Music Project Memorandum of Understanding
Aladdin Gaming, LLC
Proposed Development
of the
Sound Asylum Hotel and Casino
Las Vegas, Nevada
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
Set forth below is the Memorandum of Understanding and Letter of Intent ("MOU")
between Planet Hollywood International, Inc. ("PH") and Xxxxxxx Xxxxxx, LLC
("Aladdin") relating to the planned Sound Asylum Hotel and Casino to be
constructed at the corner of Xxxxxx Street and Xxxxxx Avenue in Las Vegas,
Nevada. Except as otherwise specified herein, this MOU is a non-binding upon
either party.
Project size; scope and site: 1,000 room hotel with an approximately 50,000
square foot casino on the corner of Xxxxxx
Street and Xxxxxx Avenue in Las Vegas (the
"Hotel"). The site is approximately 4.7 acres.
All parking and central utilities will be
purchased from affiliated entities via a
parking agreement and a utility metering
agreement. The site will also be subject to a
reciprocal easement agreement with Aladdin
Bazaar, LLC (the "Shopping Mall") and Aladdin
Hotel and Casino, LLC (the "Aladdin Hotel"), a
wholly owned subsidiary of Aladdin.
Theme: PH's new music theme currently anticipated to
be named "Sound Asylum".
Corporate organization: Aladdin shall form Aladdin Music, LLC, a
Nevada limited liability company (the "LLC").
Board of Directors, corporate
governance and management: Except as set forth below, the Board of
Directors shall be voted upon by all holders
of greater than 10% of the issued and
outstanding common stock of the LLC. However,
so long as PH has not exercised its right to
purchase common stock of the LLC pursuant to
its Warrant, as hereinafter defined, then PH
shall be entitled to appoint one member to the
Board of Directors in order to protect its
tradenames and trademarks. At such time as PH
exercises its right to
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
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purchase common stock of the LLC and votes its
shares in the election of the Board of
Directors, its right to appoint one such
member of the Board of Directors shall be
terminated. The Board of Directors shall have
a maximum of four members. Certain matters (to
be determined by PH) deemed necessary to
protect PH's trademarks and tradenames shall
require the affirmative vote of a
super-majority of 80% of the Board of
Directors for approval. Such items deemed
necessary to protect PH's trademarks and
tradenames may include, but not be limited to,
all major financial and operational decisions,
approval of the annual budget, adopting a
management compensation and stock option plan
and approving certain items as described and
set forth in the section labeled Reciprocal
Easement Agreement.
Executive management of the Hotel will report
to management of Aladdin of which Xxxxxxx
Xxxxxxxx is the President and Chief Executive
Officer. Management of Aladdin will in turn
report to the Board of Directors of the LLC.
All corporate events outside the ordinary
course of business shall be approved by the
Board of Directors. The Board of Directors
shall have regular meetings, at least
quarterly, at which time management of the
Hotel and Aladdin shall advise the Board of
Directors as to the Hotel's operations and
financial condition as well as submit for
Board approval and consideration any items
that require the advice and consent of the
Board. The LLC agreement shall detail a
schedule of items that require the advice and
consent of the Board of Directors. The
affirmative vote of at least a majority of the
Board of Directors is necessary to approve any
proposal.
Name of the Hotel: At the option of Xxxxxxx, the name of the
Hotel may be either the Sound Asylum (or other
name adopted by PH for its music concept
theme, however, for the purposes of this
memorandum such name, whether Sound Asylum or
other name selected by PH, shall be referred
to as Sound Asylum) or another name mutually
agreed upon by PH and Xxxxxxx. However, in the
event that the name of the Hotel is not Sound
Asylum, then a Sound Asylum restaurant and
showroom shall
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
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be a featured as the Hotel's main attraction.
To the extent that the name of the Hotel is
not the Sound Asylum, then the name of the
Hotel shall be the property of PH for use on
other hotels other than in Xxxxx County.
