrenheit (175F). The Energy Service Agreement is further amended by amending Exhibit C thereto as follows: The final paragraph of the definition of the "Operational Charge" set forth in D of I of Exhibit C is restated in its entirety as follows: At the option of the Customer, exercised by written notice to the Supplier given not less than thirty (30) days prior to the end of any Contract Year, the Customer may elect to have the Operational Charge for the next Contract Year fixed at an amount equal to one hundred twenty percent (120%) of the Operational Charge for the Contract Year then ended (as determined pursuant to clause i above (the "Fixed Operational Charge Amount")). Thereafter, for each new Contract Year the Operational Charge shall be equal to the Fixed Operational Charge Amount multiplied by a fraction, the denominator of which shall be the CPI as of the most recent date of publication thereof prior to the first day of the Contract Year for which the Fixed Operational Charge Amount was first established and the numerator of which shall be the CPI most recently published prior to the first day of such new Contract Year. 5. EFFECTIVENESS. The amendments set forth in Sections 1, 2 and 3 shall be effective immediately upon execution of this Amendment by Northwind and Aladdin. Except as expressly set forth herein, the Lease, the Development Agreement and the Energy Service Agreement are not amended or modified hereby and continue in full force and effect. From and after the date of execution of this Amendment by Northwind and Aladdin, unless the context otherwise expressly so states, all references to the Lease, the Development Agreement or the Energy Service Agreement shall mean and include such agreement as amended hereby. 6. Shortly after executing the Lease and the Development Agreement, Northwind and Aladdin agreed to amend and restate (i) the Lease in the form attached hereto as Exhibit A and (ii) the Development Agreement in the form attached hereto as Exhibit B. Northwind and Aladdin hereby ratify and adopt the Lease and the Development Agreement, as so amended and restated, effective as of December 3, 1997, and agree that as of such date the original Lease and the original Development Agreement were superceded by the Lease attached hereto as Exhibit A 2 and the Development Agreement attached hereto as Exhibit B, respectively. All references to the Lease and/or the Development Agreement contained herein or in any other instrument executed by the parties hereto shall refer to the Lease and/or the Development Agreement, as the case may be, as so amended and restated. IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first written above. ALADDIN GAMING, LLC, a Nevada limited-liabilitycompany By: /s/ Richard Goeglein ------------------------------ Name: Richard Goeglein Title: President & Chief Executive Officer NORTHWIND ALADDIN, LLC, a Nevada limited-liability company By: /s/ John Mitola ------------------------------ Name: John Mitola Title: Vice President & General Manager 3 EXHIBIT I 4 EXHIBIT II 5 EXHIBIT III 6 EXHIBIT IV 7 EXHIBIT V 8 EXHIBIT VI 9 EXHIBIT VII 10 EX-10.4 5 EXHIBIT 10.4 EXHIBIT 10.04 ENERGY SERVICES COORDINATION AGREEMENT This Energy Services Coordination Agreement ("the Agreement") is made and entered into as of this 28th day of May 1999 (the "Effective Date"), by and among (i) Aladdin Gaming, LLC ("Aladdin"), a limited liability company organized under the laws of the State of Nevada and (ii) Aladdin Bazaar, LLC ("Bazaar"), a Delaware limited liability company (each of Aladdin and Bazaar named individually as a "Party" and collectively as the "Parties"). W I T N E S S E T H WHEREAS, the Parties plan to participate in the development, construction and operation of (i) 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 "Aladdin Hotel and Casino"); (ii) a high-end themed entertainment shopping mall with a gross-leasable area of approximately 450,000 square feet (the "Desert Passage"); and (iii) a 4,800-space parking facility (the "Carpark" and together with the Desert Passage, the "Mall Project"). The Aladdin Hotel and Casino and the Mall Project are hereinafter referred to as the "Complex." WHEREAS, Aladdin has entered into an agreement with Northwind Aladdin, LLC (the "Energy Provider"), a company a majority of which is indirectly-owned by Unicom Corporation, dated as of December 3, 1997 (as amended and in effect from time to time the "Development Agreement") to develop and construct an energy facility (the "Plant") to supply the hot water, chilled water and electricity needs of the Complex (the "Energy Services") with the understanding that the Mall Project intends to acquire Energy Services, as further set forth herein, from the Energy Provider, and further, that Bazaar would enter into this Agreement; WHEREAS, Aladdin is the beneficiary of a guaranty of Unicom Corporation (the "Guarantor"), dated as of December 3, 1997 (as amended and in effect from time to time the "Guaranty") pursuant to which the Guarantor unconditionally and irrevocably guaranties to Aladdin the performance of the obligations and duties of the Energy Provider under the Development 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"; WHEREAS, Aladdin has entered into a lease with the Energy Provider dated as of December 3, 1997 (as amended and in effect from time to time the "Lease") to lease a site (the "Site") to the Energy Provider on which the Energy Provider will construct and operate the Plant pursuant to the Development Agreement and the Energy Service Agreements; WHEREAS, each of the Parties has entered into an energy service agreement with the Energy Provider dated as of September 24, 1998 (as amended and in effect from time to time 1 the "Energy Service Agreements" and together with the Development Agreement, the Guaranty and the Lease, the "Project Agreements") to operate the Plant and to provide Energy Services to each of the Parties for an initial term of twenty (20) years (the "Initial Term"); WHEREAS, the Energy Provider has agreed pursuant to the terms of the Development Agreement and the Energy Service Agreements to finance the development, construction and initial operation of the Plant; WHEREAS, the Energy Provider will recover its investment in the Plant pursuant to a monthly capacity charge set forth in the Energy Service Agreements (the "Contract Capacity Charges") to be collected from each of the Parties pursuant to the terms of the respective Energy Service Agreements; and WHEREAS, the Parties desire to set forth their understandings as to their respective rights, obligations and interests with respect to the development, construction, operation and ownership of the Plant as set forth in the Project Agreements; the responsibilities of each Party with respect to the Contract Capacity Charges; the procedures to be followed in the event of an Energy Provider default or defaults under the Project Agreements; and certain other matters with respect to the Plant and the Energy Services. NOW, THEREFORE, in consideration of the premises and mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties, intending to be legally bound, hereby agree as follows: ARTICLE 1 DEFINITIONS AND INTERPRETATION; ASSIGNMENT 1.1 DEFINITIONS. Capitalized terms used herein shall have the meanings set forth in Exhibit A (unless a different meaning shall be expressly stated herein). ARTICLE 2 GENERAL OBLIGATIONS 2.1 GOOD FAITH OF THE PARTIES. During the term of this Agreement, the Parties will each (i) exercise good faith efforts in performing their respective obligations under this Agreement and the Project Agreements, (ii) cooperate and communicate fully with one another to that end and (iii) continue in good faith to meet their respective obligations under this Agreement and the Project Agreements to provide information and assistance requested by the Energy Provider to be utilized by it in its development, construction and operation of the Plant subject to the terms and conditions of this Agreement and the Project Agreements. 2.2 PARTIES' POWER TO BIND COMPANIES. No Party or affiliate thereof shall take any action purporting to bind any other Party or its affiliates. All actions in connection with the development, construction and operation of the Plant undertaken after the execution of this Agree- 2 ment by the Parties or their affiliates without the prior written approval of the Management Committee, as defined below, are at their sole risk and expense. 2.3 COMPLIANCE WITH PROJECT AGREEMENTS. No Party shall take, allow, permit, cause or fail to take any action which results in a material breach of the Project Agreements by any person or entity party thereto. Each Party shall enforce and shall not permit the breach of any terms or provisions of the Project Agreements to which such Party is a party. (a) In the event a Party does allow, permit or cause, through action or, when obligated to act as provided therein or above, inaction, the breach of any provision of a Project Agreement, such Party shall promptly remedy such breach at its sole cost and expense and shall be solely liable for any costs, other than consequential damages, resulting from such breach. (b) In the event a Party causes any of the other Parties to incur costs and/or expenses pursuant to a Project Agreement, such Party shall be solely liable for such costs and/or expenses, other than consequential damages, and such Party shall pay to the other Parties incurring any such cost, interest on amounts expended by such Parties, as provided in Section 8.5 hereof. 2.4 COORDINATION REGARDING ENERGY SERVICES. In the event that any of the Parties are unable for any reason and at any time to obtain sufficient levels of any of the Energy Services from the Energy Provider, the other Party or Parties shall use good faith efforts, at no cost thereto, to assist the Party or Parties in obtaining such Energy Services from alternative sources acceptable to such Party or Parties. 2.5 ASSIGNMENT OF DEVELOPMENT AGREEMENT AND GUARANTY. (a) As an inducement to The Bank of Nova Scotia, in its capacity as the administrative Agent for certain Lenders (in such capacity, the "Administrative Agent"), to consent to the execution and delivery of this Agreement and to Bazaar to enter into this Agreement, Aladdin hereby absolutely and unconditionally grants, assigns, transfers, conveys and delivers all of Aladdin's right, title, interest, benefits and privileges under the Development Agreement and the Guaranty to the Administrative Agent for the benefit of such Lenders, as the senior assignee (the "Senior Assignee") and Bazaar, as the junior assignee (the "Junior Assignee"); provided, however, during such time as Aladdin is enforcing in all material respects the obligations of the other parties to the Development Agreement and the Guaranty, Aladdin shall have a revocable license to receive and collect all amounts due or which may become due to Aladdin under the Development Agreement and the Guaranty, as applicable, and make all claims and demands thereunder. If at any time prior to the performance by the other parties of their respective obligations under the Development Agreement and the Guaranty Aladdin for any reason whatsoever fails, refuses or is unable to enforce the provisions of the Development Agreement and the Guaranty in all material respects, either of the Senior Assignee or the Junior Assignee may demand that Aladdin enforce such obligations under the Development Agreement and the Guaranty. Such demand shall be given in accordance with the notice provisions in Article 11. If Aladdin is unable or fails to resume enforcement of the Development Agreement and the Guaranty, as the case may be, within five (5) days after the date of such notice, the Senior Assignee shall have the sole right to enforce the Development Agreement and the Guaranty. If the Senior Assignee does not exercise such right within 10 days after the 3 date of such notice or, if after such exercise does not diligently enforce such obligations in all material respects, the Junior Assignee shall have the right to exercise such right to enforce the Development Agreement and the Guaranty by giving notice to Aladdin and the Senior Assignee of its intention to do so. (b) Notwithstanding anything to the contrary in clause (a) of this Section 2.5, Bazaar agrees with the Administrative Agent that Bazaar's sole remedy for the failure of the Administrative Agent to exercise its rights under clause (a) shall be the exercise of Bazaar's rights to compel enforcement of the Development Agreement and the Guaranty in accordance with clause (a) and that Bazaar shall have no rights to sue for, seek or collect from the Administrative Agent any monetary or other damages of any sort whatsoever including, without limitation, actual, compensatory, consequential, punitive or special damages. (c) Aladdin agrees that the provisions of Section 10.4 of that certain Agreement between Aladdin, the Administrative Agent and others dated as of February 26, 1997, as the same may be amended from time to time, shall apply to any exercise by the Administrative Agent of any of its rights under this Agreement. ARTICLE 3 MANAGEMENT COMMITTEE 3.1 AUTHORITY. As soon as possible after the Effective Date, the Parties agree to establish a management committee ("the Management Committee") to monitor and supervise the implementation of this Agreement and certain activities related to the Project Agreements. The Management Committee shall have the power and authority to: (i) supervise the implementation of, and take whatever actions are reasonably necessary to effect the implementation of, this Agreement and the Project Agreements; (ii) set the principles for negotiating all amendments, modifications and renewals of this Agreement and the Project Agreements; (iii) set the principles for negotiating all contracts for energy services the Energy Provider may seek to negotiate with third parties; (iv) appoint and supervise a Person (the "Energy Services Liaison") to be responsible for monitoring the day-to-day development, construction and operation of the Plant and acting as the Parties' first and primary contact with the Energy Provider in the event of an Energy Provider Default; (v) allocate among the Parties any net proceeds or economic benefits derived from the Energy Provider's sale of energy services to third parties ("Third-Party Sales Proceeds"), from any lines fees, transmission fees, tariffs or other such amounts paid by any of Bazaar's tenants to utilize the Plant or any power lines or other infrastructure connected thereto if any such tenant elects to obtain electricity service from a provider other than the provider providing electricity services to the Mall Project ("Tenant Sales Proceeds") or from any condemnation proceeds payable with respect to the Plant pursuant to Article 8 of the Lease ("Condemnation Proceeds") according to the respective interests of the Parties in and to the Plant, as such interests are set forth in, and as otherwise provided in, Section 3.8 below; and (vi) take any actions reasonably necessary to effect the purposes of this Agreement and of the Project Agreements. 4 3.2 REPRESENTATION. (a) The Management Committee shall be composed of four (4) representatives as follows: (i) Aladdin shall appoint two (2) representatives (and two (2) alternative representatives) to represent the interests of the Aladdin Hotel and Casino on the Management Committee. Initially, Aladdin's representatives shall be Richard Goeglein and James McKennon and its alternate representatives shall be Ronald Dictrow and Jack Sommer; and (ii) Bazaar shall appoint two (2) representatives (and two (2) alternative representatives) to represent the interests of the Mall Project on the Management Committee. Initially, Bazaar's representatives shall be Ronald Dictrow and Jim Harris and its alternate representatives shall be Jack Sommer and Ken Gillett. (b) Each Party shall as soon as possible after the Effective Date give notice in writing to the other Parties of the names and addresses of its representatives and alternative representatives and, following the designation of the Energy Services Liaison, shall give notice to the Energy Services Liaison of at least five (5) business days in advance of changes in representation or alternative representation of the Management Committee. Each representative shall have only one vote on Management Committee decisions. Each Party's representatives or alternative representatives in the absence of a Party's representatives, shall be authorized, collectively and individually, to represent and to bind such Party with respect to any matter which is within the powers and authority of the Management Committee as set forth in this Agreement. Each Party, through its representatives, shall inform the other Parties of any information it anticipates will affect the rights, duties and/or obligations of any other Party under this Agreement. For the purposes of this Agreement, the term "representative" or "representatives" shall hereafter be deemed to include any alternate representative taking the place of an absent representative. 3.3 ORGANIZATIONAL MEETING; CHAIRMAN AND ENERGY SERVICES LIAISON. (a) Following the Effective Date, the Management Committee shall meet within thirty (30) days (the "Organizational Meeting") and at such meeting shall: (i) elect one (1) of the representatives to serve as the Chairman of the Management Committee (the "Chairman"). The Chairman shall be elected by a majority vote of the representatives serving on the Management Committee present at such first meeting; and (ii) appoint and provide for the terms and conditions for the employment and compensation of the Energy Services Liaison, whose duties are set forth in Article 5. 5 (b) On or about each annual anniversary of the Organizational Meeting, such meeting to be held in accordance with Section 3.4 below, the Parties shall hold an election, and a Chairman will be elected in accordance with the provisions of this Section 3.3. (c) The Management Committee may replace the Energy Services Liaison at any meeting held in accordance with Section 3.4. 3.4 MEETINGS. (a) Following the Organizational Meeting, the Management Committee shall meet as determined in accordance with this Section 3.4. The Chairman shall deliver to each of the Parties' representatives and each of the alternate representatives a proper notice consisting of the date, time, location and agenda of the meeting selected in good faith at least ten (10) business days in advance of such meeting, except that such notice requirements may be waived on a case-by-case basis upon the unanimous written agreement of the representatives who did not receive notice of such meeting as required. Any representative may request a meeting of the Management Committee by giving proper notice consisting of the date, time, location and agenda of the meeting to the other representatives at least ten (10) business days in advance of such meeting. (b) Attendance at meetings of the Management Committee by a Party's representatives may include attendance by phone. In the event any representative of a Party misses a meeting after proper notice under subsection (a) of this Section 3.4, then for the sole purpose of any vote taken at that meeting called with respect to any item listed on the agenda for such missed meeting, a quorum shall be deemed to consist of the representatives present at such meeting and the requirement for a majority vote in Section 3.5 shall only refer to the vote or votes of the representatives present at such meeting. 3.5 VOTING. (a) Except as specified in Sections 3.4(b) and 3.5(b), and subject to Article 4, all decisions, approvals and other actions of the Management Committee shall require the majority vote of all representatives present and having the right to vote at a meeting. In the event that the vote on any decision, approval or other such action is deadlocked and such deadlock is not resolved within three (3) days after the initial vote on such matter, then any Party may submit such matter to arbitration in accordance with the provisions of Article 8. (b) Notwithstanding anything to the contrary contained in Section 3.5(a), any decision, approval or other action which reasonably could be believed to materially affect a Party's rights, duties or obligations under its Energy Service Agreement or the development or operation of its portion of the Complex shall require the express written consent of such Party, which may be withheld in such Party's reasonable discretion. Such decisions include, by way of illustration and not by way of limitation, the decision to release the Guarantor from the Guaranty, to modify, amend or terminate the Guaranty, or to increase the Plant Price (as defined in the Development Agreement) above $45,000,000.00. 