SALLE PRIVEE AGREEMENT
BY AND AMONG
ALADDIN GAMING, LLC,
LONDON CLUBS NEVADA INC.
AND
LONDON CLUBS INTERNATIONAL, PLC
SALLE PRIVEE AGREEMENT, dated as of February 26, 1998, by and among
ALADDIN GAMING, LLC, a Nevada limited liability company with its principal
office located at ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇-▇▇▇▇ ("Aladdin"), LONDON CLUBS NEVADA INC., a Nevada corporation with its
principal office located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇
▇▇▇▇▇ ("London Clubs") and LONDON CLUBS INTERNATIONAL, PLC, a United Kingdom
public limited company with its principal office located at ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇ ("Guarantor").
W I T N E S S E T H :
WHEREAS, Aladdin owns that certain parcel of land and the existing
improvements thereon (including, without limitation, the Aladdin Hotel and
Casino) located at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ (the
"Premises"), as the same is more particularly described in the Purchase
Agreement dated as of September 24, 1997, as amended, entered into among, INTER
ALIA, Aladdin, London Clubs and Guarantor (the "Purchase Agreement");
WHEREAS, Aladdin is undertaking, among other things, to redevelop the
Aladdin Hotel and Casino (as so redeveloped, the "Redeveloped Aladdin");
WHEREAS, Aladdin and Aladdin Hotel will acquire and maintain all necessary
licenses and permits in their respective names as shall be necessary to
authorize them to legally operate and maintain gaming operations and a casino at
the Redeveloped Aladdin;
WHEREAS, London Clubs and Guarantor will acquire and maintain all necessary
licenses, approvals or permits in their respective names as shall be necessary
to permit each of London Clubs and Guarantor to perform their respective
obligations hereunder;
WHEREAS, the group of companies of which London Clubs is an Affiliate (as
hereinafter defined) has considerable experience and acknowledged expertise and
know-how in operating premium casino businesses, and Aladdin wishes to have
access to the expertise, advice and know-how of London Clubs;
WHEREAS, the "Salle Privee Facilities" (as hereinafter defined) are to be
included in the Redeveloped Aladdin and it has been agreed that London Clubs
shall (i) provide advice and consulting services regarding the development and
fitting out of the Salle Privee Facilities, and (ii) provide certain worldwide
marketing and promotional services in relation thereto, and shall direct the
operations thereof, pursuant to the principles, policies, procedures and
standards as set forth in Article 6 hereof
and such additional principles, policies, procedures and standards as shall be
determined from time to time by London Clubs in consultation with Aladdin (the
"Policies and Procedures");
WHEREAS, Guarantor has agreed to guarantee the obligations and liabilities
of London Clubs under this Agreement on the terms set forth herein; and
WHEREAS, this Agreement is being entered into pursuant to the Purchase
Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements herein set forth, the parties hereto agree as follows:
1. DEFINITIONS.
Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in the Purchase Agreement. In addition, the following terms
shall have the following meanings:
"ABOVE LIMITS GAMING" means all ▇▇▇▇▇▇ made in the Salle Privee Facilities
during the "Above Limits Gaming Period" by any person who has been granted the
right by London Clubs to exceed the Normal Gaming Limits.
"ABOVE LIMITS GAMING LOSSES" means the aggregate of the amounts won by
customers in respect of Above Limits Gaming in any Financial Year.
"ABOVE LIMITS GAMING PERIOD" means, with respect to a particular person,
the period during which London Clubs has granted such person the right to
exceed the Normal Gaming Limits.
"ABOVE LIMITS GAMING WINS" means the aggregate of the amounts lost by
customers in respect of Above Limits Gaming in any Financial Year.
"ABOVE LIMITS GUARANTY" means the guaranty of certain Net Above Limits
Gaming Losses as set forth in Section 6.3 (b) hereof.
"AFFILIATE" means, in respect of a specified Person, any Person who or
which is (a) directly or indirectly controlling, controlled by or under common
control with such specified person, or (b) any member, director, officer,
manager, relative or spouse of such specified person. For the purpose of this
definition, "CONTROL" means the right to exercise, directly or indirectly, more
than fifty percent of the voting power of the stockholders, members or owners,
and, with respect to any individual, partnership, trust or other entity or
association, the possession, directly or indirectly, of the power to direct or
cause the direction of the
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management or policies of the controlled entity, and "CONTROLLED" and
"CONTROLLING" shall have corresponding meanings.
"BOARD" means the Board of Managers of Aladdin.
"EXECUTIVE MANAGEMENT COMMITTEE" means the committee of the management of
Aladdin which shall include, without limitation, the following persons: the
president and chief executive officer of Aladdin, the chief financial officer of
Aladdin, the senior vice president of Aladdin who is the president and chief
operating officer of the Aladdin hotel and casino, the senior vice president of
Aladdin who is the president and chief operating officer of the second hotel and
casino to be located on the Premises, the senior vice president human resources
of Aladdin, the senior vice president electronic gaming of Aladdin and the
managing director of the Salle Privee.