Contribution of Xxxxxxx Xxxxxxx shall contribute the following to the
Gaming to the LLC: LLC:
(i) Approximately 4.7 acres at the corner of
Xxxxxx Street and Xxxxxx Avenue (the "Land"),
(ii) the TPA Lease (as hereinafter defined),
(iii) the Parking Lease (as hereinafter
defined),
(iv) the Utility Agreement (as hereinafter
defined),
(v) the Reciprocal Easement Agreement (as
hereinafter defined),
(vi) the Management Agreement (as hereinafter
defined),
(vii) the Aladdin Hotel Management Services
Agreement and
(viii) $21.25 million in cash.
Contribution of
PH to the LLC: PH shall contribute the following to the LLC:
(i) $41.25 million,
(ii) all rights and trade name/trademark
agreements necessary for the Hotel to operate
as the Sound Asylum Hotel and maintain a Sound
Asylum restaurant on its premises and
(iii) the Marketing and Consulting Agreement
(as hereinafter defined).
Form of Interest Purchased By As hereinafter defined, Convertible Preferred
Aladdin Gaming: Stock and Common Stock.
Form of Interest Purchased by As herein defined, Subordinated Debt and
Warrants.
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
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PH:
The TPA Lease: The Aladdin Theater for the Performing Arts
(the "TPA") shall be leased from Aladdin to
the LLC for a period of at least 30 years for
nominal annual rent. Such lease shall be a
triple net lease and will contain provisions
relating to the Aladdin's right to leaseback
the TPA for a reasonable number of weekend
nights, holiday nights, weekday nights and
days to promote special events. The leaseback
price shall be the daily "going rate" lease
amount charged to non-related third parties
for similar time periods. In addition, the TPA
Lease shall contain provisions for cooperation
and coordination between the LLC, the Shopping
Mall and the Aladdin Hotel relating to
promotion and security of the TPA. Management
of the Aladdin Hotel and the Hotel shall work
together in a cooperative mode with the common
goal to maximize utilization of the TPA
throughout the year and for all "day-parts".
Pursuant to the TPA Lease, the LLC shall have
the obligation to use its good faith business
efforts to maximize the utilization of the
TPA. In addition, the LLC shall have the
obligation to renovate the TPA for a
"reopening" of the facility on the date that
the Aladdin Hotel opens for business. The
anticipated renovation costs for the TPA are
approximately $8 million of hard construction
and FF&E expenses plus "soft costs" and
construction interest expense. The LLC shall
have the obligation to maintain the TPA in a
"first class" condition during the term of the
TPA Lease. PH shall assist the LLC in
obtaining commitments to perform at TPA from
the various celebrities involved with the
promotion of the Hotel and the Sound Asylum
brand.
The Parking Lease: The Parking Lease shall be between the LLC and
the Shopping Mall and shall provide for access
to an appropriate number of parking spaces for
customers and guests of the Hotel and the TPA.
The number of parking spaces for the Hotel and
the TPA will be calculated in accordance with,
among other things, the Xxxxx County Use
Permit governing the site and all applicable
zoning regulations. The amount of rent to be
paid by the LLC to the Shopping Mall will be
equal to the LLC's and TPA's estimated
allocable share of the use
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
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of the parking facilities multiplied by the
actual annual cost of operating the parking
facilities (including financing the
construction of the parking facilities and
amortization and depreciation). Such allocable
share shall be determined at the time of
executing the lease. The first year parking
rent is currently estimated to be
approximately $1.12 million, however, such
rent allocation for the parking may need to be
adjusted to reflect the TPA parking
allocation. Such additional parking rent is
anticipated to be "revenue neutral" to the
Hotel since it is anticipated to be paid for
from event ticket sales and rental income from
TPA.