6 3.6 OTHER COMMITTEES. The representatives may by mutual agreement establish such other committees as deemed necessary. The provisions of Article 3 hereof shall apply to the workings of each such committee; PROVIDED, HOWEVER, that in the event any such committee is unable to reach a majority decision with respect to any matter before it, the decision shall be referred to the Management Committee for final decision. 3.7 COSTS. Each Party will bear its own costs in connection with its participation in the Management Committee, and any other committee established pursuant to Section 3.6 hereof, and this Agreement. 3.8 DIVISION OF THIRD-PARTY SALES PROCEEDS, TENANT SALES PROCEEDS AND CONDEMNATION PROCEEDS. At such time as the Parties have reason to believe that Third-Party Sales Proceeds may be generated from the Plant, the Parties shall agree upon the respective percentages of Third-Party Sales Proceeds to which the Parties shall be entitled, including, but not limited to, the percentage of Third-Party Sales Proceeds which shall be considered an increase in the rent payable by the Energy Provider to Aladdin pursuant to the Lease as a result of the Energy Provider's sale of energy services to third parties, which agreement shall require the unanimous consent of the Parties. Tenant Sale Proceeds shall be divided such that seventy-five percent (75%) of such proceeds shall be attributed to the infrastructure of the Plant and twenty-five percent (25%) of such proceeds shall be attributed to the infrastructure of the Mall Project. The Parties shall be entitled to a percentage of the Tenant Sales Proceeds attributable to the Plant in accordance with a percentage determined by their respective initial investments in the Plant divided by the total initial investment of all Parties in the Plant (each a "Party Investment Percentage"), which percentage for each Party is set forth on Exhibit C attached hereto. Bazaar also shall be entitled to the entire portion of the Tenant Sales Proceeds attributable to the Mall Project infrastructure (I.E., 25% of the Tenant Sales Proceeds). Any Condemnation Proceeds awarded to any of the Parties and attributable to the Plant shall be apportioned between the Parties based upon their respective Party Investment Percentage, and the Party so receiving such proceeds shall promptly pay to each other Party the portion of such Condemnation Proceeds to which each such Party is entitled hereunder. ARTICLE 4 LOSS OF VOTING RIGHTS AND RIGHTS TO CONTROL 4.1 LOSS OF VOTING RIGHTS AND RIGHTS TO CONTROL. A Party shall be deemed to have automatically lost its voting rights and any rights to control matters with respect to the Plant or Energy Services provided under this Agreement in the event that it: (i) commits a "Party Default," as defined in Section 7.3 hereof, and fails to remedy the same in the period provided in Section 7.3, or, (ii) if it commits a payment default under this Agreement ("Party Payment Default") and does not remedy such breach within fifteen (15) days of notice of such breach provided by the Energy Services Liaison; (iii) becomes a party to a voluntary or involuntary bankruptcy or insolvency proceeding against it or a receiver or custodian is appointed with respect to its assets and, if an involuntary proceeding, such proceeding is not dismissed within ninety (90) days; (iv) takes action, voluntarily or involuntarily, to liquidate or dissolve; or (v) undertakes such other actions as would require its mandatory withdrawal pursuant to the specific terms of any other provision of this Agreement. Notwithstanding a Party's automatic loss of its voting 7 rights and rights to control as provided in this Section 4.1, such Party and its rights under its Energy Service Agreement shall remain subject to this Agreement. 4.2 LIABILITY. As between the Parties and without prejudice to the obligations under the Energy Service Agreements, in the event of an automatic withdrawal, a Party shall remain liable for Contract Capacity Charges past due as well as for future Contract Capacity Charges unless and until a third party in accordance with its Energy Service Agreement and this Agreement, respectively, has assumed the Party's obligations under such Energy Service Agreement and this Agreement. 4.3 INTERRELATIONSHIP WITH ENERGY SERVICE AGREEMENT. The Parties hereby acknowledge and agree solely between themselves and without prejudice to the rights of the Energy Provider that, due to the complex nature of the interrelationship between the Parties and their respective Energy Service Agreements, (i) this Agreement is essential for the assurance of the Parties' rights under their respective Energy Service Agreements, (ii) this Agreement and the Energy Service Agreements are mutually dependent and not severable, (iii) the validity of this Agreement and each Energy Service Agreement is contingent upon, with respect to each Party, the continued existence of this Agreement and such Party's respective Energy Service Agreement, and (iv) the rejection by any Party or its trustee in a bankruptcy proceeding of this Agreement or its Energy Service Agreement shall constitute an automatic rejection by such Party of the other of this Agreement or its Energy Service Agreement not so rejected. 4.4 MORTGAGEE CURE RIGHTS. Each mortgagee of a Party who shall have notified the other Parties of its name and address shall be entitled to notice of any default or mandatory withdrawal event hereunder on the part of such first Party and shall have the opportunity to cure such default or mandatory withdrawal event until ten (10) days after the later of (i) the expiration of the cure period allowed to such first Party hereunder or (ii) such mortgagee's receipt of such notice; provided, however, that (a) a default or mandatory withdrawal event that by its nature is incapable of cure by such mortgagee shall be deemed cured if such mortgagee promptly commences, and diligently prosecutes to completion, proceedings to acquire the Defaulting Party's interests in its premises and under the Project Agreements and hereunder, and (b) such additional mortgagee cure period shall not affect any cure periods provided by the Energy Provider to such mortgagee(s) under any of the other Project Agreements. In the event that a Party or its trustee rejects this Agreement in a bankruptcy proceeding, then (i) such Party's Energy Service Agreement shall be deemed automatically rejected as provided in Section 4.3 above and (ii) such Party's mortgagee (x) will enter into an agreement with the other Party or Parties to this Agreement in a form substantially similar to this Agreement which shall contain the same conditions, agreements, terms, provisions, and limitations as this Agreement (except for any obligations which have been performed by Aladdin prior to such rejection or termination), (y) in the case of Aladdin, will enter into new Aladdin Energy Documents (as such term is defined in that certain Subordination, Non-Disturbance and Attornment Agreement and Consent between Aladdin, the Administrative Agent and others having an effective date as of May 27, 1999 (the "Subordination Agreement")), in each case in accordance with the provisions of clause (e) Section 1.4 of the Subordination Agreement and (z) in the case of Bazaar, will enter into a new Bazaar ESA which shall contain the same conditions, agreements, terms, provisions, and limitations as the current 8 Bazaar ESA (except for any obligations which have been performed by Bazaar prior to such rejection or termination). ARTICLE 5 ENERGY SERVICES LIAISON 5.1 AUTHORITY. (a) GENERAL AUTHORITY. The Energy Services Liaison shall have those powers and authorities explicitly granted to it in writing by the Management Committee, including those set forth in Exhibit B hereto, and shall act on behalf of and owe an equal duty to all of the Parties. The Parties agree by the execution of this Agreement that the Energy Services Liaison, in accordance with and subject to the limitations of such powers and authorities set forth herein, shall make any and all decisions relating to the day-to-day operations of the Plant, and the Parties' rights, duties and obligations under the Project Agreements, except as explicitly directed otherwise by the Management Committee. The powers and authorities of the Energy Services Liaison set forth in Exhibit B may be amended and/or modified at any time in accordance with Section 3.5(a). 5.2 DUTIES. The Energy Services Liaison shall have those duties and obligations set forth in Exhibit B hereto and as specified in writing by the Management Committee. The Parties agree by the execution hereof that the Energy Services Liaison shall (i) report to the Management Committee at each meeting; (ii) promptly deliver all notices received from the Energy Provider with respect to the Development Agreement to the Management Committee generally and the relevant representatives thereof particularly; (iii) promptly inform the Management Committee generally and the relevant representatives thereof particularly of events which might reasonably be anticipated to affect the rights, duties and/or obligations of any of the Management Committee or any of the Parties; and (iv) perform the duties set forth in Exhibit B. The duties of the Energy Services Liaison set forth in Exhibit B shall be in addition to those general duties of this Section 5.2. 5.3 COMPENSATION AND PAYMENT. (a) In the event the Energy Services Liaison already is directly employed by one of the Parties, that Party will pay the Energy Services Liaison a reasonable salary and all reasonable costs associated with the performance of its duties under this Agreement. (b) The Party employing the Energy Services Liaison will be reimbursed for portions of the Energy Services Liaison's salary and associated costs as follows: (i) the costs and expenses of the Energy Services Liaison with respect to activities performed for the benefit of the Parties collectively under the terms of this Agreement shall be charged to each of the Parties in equal portions; (ii) the costs and expenses of the Energy Services Liaison with respect to activities performed for the benefit of one Party at such Party's request or with such Party's authorization shall be paid by such Party. 9 ARTICLE 6 DEVELOPMENT AGREEMENT 6.1 ENERGY SERVICES LIAISON. The Parties agree that they will coordinate the exercise of the rights, duties and obligations under the Development Agreement by relying on the Energy Services Liaison to the extent set forth in Article 5. ARTICLE 7 ENERGY SERVICE AGREEMENTS 7.1 COORDINATION. (a) The Parties covenant and agree that they shall not negotiate with the Energy Provider except in conjunction with the other Parties hereto, and that each Energy Service Agreement executed after the date hereof shall be substantially in identical form and of substantially identical effect. In general, the Parties agree that they will coordinate the exercise of the rights, duties and obligations under the Energy Service Agreements by relying on the Energy Services Liaison to the extent set forth in Article 5. (b) In particular, the Parties agree as follows: (i) The Parties will cooperate and coordinate to the extent practicable to provide the Energy Provider with, or assist in the development of, any Exhibits to the Energy Service Agreements to be completed after the date hereof; (ii) Each of the Parties shall have "first call" on Services produced by the Plant, as set forth in Section 2.1(c) of the Energy Service Agreements; provided, however, that (A) a Party's demand for Services may equal but shall not exceed the Customer Energy Requirements as set forth in Exhibit B.2 to each Energy Service Agreement and (B) a Party's demand for Services shall not cause the Plant Energy Requirements as set forth in Exhibit B.1 of each Energy Service Agreement to be exceeded; (iii) A Party shall submit any "Additional Services Request" (as defined in the Energy Service Agreement) to the Management Committee at least seven (7) days prior to submitting such request to the Energy Provider. If the period for which the Additional Services are to be obtained exceeds thirty (30) days, the Management Committee must approve such request as provided in Section 3.5 hereof before the Party can submit it to the Energy Provider. If such Additional Services Request has not been rejected by the Management Committee within such seven (7) day period, it shall be deemed approved; (iv) The cost for Additional Services which increases the Contract Capacity Charges shall be borne in full by the requesting Party alone; 10 (v) Bazaar shall not consent to the Energy Provider's entering into commitments to sell Additional Services to third parties; Aladdin shall do so only after giving Bazaar thirty (30) days written notice and subject to the provisions of Section 3.8 hereof; (vi) The Parties will work in concert to ensure that the provisions of Section 2.2 and Section 2.3 of each Energy Service Agreement are complied with and, to the extent one or all of the Parties violates Section 2.2 or Section 2.3 thereof and the Party responsible cannot be positively identified, the Parties agree to share equally in any costs arising under Section 2.2(c) and, to the extent applicable, Section 2.3(c) thereof; provided, however, that Bazaar shall bear no responsibility for items related exclusively to the generation or distribution of hot water services to the extent Bazaar was not responsible for such costs; (vii) To the extent any of the Supplier Interconnection Equipment is damaged or destroyed by the action or inaction of a Party and the Party responsible for the damage or destruction is ascertained by either the Energy Provider or the other Parties, that Party shall pay all costs, as further described in Section 3.1 of each Energy Service Agreement. To the extent a particular Party's responsibility cannot be ascertained, the Parties shall pay, in equal portions, the amounts then owing, as further described in Section 3.1 of each Energy Service Agreement provided, however, that notwithstanding anything in this Agreement to the contrary, Bazaar shall bear no responsibility for items related exclusively to the generation or distribution of hot water services to the extent Bazaar was not responsible for such costs and other than as set forth in Section 7.5(a) hereof, Bazaar shall not be responsible for any costs associated with repair or replacement of any portion of the Plant which must be repaired or restored due to mechanical or structural failure or ordinary wear and tear; (viii) Subject to Section 3.5, the Parties will coordinate a response to any Energy Provider request to modify the Supplier Interconnection Equipment; (ix) Subject to Section 3.5, the Parties will use their best efforts to agree upon the contingency plan as further described in Section 4.3 of each Energy Service Agreement on or before the date on which the Guaranteed Maximum Plant Price is fixed under the Development Agreement; (x) Each Party hereby consents to the assignment by the Energy Provider's members of their respective membership interests in the Energy Provider to State Street Bank and Trust Company ("SSB&T") as collateral agent for the Energy Provider's lenders, as security for the Energy Provider's obligations to such lenders, and further consents to the exercise by SSB&T as such collateral agent of its rights under such assignments, on and subject to the terms and conditions of those certain consent agreements between Aladdin and Bazaar, respectively, and SSB&T. Subject to the foregoing, no Party shall permit the Energy Provider to transfer a membership interest or issue any new membership interests, 11 as further described in Section 4.3(b) of each Energy Service Agreement but subject to the exceptions thereto set forth in Section 10.2 of the Energy Service Agreements, without the express permission of the Management Committee as provided in Section 3.5; (xi) Parties acquiring the Plant pursuant to Sections 6.3 (if applicable), 6.4 or 9.3 of each Energy Service Agreement shall provide each other with full and complete copies of all information obtained from the Energy Provider pursuant to Section 5.5 of each Energy Service Agreement; (xii) The Parties will use the Energy Services Liaison as their primary contact with the Energy Provider in the event of a default as more fully described in Exhibit B hereto and in Article 6 of each Energy Service Agreement; (xiii) The Parties will cooperate with each other and coordinate their efforts in the event of a Force Majeure Event, as described in Article 7 of each Energy Service Agreement; and (xiv) No Party shall have the right to terminate its respective Energy Service Agreement due to a default by the Energy Provider thereunder unless such party in furtherance of Section 6.3 of its Energy Service Agreement, posts a cash deposit or letter of credit in form acceptable to the remainder of the Parties, covering such terminating Party's pro rata share of the cost of purchasing the Plant based upon the Party's Party Investment Percentage. 7.2 ENERGY SERVICE AGREEMENT PAYMENT DEFAULTS. In the event a Party fails to comply with its obligation to pay all invoices delivered pursuant to its Energy Services Agreement on or before the Energy Service Agreement Due Date, or to make any payment of the Make Whole Amount or Default Make Whole Amount, as applicable, pursuant to Section 6.3 of its Energy Service Agreement, the Energy Provider will, within five (5) days of such Energy Service Agreement Due Date or the due date for such Make Whole Amount or Default Make Whole Amount, as applicable, having passed without payment, provide all Parties and the Energy Services Liaison with notice of such payment lapse and afford the non-failing Party an additional ten (10) days from receipt of such notice to step in and make such payment. If any non-failing party makes such payment, then such payment shall accrue interest as provided in Section 8.5 hereof until the Failing Party repays such non-failing Party in full, including any accrued and unpaid interest charges. If no other Party makes such payment on behalf of the defaulting party within such ten (10) day period, the Energy Provider shall have the right to pursue all of its rights and remedies under the applicable Energy Service Agreement. 7.3 PARTY DEFAULTS. (a) A Party shall have committed a Party Default if its failure to make payments as required by its Energy Services Agreement, or otherwise comply with its obligations thereunder, results in the Energy Provider discontinuing Services to that Party pursuant to Section 6.3 thereof. 12 (b) Failure to remedy a Party Default within ten (10) business days after the defaulting Party's receipt of a written notice from the Energy Provider described in Section 6.3(a) of its Energy Service Agreement shall be a material default under this Agreement and the defaulting Party shall be deemed to have automatically lost its voting rights and rights to control in accordance with Section 4.1 hereof. 