Exhibit 10.57
LEASE AGREEMENT
THIS LEASE AGREEMENT (the “
Lease ”) is made and entered into this 30th day of
November, 2006 (the “ Effective Date ”), by and
between PH Fee Owner LLC, a Delaware limited liability company
(“ Landlord ”), and OpBiz, L.L.C., a Nevada
limited liability company (“ Tenant ”).
Capitalized terms used herein and not otherwise defined shall have
the meanings provided in the Glossary attached hereto.
RECITALS
A.
Landlord is the owner of the real property and all improvements
thereon located in Clark County, Nevada (the “
Property ”), including, without limitation, that
certain resort located thereon and more commonly and formerly known
as the Aladdin Hotel and Casino (the “ Premises
”), as more particularly described on Exhibit A
attached hereto, , and all fixtures permanently attached to the
realty and located therein or thereon . The Leased Assets
specifically exclude the Gaming Equipment, the ownership of which
is and shall remain in Tenant; and
B.
Landlord desires to lease to Tenant and Tenant desires to accept,
hire and lease from Landlord the premises described on Exhibit A
less and except (i) the Timeshare Operations Space
and (ii) those areas comprising the casino areas (the “
Casino ”)of the Property which are described on
Exhibit A-1 attached hereto (the “ Premises
”) and all fixtures permanently attached to the realty and
located therein or thereon as of the Effective Date (the
“Fixtures” and together with the Premises, the “
Leased Assets ”). for Tenant’s operation of the
Premises, subject to the terms and conditions more particularly
described herein.
AGREEMENT
1.
LEASED ASSETS.
1.1
Leased Assets . Upon the conditions, limitations,
covenants and agreements herein set forth, Landlord hereby leases
to Tenant, and Tenant hereby accepts, hires and leases from
Landlord the Leased Assets. Landlord and Tenant
acknowledge that the description of the Premises in Exhibit
A may change from time to time if Exhibit A to the
Casino Lease Agreement is revised as permitted under Section 1.1 of
the Casino Lease Agreement.
1.2
Future Reservations . This Lease shall be subject to
all existing and future covenants, conditions, restrictions,
reservations and easements now or hereafter recorded against the
Property including, without limitation, that certain Agreement and
Amendment to Construction Operation and Reciprocal Easement
Agreement by and between Boulevard Invest, LLC and Planet
Hollywood, dated on or about July 31, 2005, and recorded in Book
20051117 as Instrument No. 0005802 of the Official Records of Clark
County, Nevada, concerning the Desert Passage Mall, and that
certain Construction, Operation and Reciprocal Easement Agreement
entered into as of February 26, 1998 by and among Aladdin Gaming,
LLC, Aladdin Bazaar, LLC and Aladdin Music Holdings,
LLC.
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2.
TERM.
2.1
Commencement Date . The commencement date of this
Lease (the “ Commencement Date ”) shall be the
date hereof.
2.2
Term . The initial term of the Lease (the “
Initial Term ”) shall be two (2) years commencing on
the Commencement Date. Provided, however, that the Initial
Term shall automatically renew for successive periods of one (1)
year each for so long as the Debt is outstanding and, thereafter,
for successive periods of three (3) months (each a “
Renewal Period ” and together with the Initial Term,
the “ Term ”), unless, after the Debt is no
longer outstanding, either party gives thirty (30) days’
written notice to the other party prior to the expiration of the
then current Initial Term or Renewal Period, as the case may be,
that such automatic renewal will not occur.
3.
RENT.