The Utility Agreement: Located on the current Aladdin site will be a
co-generation or central utility plant that
will be owned and operated by an independent
third party. Such plant will provide
electricity, hot water and chilled water to
the Hotel, the Aladdin Hotel and the Shopping
Mall. Utilities purchased by the Hotel will be
metered with such rate charged to the Hotel to
be the same as that charged to the Aladdin
Hotel and the Shopping Mall. Such
co-generation facility will be of size and
scope to provide all peak demand electricity,
hot water and chilled water to the Hotel, the
Aladdin Hotel, the Shopping Mall and all other
structures on the current Aladdin site and
will contain appropriate redundancies.
The Reciprocal Easement The LLC will execute a Reciprocal Easement
Agreement: Agreement with the Shopping Mall and Aladdin
relating to (i) vehicular access and
maintenance of roads, (ii) pedestrian access,
maintenance of sidewalks and internal
circulation, (iii) the construction and rental
of abutting space by the Shopping Mall from
the Hotel and by the Hotel from the Shopping
Mall, (iv) security and reciprocal access of
Aladdin Hotel personnel and Hotel personnel
and (v) Strip signage and visibility of the
Hotel from the Strip. Through the Reciprocal
Easement Agreement, among other documents and
agreements, the Hotel, the Shopping Mall, the
Aladdin Hotel and all other structures that
are governed by the Reciprocal Easement
Agreement, will comply with, among other
things, the Xxxxx County Use Permit governing
the site and all applicable zoning
regulations. In addition, the Reciprocal
Easement Agreement
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As of September 2, 1997
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shall contain a specific list of actions and
items that each party to such agreement must,
prior to undertaking any of the actions or
items on such list, obtain the consent of the
other parties to such agreement, with such
consent not to be unreasonably withheld. Such
list shall contain actions and items which may
cause irreparable harm to another party to the
Reciprocal Easement Agreement. The Reciprocal
Easement Agreement shall contain appropriate
provisions to make possible a connection with
the planned Las Vegas Regional Monorail
System. In addition, to the extent that either
the Aladdin, the Shopping Mall or an affiliate
thereof is able to purchase the land adjacent
to the Aladdin and the Mall and on Las Vegas
Boulevard, (i) there shall be nothing
constructed on such site that will block
either access or reasonable visibility of the
Hotel from Las Vegas Boulevard (expansion of
the Mall in a low rise format (up to 3
stories) consistent with the architectural
character of the rest of the Mall does not
constitute blocking visibility) (ii) enhanced
pedestrian access from Las Vegas Boulevard to
the Hotel shall be constructed provided such
access is commercially reasonable, does not
interfere with the operation of either the
Mall or the Aladdin Hotel, is approved by the
Board of Directors, and is constructed at the
LLC's expense.
The Management Agreement: In exchange for providing certain management
services and promotional services, Aladdin
shall be paid fees as set forth below.
The Aladdin Hotel Management Aladdin shall provide certain management
Agreement: services to the Hotel and shall be reimbursed
for its fully allocated cost of providing such
services. Such services shall include, but not
be limited to, accounting and financial
services, MIS, general management,
investor/lender relations, promotional
services and other management services that
may be agreed upon by the LLC in the ordinary
course of business.
The Marketing and Consulting In exchange for providing certain marketing
Agreement: and consulting services, PH shall be paid fees
as set forth below. Such services shall
include arranging for a minimum amount of
promotional spots and events for the Hotel (at
no additional
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
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cost to the Hotel), a minimum number of guest
appearances by celebrities related to the
Hotel, and the coordination of a public
relations strategy and campaign. In addition,
PH will consult with Aladdin on the design,
development and operations of the Sound Asylum
food and beverage, entertainment and
merchandising activities at the Hotel and will
provide basic interior design and
architectural services consistent with the
services provided in connection with PH's
other themed entertainment restaurant
properties. Reasonable out-of-pocket costs
incurred by PH in connection with the
provision of interior design and architectural
services will be passed through to the LLC
without mark-up or overhead charges and all
budgets relating to the interior fit-up or the
Sound Asylum components of the Hotel will be
subject to the approval of the LLC's Board of
Directors.