7.4 PURCHASE OF THE PLANT. The Parties agree that only Aladdin, for so long as it is a member of the Management Committee hereunder and has not been deemed to have automatically lost its voting rights and rights to control pursuant to the provisions of Article 4 hereof, shall be the Controlling Party and have the right to initiate the purchase of the Plant pursuant to Section 6.4 and Section 9.3 of the Energy Service Agreements, provided, however, that if there is a Service Default (as defined in Bazaar's Energy Service Agreement) with respect to any Party's Energy Services and Aladdin does not exercise the remedies requested by such Party and provided as of the date hereof under Sections 6.1 and 6.4 of Aladdin's Energy Service Agreement, then such Party shall have its rights and remedies under Sections 6.1 and 6.4 of its Energy Service Agreement and, if it elects to pursue such rights, shall be deemed to be the Controlling Party under this Agreement for purpose of exercising such rights. Each other Party hereunder shall have the right to elect to participate in such purchase, as provided herein. If Aladdin has been deemed to have automatically lost its voting rights and rights to control pursuant to the provisions of Article 4 hereof, then the Party who is the successor to Aladdin as Controlling Party shall have the exclusive right to initiate such purchase while it remains a Party. If there is more than one Party other than Aladdin, the foregoing provisions thereafter shall apply as among such Parties. Subject to Aladdin's exclusive right set forth above, the following provisions shall apply to any purchase of the Plant: (a) In the event one or more Parties (collectively, the "Acquiring Party") elect to acquire the Plant pursuant to Section 6.4 of its Energy Service Agreement, the Acquiring Party shall notify in writing the other Party or Parties (collectively, the "Non-Acquiring Party") at least twenty one (21) days prior to notifying the Energy Provider of its intention to purchase the Plant (such notice a "Purchase Notice"). The Non-Acquiring Party shall be afforded the opportunity to acquire and share on a pro rata basis in the ownership of the Plant based upon the Parties' respective Party Investment Percentages and shall respond in writing to the Acquiring Party as to whether it intends to join the Acquiring Party in acquiring the Plant within seven (7) days of receiving the Purchase Notice. The form of ownership of the Plant shall be determined, at the time of acquisition, by unanimous vote of all of the Parties comprising the Acquiring Party. (b) In the event the Acquiring Party determines to acquire the Plant pursuant to Section 9.3 of its Energy Service Agreement, the Acquiring Party shall notify the Non-Acquiring Party at least ninety (90) days prior to notifying the Energy Provider of its intention to acquire the Plant. The Non-Acquiring Party shall be afforded the opportunity to acquire and share ratably in the ownership of the Plant based upon the Parties' respective Party Investment Percentages and shall respond in writing as to whether it intends to join the Acquiring Party in acquiring the Plant to the Acquiring Party within thirty (30) days of receiving the Purchase Notice. The form of ownership of the Plant shall be determined, at the time of acquisition, by unanimous vote of all of the Parties comprising the Acquiring Party. 13 (c) The Parties agree that the acquisition of the Plant pursuant to Section 9.3 of an Energy Service Agreement shall render that section null and void for the Non-Acquiring Party in such Party's Energy Service Agreement. (d) Unless all Parties acquire the Plant, the Acquiring Party shall assume the full obligations owed by the Energy Provider to the Non-Acquiring Party under the Project Documents. Simultaneous with the transfer of ownership from the Energy Provider to the Acquiring Party, the Acquiring Party shall be deemed to have withdrawn from this Agreement. The Non-Acquiring Party shall have all of its rights and obligations under its Energy Service Agreement, including the right to revenues from sales to third-parties and the right to own a pro rata portion of the Plant upon the expiration of the term of such Energy Service Agreement in accordance with Sections 3.8 and 7.4 hereof. Upon the election by the Non-Acquiring Party to own a portion of the Plant, upon the expiration of the term of its Energy Service Agreement, the ownership of the Plant shall be in a form unanimously agreed upon by the Acquiring Party and the Non-Acquiring Party. The Parties shall execute such agreements as either may reasonably request in order to effectuate the terms of this Section 7.4. Aladdin hereby covenants and agrees to maintain the Lease in full force and effect and extend the term of the Lease for so long as any Energy Services Agreement remains in force unless Aladdin is the sole Acquiring Party. 7.5 RATE DIFFERENTIAL. The Parties acknowledge that Bazaar's Energy Service Agreement provides that Bazaar will pay a different rate for Energy Services than the other Parties will pay therefor under their respective Energy Service Agreements. The Parties agree that, to the extent that Bazaar pays higher rates for Energy Services than the other Parties, the portion of the Consumption Charges (as defined in Bazaar's Energy Service Agreement) paid by Bazaar each year attributable to the rate differential between the rates paid by Bazaar for Energy Services and the rates paid by the other Parties for Energy Services (the "Rate Differential Amount") will be credited towards Aladdin's Contract Capacity Charges (as defined in Aladdin's Energy Service Agreement) payable under Aladdin's Energy Service Agreement for the following year. Notwithstanding the foregoing, the following provisions shall apply with respect to all Consumption Charges paid by Bazaar during the term of its Energy Service Agreement (as it may be extended): (a) In the event that the Rate Differential Amount for any calendar year is less than Bazaar's "Contract Maintenance Costs" (defined as Bazaar's share (which shall be determined based upon the respective demands of the Parties, but shall not exceed $110,000 per calendar year) of the maintenance cost of the Plant for such year, based solely upon costs under actual maintenance contracts for the Plant, including bid-out, full coverage maintenance and in-house maintenance contracts, and not including any other Operational Charges as defined in Exhibit C to the Aladdin Energy Service Agreement) or any repair or replacements of any portion of the Plant (other than those specifically attributable to the affirmative actions or, when obligated to act, inaction, of Bazaar)), then Bazaar's monthly Consumption Charges for the subsequent calendar year shall be recalculated and adjusted upward, each by an amount equal to 1/12 of the lesser of the amount by which the Rate Differential Amount is less than Bazaar's Contract Maintenance Costs or $110,000, provided such upward adjustment shall not exceed $110,000.00 in the aggregate for such year, and Aladdin's Consumption Charges for such year, payable under the Aladdin 14 Energy Service Agreement, will be adjusted downward in an amount equal to the upward adjustments of Bazaar's Consumption Charges. Such adjustment shall take into consideration and be based upon the final Market Rate for Chilled Water Services, as provided in Exhibit "C" of Bazaar's Energy Service Agreement. (b) In the event that for any calendar year during the term of Bazaar's Energy Service Agreement: (a) the percentage obtained by dividing (i) the aggregate Contract Capacity Charges actually paid by the Parties other than Bazaar (I.E., excluding the Rate Differential Amount credited towards such Contract Capacity Charges as provided above) during such year, by (ii) the aggregate of all Contract Capacity Charges paid by all of the Parties plus the Rate Differential Amount (the "Actual Percentage") during such year (b) is less than 66.67%, then Aladdin shall pay to Bazaar, within sixty (60) days after the date such amount is determined by the Energy Provider, an amount equal to: (a) the percentage resulting from 66.67% minus the Actual Percentage, multiplied by (b) the aggregate during such year of all Contract Capacity Charges paid by all of the Parties plus the Rate Differential Amount. The Parties shall cause the Energy Provider to undertake the foregoing calculation and to inform the Parties of the results thereof, and the amounts, if any, owed by Aladdin to Bazaar, within thirty (30) days after end of each calendar year during the term of Bazaar's Energy Service Agreement. ARTICLE 8 DISPUTE RESOLUTION 8.1 DISPUTES. In the event of a dispute among the Parties or their representatives with respect to the terms of this Agreement, the Parties and their representatives shall seek to resolve such dispute at a meeting of the Management Committee. 8.2 ARBITRATION. In the event the Parties or their representatives are unable to resolve any dispute, controversy or claim arising out of or in connection with this Agreement as set forth in Section 8.1 above, any Party may request in writing that the dispute be referred to the respective senior level management of each Party for decision. Such managers shall meet immediately and attempt in good faith to negotiate a resolution of the dispute. If the managers are unable to resolve the matter within thirty (30) days of the written request referring the matter to them, any Party may, within thirty (30) days following the end of such thirty (30) day period, elect to refer the matter to arbitration and the dispute shall be settled by binding arbitration in accordance with the Arbitration Rules of the American Arbitration Association then in effect. 8.3 ARBITRATORS. There shall be three (3) arbitrators selected in accordance with the Rules. The arbitration shall be held in the State of Nevada. 8.4 BINDING DECISION. The decision of the arbitrators shall be final and binding on the Parties and shall be the sole and exclusive remedy regarding any claims, counterclaims, issues or accounting presented to the arbitrators. Judgment upon the award may be entered by any court having jurisdiction thereof. The Parties agree to exclude any rights of application or appeal to the courts of the State of Nevada in connection with any questions of law arising in the course of the arbitration or with respect to any award made except for actions to enforce an award. 15 8.5 AWARD. The Party prevailing in any dispute submitted to arbitration or in any suit filed thereby shall be entitled to a monetary award for actual damages sustained. Any monetary award shall be made and payable in U.S. Dollars. The arbitrators shall be authorized to grant pre-award and post-award interest at commercial rates without there being any presumption as to whether such interest will be granted. In addition, and in the event that any Party incurs costs on behalf of another Party and this Agreement provides that the Party incurring such costs is entitled to interest on the amounts expended thereby, then such amounts shall bear interest at a rate equal to the lesser of one and one-half percent (1 1/2%) per month, or the maximum amount permitted by applicable law, until such amounts, together with interest accrued thereon, are repaid in full by the Party causing such costs to be incurred. Unless otherwise ordered by the arbitrators, the prevailing Party shall be entitled to reasonable costs and fees, including its share of the costs of the arbitration, and its own attorneys' fees and expenses. The Parties expressly agree that the arbitrators shall have no power to consider or award punitive or exemplary damages. 8.6 BINDING ON PARTIES. This agreement to arbitrate shall be binding upon the successors, assigns, trustee, receiver or executor of each Party. 8.7 INJUNCTIVE RELIEF. Notwithstanding the foregoing provisions of this Article 8, each Party specifically acknowledges that monetary damages alone would be an inadequate remedy for the damages which would be incurred by a Party as a result of a breach of any of the provisions of this Agreement by the other Parties. Accordingly, each Party will be entitled to petition a court or tribunal of competent jurisdiction for injunctive relief to enjoin any breach or threatened breach of this Agreement by another Party, prior to or during the pendency of arbitral proceedings. ARTICLE 9 LIMITATION OF LIABILITY 9.1 LIMITATION OF LIABILITY. Notwithstanding any other provision of this Agreement, in no event shall the Parties or any of their Affiliates, subcontractors or vendors, by reason of any of their respective acts or omissions relating to the design, financing, ownership, construction, operation or maintenance of the Plant or relating to any of their obligations under this Agreement, be liable to the other Parties whether in contract, tort, warranty, negligence, strict liability or otherwise for any special, indirect, incidental, consequential, punitive, exemplary, or similar damages arising out of or in connection with this Agreement, or the performance, non-performance or breach thereof. ARTICLE 10 REPRESENTATIONS AND WARRANTIES Each Party hereby represents and warrants to the other Parties that: (a) It is a duly organized, validly existing entity of the type described in the introduction to this Agreement and is in good standing under the laws of the jurisdiction of 16 its formation. It has all requisite power and authority to enter into and to perform its obligations under this Agreement; (b) Its execution, delivery and performance of this Agreement have been authorized by all organizational action on its part and that of its equity owners (if required), and do not and will not (i) violate any law, rule, regulation, order or decree applicable to it, (ii) violate its organizational documents, or (iii) cause a default or cause it to contravene the terms of any contract to which the Party or its property is bound; (c) This Agreement is a legal and binding obligation of the Party, enforceable against the Party in accordance with its terms, except to the extent enforceability is modified by bankruptcy, reorganization and other similar laws affecting the rights of creditors and by general principles of equity; and (d) There is no litigation pending or, to the best of its knowledge, threatened to which that Party or any or its Affiliates is party that, if adversely determined, would have a material adverse effect on the financial condition, prospects, or business of that Party or its ability to perform its obligations under this Agreement. ARTICLE 11 NOTICES Except as otherwise provided in this Agreement, all notices, requests or consents hereunder shall be in writing and shall be deemed effective when delivered by registered mail or facsimile to the Party at its address or facsimile number as follows: If to Aladdin, to: Aladdin Gaming, LLC 831 Pilot Road Las Vegas, Nevada 89119 Attention: Richard Goeglein and General Counsel Fax: (702) 736-7107 with a copy to: The Bank of Nova Scotia 580 California Street 21st Floor San Francisco, California 94104 Fax: (415) 397-0791 17 If to Bazaar, to: Aladdin Bazaar, LLC c/o TH Bazaar Centers Inc. 4350 La Jolla Village Drive, Suite 400 San Diego, California 92122 Attention: Wendy Godoy, Andrew Blair Fax: (619) 546-3307 with a copy to: Aladdin Bazaar Holdings, LLC 831 Pilot Road Las Vegas, Nevada 89119 Attention: Ronald Dictrow Fax: (702) 736-7107 and to: TrizecHahn Centers, Inc. 4350 La Jolla Village Drive, Suite 400 San Diego, California 92122 Attention: Legal Department and to: Fleet National Bank 75 State Street MA BOF 11C Boston, Massachusetts 02109 Attention: Real Estate Finance If to the Energy Services Liaison, to: [-----------------] If to the Energy Services Provider, to: Northwind Aladdin, LLC c/o UTT Holdings, Inc. 30 West Monroe Street, Suite 500 Chicago, Illinois 60603 Attention: General Manager Fax: (312) 634-3201 18 with a copy to: Northwind Aladdin, LLC 6655 West Sahara Ave., Suite B102 Las Vegas, Nevada 89146 Attention: General Manager Fax: (702) 247-4325 Any Party may change its address or facsimile number to which notices are to be directed to it by written notice to the other Parties in the manner provided above. Any notice sent to one Party must be sent to all Parties in the manner provided above. ARTICLE 12 MISCELLANEOUS 12.1 GOVERNING LAW. This Agreement shall be interpreted in accordance with and governed by the laws of the State of Nevada. 12.2 ASSIGNMENT. Any assignment of any or all of a Party's interests hereunder or to the Project Agreements shall only be made upon the prior written approval of the other Parties hereto, which approval will not be unreasonably withheld; PROVIDED, HOWEVER, that any Party may assign any or all of its interests hereunder to: (i) any of its lenders; or (ii) any Affiliate of such party or to any party acquiring such Party's portion of the Complex or all of the interests in such Party without the approval of the other Parties. The assigning Party under (ii) above shall be released from all duties, liability and obligations hereunder upon the assumption by the assignee of all the assigning Party's duties and obligations hereunder. No assignment shall relieve, release or discharge the assigning Party of its obligations hereunder, except as expressly provided herein. All references herein to Aladdin and Bazaar shall include their successors and assigns with respect to all or any portion of the Complex. In addition, and notwithstanding anything to the contrary contained herein, one or more Parties shall have the right to assign rights and obligations under this Agreement to the Aladdin Music Project. Upon the assumption by the Aladdin Music Project of the rights and obligations hereunder and the execution by the Aladdin Music Project and the Energy Provider of an Energy Service Agreement in substantially the identical form executed by the Parties, the Aladdin Music Project shall become a Party hereunder with all of the rights and obligations of the other Parties hereunder as if the Aladdin Music Project had executed this Agreement as of the date hereof. 12.3 RELATIONSHIP OF PARTIES. The Parties understand and agree that none of the Parties is an agent, employee, contractor, vendor, representative or partner of any other Party and that they shall not hold themselves out as such to third-parties. 12.4 INTEGRATION. The terms and provisions contained in this Agreement set forth the entire agreement of the Parties with respect to the subject matter hereof and supersede and terminate all previous undertakings, representations and agreements, both oral and written, between any one or more of the Parties with respect to the Plant. 19 12.5 SEVERABILITY. If any of the provisions of this Agreement are held to be invalid or unenforceable under the applicable law of any jurisdiction, the remaining provisions shall not be affected, and any such invalidity or unenforceability shall not invalidate or render unenforceable that provision in any other jurisdiction. In that event, the Parties agree that the provisions of this Agreement shall be modified and reformed so as to effect the original intent of the Parties as closely as possible with respect to those provisions that were held to be invalid or unenforceable. 12.6 NON-RECOURSE. The obligations of the Parties under this Agreement are obligations of the Parties only, and no recourse shall be available against any officer, director or member of a Party. 12.7 NO ORAL MODIFICATIONS. This Agreement may not be amended or modified except by written agreement signed by each of the Parties. 12.8 EFFECTIVE DATE; TERM. This Agreement shall become effective as of the Effective Date and shall continue in full force and effect until the termination of either of the Energy Service Agreements. 12.9 OBSERVANCE OF LAWS. Each Party shall comply with, and shall cause its Affiliates to comply with, all applicable laws, rules and regulations of the United States and the State of Nevada, or any other jurisdiction that is or may be applicable to the Parties and their Affiliates' activities in connection with the Plant. Any proven breach of this obligation shall be a material breach of this Agreement. 12.10 WAIVER. The waiver of any breach of any of the terms or conditions hereof shall not be deemed a waiver of any other or subsequent breach, whether of like or different nature. No failure to exercise and no delay in exercising, on the part of any Party hereto, any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof. 12.11 NO THIRD-PARTY BENEFICIARIES. This Agreement is solely for the benefit of the Parties and their respective successors and permitted assigns, including lenders, and this Agreement shall not otherwise be deemed to confer upon or give to any other third-party, including but not limited to the Energy Provider, any remedy, claim, reimbursement, cause of action or other rights, except that the Energy Provider may rely upon this Agreement in dealing with the Energy Services Liaison and/or the Management Committee, and the Energy Provider agrees to be bound by and/or undertake the obligations set forth in and pursuant to Sections 2.5, 7.2, and 7.5 hereof. Notwithstanding anything contained herein, the Energy Provider shall have no obligations hereunder or be bound by the terms hereof other than under Sections 2.5, 7.2 and 7.5. 12.12 FURTHER ASSURANCES. Each Party shall procure all acts, matters, and things and the execution or signature of all other and further deeds and documents to give full effect to the provisions of this Agreement. 20 12.13 COUNTERPARTS; DELIVERY. This Agreement may be executed in more than one counterpart, each of which shall be deemed to be an original, but all of which together shall constitute one and the same document. Delivery of executed signature pages may be accomplished by facsimile transmission. 