3.1
Rent . Beginning on the first (1 st ) day of
the month immediately following the Commencement Date and on the
first (1 st
) day of each month during the Term
thereafter, Tenant shall pay to Landlord, without offset or
deduction, monthly base rent for the Leased Assets of Nine Hundred
Sixteen Thousand Six Hundred Sixty-Seven and 00/100 Dollars
($916,667.00) (the “ Rent ”). In the event
the Commencement Date of this Lease occurs on a day other than the
first day of a calendar month, the Rent for such partial calendar
month shall be a prorated portion of a full monthly installment of
Rent, which shall be paid to Landlord on the Commencement
Date. In the event this Lease expires or is earlier
terminated on a day other than the last day of a calendar month,
the Rent for such partial calendar month shall be a prorated
portion of a full monthly installment of Rent, and Tenant shall be
reimbursed by Landlord for any amounts applicable to the portion of
the calendar month following the expiration of the Term.
3.2
Payment . All payments of Rent shall be payable by
Tenant to Landlord in legal tender of the United States of America
at the address set forth for Landlord in Section 22.2 or such other
place as Landlord may, from time to time, designate in
writing.
3.3
Late Charge . If Tenant shall fail to pay Rent within
five (5) days after written notice from Landlord to pay rent, then
the past due rent shall bear interest at the Interest Rate (as
defined below), from the due date thereof until paid. The
amount of any such interest shall be additional rent hereunder and
shall be payable upon demand. The assessment and receipt of
interest as aforesaid shall be in addition to, and shall in no way
be deemed to limit, any other rights and remedies Landlord may have
under this Lease or otherwise for non-payment of Rent. As
used herein, “Interest Rate” shall mean an interest
rate equal to the statutory rate of interest set forth in NRS
99.040 or any successor statute.
3.4
Net Lease . It is the purpose and intent of Landlord
and Tenant that the Rent payable hereunder shall be absolutely net
to Landlord so that this Lease shall yield, net to Landlord, the
Rent specified herein in each month during the term of this
Lease. This is an absolutely net lease, and, except as
otherwise specifically provided in Sections 2.2 and 16 hereof, this
Lease shall not terminate nor shall Tenant have any right to
terminate this Lease; nor shall Tenant be entitled to any
abatement, deduction, deferment, suspension or reduction of, or
setoff,
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defense or counterclaim against, any
rentals, charges, or other sums payable by Tenant under this
Lease.
4.
POSSESSION AND SURRENDER.
4.1
Acceptance . Tenant shall be deemed to have accepted
the Leased Assets on the date hereof. Tenant represents to
Landlord that Tenant has examined the title to and the physical
condition of the Premises prior to the execution and delivery of
this Lease and has found the same to be satisfactory for all
purposes hereof, and Tenant accepts the title and condition of the
Premises in their respective, present condition “as is, where
is, with all faults”. Landlord makes no representation
or warranty with respect to the condition of the Premises or its
fitness or availability for any particular use, and Landlord shall
not be liable for any latent or patent defect therein.
4.2
Tenant’s Property . Unless otherwise agreed
between Landlord and Tenant, upon the expiration or earlier
termination of the Term, Tenant shall surrender the Leased Assets,
including, without limitation, any improvements or repairs
undertaken by Tenant and any other improvements to the realty, in
the same condition as on the Commencement Date, reasonable wear and
tear excepted. Any of Tenant’s Property which is not
promptly removed upon the expiration or earlier termination of the
Term shall be deemed abandoned by Tenant, and Tenant shall have no
further right, title or interest in and to such abandoned
Tenant’s Property.
5.
USE OF LEASED ASSETS.
5.1
Use of Leased Assets; and Operating Standards . The
Leased Assets are leased to Tenant solely for conducting the
business of operating the Premises, so long as such use is in
accordance with the Operating Standards (as defined herein).
For purposes of this Lease, “Operating Standards” mean,
collectively, the standards and manner of operation for the
Premises and the management of the hotel business (including any
operations related or ancillary thereto) which shall be (i)
substantially consistent and in accordance with prior practice and,
in any event, no less than the standards and manner of operation on
the date hereof in all material respects, (ii) in accordance with
the requirements of the Management Agreement (as defined in the
Loan Agreement), this Lease and the Loan Documents (as defined in
the Loan Agreement), (iii) in accordance with Applicable Laws and
(iv) in accordance with the applicable insurance policies and other
reasonable business requirements of any carrier having insurance on
the Property or any part thereof.