PH shall be reimbursed for certain of its
costs and expenses relating to the Marketing
and Consulting Agreement. Such costs and
expenses shall include out-of-pocket expenses
as well as allocable overhead charges. PH's
expense reimbursement shall be equal to .5% of
the Hotel's net revenue (gross revenue
adjusted for complementaries) (the "PH Expense
Reimbursement") and shall be reimbursed on a
quarterly basis without supporting
documentation. In addition to the PH Expense
Reimbursement, to the extent the management of
the Hotel or the Board of Directors determines
that it is in the best interests of the Hotel
to incur certain promotional expenses relating
to reimbursing the out-of-pocket expenses
incurred by celebrities that are appearing at
the Hotel and are related to PH or Sound
Asylum (including but not limited to
complementaries at the Hotel or travel
expenses relating to a performance at the
Hotel) such expense reimbursement shall be the
obligation of the Hotel and not PH. Any such
expenses must be pre-approved in writing by
either the President of the Hotel or the
President of Aladdin prior to being incurred.
Also, to the extent that PH employees perform
special services for the Hotel or the LLC not
related to the Marketing and Consulting
Agreement or PH's investment in the LLC, and
such services are out-of the ordinary course
of business, and such employees incur travel
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
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or other out-of-pocket expenses, then the
Hotel shall reimburse such employees for such
expenses in accordance with the Hotel's
established expense reimbursement policy
(which may limit the type of travel, i.e.,
coach, and acceptable forms of documentation
and receipts). Any such expenses must be
pre-approved in writing by either the
President of the Hotel or the President of
Aladdin prior to being incurred.
Aladdin Fees and PH Fees (i) PH and Aladdin shall receive fees equal to
Relating to the Management 2.00% and 1.50%, respectively, of the Hotel's
Agreement and the Marketing net revenue (gross revenue adjusted for
Agreement: complementaries) on a pari passu basis, (ii)
PH shall receive an additional fee equal to 6%
of net revenue that is in excess of the net
revenue which produces EBITDA equal to $35
million (calculated using the Hotel's actual
EBITDA Margin for the period), which fee shall
be waived for any period in which EBITDA from
the Hotel is less than $35 million and (iii)
Aladdin shall receive an additional fee equal
to 6% of net revenue that is in excess of the
net revenue which produces EBITDA equal to $40
million (calculated using the Hotel's actual
EBITDA Margin for the period), which fee shall
be waived for any period in which EBITDA from
the Hotel is less than $40 million. For the
purposes of the fee calculations set forth
herein, EBITDA shall be before deducting the
fees set forth in (ii) and (iii) (the
"Additional Fees") and before any lease
payments relating to furniture, fixtures or
equipment. To the extent that EBITDA from the
Hotel exceeds the thresholds set forth in (ii)
and (iii), above, but there is either
insufficient earning or cash flow to pay any
or all of the Additional Fees, or the
providers of debt financing to the LLC
restrict the LLC's ability to pay the
Additional Fees, then the LLC shall accrue any
unpaid Additional Fees and shall pay them on a
basis that gives priority to the Additional
Fees owed to PH.
The Subordinated Debt:
Amount: $41.25 million.
Coupon: 12% per annum. The coupon must be paid out of
cash flow to the extent such cash flow is
available and the payment of
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
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such coupon does not violate the terms and
conditions of any senior obligations of the
LLC. To the extent the coupon is not paid
currently it shall accrue but not compound.
Term: 30 years.
Periodic principal After 10 years the Subordinated Debt shall
payments: receive annual periodic principal payments, in
arrears, equal to 1% of its original principal
balance.
Mandatory redemption: Upon the occurrence of a merger or sale of
substantially all of the assets of the LLC the
Subordinated Debt shall be redeemed at an
amount equal to the remaining outstanding
principal amount of the Subordinated Debt.
Subordination: The Subordinated Debt shall be junior to all
other debt or operating obligations of the
LLC. The Subordinated Debt shall be unsecured
and shall have no right to declare any event
of default or exercise any remedies during any
period that any senior debt is outstanding.