12.14 ESTOPPEL CERTIFICATES. The Parties agree to provide to the other Parties hereto, from time to time, upon request, one or more commercially reasonable estoppel certificates confirming the matters set forth herein. IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their duly authorized officers as of the day and year first above written. ALADDIN GAMING, LLC, a Nevada limited-liability company By: /S/ Richard Goeglein ----------------------------------- Name: Richard Goeglein Title: President & Chief Executive Officer ALADDIN BAZAAR, LLC, a Delaware limited-liability company By: TH Bazaar Centers, Inc., a Delaware corporation, Member By: /S/ Greg Bowen ----------------------------------- Name: Greg Bowen Title: Vice President, Finance & Treasurer By: Aladdin Bazaar Holdings, LLC, a Nevada limited-liability company, Member By: /S/ Ronald Dictrow ----------------------------------- Name: Ronald Dictrow Title: Secretary/Treasurer 21 The undersigned hereby acknowledges and agrees to be bound by the provisions of Sections 2.5, 7.2, 7.5, and 12.11 hereof and to accept the performance by Aladdin, Bazaar and any subsequent permitted Party hereto of their obligations under their respective Energy Services Agreements as provided in this Agreement and agrees to deliver and accept notices, information and materials as provided for herein. NORTHWIND ALADDIN, LLC, a Nevada limited-liability company By: /S/ John P. Mitola --------------------------------------- Name: John P. Mitola Title: Manager 22 EXHIBIT A DEFINED TERMS "Affiliate" means, with respect to a Party, (i) any of the other Parties or (ii) any entity which is controlled by, under common control with or controls such Party. "Aladdin" means Aladdin Gaming, LLC, a limited liability company organized under the laws of the State of Nevada. "Aladdin Hotel and Casino" means the Hotel, together with the Casino, a 1,400-seat production showroom, six restaurants and a newly renovated 7,000 seat Theater of the Performing Arts. "Aladdin Music Project" means the developer of a hotel of approximately 1,000 rooms and a casino with a music and entertainment theme to be located adjacent to the Aladdin Hotel and Casino and the Mall Project. "Bazaar" means Aladdin Bazaar, LLC, a limited liability company organized under the laws of the state of Delaware. "Carpark" means a 4,800-space parking facility to serve the Complex. "Casino" means a 116,000 square foot casino. "Chilled Water Plant" is that cost in plant and equipment which in the good faith opinion of the Energy Provider primarily serves to provide Chilled Water Services. "Complex" means the Aladdin Hotel and Casino together with the Sound Project and the Mall Project. "Controlling Party" means, for purposes only of that certain Consent Letter Agreement dated as of May ___, 1999 by Bazaar in favor of State Street Bank and Trust Company ("SSB&T") with regard to the financing of the Plant, and except as otherwise agreed by the Parties, or as provided in Section 7.4 of this Agreement, Aladdin, until such time as Aladdin shall be deemed to have automatically lost its voting rights and rights to control pursuant to the provisions of Article 4 hereof, at which time "Controlling Party" shall be Bazaar. The Parties agree to give Energy Provider and SSB&T prompt notice of the identity of the Controlling Party hereunder from time to time. No action taken by any Party other than the Controlling Party shall be binding upon SSB&T. "Desert Passage" means a high-end themed entertainment shopping mall with a gross leasable area of approximately 450,000 square feet. "Development Agreement" means that Agreement between Aladdin and Northwind Aladdin, LLC, dated as of December 3, 1997, providing for the development and construction of 1 an energy facility to supply the hot water, chilled water and electricity needs of the Complex, as it may be amended, restated, modified or supplemented and in effect from time to time. "Effective Date" means the date of this Agreement's execution. "Energy Provider" is defined in the second "Whereas" clause hereof. "Energy Provider Default" means those service failures and defaults described more fully in Section 1(vii) of Exhibit B hereto, Section 2(iii) of Exhibit B hereto and in Article 6 of each Energy Service Agreement. "Energy Services" means the hot water, chilled water and electricity to be utilized by the Complex. "Energy Service Agreements" means those agreements between each of the Parties and Northwind Aladdin, each dated as of September 24, 1998, providing for the operation of the plant, as they may be amended, restated, modified or supplemented and in effect from time to time. "Energy Service Agreements Due Date" means with respect to each Energy Service Agreement the Due Date, as that term is defined in such Energy Service Agreements. "Energy Services Liaison" means that person or persons designated in accordance with this Agreement to exercise the rights and perform those duties and obligations as set forth herein. "Guarantor" means Unicom Corporation. "Guaranty" means a guaranty of Unicom Corporation pursuant to which the Guarantor unconditionally and irrevocably guaranties to Aladdin the performance of the obligations and duties of the Energy Provider under the Development Agreement to construct and demonstrate "Final Completion" (as such term is defined in the Development Agreement) of the Plant, subject to a limitation of the lesser of (i) $30 million or (ii) the "Guaranteed Maximum Price" (as such term is defined in the Development Agreement) as finally determined and agreed upon pursuant to the Development Agreement plus interim operating costs up to the "Substantial Completion Date" (as such term is defined in the Development Agreement). "Hotel" means a luxury-themed hotel of approximately 2,600 rooms. "Initial Term" means a term of twenty (20) years. "Lease" means that certain Lease between Aladdin and the Energy Provider dated as of December 3, 1997, to lease a site to the Energy Provider on which the Energy Provider will construct and operate the Plant pursuant to the Development Agreement and the Energy Services Agreement, as it may be amended, restated, modified or supplemented and in effect from time to time. 2 "Management Committee" means a committee established by the Parties pursuant to Article 3 of this Agreement to monitor and supervise the implementation of this Agreement and certain activities related to the Project Agreements. "Mall Project" means the Desert Passage and the Carpark. "Party Default" means a default by any Party as more fully described in Article 7 of this Agreement. "Plant" means the energy facility to be developed and constructed by the Energy Provider to supply the Energy Services. "Project Agreements" means those agreements described in the fifth "Whereas" clause of this Agreement. "Purchase Notice" means a written notice as described in Section 7.4 of this Agreement. 3 EXHIBIT B ENERGY SERVICES LIAISON: AUTHORITY, DUTIES AND OBLIGATIONS 1. AUTHORITY WITH RESPECT TO THE DEVELOPMENT AGREEMENT. The Parties agree that the Energy Services Liaison shall be the Management Committee's primary contact with the Energy Provider with respect to the following: (i) ACCESS TO WORK. The Energy Services Liaison shall coordinate all access to the Work by the Management Committee and all inspection of the Work by the Management Committee; (ii) MEETINGS. The Energy Services Liaison, together with members of the Management Committee when appropriate, shall attend all meetings with the Energy Provider provided for in the Development Agreement; (iii) ENERGY PROVIDER. The Energy Services Liaison shall receive all notices and documents delivered by the Energy Provider pursuant to the Development Agreement; (iv) CUSTOMER NOTICES AND COMMENTS. The Energy Services Liaison shall, after receiving direction from the Management Committee, deliver to the Energy Provider all notices, comments and other documents and information required by or provided for by the terms of the Development Agreement; (v) CONSENTS. The Energy Services Liaison shall, after receiving direction from the Management Committee, deliver to the Energy Provider all consents required of Aladdin under the Development Agreement; (vi) CONDEMNATION. The Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider in the event of a condemnation or eminent domain taking. Unless and until the Energy Services Liaison has been directed otherwise by the Management Committee, the Energy Services Liaison shall exercise the rights of the Parties pursuant to Section 2(k) of the Development Agreement; (vii) ENERGY PROVIDER DEFAULTS. The Energy Services Liaison shall monitor the performance of the Work and shall promptly inform the Management Committee of any Energy Provider default under the Development Agreement and of any failure by the Energy Provider to comply with any provision of the Development Agreement. The Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider with respect to defaults under Section 10 of the Development Agreement or the failure of the Energy Provider to comply with any section of the Development Agreement. The Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider with respect to Section 4(b)(iv) of the Development Agreement; (viii) CUSTOMER DEFAULTS. The Energy Services Liaison shall serve as sole liaison to the Energy Provider with respect to Customer Defaults under Section 10(d) and (e) of the Devel- 1 opment Agreement and with respect to the termination options set forth in Sections 5(c) and 10 (b) thereof; (ix) REQUEST FOR EPC PROPOSALS.The Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider with respect to the Energy Provider's selection of an EPC Contractor pursuant to Section 5 of the Development Agreement. As part of such process, the Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Service Provider with respect to the development of the Plant Scope and with respect to the Parties' requirements for the energy transfer stations to be included as part of the Plant; (x) FORCE MAJEURE. The Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider with respect to Force Majeure Events under Section 11 of the Development Agreement; (xi) CONTINGENCY PLAN. The Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider with respect to the Contingency Plan set forth in Section 8(d) of the Development Agreement; and (xii) SCOPE CHANGES. The Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider with respect to Scope Changes, as described in Section 9 of the Development Agreement. 2. AUTHORITY WITH RESPECT TO THE ENERGY SERVICE AGREEMENTS. The Parties agree that the Energy Services Liaison shall be the Management Committee's primary contact with the Energy Provider with respect to the following: (i) ENERGY PROVIDER NOTICES. The Energy Services Liaison shall receive all notices delivered by the Energy Provider pursuant to the Energy Service Agreements; (ii) CONSENTS. The Energy Services Liaison shall, after receiving direction from the Management Committee or the applicable Party, deliver to the Energy Provider all consents required of Aladdin, Music or Bazaar under the Energy Service Agreements; (iii) ENERGY PROVIDER DEFAULTS. 1. The Energy Services Liaison shall monitor the performance of the Plant and, upon a Performance Failure or a Service Failure, shall notify the Energy Provider of such failure. The Energy Services Liaison shall serve as sole liaison between the Parties and the Energy Provider in the event of a Performance Failure or a Service Failure, each as defined in the Energy Service Agreements, and shall exercise the rights of the Parties set forth in Section 6.1(a) and Section 6.1(b) of the Energy Services Agreements. 2. The Energy Services Liaison shall serve as sole liaison between the Parties and the Energy Provider in the event of a Service Default. Unless and until the Energy Services Liaison has been directed otherwise by the Management Committee, the 2 Energy Services Liaison shall exercise the rights of the Parties pursuant to Section 6.1(c)(i) of each Energy Service Agreement. 3. The Energy Services Liaison shall serve as sole liaison between the Management Committee and the Energy Provider with respect to defaults under Section 6.1(d) of the Energy Service Agreements. (iv) FORCE MAJEURE. The Energy Services Liaison shall serve as sole liaison between the Management Committee and the Energy Provider with respect to Force Majeure Events under Article 7 of the Energy Services Agreements. 3. DUTIES WITH RESPECT TO THE DEVELOPMENT AGREEMENT. (i) ACCESS TO WORK. The Energy Services Liaison shall coordinate all access by the Management Committee to the Work and all inspection of the Work by the Management Committee; (ii) MEETINGS. The Energy Services Liaison shall promptly inform the Management Committee and the relevant representatives of all meetings with the Energy Provider provided for in the Development Agreement. The Energy Services Liaison, together with members of the Management Committee when appropriate, shall attend all such meetings; (iii) ENERGY PROVIDER NOTICES AND DOCUMENTS. The Energy Services Liaison shall promptly deliver to the Management Committee and the relevant representatives all notices and documents delivered by the Energy Provider pursuant to the Development Agreement; (iv) CUSTOMER NOTICES AND COMMENTS. The Energy Services Liaison shall inform the Management Committee and the relevant representatives of all notices, comments and other documents and other information to be provided by the Customer pursuant to the Development Agreement. After receiving direction from the Management Committee, the Energy Services Liaison shall deliver to the Energy Provider all such notices, comments and other documents and information; (v) CONSENTS. The Energy Services Liaison shall inform the Management Committee and the relevant representatives of all consents required of Customer. After receiving direction from the Management Committee, the Energy Services Liaison shall deliver such consents to the Energy Provider; (vi) CONDEMNATION. The Energy Services Liaison shall promptly notify the Management Committee and the relevant representatives of any condemnation or eminent domain taking. The Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider in the event of a condemnation or eminent domain taking. Unless and until the Energy Services Liaison has been directed otherwise by the Management Committee, the Energy Services Liaison shall exercise the rights of the Parties pursuant to Section 2(k) of the Development Agreement; 3 (vii) ENERGY PROVIDER DEFAULTS. The Energy Services Liaison shall monitor the performance of the Work and shall promptly inform the Management Committee of any Energy Provider default under the Development Agreement and of any failure by the Energy Provider to comply with any provision of the Development Agreement. The Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider with respect to defaults under Section 10 of the Development Agreement or the failure of the Energy Provider to comply with any section of the Development Agreement. The Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider with respect to Section 4(b)(iv) of the Development Agreement; (viii) REQUEST FOR EPC PROPOSALS.The Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider with respect to the Energy Provider's selection of an EPC Contractor pursuant to Section 5 of the Development Agreement. As part of such process, the Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider with respect to the development of the Plant Scope and with respect to the Parties' requirements for the energy transfer stations to be included as part of the Plant; (ix) FORCE MAJEURE. The Energy Services Liaison shall promptly notify the Management Committee and the relevant representatives of any Force Majeure Event under Section 11 of the Development Agreement. The Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider with respect to such Force Majeure Events; (x) CONTINGENCY PLAN. The Energy Services Liaison shall promptly inform the Management Committee of any need to implement the Contingency Plan set forth in Section 8(d) of the Development Agreement. The Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider with respect to the Contingency Plan; and (xi) SCOPE CHANGES. The Energy Services Liaison shall promptly inform the Management Committee and the relevant representatives of any request for Scope Change received from the Energy Provider and of any need for the Management Committee to request a Scope Change. The Energy Services Liaison shall serve as the sole liaison between the Management Committee and the Energy Provider with respect to Scope Changes, as described in Section 9 of the Development Agreement. 4. DUTIES WITH RESPECT TO THE ENERGY SERVICE AGREEMENT. (i) CUSTOMER NOTICES. The Energy Services Liaison shall promptly inform the Management Committee and the relevant representatives of all notices required to be delivered to the Energy Provider under the terms of the Energy Service Agreements, and, in accordance with the directives of the Management Committee, shall deliver such notices to the Energy Provider; 4 (ii) CONSENTS. The Energy Services Liaison shall inform the Management Committee and the relevant representatives of all consents required of Aladdin or Bazaar under the Energy Service Agreements, and, in accordance with the directives of the Management Committee or applicable Party, shall deliver such notices to the Energy Provider; (iii) METERING. The Energy Services Liaison shall monitor meter accuracy generally and meter testing in particular and shall inform the Management Committee and the relevant representatives if it has reason to believe that additional meter testing should be undertaken pursuant to Section 3.3 of each of the Energy Service Agreements; and (iv) ENERGY PROVIDER DEFAULTS. 1. The Energy Services Liaison shall monitor the performance of the Plant and, upon a Performance Failure or a Service Failure, shall promptly notify the Energy Provider, the Management Committee generally and the affected representatives particularly of such failure. To the extent practicable, the Energy Services Liaison shall continually update the Chairman and the relevant representatives of the status of such Performance Failure or Service Failure. Unless and until given explicit direction to the contrary by the Management Committee, the Energy Services Liaison shall exercise the rights of the Parties set forth in Section 6.1(a) and Section 6.1(b) of the Energy Service Agreements, including but not limited to actions called for under 6.1(b)(ii)(3). 2. The Energy Services Liaison shall promptly notify the Chairman and the affected representatives of any Service Default. To the extent practicable, the Energy Services Liaison shall continually update the Chairman and the affected representatives of the status of such Service Default. Unless and until the Energy Services Liaison has been directed otherwise by the Management Committee, the Energy Services Liaison shall exercise the rights of the Parties pursuant to Section 6.1(c)(i) of each of the Energy Service Agreements. 3. The Energy Services Liaison shall promptly notify the Management Committee and the Energy Provider of defaults under Section 6.1(d) of the Energy Service Agreement. 