5.2
Maintenance . Except as provided for elsewhere herein,
Tenant shall keep and maintain, at Tenant’s sole cost and
expense, in good order, condition and repair, reasonable wear and
tear excepted.
5.3
Non-Interference . Tenant shall not do, permit or
suffer anything to be done, or kept upon the Premises which will
obstruct or interfere with the rights of Landlord.
5.4
Compliance With Easements . The use of the Leased
Assets by Tenant, its Affiliates, agents, employees, servants,
contractors, licensees, customers or business invitees, shall at
all times be in compliance with all material covenants, conditions
and restrictions, easements, reciprocal easement agreements, and
all matters presently of public record or which
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may hereafter be placed of public
record, which affect the Leased Assets or the Property, or any part
thereof.
5.5
Compliance With Laws and Loan Documents . Tenant
shall, at its sole cost and expense, comply with all Applicable
Laws during the Term and affecting the Leased Assets or
Tenant’s use thereof and Tenant shall not use the Leased
Assets so as to create waste or constitute a nuisance or
disturbance. Furthermore, the terms of the Loan Documents, to
the extent applicable, are hereby incorporated by reference and
shall, as herein incorporated, survive any foreclosure of the Loan
(as defined in the Loan Agreement) for the benefit of any Successor
Landlord (as defined herein).
5.6
Hazardous Substances . Tenant shall not use the
Premises for the generation, storage, manufacture, production,
releasing, discharge, or disposal or any Hazardous Materials or
allow or suffer any other Person to do so.
5.7
Alterations . Except as contemplated or permitted by
the Loan Agreement, Tenant shall not make any structural alteration
or replacement (whether interior or exterior, ordinary or
extraordinary) of any nature or description to the Premises without
having first obtaining Landlord’s prior written approval
thereof, which consent shall not be unreasonably withheld, delayed
or denied. Tenant is authorized to make non-structural
alterations, repairs and replacements without the necessity of
obtaining Landlord’s written consent, but only on the
condition that it provide prior notice of such work so as to afford
Landlord reasonable time to file notices of
nonresponsibility.
6.
LIQUOR.
6.1
Intentionally Omitted ..
6.2
Intentionally Omitted. .
6.3
Intentionally Omitted .
6.4
Intentionally Omitted
6.5
Intentionally Omitted.
6.6
Liquor . Tenant may conduct the sale of liquor at the
Premises (the “ Liquor Sales ”) and all
activities necessary or incidental thereto, including, without
limitation:
(a)
Liquor Sales . Maintain all licenses necessary for the
Liquor Sales, comply with all Applicable Laws, provide all
equipment necessary or customary for the Liquor Sales, and
undertaking all Liquor Sales; and
(b)
Expenses . Be responsible for, and bear the expense
of, all accounting, marketing, advertising, special events, and
maintenance associated with the Liquor Sales.
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7.
LANDLORD’S REPAIRS.
7.1
Landlord Repairs . Landlord agrees, at no additional
cost or expense to Tenant, to maintain and keep in good order,
condition and repair the foundations, exterior walls, roof, HVAC,
plumbing and electrical systems of the Premises except for
reasonable wear and tear or for any damage thereto caused by any
act or negligence of Tenant or its Affiliates, agents, employees,
servants, contractors, licensees, customers or business invitees,,
which shall be and remain the sole responsibility of Tenant
(collectively, the “ Landlord’s Repairs
”). It is an express condition precedent to all
obligations of Landlord to undertake any of the Landlord’s
Repairs that Tenant shall reasonably notify Landlord in writing of
the need for such Landlord’s Repairs.
7.2
Right of Entry . Subject to Nevada Gaming Laws, in
addition to any other rights of re-entry herein, Landlord reserves
the right to enter the Premises to undertake Landlord’s
Repairs or install and maintain energy submeters, conduits and
other appurtenances in the soffit or other space above the ceilings
or ceiling line, the walls and under any floors of the
Premises.