Accrued and Unpaid All accrued and unpaid interest upon a tender
Interest Upon a Tender or or mandatory redemption of the Subordinated
Mandatory Redemption: Debt shall remain due and owing, until
actually paid, to the holder of the
Subordinated Debt as if the Subordinated Debt
had not been tendered or redeemed.
The Warrants:
Right to purchase common The Warrants shall initially entitle PH to
stock: purchase up to 50% of the LLC's Common Stock.
Strike price: The Strike Price of the Warrants shall equal
$41.25 million for what is initially 50% of
the LLC's Common Stock. The Strike Price of
the Warrants may be paid either in cash or
through the tender of the Subordinated Debt.
To the extent that the Subordinated Debt is
tendered it shall have a value equal to the
then current outstanding face amount of such
debt and any difference between the
outstanding face amount of such debt and the
Strike Price of the Warrants shall be paid in
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
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cash.
Anti-dilution provisions: The Warrants shall contain anti-dilution
provisions that provide for either (i) the
payment of all dividends, other than tax
related dividends to the holder of the Warrant
as if it had fully exercised its right to
purchase the LLC's Common Stock or (ii) a two
for one increase in the amount of the LLC's
Common Stock that may be purchased for the
Strike Price. For example, if the LLC pays a
$10 million dividend to holders of its Common
Stock, the LLC has the option to pay the
holders of the Warrant either (i) $10 million
or (ii) adjust the Warrant Strike Price so
that upon a full exercise of the Warrant, the
holder of the Warrant will be able to purchase
the proportion of Common Stock equal to
((10x2)+41.25)/(41.25+41.25+10). However, as
provided in "Management Stock Options", below,
the Warrants will be diluted by the amount of
any management stock options actually granted.
Transfer restrictions: Except as set forth in the following sentence,
the Warrants shall not be transferrable (i)
without the consent of Xxxxxxx, which consent
shall not be unreasonably withheld, (ii) to
any "Prohibited Person" or (iii) before the
opening of the Hotel. However, the Warrants
shall be transferrable in connection with the
merger of PH, the payment by PH of a
liquidating dividend to its shareholders, the
spin-off or spin-out by PH of its interest in
the LLC to its shareholders or the sale or
liquidation of substantially all of the assets
of PH. The Warrants may not be transferred to
any person except as a unit with the
Subordinated Debt in a simultaneous transfer
to the same person. A "Prohibited Person"
shall be any person that the Nevada Gaming
authorities do not find suitable for obtaining
a gaming license. No transfer is effective
until the Nevada Gaming authorities confirm
that such transferee is suitable for obtaining
a gaming license.
The Convertible Preferred Aladdin shall purchase the Convertible
Stock: Preferred Stock in exchange for its
contribution to the LLC
Face Amount: $41.25 million.
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
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Coupon: 12% per annum. To the extent the coupon is not
paid currently it shall accrue but not
compound.
Optional Conversion: At any time into 50% of the LLC's Common Stock
(subject to any adjustment required by either
the grant of management stock options or the
anti-dilution provisions of the Warrants).
Mandatory Conversion: Upon the exercise of the Warrants, the
Convertible Preferred Stock shall be
mandatorily converted into 50% of the LLC's
Common Stock (subject to any adjustment
required by either the grant of management
stock options or the anti-dilution provisions
of the Warrants).
Accrued and Unpaid All accrued and unpaid dividends upon a
Dividends Upon a conversion of the Convertible Preferred Stock
Conversion to Common into Common Stock of the LLC shall remain due
Stock: and owing, until actually paid, to the holder
of the Convertible Preferred Stock as if the
Convertible Preferred Stock had not been
converted.
Term: Perpetual.
Transfer restrictions: Except as set forth in the following sentence,
the Convertible Preferred Stock shall not be
transferrable without (i) the consent of PH,
which consent shall not be unreasonably
withheld, (ii) to any Prohibited Person, or
(iii) before the opening of the Hotel.