"FINANCIAL YEAR" means the Initial Financial Year and each period from
January 1 to December 31 in each year after the Initial Financial Year.
"GAMING LICENSE" means all casino and gaming licenses or other necessary
authorizations which are required by the laws of the State of Nevada or ▇▇▇▇▇
county at any time and which authorizes Aladdin to operate a casino at the
Redeveloped Aladdin, including the Salle Privee Facilities.
"GAMING PROBLEM" means circumstances such that any member of Aladdin, any
Affiliate of any member of Aladdin or any Related Party of any member of Aladdin
may preclude or materially delay, impede or impair the ability of Aladdin to
obtain or retain any licenses required by the Nevada Gaming Authorities for the
conduct of business of the Aladdin and its subsidiaries, or such as may result
in the imposition of materially burdensome terms and conditions on any such
license.
"INITIAL FINANCIAL YEAR" means the period from the Opening Date to December
31 of such calendar year.
"NET ABOVE LIMITS GAMING LOSSES" means for any Financial Year, the amount,
if any, by which Above Limits Gaming Losses exceeds Above Limits Gaming Wins for
such Financial Year.
"NET ABOVE LIMITS GAMING WINS" means for any Financial Year, the amount, if
any, by which Above Limits Gamins Wins exceeds Above Limits Gaming Losses for
such Financial Year.
"NEVADA GAMING AUTHORITIES" means the Nevada Gaming Commission, the Nevada
State Gaming Control Board and any other applicable governmental or
administrative state or local agency involved in the regulation of gaming or
gaming activities in the State of Nevada.
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"NORMAL GAMING LIMITS" means the gaming limits as jointly established from
time to time by Aladdin and LCI in respect of the Salle Privee.
"OPENING DATE" means the day on which the Salle Privee first opens its
doors for the commencement of gaming operations.
"OPERATING AGREEMENT" means the Operating Agreement of Aladdin of even date
herewith among Aladdin and Aladdin Gaming Holdings LLC.
"PERSON" means a natural person, any form of business or social
organization and any other nongovernmental legal entity, whether domestic or
foreign, including a corporation, partnership, association, trust,
unincorporated organization, estate or limited liability company.
"REDEVELOPMENT" means the redevelopment and expansion of the Aladdin Hotel
and Casino and related improvements including the Salle Privee Facilities.
"RELATED PARTY" means, in respect of any member of Aladdin, its
Affiliates, and the member's and the Affiliates respective shareholders,
partners, members, directors and officers.
"SALLE PRIVEE FACILITIES" means the following components to be constructed
as part of the Redevelopment: (a) a gaming facility containing approximately 20
to 30 high limit tables and approximately 100 high limit slot devices, located
on the mezzanine level directly above the main gaming floor of the Aladdin
casino (the "Salle Privee"); (b) a super-premium gourmet restaurant facility
located adjacent to and as part of the Salle Privee and containing a separate
kitchen, a bar, approximately 25 dining tables inside the restaurant as well as
several additional dining tables located in a roof garden accessible through the
restaurant (the "Restaurant"); (c) an exclusive hospitality facility comprising
approximately 25 double-module luxury suites, 5 triple-module suites, a
concierge facility and a guest bar and lounge, to be located in the main tower
of the Redeveloped Aladdin (the "Hospitality Facility"); (d) a separate entrance
and reception area for guests of the Salle Privee offering secure and discreet
access for arrivals and departures; and (e) vertical and horizontal circulation
infrastructure providing for private elevator access to the Hospitality Facility
and private corridor access from the Hospitality Facility to the Salle Privee.
"SALLE PRIVEE EBITDA" means, for the period for which the determination is
being made (the "Determination Period") the sum of (x) the "Salle Privee Gross
Gaming Revenue" (as hereinafter defined) and (y) all other gross receipts from
all sources attributable to the Salle Privee Facilities, including, without
limitation, sales of food, beverages, and hotel accommodation which
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sales in accordance with common industry practice shall include, at the agreed
value thereof, food, beverages and hotel accommodation provided on a
complimentary basis in the Salle Privee Facilities to persons designated for
complimentary treatment in accordance with the Policies and Procedures, less (z)
all costs and expenses directly attributable to the Salle Privee without any
allocation being made for items of Aladdin's general overhead not specifically
attributable to the Salle Privee. For purposes of determining Salle Privee
EBITDA, the following items SHALL NOT be deducted:
(i) interest of any kind payable or receivable by Aladdin;
(ii) any federal, state, local or county taxes of any kind and
however measured, except for the gaming taxes of the State of Nevada
and ▇▇▇▇▇ County and any applicable sales or use taxes payable by
Aladdin in respect of the Determination Period but only in respect of
the Salle Privee Facilities;
(iii) depreciation charges of any kind;
(iv) amortization charges of any kind; or
(v) any item of cost or expense not directly attributable to the
Salle Privee.
"SALLE PRIVEE GROSS GAMING REVENUE" means with respect to any
Determination Period, the Gross Revenue (as such term is defined in
Section 463.0161 of the Nevada Revised Statutes, as amended) from gaming
operations at the Salle Privee during such Determination Period.