8.
UTILITIES; TAXES.
8.1
Payment of Utilities . From and after the Commencement
Date, Tenant shall promptly pay all charges for fuel, gas, light,
power, water, sewage, garbage disposal, trash, telephone and other
utilities and costs of every nature incurred in connection with
Tenant’s use and possession of the Leased Assets during the
Term, all of which shall be paid directly to the public utility or
private company supplying the same when due and without delinquency
or, if the charges therefor are billed to Landlord, Landlord will
subsequently bill such charges to Tenant at Landlord’s cost
therefore calculated proportionally. Landlord shall not be
responsible for any loss, cost, damage, expense or liability Tenant
may sustain as a result of a change in character of electric or
other utility service or as a result of any public or private
company’s failure to supply or reduction in any of the
foregoing utility or other services to the Premises.
8.2
Payment of Taxes . Tenant shall pay all federal,
state, county, city, school district and municipal taxes, all
assessments, both general and special, including all special
charges, benefit assessments or judgments for local improvements
and all taxes, assessments or charges of every kind or nature which
may be levied against or may become due or payable in respect to
(a) the Leased Assets, Tenant’s Property, machinery or
equipment owned by, used by, or to be used by Tenant in the
operation of the Premises; (b) the operation of the Premises,
including, without limitation, all sales taxes, food and beverage
taxes, and entertainment taxes; and (c) Rent (except income
tax). Such assessments, taxes and charges shall be paid by
Tenant directly to the appropriate taxing or collecting authority
or, if the same or any portion thereof shall have been billed to
Landlord, Landlord will subsequently bill such charges to Tenant
and Tenant shall pay such tax bills to Landlord within thirty (30)
calendar days after notification by Landlord to Tenant, along with
appropriate verification of amounts owing and paid, that the same
are due and payable. Any assessments, taxes and charges to be
paid directly by Tenant to any taxing authority shall be paid by
Tenant when due and evidence of timely payment thereof shall be
provided by Tenant to Landlord promptly after payment upon request
by Landlord. Tenant shall only be responsible for that
portion of the assessments, taxes and charges that are due or
accrue (i) prior to the term of the Lease if they relate to
Tenant’s occupation of the Premises and/or operation of the
Premises and (ii) during the Term.
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9.
INSURANCE.
9.1
Property Insurance . Tenant shall, at all times during
the Term and at its own expense, carry fire insurance and full
extended coverage protection upon the Premises, including, without
limitation, all FF&E, machinery and equipment in, on or about
the Premises and the Tenant’s Property. Such insurance
protection shall cover losses in aggregate amounts of not less than
one hundred percent (100%) of the full insurable value thereof,
with a full replacement cost rider, endorsed and attached
thereto. Such policy shall be payable to Landlord and any
mortgagee of Landlord, as their interests may appear.
9.2
Liability Insurance . Tenant shall, at all times
during the Term and at its own expense, maintain in full force and
effect for the use and benefit of Landlord, its existing policies
of liability insurance under the terms of this Lease and Landlord
shall be indemnified and protected against any and all claims for
injuries or damages, suffered or alleged to have been suffered by
any Person or Persons while in, on or about the Premises and for
property damage arising from any and all demands, loss or liability
and resulting at any time or times from the injury or death of any
Person or Persons or from damage to any and all property, however
arising, including, without limitation, food handling. The
insurance required to be provided by the provisions of this
Section 9.2 may be provided under the terms of any blanket
liability insurance policy carried by Tenant and in such event, in
accordance with Section 9.5.1, Tenant shall furnish to Landlord a
certificate of insurance evidencing the fact of such insurance on
or before the Commencement Date.