However, the Convertible Preferred Stock shall
be transferable in connection the merger of
Aladdin, the sale or liquidation of
substantially all of the assets of Aladdin,
the payment by Xxxxxxx to its shareholders of
a liquidating dividend, the spin-off or
spin-out by Xxxxxxx to its shareholders of its
interest in Convertible Preferred Stock or the
initial public offering of Aladdin. No
transfer is effective until the Nevada Gaming
authorities confirm that such transferee is
suitable for obtaining a gaming license. In
addition, all costs of gaming licensure for
either Aladdin or PH will be payable at each
parties sole cost and expense.
Management stock options: To the extent that all members of the Board of
Directors determine that it is in the best
interests of the Hotel to offer to key members
of management stock grants, warrants or stock
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
Page 12
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options as a form of compensation, the amount
of dilution represented by such compensation
shall be shared ratably by the Warrants and
the Convertible Preferred Stock.
The LLC Common Stock: At the time of formation of the LLC, Aladdin
shall purchase all of the issued and
outstanding shares of Common Stock of the LLC
for nominal consideration.
Miscellaneous:
Right of first negotiation If either Aladdin or PH decides that it
on the sale of interest in desires to sell, convey or otherwise liquidate
the LLC: its interest in the LLC, other than in
connection with the merger, sale or
liquidation of substantially all of its
assets, the payment of a liquidating dividend
to shareholders, a spin-off or spin-out to
shareholders or initial public offering of
stock, then the other party shall have a 30
day exclusive period to negotiate for the
purchase of such interest to be sold. At the
end of such 30 day period the non-selling
party shall have no rights, in law or equity,
other than those outlined above in "Transfer
Restrictions", relating to the sale of such
interest.
Opening dates for the The parties shall agree upon an appropriate
Aladdin Hotel and the opening date for the Hotel and Aladdin shall
Hotel: commit to a date by which the Aladdin Hotel
shall be opened. It is currently anticipated
that the opening date for the Hotel shall not
be more than six months before or after the
opening date of the Aladdin Hotel.
Land condominiumization: The land underlying the Hotel shall initially
be owned by Aladdin subject to a lease to the
LLC at a nominal rent. Ownership of the Land
underlying the Hotel together with the LLC's
rights under the Reciprocal Easement Agreement
and other related agreements shall be
converted into an ownership interest under a
condominium regime as soon as possible and
practical following construction of the Hotel.
The costs of such condominiumization shall be
shared by the LLC based upon the Hotel's pro
rata amount of acreage to the overall
condominiumization plan for the entire current
Aladdin site.
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
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Pre-development Upon execution of the LLC agreement, both PH
expenses: and Xxxxxxx shall contribute equally to the
funding of pre-development expenses including,
but not limited to, architectural and
pre-construction expenses. All pre-development
expense shall be subject to a budget that is
reasonably agreed upon between Xxxxxxx and PH.
Such pre-development expenses shall include
expenses incurred after execution of this
agreement but prior to the execution of the
LLC agreement. Such expenses shall not include
legal fees or the fees of financial advisors
in connection with the negotiation or
execution of the LLC agreement but shall
include expenses such as architectural and
design expenses. Upon the completion of the
major portion of the funding of the LLC, e.g.,
debt, all such legal and financial advisory
fees shall be the obligation of the LLC. The
aggregate of pre-development expenses
(excluding legal and financial advisory fees)
incurred after execution of this agreement but
prior to execution of the LLC agreement shall
be limited to $100,000.
Financial advisors: Each of PH and Aladdin agree that Westwood
Capital shall act as the LLC's financial
advisor for the purpose of securing
appropriate financing commitments. Upon the
formation of the LLC, Westwood Capital and the
LLC shall execute an engagement letter that
sets forth the fees payable to Westwood
Capital. Such fees and terms of engagement
shall be materially the same as those under
which Westwood Capital acts as the financial
advisor to Xxxxxxx Xxxxxx. As part of its due
diligence, PH shall have the right to review
and reasonably approve such engagement letter.