"SALLE PRIVEE MARKETING PLAN" means the marketing plan in respect of the
Salle Privee Facilities.
2. TERM OF THE AGREEMENT.
The term of this Agreement shall commence on the date hereof and shall
continue until the earlier of (i) the sixty ninth (69) anniversary of the date
of commencement of gaming operations at the Aladdin, (ii) the date of
termination of this Agreement under Section 11 hereof, or (iii) the date of
termination hereof by written agreement of the parties hereto.
3. THE REDEVELOPMENT AND FITTING
OUT OF THE SALLE PRIVEE FACILITIES.
Aladdin, at its sole cost and expense, and in accordance with the plans,
specifications, and budgets in such form as shall have been approved pursuant to
the Purchase Agreement and the Operating
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Agreement, shall construct, furnish and fit out the Salle Privee Facilities,
which shall include, without limitation, such furniture, fixtures, gaming
equipment and security equipment for the Salle Privee Facilities as London Clubs
may advise, with such advice and direction from London Clubs with respect to
design, lay-out, decor and style and with respect to such other matters as will
assure that the Salle Privee Facilities are in full and effective operation from
and after the Opening Date.
4. THE MARKETING AND PROMOTION
OF THE SALLE PRIVEE FACILITIES.
Throughout the term of this Agreement, London Clubs shall direct worldwide
marketing and promotional services targeted at its international clientele,
based on a Marketing Plan (the "Salle Privee Marketing Plan") to be prepared by
London Clubs and submitted to the Executive Management Committee for its advice
and comment approximately six (6) months prior to the planned Opening Date. The
Salle Privee Marketing Plan shall provide for the marketing and promoting to
such clientele of the Redeveloped Aladdin generally and the Salle Privee
Facilities particularly. The Salle Privee Marketing Plan shall include a plan
for cross-marketing the Salle Privee Facilities with London Clubs and its
affiliates' other gaming facilities. London Clubs shall utilize commercially
reasonable efforts to deploy their respective group sales and marketing
functions and staff in the provision of such services, PROVIDED, HOWEVER, that
London Clubs, at all times, shall determine the method by which such marketing
and promotional activities are to be conducted. The Salle Privee shall be open
to the public at all times that it is open for business.
5. THE OPERATION OF THE SALLE PRIVEE FACILITIES.
Throughout the term of this Agreement, London Clubs shall direct the
operations of the Salle Privee Facilities in accordance with the Policies and
Procedures and with the regulations relating to gaming and any other applicable
laws of the State of Nevada and consistent with an international premium
standard and in accordance with Aladdin's operating budget and marketing plan.
London Clubs shall inform and consult with the Board in connection with all
material issues that may arise affecting the operation of the Salle Privee
Facilities.
6. OPERATING PRINCIPLES, POLICIES, PROCEDURES
AND STANDARDS OF THE SALLE PRIVEE FACILITIES.
The following Policies and Procedures shall apply to the operation of the
Salle Privee Facilities in consultation with the Executive Management Committee.
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6.1 OPERATING PRINCIPLES, ETC. Except as otherwise expressly provided
herein, London Clubs shall determine Policies and Procedures of the Salle Privee
Facilities in consultation with the Executive Management Committee.
6.2 GAMING FACILITIES. London Clubs shall direct the gaming and
promotional operations of the Salle Privee Facilities and shall determine the
type, number and location of gaming facilities, tables and devices to be
installed in the Salle Privee, it being understood that the Salle Privee is
expected initially to contain approximately 20 to 30 high limit table games and
approximately 100 high limit slot devices.
6.3 CREDIT MANAGEMENT AND GAMING LIMITS.(a) The Salle Privee will be part
of the Redeveloped Aladdin's financial control facilities and credit management
will be administered by Aladdin's central credit oversight department, PROVIDED
that Aladdin will consult regularly with London Clubs with regard to London
Clubs' recommendations regarding credit management issues. Basic risk
management policies regarding gaming limits and credit facilities for the Salle
Privee shall be established by the Board based upon the input and recommendation
of London Clubs. In addition, in an effort to provide the same wagering
flexibility that London Clubs provides its clientele in its overseas operations,
Aladdin shall permit London Clubs greater latitude with respect to the wagering
limits imposed upon London Clubs' clientele in connection with wagering in the
Salle Privee. In consideration for Aladdin granting London Clubs' clientele such
latitude, London Clubs agrees that Net Above Limits Gaming Losses suffered by
Aladdin shall be reimbursed by London Clubs to the extent and as set forth in
subsection (b) of this Section 6.3.
(b)(i) Within sixty (60) days after the close of each Financial
Year, Aladdin shall determine the amount of Net Above Limits Gaming
Losses or Net Above Limits Gaming Wins for that year, and notify
London Clubs of the determination. London Clubs may, within thirty
(30) days thereafter, notify Aladdin that it either accepts the
determination, or wishes the auditors regularly employed by Aladdin to
audit Aladdin's financial statements for purposes of confirming the
amount of Net Above Limits Gaming Losses or Net Above Limits Gaming
Wins, as the case may be, for that Financial Year. The auditors, if
requested as above provided, shall so audit and confirm, and send
notice of their determination to Aladdin and London Clubs, within
thirty (30) days thereafter.
