Site Work Construction Agreement

Site Work, Development and Construction Agreement


SITE WORK DEVELOPMENT
AND CONSTRUCTION AGREEMENT


by and among


ALADDIN GAMING, LLC,
a Nevada limited liability company


"Aladdin Gaming"


and


ALADDIN HOLDINGS, LLC,
a Delaware limited liability company


"Holdings"


and


ALADDIN BAZAAR, LLC,
a Delaware limited liability company


"Bazaar Company"


TABLE OF CONTENTS


Page


RECITALS.....................................................................1


ARTICLE I DEFINITIONS......................................................2


ARTICLE II DEMOLITION WORK AND SITE WORK....................................9
2.1 Performance of Demolition Work...................................9
2.2 Site Work Approvals..............................................9


ARTICLE III CONSTRUCTION OF IMPROVEMENTS....................................10
3.1 Bazaar Plans and Improvements...................................10
3.2 Aladdin Plans and Improvements..................................10
3.3 Conditions Precedent............................................11
3.4 Approval of Construction Schedule...............................11


ARTICLE IV CONSTRUCTION OBLIGATIONS
AND COVENANTS...................................................11
4.1 Construction Standards..........................................11
4.2 Insurance.......................................................13
4.3 Indemnification.................................................13
4.4 Waiver of Subrogation...........................................13
4.5 Reimbursement Obligations.......................................14
4.6 Remedies and Self-Help Cure.....................................14


ARTICLES V and VI [INTENTIONALLY DELETED].................................15


ARTICLE VII EXERCISE OF APPROVAL RIGHTS....................................15


ARTICLE VIII DISPUTE RESOLUTION PROCEDURES.................................15
8.1 Arbitration.....................................................15
8.3 Fees and Costs..................................................16


ARTICLE IX FORCE MAJEURE.............................................17
9.1 Force Majeure...................................................17
9.2 Notice..........................................................17


ARTICLE X MISCELLANEOUS PROVISIONS........................................17
10.1 Attorneys' Fees.................................................17
10.2 Notice..........................................................17


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Page


10.3 Mortgagee Notice Provisions.....................................19
10.4 Amendment.......................................................20
10.5 No Third Party Beneficiaries....................................20
10.6 Counterparts....................................................20
10.7 Governing Law...................................................20
10.8 Waivers.........................................................21
10.9 Assignment......................................................21
10.10 Successors and Assigns..........................................21
10.11 Further Assurances..............................................21
10.12 Title and Headings..............................................21
10.13 Pronouns........................................................21
10.14 Severability....................................................21
10.15 Drafting Ambiguities............................................22
10.16 Entire Agreement................................................22
10.17 Conflicts with REA..............................................22
10.19 Recording Memorandum and Termination of Agreement...............22


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SITE WORK DEVELOPMENT
AND CONSTRUCTION AGREEMENT


THIS SITE WORK DEVELOPMENT AND CONSTRUCTION AGREEMENT ("Agreement") is entered into as of this 26th day of February, 1998, by and among Aladdin Gaming, LLC, a Nevada limited liability company ("Aladdin Gaming"), Aladdin Holdings, LLC, a Delaware limited liability company ("Holdings") and Aladdin Bazaar, LLC, a Delaware limited liability company ("Bazaar Company"), with reference to the following recitals:


R E C I T A L S


A. Aladdin Gaming is the owner of that certain real property generally located at 3667 Las Vegas Boulevard South in Clark County, Nevada, which is more particularly described on Exhibit "A-1" attached hereto (the "Site").


B. Pursuant to a lease agreement (the "Bazaar Lease"), Aladdin Gaming will lease to Bazaar Company that portion of the Site more particularly described on Exhibit "A-2" attached hereto (the "Bazaar Site") on which Bazaar Company shall construct an enclosed themed entertainment shopping center consisting of approximately 726,000 square feet of gross building area, including approximately 462,000 retail gross leasable area at particular elevations of the Aladdin Improvements (the "Retail Facility"), as well as a multi-level parking structure for approximately 4,800 motor vehicles, and additional surface-level parking facilities beneath and adjacent to the Retail Facility for approximately 364 motor vehicles (collectively, the "Common Parking Area"), all as shown on the Plans which are described on Exhibit "B" attached hereto. The Retail Facility and the Common Parking Area are hereinafter referred to collectively as the "Bazaar Improvements".