5 EXHIBIT C PARTY INVESTMENT PERCENTAGES PARTY PERCENTAGE ----- ---------- Aladdin Gaming, LLC Aladdin Bazaar, LLC 1 EX-10.5 6 EXHIBIT 10.5 EXHIBIT 10.05 CONSENT AND RATIFICATION AND REAFFIRMATION AGREEMENT THIS CONSENT AND RATIFICATION AND REAFFIRMATION AGREEMENT (this "AGREEMENT"), dated as of May 27, 1999, is made between by THE BANK OF NOVA SCOTIA, in its capacity as the Administrative Agent for the Lenders (in such capacity, the "ADMINISTRATIVE AGENT") and ALADDIN GAMING LLC (the "BORROWER"). Capitalized terms used herein but not otherwise defined shall have the meanings assigned thereto in the Credit Agreement (as hereinafter defined). W I T N E S S E T H : ===================== WHEREAS, pursuant to a Credit Agreement, dated as of February 26, 1998, as amended by the First Amendment to Credit Agreement dated as of January 29, 1999 and as further amended by that certain Second Amendment to Credit Agreement dated as of April 5, 1999 (together with all other amendments and other modifications from time to time thereafter made thereto, collectively, the "CREDIT AGREEMENT"), each among the Borrower, the various lending institutions (individually a "LENDER" and collectively the "LENDERS") as are, or may from time to time become, parties thereto, the Administrative Agent, CIBC Oppenheimer Corp., as the documentation agent, and Merrill Lynch Capital Corporation as the syndication agent, the Lenders extended Commitments to make Loans to the Borrower and to issue Letters of Credit for the account of the Borrower; and WHEREAS, pursuant to that certain Subordination, Non-Disturbance and Attornment Agreement and Consent (the "ALADDIN SNDA") dated as of June 7, 1999, between the Administrative Agent, Northwind Aladdin, LLC, a Nevada limited-liability company ("NORTHWIND"), the Borrower, State Street Bank and Trust Company, as collateral agent, Aladdin Music, LLC, Aladdin Music Holdings, LLC, and Unicom Corporation, as guarantor, the parties thereto set forth certain agreements regarding their respective rights vis-a-vis one another in connection with the financing, development and use of the Aladdin Project and the Energy Project (as such terms are defined below); WHEREAS, the Borrower, as lessor, and Northwind, as lessee, entered into the Lease dated as of December 3, 1997, as amended by that certain Amendment and Agreement dated as of September 25, 1998, that certain Second Amendment and Agreement dated as of May 28, 1999, and that certain Third Amendment and Agreement dated as of May 28, 1999 (such amendments are collectively referred to herein as the "AMENDMENTS", and such lease as so amended is referred to herein as the "LEASE") in respect of a portion of the Property described on Exhibit A thereto (the "ENERGY PROJECT SITE") pursuant to which the Borrower leased the Energy Project Site to Northwind, subject to the terms thereof; and WHEREAS, pursuant to that certain Development Agreement dated as of December 3, 1997 between the Borrower and Northwind, as amended by the Amendments (as so amended, the "DEVELOPMENT AGREEMENT"), Northwind agreed to construct an energy production and distribution facility (the "ENERGY PROJECT") to distribute electricity to, and to produce emergency -1- power, hot water and chilled water for the hotel/casino (the "ALADDIN PROJECT") that is being constructed by the Borrower, the retail project that is being constructed by Aladdin Bazaar LLC ("ALADDIN BAZAAR") and the addition hotel project that may be constructed by Aladdin Music LLC; and WHEREAS, pursuant to that certain Energy Services Agreement dated as of September 24, 1998 between the Borrower and Northwind as amended by the Amendments (as so amended, the "ALADDIN ESA", and together with the Lease, the Development Agreement, and the Aladdin SNDA, the "ALADDIN ENERGY DOCUMENTS"), Northwind agreed to sell, and Aladdin Gaming agreed to purchase, electricity, emergency power, hot water and chilled water for the Aladdin Project, subject to the terms thereof; and WHEREAS, pursuant to that certain Coordination Agreement dated as of May 28, 1999 between Aladdin Gaming and Aladdin Bazaar (the "COORDINATION AGREEMENT"), Aladdin Gaming and Aladdin Bazaar entered into an agreement regarding their respective rights VIS-A-VIS one another under the Aladdin ESA and the energy services agreement which has been executed and delivered by Aladdin Bazaar; and WHEREAS, the Borrower has requested the Administrative Agent to consent to the execution and delivery of the Aladdin Energy Documents by the Borrower and the Administrative Agent has agreed to do so, subject to the terms of this Agreement. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower and the Administrative Agent agree as follows: 1. CONSENT. The Administrative Agent hereby consents to the execution and delivery of the Aladdin Energy Documents by Borrower; PROVIDED HOWEVER, that the Aladdin ESA shall be in the form annexed hereto as Exhibit A, the Coordination Agreement shall be in the form annexed hereto as Exhibit B, and the Aladdin SNDA shall be in the form attached hereto as Exhibit C. 2. BORROWER REPRESENTATIONS AND WARRANTIES. As an inducement to the Administrative Agent to deliver this Consent, the Borrower represents and warrants to the Administrative Agent that: a. POWERS AND AUTHORITY. The Borrower has the power and authority to enter into and perform, and has taken all necessary action to duly authorize its entry into, performance and delivery of, the Aladdin Energy Documents and the Coordination Agreement. b. COMPLIANCE WITH LAWS, OTHER INSTRUMENTS, ETC. The execution, delivery and performance by the Borrower of the Aladdin ESA and the Coordination Agreement will not (i) contravene, result in any breach of, or constitute a default under, or result in the creation of any Lien in respect of any property of the Borrower under, any indenture, mortgage, deed of trust, loan, purchase or credit agreement, lease, memorandum or articles of association, any other -2- material agreement or instrument to which the Borrower is bound or by which the Borrower or any of its properties may be bound or affected, (ii) conflict with or result in a breach of any of the terms, conditions or provisions of any order, judgment, decree, or ruling of any court, arbitrator or Governmental Authority applicable to the Borrower or (iii) violate any provision of any statute or other rule or regulation of any Governmental Authority applicable to the Borrower. c. GOVERNMENTAL CONSENT. The entry into and the performance, validity and enforceability of the Aladdin ESA and the Coordination Agreement and the transactions contemplated thereby does not require any authorization, consent, approval, exemption or other action by or notice to or filing, registration or declaration with, any court or administrative body or other Governmental Authority in connection with the execution and delivery of the Aladdin Energy Documents or the Coordination Agreement, or fulfillment of or compliance with the terms and provisions hereof. d. LEGAL VALIDITY. The Aladdin ESA and the Coordination Agreement constitute the legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its respective terms, except as such enforceability may be limited by (a) bankruptcy, insolvency, reorganization or other similar laws affecting the enforcement of creditors' rights generally and (b) general principles of equity (regardless of whether such enforceability is considered in a proceeding in equity or at law). e. NO OFFSETS OR DEFENSES. To its knowledge, the Borrower has no offsets or defenses to its obligations under the Loan Documents and no claims or counterclaims against the Administrative Agent and the Lender Parties thereunder. f. NO DEFAULTS. The Loan Documents are in full force and effect, there are no Events of Defaults by the Borrower thereunder and no event has occurred or failed to occur which, with the giving of notice and/or the passage of time, could constitute an Event of Default thereunder. 3. RATIFICATION AND REAFFIRMATION. The Borrower hereby ratifies and reaffirms the Loan Documents and each and every covenant and agreement of the Borrower contained therein. 4. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEW YORK. 5. HEADINGS. The descriptive headings of the several paragraphs of this Agreement are inserted for convenience only and do not constitute a part of this Agreement. -3- 6. COUNTERPARTS. This Agreement may be executed simultaneously in two or more counterparts, each of which shall be deemed an original, and it shall not be necessary in making proof of this Agreement to produce or account for more than one such counterpart. IN WITNESS whereof the Administrative Agent and the Borrower have caused this Agreement to be executed as of the day and year first above written. THE BANK OF NOVA SCOTIA, as the Administrative Agent By: /S/ Alan Pendergast ------------------------------------- Name: Alan Pendergast Title: Relationship Manager ALADDIN GAMING, LLC By: /S/ Richard Goeglein ------------------------------------- Name: Richard Goeglein Title: President and Chief Executive Officer -4- By signing below, the Guarantors (w) ratify and reaffirm the Loan Documents to which they are a party, (x) acknowledge that to their respective knowledge they have no offsets or defenses to their respective obligations under the Loan Documents to which they are a party and no claims or counterclaims against the Administrative Agent or the Lenders and (z) consent to the execution and delivery of the Aladdin ESA and the Coordination Agreement by the Borrower; PROVIDED, HOWEVER, the aforementioned consent shall not affect any of the rights and obligations of any of the parties to the Loan Documents whether existing on the date hereof or hereafter arising in accordance with the terms of the applicable Loan Documents. ALADDIN BAZAAR HOLDINGS, LLC By: /S/ Ronald Dictrow - ------------------------------------- Name: Ronald Dictrow Title: Secretary/Treasurer THE TRUST UNDER ARTICLE SIXTH UNDER THE WILL OF SIGMUND SOMMER By: /S/ Viola Sommer , in its - ------------------------------------- capacity as a trustee and not individually Name: Viola Sommer Title: Trustee By: /S/ Jack Sommer , in its - ------------------------------------- capacity as a trustee and not individually Name: Jack Sommer Title: Trustee LONDON CLUBS INTERNATIONAL PLC By: /S/ G. Barry C. Hardy - ------------------------------------- Name: G. Barry C. Hardy Title: Chief Operating Officer -5- EXHIBIT A Form of Aladdin ESA -6- EXHIBIT B Form of Coordination Agreement -7- EXHIBIT C Form of Aladdin SNDA -8- EX-10.6 7 EXHIBIT 10.6 EXHIBIT 10.06 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Northwind Aladdin, LLC ) c/o Lionel, Sawyer & Collins ) 1700 Bank of America Plaza ) 300 South 4th Street ) Las Vegas, Nevada 89101 ) Attn: Mark H. Goldstein, Esq. ) (Space above for Recorder's use) SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT AND CONSENT THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT AND CONSENT (this "AGREEMENT") dated as of June 7, 1999 by and among THE BANK OF NOVA SCOTIA ("SCOTIABANK"), a Canadian chartered bank, as the administrative agent (in such capacity, the "ADMINISTRATIVE AGENT") for the Aladdin Lenders under the Aladdin Credit Agreement (as such terms are hereinafter defined), NORTHWIND ALADDIN, LLC, a Nevada limited-liability company ("NORTHWIND"), ALADDIN GAMING, LLC, a Nevada limited-liability company ("ALADDIN GAMING"), STATE STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as collateral agent (in such capacity, the "COLLATERAL AGENT") for the Northwind Noteholders under the Note Purchase Agreement (as such terms are hereinafter defined), ALADDIN MUSIC, LLC, a Nevada limited-liability company ("ALADDIN MUSIC") and ALADDIN MUSIC HOLDINGS, LLC, a Nevada limited-liability company ("AMH"). W I T N E S S E T H: WHEREAS, Aladdin Gaming owns certain real property located in Las Vegas, Nevada and more particularly described in EXHIBIT A attached hereto and made a part hereof (the "PROPERTY") and is constructing a hotel, casino and theater complex (the "ALADDIN PROJECT") on a portion of the Property (the "ALADDIN PROPERTY"); WHEREAS, pursuant to that certain Lease (the "BAZAAR GROUND LEASE") dated as of February 26, 1998, Aladdin Gaming leased a portion of the Property to Aladdin Bazaar, LLC, a Delaware limited-liability company ("ALADDIN BAZAAR"), upon which property Aladdin Bazaar is constructing a retail mall and parking facility (the "MALL PROJECT"); WHEREAS, pursuant to that certain Lease (the "MUSIC GROUND LEASE") dated as of February 26, 1998, Aladdin Gaming leased a portion of the Property (the "MUSIC PROPERTY") to 1 Aladdin Music, upon which property Aladdin Music is to construct a hotel and casino complex with a music entertainment theme (the "MUSIC PROJECT"); WHEREAS, pursuant to that certain Credit Agreement dated as of February 26, 1998 among Aladdin Gaming, various financial institutions party thereto (the "ALADDIN LENDERS"), Scotiabank, individually and as the Administrative Agent for the Aladdin Lenders, Merrill Lynch Capital Corporation, as the syndication agent for the Aladdin Lenders, and CIBC Oppenheimer Corp., as the documentation agent for the Aladdin Lenders, as amended by that certain First Amendment to Credit Agreement dated as of January 29, 1999, and as further amended by that certain Second Amendment to Credit Agreement dated as of April 5, 1999 (as so amended and as hereafter amended, modified or replaced, the "ALADDIN CREDIT AGREEMENT"), the Aladdin Lenders agreed, INTER ALIA, to make the senior credit facility described therein (the "ALADDIN CREDIT FACILITY") available to Aladdin Gaming to finance a portion of the cost of construction of the Aladdin Project, subject to the terms of the Aladdin Credit Agreement; WHEREAS, the obligations of Aladdin Gaming under the Aladdin Credit Agreement are secured, in part, by that certain Deed of Trust dated as of February 26, 1998 and recorded March 2, 1998, among Aladdin Gaming, as trustor, Stewart Title of Nevada, as trustee, and Administrative Agent, as beneficiary (as now or hereafter amended, modified or replaced, the "ALADDIN DEED OF TRUST"; together with all other documents evidencing, securing or relating to the Aladdin Credit Agreement as the same may be amended, modified, restated, renewed or supplemented from time to time, collectively, the "ALADDIN LOAN DOCUMENTS"); WHEREAS, Aladdin Gaming, as lessor, and Northwind, as lessee, entered into the Lease dated as of December 3, 1997, as amended by that certain Amendment and Agreement dated as of September 25, 1998, that certain Second Amendment and Agreement dated as of May 28, 1999 (such amendments are collectively referred to herein as the "AMENDMENTS", and such lease as so amended is referred to herein as the "LEASE") in respect of a portion of the Property described on Exhibit A thereto (the "ENERGY PROJECT SITE") pursuant to which Aladdin Gaming leased the Energy Project Site to Northwind, subject to the terms thereof; WHEREAS, pursuant to that certain Development Agreement dated as of December 3, 1997 between Aladdin Gaming and Northwind, as amended by the Amendments (as so amended, the "DEVELOPMENT AGREEMENT"), Northwind agreed to construct an energy production and distribution facility (the "ENERGY PROJECT") to distribute electricity to, and to produce emergency power, hot water and chilled water for, the Aladdin Project, the Mall Project and the Music Project (referred to in the Development Agreement as the "SOUND ASYLUM PROJECT"); WHEREAS, pursuant to that certain Energy Services Agreement dated as of September 24, 1998 between Aladdin Gaming and Northwind, as amended by the Amendments (as so amended, the "ALADDIN ESA", and together with the Lease and the Development Agreement, the "ALADDIN ENERGY DOCUMENTS"), Northwind agreed to sell, and Aladdin Gaming agreed to purchase, electricity, emergency power, hot water and chilled water for the Aladdin Project, subject to the terms thereof; 2 WHEREAS, pursuant to that certain Energy Services Agreement dated as of September 24, 1998 between Aladdin Bazaar and Northwind, as amended by three amendments each dated as of May 28, 1999 (as so amended, the "BAZAAR ESA"), Northwind agreed to sell, and Aladdin Bazaar agreed to purchase, electricity, emergency power and chilled water for the Mall Project, subject to the terms thereof; WHEREAS, pursuant to that certain Coordination Agreement dated as of May 28, 1999 between Aladdin Gaming and Aladdin Bazaar (the "COORDINATION AGREEMENT"), Aladdin Gaming and Aladdin Bazaar entered into an agreement regarding their respective rights VIS-A-VIS one another under the Aladdin ESA and the Bazaar ESA; WHEREAS, Northwind's obligations to construct and demonstrate final completion of the Energy Project under the Development Agreement are guaranteed by Unicom Corporation ("UNICOM") pursuant to a Guaranty dated as of December 3, 1997 (the "GUARANTY") by Unicom in favor of Aladdin Gaming; WHEREAS, pursuant to that certain Construction, Operation and Reciprocal Easement Agreement dated as of February 26, 1998 (as hereafter amended, modified or replaced, the "REA") among Aladdin Gaming, Aladdin Bazaar and AMH (with Northwind as a defined party, though not a signatory party, thereto), Northwind is the beneficiary of certain license, easement and other rights over, across, under and above the Property (the "RELATED RIGHTS"); WHEREAS, pursuant to that certain Assignment of Gaming Energy Documents dated as of the date hereof between Aladdin Gaming and the Administrative Agent (the "ASSIGNMENT OF GAMING ENERGY DOCUMENTS"), Aladdin Gaming has assigned to the Administrative Agent for the benefit of the Aladdin Lenders all of Aladdin Gaming's right, title and interest under the Guaranty, the Development Agreement, the Aladdin ESA, the Lease and the Coordination Agreement, subject to the terms thereof; and WHEREAS, Northwind has assigned to the Collateral Agent pursuant to that certain (i) Leasehold Deed of Trust, Assignment of Leases and Rents and Security Agreement (the "NORTHWIND DEED OF TRUST") in favor of the Collateral Agent, and (ii) Security Agreement (the "NORTHWIND SECURITY AGREEMENT") in favor of the Collateral Agent, each dated as of the date hereof, all of its right, title and interest under the Lease and the REA and the other Project Documents, as defined therein, to secure Northwind's obligations under the Note Purchase Agreement (the "NOTE PURCHASE AGREEMENT") dated as of the date hereof among Northwind, the Collateral Agent and the purchasers referred to therein (the "NORTHWIND NOTEHOLDERS") and the other documents executed in connection therewith (collectively, the "NORTHWIND FINANCING DOCUMENTS") and Aladdin Gaming is consenting to such assignment pursuant to the terms hereof; and WHEREAS, the parties hereto desire to enter into this Agreement in order to set forth certain agreements with respect to the foregoing. 3 NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound hereby, agree as follows: ARTICLE I ALADDIN ENERGY DOCUMENTS SECTION 1.1 REPRESENTATIONS BY NORTHWIND. Northwind makes the following representations and warranties to the other parties to this Agreement as of the date hereof: (1) The Aladdin Energy Documents and, to the best of its knowledge, the REA, are in full force and effect, constitute (with this Agreement) all the agreements to which it is a party with Aladdin Gaming or a beneficiary with respect to the subject matter thereof and have not been modified except for any change orders listed on Schedule 1 annexed hereto and as otherwise set forth herein; (2) The Aladdin Energy Documents are legal, valid and binding obligations of Northwind and are enforceable in accordance with their respective terms, except to the extent enforceability is modified by bankruptcy, reorganization and other similar laws affecting the rights of creditors and by general principles of equity; (3) The rights of Northwind under the Aladdin Energy Documents and the REA have not been assigned by Northwind except to the Collateral Agent for the benefit of the Northwind Noteholders pursuant to the Northwind Financing Documents; (4) No default or event of default on the part of Northwind (or, to the best of its knowledge, on the part of any other party thereto) exists under the Aladdin Energy Documents or the REA with respect to matters relating to the Energy Project (nor has any event occurred which, with the giving of notice and/or the passage of time, would constitute an event of default thereunder), the conditions precedent to the effectiveness thereof set forth in SECTION 5.1(a) of the Aladdin ESA have been fulfilled, and the conditions required to be fulfilled as of the date hereof under SECTIONS 5.1(b) and (c) of the Aladdin ESA have been fulfilled; (5) No Event of Default (as defined in the Note Purchase Agreement) which would be material to the interests of the Purchasers (as defined in the Note Purchase Agreement) under the Note Purchase Agreement has occurred and is continuing; (6) To the best of its knowledge, Northwind has no offsets or defenses to its obligations under the Aladdin Energy Documents or the REA with respect to matters relating to the Energy Project; and (7) To the best of its knowledge, Northwind has no claims or counterclaims against any other party with respect to the Aladdin Energy Documents or the REA with respect to matters relating to the Energy Project. 