(ii) Within thirty (30) days after (x) London Clubs shall have
accepted Aladdin's determination, or (y) the auditors shall have
notified London Clubs and Aladdin of their determination, London Clubs
shall pay to Aladdin
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the amount, if any, of any Net Above Limits Gaming Losses, or, at the
option of London Clubs, apply any amounts due London Clubs under this
Agreement (whether in respect of Incentive Marketing and Consulting Fees or
expense reimbursements as provided in Section 8.9) and pay the balance, if
any, remaining after such application. Any amounts not paid or applied as
set forth above shall be offset against the next amount of any fees
otherwise due to London Clubs hereunder.
(iii) If during the period of the next two Financial Years
immediately following a Financial Year in respect of which London
Clubs shall have made a payment to Aladdin of Net Above Limits Gaming
Losses as provided in subsection (b) (ii), there shall be Net Above
Limits Gaming Wins, Aladdin shall, within thirty (30) days after its,
or its auditors' (as the case may be), determination of the amount of
Net Above Limits Gaming Wins for such year, reimburse to London Clubs
the amount thereof, but not in excess of the aggregate of all amounts
theretofore paid by London Clubs to Aladdin pursuant to subsection (b)
(ii) in respect of Net Above Limits Gaming Losses not theretofore
reimbursed by Aladdin.
6.4 RESTAURANT AND HOSPITALITY EMPLOYEES. London Clubs will direct the
Restaurant and the Hospitality Facility. Employees in the Restaurant and the
Hospitality Facility will be staffed by the managing director of the Salle
Privee Facilities. London Clubs shall provide such training for the employees
engaged in the Salle Privee Facilities as it deems necessary in consultation
with the Executive Management Committee and consistent with an international
premium standard.
6.5 LEGAL PROCEEDINGS IN RESPECT OF SALLE PRIVEE CUSTOMERS. Aladdin will
consult with London Clubs before initiating legal proceedings against any
customer of the Salle Privee, and will keep London Clubs fully informed of all
actions proposed to be taken in connection with credit collection or the status
of any legal proceedings.
6.6 REFURBISHMENT, REPAIR AND REDECORATION. Aladdin will be responsible
for undertaking such works of refurbishment, repair and redecoration in respect
of the Salle Privee Facilities as London Clubs shall advise from time to time as
being reasonably necessary to maintain the Salle Privee Facilities at their
international premium standard consistent with the Aladdin's budget approved by
the Board. London Clubs shall advise Aladdin from time to time in respect of
any refurbishment, repair and redecoration of the Salle Privee Facilities that
may be required.
6.7 SECURITY. Aladdin shall provide security facilities, equipment and
services for the Salle Privee Facilities as directed
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by London Clubs, provided that such security requests shall be consistent with
and not disruptive of the security arrangements for the Redeveloped Aladdin.
6.8 PRICES FOR FOOD, BEVERAGE AND HOSPITALITY FACILITY ACCOMMODATIONS.
All pricing in respect of food and beverage charges and Hospitality Facility
accommodations shall be determined by London Clubs from time to time in
consultation with the Executive Management Committee.
6.9 SALLE PRIVEE COMMITTEE. When, during the term of this Agreement,
matters shall arise requiring consultation between London Clubs and Aladdin with
respect to the Salle Privee Facilities, such matters shall be referred to a
special committee of the Board (the "SALLE PRIVEE COMMITTEE"). The Salle Privee
Committee shall consist of the Chief Executive Officer of Aladdin and a member
of the Board designated by London Clubs.
7. ACCOUNTING AND REPORTING.
Aladdin shall:
(i) maintain, in accordance with generally accepted accounting
principles, complete and accurate books of account and records
relating to the Salle Privee Facilities which shall be made available
at any time on reasonable notice to Aladdin for inspection by London
Clubs or its agents;
(ii) cause to be rendered to London Clubs, in an agreed format,
daily reports and weekly summary reports as to drop, win, major
players, credit facilities granted and other operating and financial
statistics in relation to the Salle Privee Facilities;
(iii) cause to be rendered to London Clubs, in an agreed format,
monthly reports and accounts relating to the Salle Privee Facilities
detailing for each month (A) the Salle Privee EBITDA, and (B) the
results of Above Limits Gaming, each of such reports and accounts to
be rendered in every case within fifteen (15) days from the conclusion
of the month to which they relate;
(iv) cause to be rendered to London Clubs, quarterly reports and
accounts relating to the Salle Privee Facilities detailing the
calculation of the Salle Privee EBITDA for that quarter, each of such
reports and accounts to be rendered in every case within thirty (30)
days from the conclusion of the quarter to which they relate; and
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(v) cause to be submitted to London Clubs on or prior to sixty
(60) days following the end of the Initial Financial Year and each
Financial Year thereafter, a draft Statement of Accounts in respect of
the Salle Privee Facilities for such Financial Year, such Statement
detailing the Salle Privee Gaming Win and the Salle Privee EBITDA for
such Financial Year.