9.3
Automobile Insurance . Tenant shall, at all times
during the Term and at its own expense, maintain in full force and
effect for the use and benefit of Landlord, its existing policies
of automobile liability insurance and Landlord shall be indemnified
and protected against any and all claims for injuries or damages,
suffered or alleged to have been suffered by an Person or Persons
by vehicles owned, non-owned, or hired for use during the Term by
or on behalf of Tenant.
9.4
Workers’ Compensation; Employer’s Liability
. Tenant shall, at all times during the Term and at its own
expenses, maintain in full force and effect workers’
compensation insurance in accordance with Applicable Laws.
Tenant shall, at all times during the Term and at its own expense,
maintain in full force and effect for the use and benefit of
Landlord, its existing policies of employer’s liability
insurance and Landlord shall be indemnified and protected against
any and all claims for injuries or damages, suffered or alleged to
have been suffered by an employee of Tenant.
9.5
Insurance Policies — General .
9.5.1
Payment of Premiums; Evidence . Tenant shall pay all
premiums for each policy of insurance required by this Article 9
when due. Tenant has heretofore forwarded, and from time to
time shall forward, to Landlord duplicate originals of certificates
of insurance, together with true, correct and complete copies of
all such insurance policies, including renewal and replacement
policies, together with written evidence that the premiums
therefore have been paid in full.
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9.5.2
Cancellation . Each policy of insurance required by
this Article 9 shall provide that the same may not be cancelled
upon less than thirty (30) calendar days prior written notice to
Landlord. Tenant shall direct Tenant’s insurance
carriers to send copies of any and all notification of pending
cancellation of insurance for any purpose whatsoever direct to the
attention of Landlord at least thirty (30) calendar days prior to
cancellation.
9.5.3
Subrogation . Each policy of insurance required by
this Article 9 shall contain an express waiver of any and all right
of subrogation thereunder against Landlord, its agents, employees,
servants or contractors. All such policies shall be written
as primary policy and not contribution with or in excess of the
coverage, if any, that Landlord may carry. Any provision of
this Lease notwithstanding, the amounts of all insurance required
hereunder to be paid by Tenant shall be not less than an amount
sufficient to prevent Landlord from becoming a
co-insurer.
9.5.4
Hazardous Activities . Tenant shall not use or occupy,
or permit the Leased Assets to be occupied or used, in an manner
which will increase the rates of any insurance for the Leased
Assets, the Property or the overall development within which the
Premises is situated or that will make void or voidable any
insurance then in force with respect to the Leased Assets, the
Property or the overall development within which the Premises is
situated, or which will make it impossible to obtain fire or other
insurance with respect to the Leased Assets, the Property or the
overall development within which the Premises is situated. If
Tenant shall fail to comply with the provisions of this Section
9.5.4, such noncompliance may be deemed, in Landlord’s sole
discretion, to be an Event of Default hereunder and Tenant shall
indemnify Landlord for any increases in insurance premium charged
to Landlord as a result of Tenant’s noncompliance with the
Section 9.5.4.
9.5.5
No Prohibited Activity . Tenant agrees that it will
not keep, use, sell or offer for sale in or upon the Premises any
article or permit any activity which may be prohibited by any
standard form of insurance policy. Tenant agrees to pay any
increase in premiums for insurance which may be carried by Landlord
on the Property or the overall development in which the Premises is
situated, resulting from the type of operations, of merchandise
sold, or services rendered by Tenant or any of its activities in or
about the Premises, whether or not Landlord has consented to the
same.
9.5.6
Additional Insureds . Each policy of insurance
required by this Article 9 shall name Landlord or its successors or
Affiliates as an additional insured thereunder.
9.6
Insurance Obligations under Loan Agreement . Article
VI of the Loan Agreement is hereby incorporated by reference and
shall survive any foreclosure of the Loan for the benefit of
Lender. Tenant’s maintenance of all insurance coverages
required to be carried by the borrower under the Loan Agreement
shall be deemed to satisfy the Tenant insurance requirements of
this Article 9.
10.
LIENS.