4 SECTION 1.2 REPRESENTATIONS OF ALADDIN GAMING. Aladdin Gaming makes the following representations and warranties to the other parties to this Agreement as of the date hereof: (1) The Aladdin Energy Documents, the Coordination Agreement and the REA are in full force and effect, constitute (with this Agreement) all the agreements to which it is a party with Northwind with respect to the subject matter thereof and have not been modified except for any change orders listed on Schedule 1 annexed hereto and as otherwise set forth herein; (2) The Aladdin Energy Documents, the Coordination Agreement and the REA are the legal, valid and binding obligations of Aladdin Gaming and are enforceable in accordance with their respective terms, except to the extent enforceability is modified by bankruptcy, reorganization and other similar laws affecting the rights of creditors and by general principles of equity; (3) The rights of Aladdin Gaming under the Aladdin Energy Documents, the Coordination Agreement and the REA have not been assigned by Aladdin Gaming except that the Aladdin Energy Documents and the rights of Aladdin Gaming under the Guaranty, the REA and the Coordination Agreement have been assigned to the Aladdin Lenders pursuant to the Aladdin Loan Documents, the Assignment of Gaming Energy Documents and the Coordination Agreement and the rights of Aladdin Gaming under the Development Agreement and the Guaranty have been assigned to Aladdin Bazaar pursuant to the Coordination Agreement, subject to the rights of the Aladdin Lenders under the Aladdin Loan Documents and the Assignment of Gaming Energy Documents and this Agreement; (4) No default or event of default on the part of Aladdin Gaming (or, to the best of its knowledge, on the part of any other party thereto) exists under the Aladdin Energy Documents, the Coordination Agreement, the Guaranty or the REA with respect to matters relating to the Energy Project (nor has any event occurred which, with the giving of notice and/or the passage of time, would constitute an event of default thereunder) and the conditions precedent to the effectiveness thereof have been fulfilled; (5) No Event of Default (as defined in the Aladdin Credit Agreement) which would be material to the interests of Northwind or the Collateral Agent or the Purchasers (as each such term is defined in the Note Purchase Agreement) under the Aladdin Credit Agreement has occurred and is continuing; (6) To the best of its knowledge, Aladdin Gaming has no offsets or defenses to its obligations under the Aladdin Energy Documents or the REA with respect to matters relating to the Energy Project; and (7) To the best of its knowledge, Aladdin Gaming has no claims or counterclaims against any other party with respect to the Aladdin Energy Documents, the Guaranty or the REA with respect to matters relating to the Energy Project. 5 (8) The conditions precedent set forth in CLAUSE (a) of SECTION 5.1 of the Aladdin ESA which are conditions to the effectiveness of the Aladdin Energy Documents have been satisfied or waived; and (9) Aladdin Gaming has delivered to the Collateral Agent a copy of all financial statements required by the Northwind Financing Documents, all of which have been prepared in accordance with generally accepted accounting principles consistently applied and present fairly the financial condition of Aladdin Gaming as at the dates thereof and the results of their operations for the periods then ended. All factual information which is set out in the Aladdin Prospectus (as defined in the Note Purchase Agreement) or which has been made available in writing to the Northwind Noteholders by or on behalf of Aladdin Gaming is complete and correct in all material respects and does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made. SECTION 1.3 SUBORDINATION, NONDISTURBANCE AND ATTORNMENT. (1) The Lease and the leasehold estate created thereby are now and at all times shall continue to be subject and subordinate to the Aladdin Deed of Trust and to any and all increases, renewals, modifications, extensions, consolidations and replacements thereof, including, without limitation, amendments which increase the amount of the indebtedness secured by the Aladdin Deed of Trust. (2) So long as Northwind or the Collateral Agent (or its designee or nominee or Permitted Transferee (the "NORTHWIND PURCHASER")), as applicable, is not in default beyond the expiration of any applicable notice or grace period (as extended hereunder pursuant to SECTION 1.5) in the payment of rent or in the performance of any of the other terms, covenants or conditions of the Lease or so long as Northwind or the Collateral Agent or Northwind Purchaser shall be exercising rights under Section 365(h)(1)(A)(ii) of the United States Bankruptcy Code (or any similar provision under any applicable state law), neither the Administrative Agent, its successors or assigns nor any other person acquiring the Aladdin Property (each a "PURCHASER") (i) in any foreclosure or any action or proceeding (judicial or nonjudicial) instituted under or in connection with the Aladdin Deed of Trust, (ii) by delivery of a deed or assignment given in lieu of foreclosure, (iii) by order of the United States Bankruptcy Court or (iv) otherwise, shall (x) in any way terminate the Lease or disturb Northwind's, the Collateral Agent's, or any Northwind Purchaser's, as the case may be, use or possession of the Energy Project Site or exercise of the Related Rights in any foreclosure action or any other action or proceeding instituted under or in connection with the Aladdin Deed of Trust and the Lease and the REA shall continue in full force and effect and the Administrative Agent and each Purchaser shall recognize Northwind's, the Collateral Agent's, or any Northwind Purchaser's, as the case may be, rights thereunder or, so long as Northwind or the Collateral Agent or Northwind Purchaser shall be exercising rights under Section 365(h)(1)(A)(ii) of the United States Bankruptcy Code (or any similar provision under any applicable state law), such rights, as though Northwind, the Collateral Agent, or any Northwind Purchaser, as the case may be, were a party to the REA and the Lease was a direct 6 agreement between Northwind and the Administrative Agent or such other Purchaser, as the case may be, or (y) join Northwind as a party defendant in any foreclosure action or proceeding or other action or proceeding in the nature of foreclosure instituted in connection with the Aladdin Deed of Trust, except as may be required by law in the foreclosure of the Property or with respect to adjudication of rights hereunder instituted in connection with a foreclosure of the Aladdin Deed of Trust. (3) If the interests of Aladdin Gaming under the Lease shall be transferred to a Purchaser, Northwind shall be bound to the Purchaser, and the Purchaser shall be bound to Northwind, in accordance with clause (d) of SECTION 1.3 below, under all of the terms, covenants and conditions of the Lease for the balance of the term thereof remaining and any extensions and renewals thereof which may be effected in accordance with any option therefor in the Lease with the same force and effect as if the Purchaser were the landlord under the Lease; PROVIDED, HOWEVER, that the Purchaser shall not be: (1) liable for any act or omission of or default by Aladdin Gaming or any prior landlord under the Lease which has been cured by the Administrative Agent or a Purchaser under Section 1.4 of this Agreement or deemed waived by Northwind or, if applicable, the Collateral Agent under Section 1.4 of this Agreement; (2) subject to any credits, claims, setoffs or defenses which Northwind might have against Aladdin Gaming or any prior landlord under the Lease as a result of any acts or omissions of Aladdin Gaming or any prior landlord which has been cured by the Administrative Agent or a Purchaser under Section 1.4 of this Agreement or deemed waived by Northwind or, if applicable, the Collateral Agent under Section 1.4 of this Agreement; (3) bound by any fixed rent, basic rent, additional rent or other amounts which Northwind may have paid to Aladdin Gaming under the Lease more than thirty days in advance of the month to which such payments relate other than any payments of Base Rent (as defined in the Lease) required to be made upon the signing of the Lease and all such prepaid rent and additional rent shall remain due and owing without regard to such prepayment; (4) bound by any amendment or modification unless made in accordance with SECTION 7.19, or (except by the terms of the Lease) any cancellation of the Lease or (except by the terms of the Lease) surrender of the Energy Project Site unless made in accordance with SECTION 7.19. (4) Northwind hereby agrees to attorn to the Purchaser, including the Administrative Agent if it be the Purchaser, as its landlord, said attornment to be effective and self-operative upon the Purchaser's succeeding to the interest of Aladdin Gaming under the Lease and upon such attornment, the Purchaser shall be bound to Northwind thereunder and the Purchaser and Northwind shall promptly execute and deliver an instrument reasonably acceptable to each of them to evidence such attornment. Upon the effective date of such attornment (x) the Lease shall 7 continue in full force and effect as a direct lease between Northwind and the Purchaser, (y) the respective rights and obligations of Northwind and the Purchaser as set forth in the Lease shall be the same as set forth therein to the extent of the then remaining balance of the term of the Lease and any extensions and renewals thereof and (z) such Purchaser shall assume the obligations of the landlord under the Lease. Northwind acknowledges and agrees that this Agreement satisfies and complies in all respects with all provisions of the Lease (including, without limitation, Article 16 thereof) requiring a non-disturbance agreement in respect of the financing provided pursuant to the Aladdin Credit Agreement and that this Agreement supersedes the provisions of any such inconsistent provision and any other provision of the Northwind Deed of Trust relating to the priority or subordination of the Lease and the interests or estates created thereby to the Aladdin Deed of Trust. SECTION 1.4 ADMINISTRATIVE AGENT'S CURE RIGHTS. (1) Except as otherwise set forth in this Agreement, the parties hereto shall continue to look solely to Aladdin Gaming (and its successors and assigns) for the performance of Aladdin Gaming's obligations under the Aladdin Energy Documents and the REA with respect to the Energy Project. (2) Each of Northwind and the Collateral Agent acknowledge that Aladdin Gaming has assigned to the Administrative Agent for the benefit of the Aladdin Lenders (and their successors and assigns, including a Purchaser) all of Aladdin Gaming's rights under the Aladdin Energy Documents, the Guaranty and the REA as security for the Aladdin Credit Facility. Each of Northwind and the Collateral Agent agree that the Administrative Agent or, if applicable, a Purchaser shall be entitled to exercise all rights (including making demands and giving all notices) of Aladdin Gaming under the Aladdin Energy Documents and the Guaranty in accordance with the terms of the Assignment of Gaming Energy Documents upon the Administrative Agent or Purchaser succeeding to Aladdin Gaming's interests under the Aladdin Energy Documents (whether pursuant to foreclosure of the Aladdin Deed of Trust or otherwise), and giving notice to Northwind and the Collateral Agent that the Administrative Agent or, if applicable, a Purchaser is entitled under the terms of the Assignment of Gaming Energy Documents to exercise such rights, PROVIDED HOWEVER, that any such exercise of rights or giving of notice by the Administrative Agent (or its successors or assigns or a Purchaser), if the Administrative Agent or Purchaser has not succeeded to the interests of Aladdin Gaming under the Aladdin Energy Documents, shall not be deemed to be and shall not be an assumption by the Administrative Agent (or its successors or assigns or a Purchaser) of the obligations or liabilities of Aladdin Gaming under the Aladdin Energy Documents, the Guaranty or the REA. Northwind and the Collateral Agent, as applicable, shall accept such exercise and render all performance due to Aladdin Gaming by it under the Aladdin Energy Documents and the REA, as the case may be, to the Administrative Agent. The foregoing shall include, without limitation, Aladdin Gaming's approval rights in respect of gas and electricity supply contracts under the Aladdin Energy Documents. Aladdin Gaming hereby irrevocably authorizes Northwind and the Collateral Agent to accept and act upon any such notice delivered by the Administrative Agent and agrees that neither of Northwind nor the Collateral Agent shall be bound to inquire into the authorization or legitimacy of the same. 8 (3) Each of Northwind and the Collateral Agent agrees that it will not cancel, terminate or suspend its obligations under any of the Aladdin Energy Documents or the REA on account of any default or breach by Aladdin Gaming thereunder without first providing written notice to Aladdin Gaming and the Administrative Agent and granting to the Administrative Agent (i) if such default is the failure to pay amounts which are due and payable to Northwind under the Aladdin Energy Documents, those rights and time periods granted to Aladdin Gaming thereunder to cure such default plus an additional 10-day period or (ii) in the case of any other breach or default, a reasonable opportunity, but not fewer than 30 days, to cure such other breach or default by Aladdin Gaming unless (x) such breach or default is of a nature which cannot be reasonably cured within such 30 day period in which case the Administrative Agent or, if applicable, a Purchaser shall have commenced to cure such breach or default within such 30-day period and thereafter diligently pursues such cure and achieves substantial completion with 150 additional days and, in each case, shall continue to perform all monetary obligations under the Aladdin Energy Documents and all other obligations of Aladdin Gaming thereunder which the Administrative Agent is reasonably able to perform, (y) such breach or default arises in connection with or after commencement of a bankruptcy or insolvency of Aladdin Gaming in which case the provisions of clause (e) of Section 1.4 shall apply and the Administrative Agent or, if applicable, the Purchaser continues to perform all monetary obligations under the Aladdin Energy Documents and all other obligations of Aladdin Gaming thereunder which the Administrative Agent, or, if applicable, the Purchaser is reasonably able to perform or (z) such breach or default (1) is personal to Aladdin Gaming, (2) cannot be performed or cured by the Administrative Agent or such Purchaser and (3) does not materially and adversely affect the ability of Northwind or, if applicable, the Collateral Agent from performing its obligations under the Aladdin Energy Documents or interfere with the practical realization of the rights and benefits provided to Northwind or the Collateral Agent by the Aladdin Energy Documents in which case such breach or default by Aladdin Gaming shall be waived by Northwind or, if applicable, the Collateral Agent; PROVIDED, HOWEVER, that nothing in this CLAUSE (c) shall limit the rights of Aladdin Gaming or the Administrative Agent, or the obligations of Northwind, as set forth in clause (c) of Section 6.1 of the Aladdin ESA; and FURTHER PROVIDED, HOWEVER, that nothing in this CLAUSE (c) shall limit the right of Northwind or, if applicable the Collateral Agent to terminate the Aladdin Energy Documents if the breach or default is not cured at the later of (x) the time permitted herein and (y) when entitled to do so under the Aladdin Energy Documents. (4) Each of Northwind and the Collateral Agent agrees to accept each cure by the Administrative Agent or another Purchaser of a breach or default by Aladdin Gaming which is performed in accordance with clause (c) of this Section 1.4 and each such cure (or, if applicable, any waiver under item (z) of clause (c) of Section 1.4) shall be binding upon Northwind, the Collateral Agent and their respective successors and assigns. (5) In the event that (i) any of the Aladdin Energy Documents or the REA is rejected by a trustee or debtor-in-possession in any bankruptcy or insolvency proceeding involving Aladdin Gaming (such proceeding, an "ALADDIN BANKRUPTCY PROCEEDING"), the Administrative Agent or, if applicable, a Purchaser shall execute and deliver to Northwind or, if applicable, the Collateral 9 Agent within 45 days after the Administrative Agent or such other Purchaser acquires title to the Aladdin Property new Aladdin Energy Documents which shall be for the balance of the remaining term under the original Aladdin Energy Documents before giving effect to such rejection or termination. Such new Aladdin Energy Documents shall contain the same conditions, agreements, terms, provisions and limitations as the original Aladdin Energy Documents (except for any obligations which have been performed by Aladdin Gaming prior to such rejection or termination). (6) If the interests of Aladdin Gaming under the Aladdin Energy Documents shall be transferred to the Administrative Agent (or its successors or assigns) or a Purchaser, the Administrative Agent (or its successors or assigns) or such Purchaser shall be bound to Northwind, under all of the terms, covenants and conditions of this Agreement and the Aladdin Energy Documents, the Guaranty and the REA; PROVIDED HOWEVER, that any such assumption shall only be made in writing in an agreement acceptable in form and content to the Administrative Agent or its successors or assigns or such Purchaser, as the case may be. SECTION 1.5 COLLATERAL AGENT'S CURE RIGHTS. (1) Except as otherwise set forth in this Agreement, the parties hereto shall continue to look solely to Northwind (and its successors and assigns) for the performance of Northwind's obligations under the Aladdin Energy Documents and the REA with respect to the Energy Project and the Guarantor of its obligations under the Guaranty. (2) Each of Aladdin Gaming and the Administrative Agent acknowledge that Northwind has assigned to the Collateral Agent for the benefit of the Northwind Noteholders (and their successors and assigns, including a Permitted Transferee (as defined below)) all of Northwind's rights under the Aladdin Energy Documents and the REA as security for the Northwind Financing Documents. Each of Aladdin Gaming and the Administrative Agent agree that the Collateral Agent or, if applicable, a Permitted Transferee shall be entitled to exercise all rights (including making demands and giving all notices) of Northwind under the Aladdin Energy Documents and the REA in accordance with the terms of the Northwind Financing Documents upon the Collateral Agent succeeding to Northwind's interests under the Aladdin Energy Documents (whether pursuant to foreclosure of the Northwind Deed of Trust or otherwise) giving notice to Aladdin Gaming and the Administrative Agent that the Collateral Agent or, if applicable, a Permitted Transferee is entitled under the terms of the Northwind Financing Documents to exercise such rights, PROVIDED HOWEVER, that any such exercise of rights or giving of notice by the Collateral Agent (or its successors and assigns, including a Permitted Transferee) shall not be deemed to be and shall not be an assumption by the Collateral Agent (or its successors and assigns, including a Permitted Transferee) of the obligations or liabilities of Northwind under the Aladdin Energy Documents or the REA. Aladdin Gaming and the Administrative Agent, as applicable, shall accept such exercise and render all performance due to Northwind under the Aladdin ESA and the Bazaar ESA and the REA, as the case may be, to the Collateral Agent. Northwind hereby irrevocably authorizes Aladdin Gaming and the Administrative Agent to accept and act upon any such notice delivered by the Collateral Agent 10 and agrees that neither of Aladdin Gaming nor the Administrative Agent shall be bound to inquire into the authorization or legitimacy of the same. (3) Each of Aladdin Gaming and the Administrative Agent agrees that it will not cancel, terminate or suspend its obligations under any of the Aladdin Energy Documents or the REA on account of any default or breach by Northwind thereunder without first providing written notice to Northwind and the Collateral Agent and granting to the Collateral Agent (i) if such default is the failure to pay amounts which are due and payable to Aladdin Gaming under the Aladdin Energy Documents, those rights and time periods granted to Aladdin Gaming thereunder to cure such default plus an additional 10-day period or (ii) in the case of any other breach or default, a reasonable opportunity, but not fewer than 30 days, to cure such other breach or default by Northwind unless (x) such breach or default is of a nature which cannot be reasonably cured within such 30 day period in which case the Collateral Agent or, if applicable, a Permitted Transferee shall have commenced to cure such breach or default within such 30-day period and thereafter diligently pursues and achieves substantial completion with 150 additional days and, in each case, continues to perform all monetary obligations under the Aladdin Energy Documents and all other obligations of Northwind thereunder which the Collateral Agent is reasonably able to perform, (y) such breach or default arises in connection