(vi) Any disputes regarding the definition of Salle Privee
EBITDA, the components thereof, the allocation or non- allocation of
any items of Aladdin's general overhead and the nature and amount of
any line items incorporated in Salle Privee EBITDA shall be determined
by Aladdin's regular auditors.
8. INCENTIVE MARKETING AND CONSULTING FEE.
8.1 In consideration of the services to be furnished by London Clubs
hereunder, Aladdin shall pay to London Clubs, in relation to the Initial
Financial Year and each Financial Year thereafter, an incentive marketing and
consulting fee (the "Incentive Marketing and Consulting Fee") calculated as
follows:
(i) 10% of the Salle Privee EBITDA, in excess of $0, up to
and including $15,000,000; plus
(ii) 12.5% of the Salle Privee EBITDA, in excess of
$15,000,000, up to and including $17,000,000; plus
(iii) 25% of the Salle Privee EBITDA, in excess of
$17,000,000, up to and including $20,000,000; plus
(iv) 50% of the Salle Privee EBITDA over the amount of
$20,000,000.
8.2 In respect of the Initial Financial Year or the Financial Year in
which this Agreement terminates, if not a full twelve month period, the dollar
thresholds of the Incentive Marketing and Consulting Fee set forth in clauses
(i) through (iv) of Section 8.1 (each such threshold a "Dollar Threshold" and,
collectively, the "Dollar Thresholds") shall be pro-rated by multiplying each
Dollar Threshold amount by a fraction, the numerator of which shall be the
number of days in the Initial Financial Year or such final Financial Year (as
the case may be) and the denominator of which shall be three hundred sixty-five
(365).
8.3 The Dollar Thresholds shall be adjusted on every fifth anniversary of
the Opening Date by such percentage as shall be equal to the percentage change,
if any, in the Consumer Price Index
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for All Urban Consumers, U.S. City Average All Items - (CPI-U; 1982 - 1984 =
100), published by the Bureau of Labor Statistics of the United States
Department of Labor ("CPI"), by comparing the CPI for the month immediately
preceding the month in which such fifth anniversary occurs and the CPI for the
month in which the Opening Date occurs. If publication of the Consumer Price
Index is discontinued, the parties shall accept comparable statistics on the
cost of living as computed and published by an agency of the United States or by
a responsible financial periodical of recognized authority to be selected by the
parties.
8.4 For the purpose of determining the quarterly payments provided in
Section 8.5 below, the Dollar Thresholds set forth in Section 9.1 shall be
pro-rated by quarter.
8.5 Payments on account of the Incentive Marketing and Consulting Fee
shall be made by Aladdin to London Clubs within thirty (30) days after the end
of each calendar quarter and the amounts of such payments shall be based on the
reports to be provided by Aladdin pursuant to Section 7 (iv) above.
8.6 Any adjustment that may be required to the Incentive Marketing and
Consulting Fee shall be made after the Salle Privee EBITDA for the relevant
Financial Year has been mutually agreed upon by Aladdin and London Clubs. In
the absence of such agreement, and upon the request of either party, Aladdin's
regularly retained auditors shall conduct an audit of the Salle Privee EBITDA in
accordance with Generally Accepted Auditing Standards and shall certify the
Salle Privee EBITDA for the relevant Financial Year in accordance with the
definition thereof set forth in Section 1 of this Agreement. Such certification
shall be completed within fifteen (15) days of completion of the audit of
Aladdin's accounts for the Financial Year in question or within thirty (30) days
after a request, whichever shall last expire. For purposes of performing any
audit hereunder, Aladdin and London Clubs shall provide said auditors with
reasonable access to all accounts, books, records, working papers and other
information.
8.7 Aladdin shall make further payment to London Clubs or London Clubs
shall reimburse to Aladdin the amount of such adjustment required, if any,
within fifteen (15) days of such agreement or certification as is referred to in
Section 8.6 above.
8.8 The Incentive Marketing and Consulting Fee shall be determined and be
made payable in US dollars.
8.9 In addition to the Incentive Marketing and Consulting Fee, London
Clubs shall be entitled to prompt reimbursement from Aladdin subject to
Aladdin's budget and upon submission by London Clubs of any report setting forth
all expenses incurred by London Clubs in the provision of marketing, promotional
and advertising service and in the provision of any staff of London Clubs for
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employment by Aladdin in the Salle Privee Facilities and of all travel
accommodations and related expenses properly incurred in connection with
services rendered by such staff and also in connection with marketing,
promotional and advertising services rendered by executives of any Affiliate of
London Clubs, all of which, to the extent actually reimbursed by Aladdin, shall
be deducted in calculating the Salle Privee EBITDA.