10.1
Liens . Tenant shall at all times indemnify, save and
hold Landlord, the Premises, the Property and the leasehold created
by this Lease free of and harmless from any claims,
liens,
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demands, charges, encumbrances,
litigation and judgments arising directly or indirectly out of any
use, occupancy or activity of Tenant, or out of any work performed,
material furnished, or obligations incurred by Tenant in, upon or
otherwise in connection with the Leased Assets. Tenant shall,
at its sole cost and expense, within sixty (60) calendar days after
filing of any lien of record, obtain the discharge and release
thereof. Provided, however, if Tenant disputes the validity
of any lien, Tenant shall be given a reasonable amount of time to
resolve such dispute and obtain the discharge and release of such
lien.
11.
INDEMNIFICATION.
11.1
Indemnification by Tenant . Tenant hereby indemnifies,
saves and holds Landlord, the Leased Assets, the Property, and the
leasehold estate created by this Lease free of and harmless from
any and all liabilities, losses, costs, expenses, including
reasonable attorneys’ fees (at trial and on appeal), causes
of action, suits, judgments, claims, liens and demands of any kind
whatsoever in connection with, resulting from or arising out of or
by reason of any direct or indirect use, misuse, occupancy,
possession, act, omission or negligence of, Tenant, its agents,
employees, servants, contractors, subtenants, licensees, customers
or business invitees while in, upon, about or in any way connected
with the Leased Assets, the Property, or the overall development in
which the Premises is situated or arising from any accident, injury
or damage, howsoever and by whomsoever caused, to any Person or
property whatsoever, occurring in, upon, about or in any way
connected with the Leased Assets or any portion thereof.
Tenant’s indemnification obligations shall include all
obligations and liabilities arising from Tenant’s occupation
of the Premises (whether prior to or during the Term) and all
matters pertaining to Tenant’s employees.
11.2
Indemnification by Landlord . Landlord hereby
indemnifies, saves and holds Tenant, the Leased Assets, the
Property, and the leasehold estate created by this Lease free of
and harmless from any and all liabilities, losses, costs, expenses,
including reasonable attorneys’ fees (at trial and on
appeal), causes of action, suits, judgments, claims, liens and
demands of any kind whatsoever in connection with, resulting from
or arising out of or by reason of any intentional act, omission or
negligence of, Landlord, its agents, employees, servants,
contractors, licensees, customers or business invitees while in,
upon, about or in any way connected with the Leased Assets or
Property.
12.
SUBORDINATION.
12.1
Subordination. . This Lease and Tenant’s rights
hereunder are and shall remain subordinate to the lien of any
mortgage, deed of trust or other encumbrance, together with any
renewals, extensions or replacements thereof, now or hereafter
placed, charged or enforced against the Leased Assets, or any
portion thereof, the Property or the overall development within
which the Premises is situated.
12.2
Deemed Prior Lien . In the event that the mortgagee or
beneficiary of any such mortgage, deed of trust, or other
encumbrance elects to have this Lease deemed a prior lien to
its mortgage, deed of trust, or other encumbrance, then and in such
event, upon such mortgagee’s or beneficiary’s giving
written notice to Tenant to that effect, this Lease shall be deemed
a prior lien to such mortgage, deed of trust, or other encumbrance,
whether this Lease is dated prior to or
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subsequent to the date of
recordation of such mortgage, deed of trust, or other
encumbrance. If this Lease is deemed a prior lien and this
Lease is not automatically terminated by any applicable
foreclosure, then the Term shall automatically become a
month-to-month tenancy and Landlord shall have the right to
terminate this Lease upon thirty (30) days prior written notice to
Tenant.
12.3
Attornment . If any mortgagee (or its nominee or
designee) shall succeed to the rights of Landlord hereunder through
possession or foreclosure action, deed in lieu of foreclosure or
otherwise, or another person purchases the Property or the portion
thereof containing the Premises upon or following foreclosure or in
connection with any bankruptcy case commenced by or against
Landlo