C. On that portion of the Site that does not include the Bazaar Site, the Music Site or the Energy Site (the "Aladdin Site") (more particularly described on Exhibit "A-3" attached hereto), the Aladdin Parties shall demolish or cause to be demolished portions of, and shall renovate, expand and construct or cause to be renovated, expanded and constructed, the hotel-casino commonly known as the "Aladdin Hotel and Casino" containing approximately 2,600 rooms and an approximately 100,000 square foot casino, together with related and physically attached facilities (the "Aladdin Hotel and Casino"), and including parking facilities beneath the Aladdin Hotel and Casino for approximately 500 motor vehicles (collectively, the "Aladdin Parking Area"), all as shown on the Plans. The Aladdin Hotel and Casino and the Aladdin Parking Area are hereinafter referred to collectively as the "Aladdin Improvements".


D. Aladdin Gaming has leased to Energy Company a portion of the Site (the "Energy Site") (more particularly described on Exhibit "A-5" hereto") pursuant to a lease agreement dated as of December 3, 1997, pursuant to which Energy Company is obligated to construct and operate a central energy plant (the "Central Energy Plant") for the cogeneration of electricity, chilled and hot water to the Site and the distribution of electricity, chilled water and hot water to the Site. Pursuant to a lease agreement (the "Music Lease"), Aladdin Gaming has leased to Aladdin Music


approximately 4.75 acres located on the corner of Audrie Street and Harmon Avenue (the "Music Site") (as more particularly described on Exhibit "A-4" hereto), to permit the construction and operation of a second hotel and casino facility consisting of certain related and physically attached facilities, including a hotel containing approximately 1,000 rooms and an approximately 50,000 square foot casino (the "Music Hotel").


E. The Site currently has certain improvements, including portions of the Aladdin Hotel and Casino, from which asbestos must be removed or abated or which will be demolished, razed and removed (collectively, the "Demolition Work") by the Aladdin Parties pursuant to the terms of this Agreement and as shown on Exhibit "C" hereto. Thereafter, pursuant to the terms hereof, the Site will be prepared by the Aladdin Parties with certain Infrastructure Improvements and related work all as specified in the Site Work Plans (collectively, the "Site Work") so as to then permit the development and construction of the Bazaar Improvements by Bazaar Company and the Aladdin Improvements by the Aladdin Parties. The Bazaar Improvements, the Aladdin Improvements, the Central Energy Plant and the Music Hotel are sometimes hereinafter collectively referred to as the "Redeveloped Aladdin".


F. Holdings has entered into an agreement with the County of Clark, State of Nevada (the "County") dated March 18, 1997 (the "DPW Agreement") which permits Aladdin Gaming and/or its assignees to perform the Demolition Work and a portion of the Site Work prior to the issuance of any building permits.


G. The development, construction and operation of the Redeveloped Aladdin shall be conducted in accordance with and subject to the provisions and requirements of that certain Construction, Operation and Reciprocal Easement Agreement to be entered into concurrently herewith by and among Aladdin Gaming, Aladdin Music, and Bazaar Company, among others (the "REA").


H. The parties to this Agreement desire to set forth their respective rights, duties and obligations with respect to the Demolition Work and the Site Work and their subsequent development and construction obligations with respect to the Redeveloped Aladdin.


NOW, THEREFORE, incorporating and with reference to the foregoing recitals and in consideration of the mutual promises, representations and covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto agree as follows:


ARTICLE I
DEFINITIONS


As used in this Agreement, the following terms shall have the following particular meanings:


Affiliate. "Affiliate" means a Person that Controls, is directly or indirectly Controlled by, or is under common ownership or Control with, another Person. Notwithstanding the foregoing or any other provision of this Agreement to the contrary, Bazaar Company shall not be considered to


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be an Affiliate of Aladdin Gaming, Holdings or any Affiliates thereof, and Aladdin Gaming and Holdings shall not be considered to be Affiliates of Bazaar Company or any Affiliates thereof, notwithstanding the fact that an Affiliate of Aladdin Gaming and Holdings holds a fifty percent (50%) membership interest in Bazaar Company.


Agreement. "Agreement" means this Site Work Development and Construction Agreement, as amended from time to time.


Aladdin Gaming. "Aladdin Gaming" is defined in the introductory paragraph of this Agreement.


Aladdin Hotel and Casino. "Aladdin Hotel and Casino" is defined in Recital C of this Agreement.


Aladdin Improvements. "Aladdin Improvements" is defined in Recital C of this Agreement and includes the Buildings, Separate Utility Lines, Common Utility Lines and truck loading docks and access areas, turn-around and loading/delivery areas, storage racks, delivery elevators and related facilities, constructed and installed on the Aladdin Site, including any present or future construction or alteration thereof from time to time.