9. MANAGEMENT AND PERSONNEL.
9.1 The Salle Privee Facilities shall be operated as a department within
the Redeveloped Aladdin. All personnel to be engaged from time to time in
relation to any of the Salle Privee Facilities shall be approved by London Clubs
and shall be employees of Aladdin. London Clubs shall provide such additional
training for employees engaged in the Salle Privee Facilities as it shall deem
appropriate in order for the Salle Privee Facilities to be operated at their
international premium standard. Aladdin and London Clubs agree that they shall
endeavor to promote employees of the Redeveloped Aladdin who have exhibited
exemplary work performance into employment positions in the Salle Privee
Facilities when such positions become available.
9.2 London Clubs shall source and nominate, and may from time to time
second or assign, the managing director for the Salle Privee Facilities and
experienced employees to staff the principal management posts in the Salle
Privee Facilities, including, but not limited to, the heads of the Salle Privee,
the Restaurant, the Hospitality Facility, the registration desk and the
marketing departments of the Salle Privee Facilities. The employment of such
nominees will be subject to the approval of Aladdin, which approval shall not be
unreasonably withheld or delayed. In this connection, London Clubs shall
arrange prior to the Opening Date for training of employees designated by London
Clubs for key positions in the Salle Privee Facilities who will take up their
posts on or (as necessary) before the Opening Date.
9.3 Aladdin shall use all reasonable efforts to resolve any immigration
requirements for any of the foregoing persons and shall use all reasonable
efforts to obtain such work permits and visas as may be required.
9.4 The employees of the Salle Privee Facilities will participate
equitably with all other employees of the Redeveloped Aladdin with respect to
all employment policies and benefits including, but not limited to, the pooling
of gratuities, incentive compensation and stock option and ownership plans based
upon the relative seniority, performance and position of individual employees.
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9.5 Without limitation to the definition of Salle Privee EBITDA, Aladdin
shall procure and maintain in force at all times during this Agreement (which
may be within its insurance coverage for the Aladdin Hotel and Casino
generally), workers compensation, employer's liability and public and commercial
general liability insurance coverages against any claims for personal injury,
death, loss or damage to property or any other claim made by or against
employees of Aladdin serving in the Salle Privee Facilities, including any
employees seconded or assigned by London Clubs. Such policies shall include
London Clubs and Guarantor as additional named insureds. Aladdin hereby further
agrees to produce evidence of all such coverages to London Clubs upon demand.
10. NAME.
10.1 Throughout the term of this Agreement, the Salle Privee shall be known
as the "Salle Privee at the Aladdin" or such other name as shall be selected by
London Clubs subject to approval by Aladdin not to be unreasonably withheld or
delayed.
10.2 The name "London Clubs" is and shall remain the exclusive property of
London Clubs and its use, and the use of any logos in connection therewith,
shall be strictly controlled by London Clubs in its sole discretion. No right
to use such name, whether on its own or in conjunction with any other word or
words, shall be conferred on Aladdin by this Agreement or following the
termination hereof. London Clubs agrees to allow Aladdin to use the name
"London Clubs" and related logos in connection with the Redeveloped Aladdin,
provided that such use shall require the express prior written approval of
London Clubs in each instance (except for on-going usage in the normal course of
business previously approved pursuant to this Section 10.2).
11. TERMINATION.
11.1 This Agreement may be terminated by London Clubs or Aladdin:
(i) in the event of any default in the performance of any
obligation by the other party, thirty (30) days after the date of the
delivery of written notice specifying the nature of the asserted
default, unless the defaulting party shall have cured same within said
thirty (30) days hereunder or, if the default is of such a nature that
it cannot be cured within thirty (30) days, unless during such thirty
(30) days the defaulting party shall have commenced curing such
default and have proceeded with diligence to effect the cure within a
reasonable period thereafter; or
13
(ii) in the event of the failure of the other party to make any
payment due hereunder within ten (10) days after the date of provision
of written notice from the non-defaulting party specifying the amount
due.
11.2 This Agreement may be terminated by London Clubs immediately upon
provision of notice in writing to Aladdin, without prejudice to any claim which
London Clubs may have against Aladdin, if, at any time during the term of this
Agreement, Aladdin shall have a Gaming Problem not directly attributable to
London Clubs or any Related Party of London Clubs.
11.3 This Agreement shall be terminated effective as of the date that
London Clubs shall no longer own any common membership interest or common stock,
as the case may be, of Aladdin or any successor entity.
11.4 This Agreement shall be terminated if London Clubs has a Gaming
Problem which would prevent it from operating the Salle Privee Facilities as
contemplated by the terms of this Agreement; provided, however, that this
Agreement shall be reinstated effective immediately upon the resolution of the
Gaming Problem in a manner that would permit London Clubs to operate the Salle
Privee Facilities as contemplated by the terms of this Agreement.