with or after commencement of a bankruptcy or insolvency of Northwind in which case the provisions of clause (e) of this Section 1.5 shall apply and the Collateral Agent or, if applicable, the Permitted Transferee continues to perform all monetary obligations under the Aladdin Energy Documents and all other obligations of Northwind thereunder which the Collateral Agent or, if applicable, the Permitted Transferee is reasonably able to perform or (z) such breach or default (1) is personal to Northwind, (2) cannot be performed or cured by the Collateral Agent or, if applicable, a Permitted Transferee and (3) does not materially and adversely affect the ability of Aladdin Gaming or, if applicable, the Administrative Agent from performing its obligations under the Aladdin Energy Documents or interfere with the practical realization of the rights and benefits provided to Aladdin Gaming or the Administrative Agent by the Aladdin Energy Documents in which case such breach or default by Northwind shall be waived by Aladdin Gaming or, if applicable, the Administrative Agent; PROVIDED, HOWEVER, that nothing in this CLAUSE (c) shall limit the rights of Aladdin Gaming or the obligations of Northwind, as set forth in CLAUSE (c) of SECTION 6.1 of the Aladdin ESA; and FURTHER PROVIDED, HOWEVER, that nothing in this CLAUSE (c) shall limit the right of Aladdin Gaming or, if applicable the Administrative Agent to terminate the Aladdin Energy Documents if the breach or default is not cured at the later of (x) the time permitted herein and (y) when entitled to do so under the Aladdin Energy Document. (4) Each of Aladdin Gaming and the Administrative Agent agrees to accept each cure by the Collateral Agent or a Permitted Transferee of a breach or default by Northwind which is performed in accordance with clause (c) of this Section 1.5 and each such cure (and any waiver under item (z) of clause (c) of this Section 1.5) shall be binding upon Aladdin Gaming, the Administrative Agent, and their respective successors and assigns. (5) In the event that (i) any of the Aladdin Energy Documents or the REA is rejected by a trustee or debtor-in-possession in any bankruptcy or insolvency proceeding involving Northwind (such proceeding, a "NORTHWIND BANKRUPTCY PROCEEDING"), Aladdin Gaming or the 11 Administrative Agent, as applicable, shall execute and deliver to the Collateral Agent or, if applicable, the Permitted Transferee shall execute and deliver to Aladdin Gaming, or if applicable, the Administrative Agent within 45 days after the Collateral Agent or such Permitted Transferee acquires an interest in and to the Aladdin Energy Documents new Aladdin Energy Documents which shall be for the balance of the remaining term under the original Aladdin Energy Documents before giving effect to such rejection or termination. Such new Aladdin Energy Documents shall contain the same conditions, agreements, terms, provisions and limitations as the original Aladdin Energy Document (except for any obligations which have been performed by Northwind prior to such rejection or termination). (6) The Collateral Agent shall have the right to transfer Northwind's interest in the Aladdin Energy Documents and the interests of the Members (as defined in the Note Purchase Agreement) in Northwind to a purchaser at a foreclosure sale without the prior written consent of the Administrative Agent, to an entity which (x) has (or has engaged an operator that has) the same or similar technical expertise and experience in the field of the delivery of hot water, chilled water and electricity as Northwind and substantially the same net worth as the aggregate net worth of Northwind and Unicom Thermal Technologies, Inc., an Illinois corporation, on the date hereof, (y) expressly assumes in writing the obligations of Northwind under the Aladdin Energy Documents and (z) has (or in the sole discretion of the Administrative Agent is reasonably likely to obtain in a timely manner) all approvals, licenses and permits necessary to operate the Energy Project as operated by Northwind. In addition to the foregoing, the Collateral Agent shall have the right to transfer in lieu of foreclosure Northwind's interest in the Aladdin Energy Documents and the interests of the Members (as defined in the Note Purchase Agreement) in Northwind to an entity only after (a) Aladdin Gaming has given its prior written consent; PROVIDED HOWEVER, that prior to giving such consent Aladdin Gaming shall obtain all necessary approvals required in connection therewith, including the approval of the Administrative Agent if required under the Aladdin Credit Agreement or (b) if the Administrative Agent or its successors or assigns or a Purchaser has succeeded to the interests of Aladdin Gaming, then only after the Administrative Agent or its successors or assigns or such Purchaser has given its prior written consent; PROVIDED, HOWEVER, neither Aladdin Gaming nor the Administrative Agent or its successors or assigns or a Purchaser shall unreasonably withhold or delay its consent with respect to any such transfer to an entity (a "PERMITTED TRANSFEREE") which (i) in the case of a transfer of Northwind's interest in the Aladdin Energy Documents (A) has substantially the same net worth as the aggregate net worth of Northwind and Unicom Thermal Technologies, Inc., an Illinois corporation, on the date hereof and substantially the same or similar technical expertise and experience in the field of the delivery of hot water, chilled water and electricity as Northwind, (B) expressly assumes in writing the obligations of Northwind under the Aladdin Energy Documents and (C) has (or in the sole discretion of the Administrative Agent is reasonably likely to obtain in a timely manner) all approvals, licenses and permits necessary to operate the Energy Project as operated by Northwind, (ii) in the case of a transfer of the interests of the Members in Northwind, has substantially the same net worth as Unicom Thermal Technologies, Inc. on the date hereof and substantially the same or similar technical expertise and experience in the field of the delivery of hot water, chilled water and electricity as Northwind and (iii) in the case of a transfer of Northwind's interest in the Aladdin Energy Documents to one or more of the Northwind Noteholders, the Northwind Noteholders engage an 12 operator having substantially the same or similar technical expertise and experience in the field of the delivery of hot water, chilled water and electricity as Northwind and has (or in the sole discretion of the Administrative Agent is reasonably likely to obtain in a timely manner) all approvals, licenses and permits necessary to operate the Energy Project as operated by Northwind; PROVIDED, HOWEVER, that, in each case, any such assignment or sale shall be subject to clause (c) of this Section 1.5. Upon such assignment and assumption, the Northwind Noteholders and the Collateral Agent (including their agents and employees) shall be released from any further liability thereunder (if any liability has been assumed pursuant hereto) arising from and after the effective date of such assignment to the extent of the interest so assigned. (7) If the interests of Northwind under the Aladdin Energy Documents shall be transferred to the Collateral Agent (or its successors or assigns, including a Permitted Transferee), the Collateral Agent (or its successors or assigns, including such Permitted Transferee) shall be bound to Aladdin Gaming, under all of the terms, covenants and conditions of this Agreement and the Aladdin Energy Documents, the Guaranty and the REA; PROVIDED HOWEVER, that any such assumption shall only be made in writing in an agreement acceptable in form and content to the Collateral Agent or its successors or assigns, including a Permitted Transferee, as the case may be. SECTION 1.6 INSURANCE. Aladdin Gaming and Northwind agree that (a) all insurance required by the terms of the Aladdin Energy Documents shall provide that it may not be terminated or canceled without 30 days' prior written notice to the Administrative Agent and (b) Aladdin Gaming and the Administrative Agent shall each be named as an additional insured on all policies of liability insurance required by the terms of the Aladdin Energy Documents. SECTION 1.7 CERTAIN AGREEMENTS OF ALADDIN GAMING. Aladdin Gaming agrees that (a) it shall not exercise its rights under SECTION 9.2 of the Aladdin ESA to require Northwind to remove its property from the Energy Project Site without the prior written consent of the Administrative Agent and (b) it shall immediately notify the Administrative Agent (i) upon any exercise of its right to assume control of the Energy Project pursuant to CLAUSE (c) of SECTION 6.1 of the Aladdin ESA and (ii) of any default by Northwind under the Aladdin Energy Documents or of a default under the Guaranty and, in each case, Aladdin Gaming shall provide such additional information with respect thereto as the Administrative Agent or its consultants may request, including the opportunity to inspect the Energy Project and participate in any decisions or actions taken in connection therewith. SECTION 1.8 EQUIPMENT. All of the parties hereto acknowledge that Northwind is the sole owner of the Energy Project and certain related personal property, machinery and equipment (the "EQUIPMENT") to be constructed, installed and located at the Energy Project Site and on the Property, which will be subject to a security interest of the Collateral Agent pursuant to the Northwind Deed of Trust and the Northwind Security Agreement. The Administrative Agent acknowledges for itself and the Aladdin Lenders that neither the Equipment on the Project Site nor the Distribution System (as defined in the Note Purchase Agreement) shall be subject to or encumbered by the Aladdin Deed of Trust including, without limitation, where such Equipment or Distribution System is or is deemed to be a fixture on the Aladdin Property or the Project Site 13 and that the security interest of the Collateral Agent granted pursuant to the Northwind Deed of Trust and the Northwind Security Agreement in the Energy Project shall encumber the Equipment and the Distribution System shall be encumbered thereby. The Collateral Agent, for itself and on behalf of the Secured Parties (as defined in the Note Purchase Agreement), covenants and agrees with the Administrative Agent and the Aladdin Lenders that (x) so long as no event of default by Aladdin Gaming under the Aladdin ESA exists (after the expiration and application of applicable grace, notice and cure periods under the Aladdin ESA and this Agreement) and (y) the Aladdin ESA (or any replacement thereof) remains in effect (i) the exercise of remedies under the Northwind Financing Documents during the existence of an event of default by Northwind under the Note Purchase Agreement shall not affect, impair or limit the rights of Aladdin Gaming (or, if applicable, the Administrative Agent or a Purchaser) under the Aladdin Energy Documents or this Agreement including, without limitation, the rights set forth in CLAUSE (c) of SECTION 6.1 of the Aladdin ESA and (ii) neither the Collateral Agent nor any of the Secured Parties shall remove any material portion of the Energy Project, the related personal property, machinery and equipment or the Distribution System. ARTICLE II BAZAAR ESA SECTION 2.1 REPRESENTATIONS REGARDING BAZAAR ESA. Northwind makes the following representations and warranties to the other parties to this Agreement as of the date hereof: (1) The Bazaar ESA is unmodified and is in full force and effect, has not been assigned by it except to the Collateral Agent for the benefit of the Northwind Noteholders pursuant to the Northwind Financing Documents, together with the REA and the Development Agreement constitute the only agreements to which it is a beneficiary or a party with Aladdin Bazaar with respect to the subject matter thereof and its obligations under the Bazaar ESA are legal, valid and binding obligations, except to the extent enforceability is modified by bankruptcy, reorganization and other similar laws affecting the rights of creditors and by general principles of equity; (2) No default or event of default on its part (or, to the best of its knowledge, on the part of any other party thereto) exists under the Bazaar ESA (nor has any event occurred which, with the giving of notice and/or the passage of time, would constitute an event of default thereunder) and the conditions precedent to the effectiveness thereof have been satisfied or waived; (3) To the best of its knowledge, it has no offsets or defenses to its obligations under the Bazaar ESA; and (4) To the best of its knowledge, it has no claims or counterclaims against any other party with respect to the Bazaar ESA. 14 ARTICLE III NOTE PURCHASE AGREEMENT SECTION 3.1 CONSENT OF ADMINISTRATIVE AGENT TO CERTAIN NORTHWIND FINANCING DOCUMENTS. The Administrative Agent hereby consents to the mortgage and assignment of Northwind's rights under the Aladdin Energy Documents and the REA to the Collateral Agent pursuant to the terms of the Northwind Deed of Trust and the Northwind Security Agreement. SECTION 3.2 CONSENT OF COLLATERAL AGENT. The Collateral Agent hereby acknowledges the lien of the Aladdin Deed of Trust on the Property (including, without limitation, the Energy Project Site) and acknowledges that Aladdin Gaming has obligations thereunder. SECTION 3.3 CONFIRMATION BY ALADDIN GAMING. Aladdin Gaming hereby confirms that (x) Northwind shall have those rights and obligations as a Party (as defined in the REA) under the REA for the benefit of the Energy Project Site as set out in Article 2 of the REA and (y) Northwind has assigned its right as a party under the Aladdin Energy Documents and the REA to the Collateral Agent. SECTION 3.4 CONDITIONS TO ADVANCES. The funding condition in CLAUSE (t) of SECTION 4.1 and CLAUSE (h) of SECTION 4.2 of the Note Purchase Agreement shall, subject to the terms of the Note Purchase Agreement, be satisfied by the delivery by Aladdin Gaming of the two certificates annexed hereto as, respectively, EXHIBIT B-1 and EXHIBIT B-2 at the times required in said CLAUSE (h). SECTION 3.5 ARRANGEMENTS REGARDING PAYMENTS. For so long as any Note (as defined in the Note Purchase Agreement) is outstanding Aladdin Gaming irrevocably agrees that all payments to be made by Aladdin Gaming to Northwind under any Aladdin Energy Documents shall be made in immediately available funds in lawful money of the United States, directly to the revenue account (Account No. 121766-001), at the office of State Street Bank and Trust Company, Two International Place, Boston, MA 02110 or to such other Person and/or at such other address as the Collateral Agent may from time to time specify in writing to Aladdin Gaming for application by the Collateral Agent, and shall be accompanied by a notice from Aladdin Gaming stating that such payments are to be made to such designated account. SECTION 3.6 DEFAULTS UNDER NORTHWIND FINANCING DOCUMENTS. The Collateral Agent covenants and agrees that the exercise of its rights and remedies under the Northwind Financing Documents during the existence of a default or event of default by Northwind thereunder shall not impair, affect or limit the rights of Aladdin Gaming or, if applicable the Administrative Agent, under the Aladdin Energy Documents including, without limitation, the rights set forth in CLAUSE (c) of SECTION 6.1 of the Aladdin ESA or the right to terminate the Aladdin Energy Documents if the breach or default is not cured at the later of (x) the time permitted herein and (y) when entitled to do so under the Aladdin Energy Documents.. SECTION 3.7 AMENDMENTS OF ALADDIN LOAN DOCUMENTS. Each of the parties hereto covenants and agrees that from time to time without notice to or consent of such party: 15 (1) the Aladdin Lenders and Aladdin Gaming may extend, amend, modify, supplement, replace and/or renew the Aladdin Credit Facility, the Credit Agreement the other Aladdin Loan Documents, and the Assignment of Gaming Energy Documents, as the case may be; (2) the Aladdin Lenders may increase the principal amount of the Aladdin Credit Facility in accordance with the terms of the Aladdin Credit Agreement; (3) the Aladdin Lenders may waive any of the terms, covenants and conditions in the Aladdin Credit Agreement and the other Aladdin Loan Documents, in whole or in part, and grant such indulgences and releases in relation or with respect to the obligations evidenced and secured by the Aladdin Credit Agreement and the other Aladdin Loan Documents as the Administrative Agent and the Aladdin Lenders may determine; and (4) the Aladdin Lenders may exercise all rights, remedies and options under the Aladdin Credit Agreement and the other Aladdin Loan Documents and take any action which may affect all or a portion of the Aladdin Project including, without limitation, (i) all self-help remedies under the Aladdin Credit Agreement and the other Aladdin Loan Documents, (ii) all rights (statutory or otherwise) relating to a sale under power of sale, (iii) accepting a deed-in-lieu of foreclosure or otherwise take title to the Property or (iv) appointing a receiver, in each case under this CLAUSE (d), subject to SECTION 1.4; PROVIDED HOWEVER, that the exercise of such rights shall not diminish the rights or increase the duties of any other party pursuant to this Agreement. SECTION 3.8 INSURANCE AND CONDEMNATION PROCEEDS. Notwithstanding anything to the contrary contained in the Northwind Deed of Trust, the Note Purchase Agreement or any other Northwind Financing Document, while the Collateral Agent may hold condemnation and insurance proceeds in accordance with the Note Purchase Agreement, all such condemnation and insurance proceeds shall be applied and distributed to Northwind and/or Aladdin Gaming in accordance with the terms and provisions of the Aladdin Energy Documents and the REA. ARTICLE IV REA AND RELATED DOCUMENTS SECTION 4.1 REPRESENTATIONS. Aladdin Gaming and AMH (individually as to itself and not with respect to one another) each makes the following representations and warranties to each other and the other parties to this Agreement that as of the date hereof: (1) No default or event of default on its part (or, to the best of its knowledge, on the part of any other party thereto) exists under the REA or the "SITE WORK AGREEMENT" or "PARKING USE AGREEMENT", as such terms are defined in the REA, nor has any event 16 occurred which, with the giving of notice and/or the passage of time, would constitute an event of default thereunder; (2) The REA, the Site Work Agreement and the Parking Use Agreement are unmodified and are in full force and effect, have not been assigned by it, except as permitted hereby, constitute all the agreements to which it is a party with respect to the subject matter thereof and its obligations thereunder are its legal, valid and binding obligations; (3) It has no offsets or defenses to its obligations under the REA, the Site Work Agreement and the Parking Use Agreement, as applicable; and (4) It has no claims or counterclaims against any other party with respect to the REA, the Site Work Agreement or the Parking Use Agreement. SECTION 4.2 CONFIRMATION OF ALADDIN GAMING. Aladdin Gaming confirms for the benefit of each of Northwind and the Northwind Noteholders that: (1) the Performance Tests (as defined in the Development Agreement) have been established pursuant to the Development Agreement and are in the form set out in Schedule 2 hereto; (2) receipt pursuant to Section 4(b) of the Development Agreement of the Project Plan and the Plant Schedule (as each is defined in the Development Agreement) and such plan and schedule are in form and substance acceptable to Aladdin Gaming for the purposes of the Development Agreement; (3) receipt pursuant to Section 5(c) of the Development Agreement of the Plant Plans and Specifications (as defined in the Development Agreement) and confirms that such plans and specifications are in form and substance acceptable to Aladdin Gaming for the purposes of the Development Agreement; (4) receipt pursuant to Section 7(b) of the Development Agreement of the Quality Control and Inspection Program (as defined in the Development Agreement) and that such program is in form and substance acceptable to Aladdin Gaming for the purposes of the Development Agreement; (5) at the date of this Agreement the Substantial Completion Deadline (as defined in the Development Agreement) is 25 March 2000; (6) no Scope Change (as defined in the Development Agreement) has been proposed, effected or implemented as of the date hereof as envisaged in the