Aladdin Music. "Aladdin Music" means Aladdin Music, LLC, a Nevada limited liability company.


Aladdin Parking Area. "Aladdin Parking Area" is defined in Recital C of this Agreement and shall mean that portion of the Aladdin Improvements for the shared use of the Redeveloped Aladdin and all of its Permittees in connection with the parking, passage and loading of motor vehicles, together with related improvements which are at any time constructed in connection therewith, including driveways, pedestrian sidewalks, walkways and stairways, escalators, elevators, light standards, directional signs, curbs and landscaping within and adjacent to areas used for such shared parking, passage and loading, underneath the Aladdin Hotel and Casino for the use of the Aladdin Parties and their respective Permittees, in each case and to the extent indicated on Exhibit "B".


Aladdin Parties. "Aladdin Parties" shall mean, collectively, Aladdin Gaming and Holdings, each of which shall be jointly and severally liable for the obligations and responsibilities of the other hereunder.


Aladdin Plans. "Aladdin Plans" is defined in Section 3.2(a) of this Agreement.


Aladdin Site. "Aladdin Site" is defined in Recital C of this Agreement.


Bazaar Company. "Bazaar Company" is defined in the introductory paragraph of this Agreement.


Bazaar Improvements. "Bazaar Improvements" is defined in Recital B of this Agreement and includes the Buildings, Separate Utility Lines, Common Utility Lines and truck loading docks


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and access areas, turn-around and loading/delivery areas, storage racks, delivery elevators and related facilities, constructed and installed on the Bazaar Site, including any present or future construction or alteration thereof from time to time.


Bazaar Lease. "Bazaar Lease" is defined in Recital B of this Agreement, and includes any amendments thereof from time to time.


Bazaar Plans. "Bazaar Plans" is defined in Section 3.1(a) of this Agreement.


Bazaar Site. "Bazaar Site" is defined in Recital B of this Agreement.


Building. "Building" shall mean all portions of the buildings and structures, as altered or restored, that exist or are constructed from time to time on a party's Tract, including the Shell and Facade.


Central Energy Plant. "Central Energy Plant" is defined in Recital D of this Agreement and shall mean that facility by and through which the Energy Company will generate and distribute electricity, hot water and chilled water sufficient to service the power, heating, ventilating and air conditioning requirements of the Redeveloped Aladdin pursuant to the Energy Company Agreement.


CIP. "CIP" shall mean the "Controlled Insurance Program" as defined and set forth in the Design/Build Contract.


Claim. "Claim" is defined in Section 4.3(a) of this Agreement.


Common Parking Area. "Common Parking Area" is defined in Recital B of this Agreement and shall mean that portion of the Bazaar Improvements for the shared use of the Redeveloped Aladdin and all of its Permittees in connection with the parking, passage and loading of motor vehicles, together with related improvements which are at any time constructed in connection therewith including driveways, pedestrian sidewalks, walkways and stairways, escalators, elevators, light standards, directional signs, curbs and landscaping within and adjacent to areas used for such shared parking, passage and loading, in each case to the extent indicated on Exhibit "B".


Common Utility Lines. "Common Utility Lines" shall mean all utility lines, connections and facilities or portions thereof that extend to a particular point of delivery to a particular Tract designated on the Plans attached hereto as Exhibit "B", installed for the common use and benefit of all Buildings and Tracts comprising the Redeveloped Aladdin for the transmission of domestic water, fire protection water, storm drainage, and sanitary sewage, which the Aladdin Parties shall install pursuant to this Agreement and which shall be maintained, repaired and restored as set forth in the REA.


Concerned Party, Concerned Parties. "Concerned Party" and "Concerned Parties" are defined in Section 8.1(a) of this Agreement.


Construction Schedule. "Construction Schedule" shall mean that time schedule in reasonable


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detail attached hereto as Schedule 1 (as amended from time to time pursuant hereto) indicating certain key, threshold dates for the construction and completion of the Demolition Work, Site Work, the Bazaar Improvements, the Aladdin Improvements, the Music Hotel, and the Central Energy Plant, including the First Scheduled Opening Date and the Second Scheduled Opening Date, and


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changes to which and further refinements of which the parties must agree in accordance with Section 3.4 of this Agreement.


Control. "Control" shall mean ownership of a Person or party in excess of 50% and/or the power, exercisable jointly or severally, to manage and direct a Person through the direct or indirect ownership of partnership interest, stock, trust powers, or other beneficial interests and/or management or voting rights.