11.5 This Agreement may be terminated immediately by Aladdin upon the
filing by London Clubs or Guarantor of a voluntary petition in bankruptcy or
insolvency under any applicable law; the filing by London Clubs or Guarantor of
any petition or answer seeking or acquiescing in any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief; the making by London Clubs or Guarantor of any general assignment for
the benefit of creditors; London Clubs' or Guarantor's failure generally to pay
its debts as such debts become due; London Clubs' or Guarantor's notice to any
governmental body of insolvency, pending insolvency or suspension of operations;
or the entry by a court of competent jurisdiction of an order, judgment or
decree approving a petition filed against London Clubs or Guarantor seeking any
reorganization, arrangement, composition, readjustment, liquidation, dissolution
or similar relief under any applicable law or regulation relating to bankruptcy,
insolvency or other relief, which order, judgment or decree remains unvacated
and unstayed for an aggregate of sixty (60) days from the date of entry thereof.
11.6 This Agreement may be terminated immediately by London Clubs upon the
filing by Aladdin or Aladdin Hotel of a voluntary petition in bankruptcy or
insolvency under any applicable law; the filing by Aladdin or Aladdin Hotel of
any petition or answer seeking or acquiescing in any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief; the making by Aladdin or Aladdin Hotel of any general assignment for the
benefit of creditors; Aladdin's or Aladdin
14
Hotel's failure generally to pay its debts as such debts become due; Aladdin's
or Aladdin Hotel's notice to any governmental body of insolvency, pending
insolvency or suspension of operations; or the entry by a court of competent
jurisdiction of an order, judgment or decree approving a petition filed against
Aladdin or Aladdin Hotel seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under any applicable
law or regulation relating to bankruptcy, insolvency or other relief, which
order, judgment or decree remains unvacated and unstayed for an aggregate of
sixty (60) days from the date of entry thereof.
11.7 In the event of a termination of this Agreement for the reasons set
forth in Section 11.2, London Clubs shall have the right, exercisable upon
written notice to ▇▇▇▇▇▇ Enterprises, LLC ("▇▇▇▇▇▇") within one hundred and
eighty (180) days after the date of termination of this Agreement, to cause
▇▇▇▇▇▇ to purchase London Clubs' entire interest in Aladdin including, without
limitation, any voting shares or preferred shares, (collectively referred to
herein as the "Interest") then owned by London Clubs, for a mutually agreed upon
price, or if no price can be mutually agreed, at a price equal to the fair
market value of the Interest on the date of the notice, as determined by an
independent qualified appraiser appointed by ▇▇▇▇▇▇ and London Clubs. If ▇▇▇▇▇▇
and London Clubs cannot agree on an appraiser within ten (10) days after the
date of the notice, they shall each select an appraiser, which appraisers
together shall select a third appraiser, which third appraiser shall determine
the fair market value of the Interest. The determination of said third
appraiser shall be binding upon the parties. The agreed price or the fair
market value of London Clubs' Interest shall be payable in cash, within one
hundred and twenty (120) days from the date of agreement or from the date of
determination thereof, as the case may be.
11.8 Guarantor hereby absolutely and unconditionally guarantees to Aladdin
and its successors and/or permitted assigns the performance by London Clubs of
all of the obligations and liabilities of London Clubs under this Agreement,
including, without limitation, London Clubs' obligation to reimburse Aladdin for
Net Above Limits Gaming Losses pursuant to Section 6.3 hereof. It is expressly
understood and agreed that this is a continuing guarantee.
12. FORCE MAJEURE.
If a party is unable to perform its obligations under this Agreement, in
whole or in part, by reason of war, riots, civil commotion, labor disputes,
strikes, lockouts, inability to obtain labor or materials, fire or other acts of
elements, acts of God, catastrophic events, accidents, government restrictions
or appropriation or other causes, whether like or unlike the forego-
15
ing, beyond its reasonable control, the party shall be relieved of those
obligations to the extent that it is so unable to perform for as long as it is
so unable to perform, and no liability shall arise from the said
non-performance; PROVIDED that in the event any of such events occurs, the
Dollar Thresholds shall be pro-rated to reflect the period of time during which
the event of force majeure subsists.
13. MISCELLANEOUS PROVISIONS.
13.1 Nothing in this Agreement shall be deemed to constitute a partnership
or joint venture between Aladdin and London Clubs, nor shall London Clubs be
deemed to be an agent of Aladdin.
13.2 This Agreement and the respective rights and obligations of the
parties hereunder shall not be assignable (whether by operation of law or
otherwise, including, without limitation, by way of merger, combination or
similar transaction) without the prior written consent of the other party.
Notwithstanding the foregoing, PROVIDED that Guarantor shall continue to
guarantee the obligations of London Clubs or its permitted assigns hereunder,
London Clubs (i) shall be entitled to assign its rights and obligations
hereunder to an Affiliate, and (ii) London Clubs shall be entitled to assign its
right to receive any payment hereunder, PROVIDED, HOWEVER, that no assignment by
London Clubs hereunder shall relieve London Clubs of any of its obligations
under this Agreement unless Aladdin expressly agrees to such release in
writing. Notwithstanding the foregoing, Aladdin shall have the right to assign
this Agreement without the consent of London Clubs (i) to any Person which is a
successor to Aladdin either by merger, consolidation or other similar
transaction, or (ii) to a purchaser of all or substantially all of Aladdin's
assets, provided that such merger, consolidation or other similar transaction or
purchase was made in compliance with, or not in contravention of, the Operating
Agreement or the Shareholders Agreement annexed thereto as Exhibit A (whichever
shall then be in effect). In addition, nothing contained herein shall prevent
Aladdin from making a collateral assignment of this Agreement to a lender or
mortgagee of the Premises.