Development Agreement; 17 (7) for all purposes under the Aladdin ESA and the Development Agreement and, in particular, the provisions of Exhibit C of the Aladdin ESA, each of the items specified in Schedule 3 to this Agreement shall form part of the Investment in the Northwind Facilities in the amounts specified in Schedule 3 or such other amounts incurred by Northwind in respect of each specified item in Schedule 3. SECTION 4.3 INSURANCE. Aladdin Gaming and AMH agree that (a) all insurance required by the terms of the REA shall provide that it may not be terminated or canceled without 30 days' prior written notice to the Administrative Agent and the Collateral Agent and (b) each Party (as defined in the REA), the Administrative Agent and the Collateral Agent shall each be named as an additional insured on all policies of insurance required by the terms of the REA. ARTICLE V ALADDIN MUSIC SECTION 5.1 MUSIC ESA. Aladdin Music and Northwind each hereby acknowledges and agrees as to itself that it shall enter into an energy service agreement (the "MUSIC ESA") with respect to the provisions of energy services in accordance with Aladdin Music's need for such services (provided that amounts payable in connection therewith that are attributable to capacity charges shall not exceed 8% of the total capacity costs of the Energy Project as currently designed or in such greater amounts as may be agreed to by each of the parties hereto) to the Music Project, PROVIDED HOWEVER, that at the time the Music ESA is executed Aladdin Music is at least as creditworthy (in the reasonable judgement of Northwind and the Collateral Agent) as Aladdin Gaming with respect to the Aladdin ESA or Aladdin Bazaar with respect to the Bazaar ESA as of the date hereof; or, in the alternative, Northwind agrees to enter into modified versions of the Aladdin ESA and the Bazaar ESA, pursuant to which 8% of such capacity shall be transferred to Aladdin Bazaar, with Aladdin Gaming being released from its obligations in connection therewith; PROVIDED, HOWEVER, that at the time the modified versions of the Aladdin ESA and the Bazaar ESA are entered into Aladdin Bazaar is at least as creditworthy (in the reasonable judgment of Northwind and the Collateral Agent ) with respect to the modified Bazaar ESA as Aladdin Gaming with respect to the Aladdin ESA as of the date hereof. Aladdin Music and Northwind agree that such Music ESA or said modified versions of the Aladdin ESA and the Bazaar ESA shall be in form and substance substantially similar to the Bazaar ESA and the Aladdin ESA, that, if applicable, Aladdin Music shall become a party to the Coordination Agreement and the Music ESA and any such amendment or modification of the Coordination Agreement joining Aladdin Music as a party thereto shall be subject to the prior written reasonable approval of the Collateral Agent and the Administrative Agent. ARTICLE VI DEFAULTS SECTION 6.1 DEFAULTS. If any party hereto fails to perform its obligations hereunder after the expiration of any applicable grace, notice or cure periods, at all times thereafter and 18 until such time as the defaulting party has performed its obligations, the non-defaulting parties shall have all rights, remedies and options at law and in equity. ARTICLE VII GENERAL PROVISIONS SECTION 7.1 DUE EXECUTION. Each of the parties hereto represents that this Agreement (a) has been duly authorized by all necessary action on the part of such party, (b) has been duly executed and delivered by such party and (c) constitutes the legal, valid and binding obligation of such party enforceable against such party in accordance with its terms (except as such enforceability may be limited by applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally and by principles of equity). SECTION 7.2 AS TO ALADDIN GAMING AND ADMINISTRATIVE AGENT. As between Aladdin Gaming and the Administrative Agent, Aladdin Gaming and the Administrative Agent covenant and agree that nothing herein shall be deemed or construed to modify the Aladdin Loan Documents or constitute a waiver of acceptance of any course of conduct thereunder by the Administrative Agent. SECTION 7.3 REMEDIES. (a) The Administrative Agent (or its designee or nominee) may exercise all rights and remedies hereunder either in person or by agent and Aladdin Gaming shall not impair the exercise thereof by the Administrative Agent whether under this Agreement, the Aladdin Energy Documents, the REA or the Northwind Financing Documents. Neither the exercise of any rights, remedies or options hereunder nor the commission of any other act by the Administrative Agent pursuant to this Agreement shall be deemed to cure or waive any default, or to waive, modify or affect any notice of default under the Aladdin Credit Agreement or the other Aladdin Loan Documents, or to invalidate any act done pursuant to such notice. (b) The Collateral Agent (or its designee or nominee) may exercise all rights and remedies hereunder either in person or by agent and Northwind shall not impair the exercise thereof by the Collateral Agent whether under this Agreement, the Aladdin Energy Documents, the REA or the Northwind Financing Documents. Neither the exercise of any rights, remedies or options hereunder nor the commission of any other act by the Collateral Agent pursuant to this Agreement shall be deemed to cure or waive any default, or to waive, modify or affect any notice of default under the Note Purchase Agreement or the other Northwind Financing Documents, or to invalidate any act done pursuant to such notice. SECTION 7.4 NO OBLIGATION OF ALADDIN LENDERS. (a) Neither the Aladdin Lenders nor the Administrative Agent shall be obligated to perform or discharge, nor do they hereby undertake to perform or discharge, any obligation, duty or liability of Aladdin Gaming under the Aladdin Energy Documents, the Bazaar Ground Lease, the Northwind Financing Documents or this Agreement, except in accordance with this Agreement. Should the Administrative Agent, individually or on behalf of the Aladdin Lenders, incur any loss, cost, claim, demand, expense, liability or damage under the Aladdin Energy Documents, the Guaranty, the Bazaar Ground 19 Lease, the Northwind Financing Documents, the REA or this Agreement, or in the defense against any claims or demands, the amount thereof, including reasonable costs and expenses and reasonable attorneys' fees, together with interest thereon at the rate set forth in Section 3.2.2 of the Aladdin Credit Agreement, shall be secured by the Aladdin Loan Documents, and Aladdin Gaming shall reimburse the Administrative Agent therefor immediately upon demand. Aladdin Gaming acknowledges that the provisions of Section 10.4 of the Aladdin Credit Agreement shall apply to this Agreement. (b) Neither the Northwind Noteholders nor the Collateral Agent shall be obligated to perform or discharge, nor do they hereby undertake to perform or discharge, any obligation, duty or liability of Northwind under the Aladdin Energy Documents, the Northwind Financing Documents or this Agreement, except in accordance with this Agreement. Should the Collateral Agent, individually or on behalf of the Northwind Noteholders, incur any loss, cost, claim, demand, expense, liability or damage under the Aladdin Energy Documents, the Northwind Financing Documents, the REA or this Agreement, or in the defense against any claims or demands, the amount thereof, including reasonable costs and expenses and reasonable attorneys' fees, together with interest thereon at the rate set forth in Section __ of the Note Purchase Agreement, shall be secured by the Northwind Financing Documents, and Northwind shall reimburse the Collateral Agent therefor immediately upon demand. SECTION 7.5 TITLE OF SECTIONS. The titles of the sections of this Agreement are for convenience and reference only, and the words contained therein shall in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of the provisions of this Agreement. SECTION 7.6 NOTICES. Any notice, request, demand, statement, authorization, approval or consent made hereunder shall be in writing and shall be by Federal Express, or other reputable courier service, or by postage pre-paid registered or certified mail, return receipt requested, and shall be deemed given when received or refused (as indicated on the receipt) and addressed as follows or as any party may specify in writing to each other party hereto: IF TO ADMINISTRATIVE AGENT: The Bank of Nova Scotia 580 California Street, 21st Floor San Francisco, CA 94104 Attn: Alan W. Pendergast IF TO ALADDIN GAMING: Aladdin Gaming, LLC 831 Pilot Road Las Vegas, NV 89119 Attn: Richard Goeglein President and Chief Executive Officer 20 IF TO NORTHWIND: Northwind Aladdin, LLC c/o UT Holdings, Inc. 30 W. Monroe Street Suite 500 Chicago, IL 60603 Attn: General Manager IF TO THE COLLATERAL AGENT: State Street Bank and Trust Company 2 International Plaza Boston, Massachusetts 02110 Attn: Corporate Trust Department IF TO ALADDIN BAZAAR: Aladdin Bazaar, LLC c/o TH Bazaar Centers, Inc. 4350 La Jolla Village Drive, Suite 400 San Diego, California 92122 Attn: Legal Department with a copy to: Aladdin Bazaar Holdings, LLC 831 Pilot Road Las Vegas, Nevada 89119 Attn: Ronald Dictrow Aladdin Music, LLC IF TO ALADDIN MUSIC: 831 Pilot Road Las Vegas, NV 89119 Attn: Richard Goeglein IF TO AMH: Aladdin Music Holdings, LLC 831 Pilot Road Las Vegas, NV 89119 Attn: Richard Goeglein SECTION 7.7 GOVERNING LAW. This Agreement shall be governed by and construed in accordance with the laws of the State of New York. SECTION 7.8 PROVISIONS BINDING. The terms and provisions hereof shall be binding upon and shall inure to the benefit of the successors and permitted assigns, respectively, of the Administrative Agent, Northwind, Aladdin Gaming, the Collateral Agent, Aladdin Music and AMH. This Agreement may not be modified or amended except by an agreement in writing signed by the parties hereto. This Agreement and the terms, covenants, conditions and agreements set forth herein shall run with the land and shall be binding upon and inure to the benefit of the Administrative Agent, Aladdin Gaming, Northwind, the Collateral Agent, Aladdin Music and AMH. 21 SECTION 7.9 SEVERABILITY. Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited or be invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. SECTION 7.10 NO WAIVER. Any failure on the part of any party hereto to promptly exercise any right given or reserved hereby or by any other document to which it is a party or beneficiary shall not prevent the exercise of any such right at any time thereafter. Except as set forth herein, each party hereto may pursue and enforce any remedy or remedies accorded herein independently of, or in conjunction or concurrently with, or subsequent to its pursuit and enforcement of, any remedy or remedies which it may otherwise have against any other party hereto. The remedies provided herein are cumulative and not exclusive of any remedies provided by law. SECTION 7.11 NO PARTNERSHIP OR JOINT VENTURE. Any provision hereof to the contrary notwithstanding, the Aladdin Lenders, the Northwind Noteholders and the parties hereto, by virtue of the issuance of this Agreement or any action taken pursuant hereto or contemplated hereby, shall not be deemed to be a partner or joint venturer with one another. SECTION 7.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties of any party hereto contained in this Agreement shall survive the execution and delivery of this Agreement. This Agreement shall survive the exercise and enforcement of remedies under the Aladdin Credit Agreement, the other Aladdin Loan Documents, the Note Purchase Agreement and the Northwind Financing Documents until such time as the parties have performed their obligations hereunder in all material respects. SECTION 7.13 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO IN CONNECTION HEREWITH OR THEREWITH. EACH PARTY HERETO ACKNOWLEDGES AND AGREES THAT IT HAS RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER PROVISION OF THIS AGREEMENT) AND THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE PARTIES HERETO ENTERING INTO THIS AGREEMENT. SECTION 7.14 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS AGREEMENT OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE PARTIES 22 HERETO IN CONNECTION HEREWITH OR THEREWITH SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK. EACH OF THE PARTIES HERETO HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE PERSONAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH SUCH LITIGATION. CT CORPORATION SYSTEM (THE "PROCESS AGENT"), WITH AN OFFICE ON THE DATE HEREOF AT 1633 BROADWAY, NEW YORK, NEW YORK 10019, HAS BEEN APPOINTED BY EACH OF THE PARTIES HERETO (OTHER THAN THE ADMINISTRATIVE AGENT) TO BE ITS AGENT TO RECEIVE, ON ITS BEHALF AND ON BEHALF OF ITS PROPERTY, SERVICE OF COPIES OF THE SUMMONS AND COMPLAINT AND ANY OTHER PROCESS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. SUCH SERVICE MAY BE MADE BY MAILING OR DELIVERING A COPY OF SUCH PROCESS TO EACH PARTY (OTHER THAN THE ADMINISTRATIVE AGENT) HERETO IN CARE OF THE PROCESS AGENT AT THE PROCESS AGENT'S ABOVE ADDRESS, AND EACH PARTY WHICH HAS DESIGNATED THE PROCESS AGENT TO ACCEPT PROCESS FOR EACH PARTY HEREUNDER HEREBY IRREVOCABLY AUTHORIZES AND DIRECTS THE PROCESS AGENT TO ACCEPT SUCH SERVICE ON ITS BEHALF. IN ADDITION TO THE FOREGOING, EACH PARTY IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE ADDRESS FOR NOTICES SPECIFIED IN SECTION 8.6. EACH PARTY HERETO HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH PARTY HEREBY IRREVOCABLY WAIVES TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT, THE ALADDIN CREDIT AGREEMENT, THE OTHER ALADDIN LOAN DOCUMENTS, THE NOTE PURCHASE AGREEMENT AND THE OTHER NORTHWIND FINANCING DOCUMENTS. 23 SECTION 7.15 NO THIRD PARTY BENEFICIARIES. The provisions of this Agreement are for the benefit of the parties hereto and their successors and assigns and no provision hereof is intended to benefit or inure to the benefit of any other person. SECTION 7.16 COUNTERPARTS. This Agreement may be executed in two or more counterparts, all of which when taken together shall constitute one and the same instrument. SECTION 7.17 CLAIMS. No claims may be made by any of the parties hereto or any other person against any of the other parties hereto or any affiliate of the foregoing, or the officers, directors, employees, attorneys, consultants or agents of any of them, for consequential or punitive damages in respect of any claim for breach of contract or any other theory of liability arising out of or related to the transactions contemplated by this Agreement, or an act, omission, or event occurring in connection therewith; and parties hereto each for itself and for all persons claiming by, through and under each of them, waives, releases, and agrees not to sue upon any claim for any such damages, whether or not accrued and whether or not known or suspected to exist in its favor. SECTION 7.18 RECORDING. The parties hereto agree to execute, acknowledge and deliver this Agreement for recordation in the official records of Clark County, Nevada. SECTION 7.19 AMENDMENTS. Without, in each case, the prior written consent of each of the parties hereto, which consent shall not be unreasonably withheld or delayed, each of the parties hereto covenants and agrees that the Aladdin Energy Documents, the Bazaar ESA, the Guaranty, the REA, and, after the Music ESA has been approved by the Collateral Agent and the Administrative Agent, the Music ESA shall not be amended, modified, supplemented or terminated (except as permitted therein and herein). SECTION 7.20 ESTOPPELS. Each party under this Agreement shall have the right to request each other party to this Agreement to deliver its estoppel certificate certifying to the matters set forth in this Agreement which are applicable to the certifying party within ten (10) days after request therefor; PROVIDED, HOWEVER, that in no event shall any party be required to provide any instrument or certificate as described in this Section 7.20 more than twice in any twelve month period. SECTION 7.21 NOTICES. Each of the parties hereto covenants and agrees to give to each of the other parties hereto a copy of all notices given by it to another party pursuant to this Agreement, the Aladdin Energy Documents or the Bazaar ESA, as the case may be, at such time as it gives such notice to such other party which notices shall be given in the manner set forth in SECTION 7.6 hereof together with all written information included with such notice. 24 SECTION 7.22 LIMITATION OF LIABILITY. In the event that any party assumes any liability of any other party under the Aladdin Energy Documents, liability and recourse in respect of any and all obligations of any party thereunder shall be limited solely to such party's interest in the Aladdin Project, the Mall Project, the Music Project, and the Energy Project (and no officer, director, employee, shareholder or agent thereof shall have any liability with respect thereto). IN WITNESS WHEREOF, the parties have hereunto set their respective hands as of the day, month and year first above written. THE BANK OF NOVA SCOTIA, as Administrative Agent By: /S/ Alan Pendergast --------------------------------- Name: Alan Pendergast Title: Relationship Manager NORTHWIND ALADDIN, LLC By: /S/ Greg Rice --------------------------------- Name: Greg Rice Title: Authorized Representative ALADDIN GAMING, LLC By: /S/ Richard Goeglein --------------------------------- Name: Richard Goeglein Title: President & Chief Executive Officer STATE STREET BANK AND TRUST COMPANY, as Collateral Agent By: /S/ Sandy Lamarr Cody --------------------------------- Name: Sandy Lamarr Cody Title: Vice President 25 ALADDIN MUSIC HOLDINGS, LLC By: /S/ Richard Goeglein --------------------------------- Name: Richard Goeglein Title: President and Chief Executive Officer ALADDIN MUSIC, LLC By: /S/ Richard Goeglein --------------------------------- Name: Richard Goeglein Title: President and Chief Executive Officer 26 EXHIBIT A Legal Description 27 EXHIBIT B-1 Aladdin Gaming, LLC Officer's Certificate 28 EXHIBIT B-2 Aladdin Gaming, LLC Officer's Certificate 29 SCHEDULE 1 Change Orders [none] 30 SCHEDULE 2 Performance Tests 31 SCHEDULE 3 Investment in Northwind Facilities Schedule 32 THE STATE OF NEVADA ) ------- ) ss. COUNTY OF CLARK ) ------ This instrument was acknowledged before me on June 4, 1999, by ---- - Alan Pendergast, Relationship Manager of The Bank of Nova Scotia on behalf of - --------------- -------------------- said bank. (SEAL) Dana L. Tasso - ------------- Notary Public, State of Nevada ------ THE STATE OF ILLINOIS ) -------- ) ss. COUNTY OF COOK ) ---- This instrument was acknowledged before me on June 3, 1999, by ---- - Greg M. Rice, Authorized Representative of Northwind Aladdin, LLC, a Nevada - ------------ ------------------------- limited-liability company, on behalf of said company. (SEAL) Daniel J. Kopp - -------------- Notary Public, State of -------- 33 THE STATE OF NEVADA ) ------ ) ss. COUNTY OF CLARK ) ----- This instrument was acknowledged before me on June 4, 1999, by ---- - Richard Goeglein of Aladdin Gaming, LLC, a Nevada limited-liability - ---------------- company, on behalf of said company. (SEAL) Kerry Koenig - ------------ Notary Public, State of Nevada ------ COMMONWEALTH OF MASSACHUSETTS ) ------------- ) ss. COUNTY OF SUFFOLK ) ------- This instrument was acknowledged before me on June 3, 1999, by ---- - Sandy Lamarr Cody, Vice President, of State Street Bank and Trust Company, on - ----------------- -------------- behalf of said bank. (SEAL) Jim Cappelletti - --------------- Notary Public, State of Massachusetts ------------- My Commission Expires July 8, 1999 34 PAGE ---- THE STATE OF NEVADA ) ------ ) ss. COUNTY OF CLARK ) ----- This instrument was acknowledged before me on June 4, 1999, by ---- - Richard Goeglein of Aladdin Music Holdings, LLC, a Nevada limited liability - ---------------- ------ company, on behalf of said company. (SEAL) Kerry Koenig - ------------ Notary Public, State of Nevada ------ THE STATE OF NEVADA ) ------ ) ss. COUNTY OF CLARK ) ----- This instrument was acknowledged before me on June 4, 1999, by ---- - Richard Goeglein of Aladdin Music, LLC, a Nevada limited liability company, - ---------------- ------ on behalf of said company. (SEAL) Kerry Koenig - ------------ Notary Public, State of Nevada ------ 35 EX-27.01 8 EXHIBIT 27.01
5 6-MOS DEC-31-1999 JAN-01-1999 JUN-30-1999 1 0 0 0 0 1 0 0 13,202 0 0 0 0 13,247 (49) 13,202 0 0 0 0 3,849 0 0 (3,849) 0 (3,849) 0 0 0 (3,849) (1.16) (1.16)
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