County. "County" is defined in Recital F of this Agreement.


Cure. At such time as a Person is in Default and has received a demand for correction of such Default, such Person and its Mortgagee shall be permitted thirty (30) days or such other amount of time specified herein within which to render remedial performance sufficient to correct said Default, which correction shall be a "Cure." Whenever a Default is not capable of Cure within the specified period, a Defaulting Party (or its Mortgagee) shall be deemed to have Cured the Default if it shall have commenced Cure within the specified time period and shall have prosecuted and pursued the Cure continuously and diligently thereafter to completion.


Default, Defaulting Party. "Default" shall mean a party's breach or violation of any of covenants, terms or obligations set forth in this Agreement. "Defaulting Party" shall mean the party in Default.


Demolition Work. "Demolition Work" is defined in Recital E of this Agreement.


Design/Build Contract. "Design/Build Contract" shall mean that certain Contract between Aladdin Gaming and Fluor Daniel, Inc. for Design/Build Services dated as of December 4, 1997.


Dispute. "Dispute" is defined in Section 8.1(a) of this Agreement.


Dispute Resolution Procedures. "Dispute Resolution Procedures" means those procedures for resolving disputes among the parties set forth in Article VIII of this Agreement.


DPW Agreement. "DPW Agreement" is defined in Recital F of this Agreement.


Energy Company. "Energy Company" means Northwind Las Vegas, LLC, a Nevada limited liability company.


Energy Company Agreement. "Energy Company Agreement" shall have the meaning ascribed to it in the REA.


Energy Company Utility Lines. "Energy Company Utility Lines" shall mean all utility lines, connections and facilities or portions thereof that extend to a particular point of delivery to a particular Tract designated on the Plans attached hereto as Exhibit "B", installed for the common use and benefit of all Buildings and Tracts comprising the Redeveloped Aladdin for the transmission of chilled water, hot water and electricity, which shall be installed and maintained by the Energy


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Company pursuant to the Energy Company Agreement.


Energy Site. "Energy Site" is defined in Recital D of this Agreement.


Excuse. "Excuse" means (a) the occurrence of an event of force majeure pursuant to Article IX that interferes with a party's ability to perform its obligations under this Agreement, or (b) the Default of the other party with respect to its construction or restoration covenants set forth herein and in the REA, to the extent that such Default interferes with a non-Defaulting Party's ability to perform its obligations under this Agreement, which force majeure event or which Default shall result in the temporary relief of the interfered-with or non-Defaulting Party (as applicable) from its duty to construct or restore, as applicable, for so long as such force majeure event continues or such Defaulting Party has not Cured its Default.


Facade. "Facade" shall mean the facia or front portions of the Buildings constituting the Aladdin Hotel and Casino that face Las Vegas Boulevard, as more specifically described in the Plans attached hereto as Exhibit "B".


First Scheduled Opening Date. "First Scheduled Opening Date" shall mean the date by which the Aladdin Improvements and the Bazaar Improvements are scheduled to be first opened for business to the public, which shall mean that (a) all certificates of occupancy for the Aladdin Hotel and Casino, the Common Parking Area, the Aladdin Parking Area, the Retail Facility and the Central Energy Plant shall have been issued by the County, (b) with respect to the Aladdin Hotel and Casino, all design and construction work in the casino has been substantially completed, the casino is fully operational, substantially all Salle Privee Facilities are open, and substantially all of the public areas (other than convention and meeting rooms) of the Aladdin Hotel and Casino are open; (c) the Common Parking Area and the Aladdin Parking Area are fully operational; (d) with respect to the Retail Facility, all of Bazaar Company's design and construction work in the Retail Facility, including substantially all of the public areas, has been substantially completed and the same is open; and (e) the Central Energy Plant is fully operational or utilities are available for use by the parties from an alternative source. The First Scheduled Opening Date shall be set forth in the Construction Schedule. Notwithstanding this fact, thirteen (13) months prior to the date set forth in the Construction Schedule, the parties hereto, in their reasonable discretion, shall confirm and establish the First Scheduled Opening Date and thereafter, subject only to an Excuse, the First Scheduled Opening Date shall not be changed unless all parties, each in its sole and absolute discretion, agrees to such change.


Indemnitor. "Indemnitor" is defined in Section 4.3(a) of this Agreement.