13.3 The validity, construction, performance and effect of this Agreement
shall be governed exclusively by the laws of the State of Nevada applicable to
contracts made in that state, without giving effect to its conflicts of laws
rules. All disputes, claims and proceedings between the parties relating to the
validity, construction, breach or performance of this Agreement shall be subject
to the exclusive jurisdiction of the Federal Courts of the State of Nevada to
which the parties hereto irrevocably submit.
13.4 All notices, consents and other communications given under this
Agreement shall be in writing and shall be deemed to
16
have been duly given and delivered (a) when delivered by hand or by DHL or
Federal Express or a courier of similar international standing to the party for
whom intended, (b) five days after being deposited in any official government
post office in the United States of America or Great Britain, as the case may
be, enclosed in an airmail postage prepaid, registered or certified envelope
addressed to the party for whom intended, or (c) when successfully transmitted
by facsimile to the party for whom intended at the address or facsimile number
for such party set forth below, or to such other address or facsimile number as
may be furnished by such party by notice in the manner provided herein;
PROVIDED, HOWEVER, that any notice of change of address or facsimile number
shall be effective only upon receipt.
If to Aladdin, Aladdin Holdings or to ▇▇▇▇▇▇ Enterprises:
ALADDIN GAMING, LLC
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇▇▇ ▇-▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ and ▇▇▇▇ ▇▇▇▇▇▇
Fax (▇▇▇) ▇▇▇-▇▇▇▇
with a copy to:
ALADDIN GAMING, LLC
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and a copy to:
▇▇▇▇▇▇▇ ▇▇▇▇ SLATE ▇▇▇▇▇▇▇ & ▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
If to London Clubs or Guarantor:
Chief Executive Officer
LONDON CLUBS NEVADA INC.
c/o London Clubs International, plc
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇
Fax: ▇▇▇-▇▇-▇▇▇-▇▇▇-▇▇▇▇
with a copy to:
17
OHRENSTEIN & ▇▇▇▇▇, LLP
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
and a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇, Esq.
Fax: (▇▇▇) ▇▇▇-▇▇▇▇
Either party may at any time change the address for notices to such party by
giving notice as provided above.
13.5 No claimed waiver of any provision of this Agreement shall be
effective unless such waiver is contained in a writing signed by the party
giving such waiver and expressly making reference to this Agreement and the
matter being waived and expressly stating that it is a waiver. No such waiver
shall be deemed to be a waiver of any other or further obligation or liability
of the party or parties in whose favor the waiver was given.
13.6 Notwithstanding termination of this Agreement for any reason, all
obligations of any party provided for herein that need to survive such
termination in order to give effect to the intention of the parties (including,
without limitation, the payment of monies) shall survive and continue until they
have been fully satisfied and performed.
13.7 The Exhibits hereto form part of this Agreement and shall be construed
and shall have the same full force and effect as if expressly set out in this
Agreement.
13.8 Neither Aladdin nor London Clubs shall at any time use or disclose the
terms of this Agreement or any confidential information concerning each other,
their respective customers or suppliers other than for the purposes of this
Agreement, and as to disclosure, solely to the extent that such disclosure is
required by law, by the rules of any competent stock exchange or by any
regulatory body, or is specifically authorized in writing by the other party, or
comes into the public domain through no act or omission of the disclosing party.
13.9 This Agreement, together with the Operating Agreement to the extent
referenced herein, contains the entire Agreement between the parties with
respect to the subject matter hereof, and supersedes all prior or
contemporaneous agreements, negotiations or
18
understandings. This Agreement may not be amended, modified, superseded, or
canceled, and the terms and conditions hereof may be waived only by an
instrument making express reference to this Agreement, stating that it is an
amendment, modification, supersession or cancellation thereof as the case may
be, executed by the party to be charged.
13.10 This Agreement shall be binding upon and inure to the benefit of
the parties hereto and their respective successors and permitted assigns,
including specifically and without limitation any corporation that shall become
a successor to Aladdin as provided in the Operating Agreement.
13.11 The parties agree that six (6) months after the Opening Date,
they shall consult with respect to the operations of the Redeveloped Aladdin,
including the Salle Privee Facilities. The parties agree to consider in good
faith each others advice and views with respect thereto.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered on and as of the day and year first above written.
ALADDIN GAMING, LLC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
Title: Chief Executive
Officer/President
LONDON CLUBS NEVADA INC.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Assistant Secretary
LONDON CLUBS INTERNATIONAL, PLC
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
----------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇
Title: Finance Director
19
▇▇▇▇▇▇ ENTERPRISES, LLC,
solely as to Section 11.7 hereof
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
----------------------------
Name: ▇▇▇▇ ▇▇▇▇▇▇
Title: Chairman
20