Infrastructure Improvements. "Infrastructure Improvements" means those off-site and on-site infrastructure improvements as more specifically described on the Site Work Plans attached as Exhibit "D" installed, made, constructed, restored or relocated by the Aladdin Parties in order to prepare the Site for the development and construction of the Redeveloped Aladdin, and for ongoing operation as required by the DPW Agreement, the Traffic Study and the County, including, without limitation, grading, pad preparation, streets (including, without limitation, the realignment of Harmon Avenue, if and to the extent the County requires the completion of such realignment),


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roadways, driveways, walkways, sidewalks, curbs, bridges, turning lanes, traffic control devices, traffic signals, traffic mitigation measures, water drainage and flood control mitigation measures, street lights, driveway and walkway lights, Building lights (including lighting and ceilings that are underneath the Retail Facility), signage, landscaping, pedestrian bridges, tunnels and overpasses and preparation for the installation of utilities.


LLC Agreement. "LLC Agreement" shall mean that certain Limited Liability Company Agreement of Bazaar Company dated September 3, 1997, by and between TH Bazaar Centers, Inc., a Delaware corporation, and Aladdin Bazaar Holdings, LLC, a Nevada limited liability company, as amended on October 16, 1997, and from time to time.


Mortgage; Mortgagor; Mortgagee. "Mortgage" shall mean an indenture of mortgage, deed of trust encumbering all or a portion of the interest of a party ("Mortgagor") in its Tract. "Mortgagee" shall mean either the trustee and beneficiary/mortgagee, individually or collectively as appropriate, under a Mortgage.


Music Hotel. "Music Hotel" is defined in Recital D of this Agreement.


Music Lease. "Music Lease" is defined in Recital D of this Agreement.


Music Site. "Music Site" is defined in Recital D of this Agreement.


NRS. "NRS" means the Nevada Revised Statutes, as currently in effect and as amended from time to time.


Permits. "Permits" means those approvals, licenses, permits, variances, entitlements and certificates of occupancy relating to or required for the Demolition Work, the Site Work and the construction of the Aladdin Improvements and the Bazaar Improvements, as the case may be, including but not limited to those set forth on Schedule 2 hereto, which shall be obtained by the Aladdin Parties or Bazaar Company (with respect to the Bazaar Improvements), as appropriate, at such parties' sole cost and expense.


Permittee. "Permittee" shall mean any Person from time to time entitled by the parties hereto to use, occupy or visit the Redeveloped Aladdin under any lease, sublease, deed or other instrument or arrangement, and its respective officers, directors, employees, representatives, agents, partners, members, managers, agents, architects, engineers, contractors, customers, visitors, invitees, tenants, subtenants, licenses and concessionaires, including, without limitation, the Project Architect/Engineer and the Project Contractor and their authorized agents and employees.


Person. "Person" shall mean an individual, fiduciary, trust, partnership, limited-liability company, firm, association and corporation, or any other form of business or governmental entity.


Plans. "Plans" shall mean collectively, the Aladdin Plans and the Bazaar Plans described on Exhibit "B" attached hereto, which shall be those certain drawings and plans to include schematics, preliminary and working drawings, designs, specifications, criteria and progress reports, as amended


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and revised from time to time (including during construction), with respect to the design, development and construction of the Aladdin Improvements and the Bazaar Improvements, which changes must be approved by the parties in accordance with Sections 3.1 and 3.2 of this Agreement and by the County in connection with the issuance of building permits and certificates of occupancy. The parties understand that the Plans shall be in final "as-built" form only at or after the completion of all work thereunder. The Plans shall include and reflect, without limitation, all plans and specifications for Buildings, Utility Lines, exterior and accent lighting, vehicle and pedestrian access, setback requirements, and the like.


Pro Forma Budget. "Pro Forma Budget" shall mean that certain pro forma budget attached hereto as Schedule 3 prepared by the Aladdin Parties identifying the costs to be incurred by the Aladdin Parties for the Site Work.


Project Architect/Engineer. "Project Architect/Engineer" shall have the meaning ascribed to it in the REA.


Project Contractor. "Project Contractor" shall have the meaning ascribed to it in the REA.


REA. "REA" is defined in Recital G of this Agreement.


Redeveloped Aladdin. "Redeveloped Aladdin" is defined in Recital E of this Agreement.


Reimbursement Obligation. "Reimbursement Obligation" is defined in Section 4.5(a) of this Agreement.


Retail Facility. "Retail Facility" is defined in Recital B of this Agreement.


Salle Privee Facilities. "Salle Privee Facilities" shall mean that separate 15,000 square foot luxurious gaming ...