Financial guarantees: It is understood that the lenders to the
project may require certain cash flow
maintenance and construction completion
guarantees. The LLC will attempt to mitigate
such construction completion guarantees
through a guaranteed fixed price
"design/build" contract from a construction
company, currently anticipated to be Fluor
Corporation and a guarantee from Aladdin. The
LLC will attempt to limit the amount and term
of any cash flow maintenance guarantees that
may be required from the parties but the
parties acknowledge that certain guarantees
may be necessary from
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
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each of them to achieve appropriate financing
for the project; provided, however, that
Aladdin hereby acknowledges PH's extreme
reluctance to be required to provide such cash
flow maintenance guarantees. In order to
induce PH to consider providing such cash flow
maintenance guarantees, Aladdin Holdings, LLC
will consider indemnifying PH for any or all
exposure it may be required to bear under such
cash flow maintenance guarantee. In addition,
Xxxxxxx acknowledges that after due diligence
PH may require either another affiliate of
Aladdin Holdings, LLC to also provide such
indemnity. With regard to indemnities provided
by Aladdin Holdings, LLC or other parties,
Aladdin Holdings, LLC or such other party will
execute all documents necessary for PH to be
assured of appropriate indemnification.
Exclusive period: Upon the execution of this letter and until
October 15, 1997 (the "Exclusive Period"),
Xxxxxxx agrees not to negotiate with any other
party in connection with the development of
the Land and PH agrees not to negotiate for
the development of any restaurant or hotel
that will be connected with the Sound Asylum
concept in Xxxxx County, Nevada. The parties
will use their best efforts, with time being
of the essence, to complete and execute a
binding agreement setting forth the foregoing
by the conclusion of the Exclusive Period. If
however, both parties agree that the Hotel is
not economically feasible prior to October 15,
1997, then the Exclusive Period shall
terminate on such date. This provision is
binding upon the parties.
Due diligence: During the Exclusive Period, each of Aladdin
and PH agree to grant the other the right to
perform reasonable due diligence for the
purpose of entering into the LLC. Reasonable
due diligence on the part of PH includes
access to all Aladdin personnel and
representatives and books and records of
Xxxxxxx and the personnel and representatives
of the Shopping Mall. Reasonable due diligence
on the part of Aladdin on PH includes access
to all of PH's personnel and representatives,
contracts and other agreements (executed,
being negotiated, planned or under
consideration) and books and records relating
to the Sound Asylum or otherwise
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
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materially impacted upon PH's execution of its
expected obligations under the various
agreements relating to the LLC and the Hotel.
Confidentiality: Except as otherwise compelled by a court of
competent jurisdiction, each of PH and Xxxxxxx
agree to keep this agreement and all matters
relating to this agreement confidential. Each
party may, however, disclose this agreement
and related matters to affiliates and
representatives and agents of themselves (or
in the case of the Aladdin to representatives
of the Shopping Mall, LCI and financing
sources for the Aladdin Hotel) solely for the
purpose of performing due diligence, obtaining
required consents, negotiating the LLC or
determining the economic feasibility of the
Hotel. To the extent either party discloses
this agreement to representatives or agents or
representatives of the Shopping Mall, it shall
inform such representatives and agents as to
the confidential nature of such disclosure. It
is understood that Xxxxxxx, and its parent,
Aladdin Holdings, LLC, are pursuing the
transaction described herein in part to be
able to make reference to PH's participation
in the Hotel so as to facilitate the leasing
of the Shopping Mall. Consequently, every
effort will be made, provided it does not
jeopardize PH's business operations in any
way, and in PH's sole discretion, to permit
Xxxxxxx to publically discuss the proposed
development of the Hotel with PH at the
earliest possible date. This provision is
binding upon the parties.
Memorandum of Understanding and Letter of Intent
As of September 2, 1997
Page 16
--------------------------------------------------------------------------------
AGREED AND ACCEPTED AS OF THE DATE HEREOF:
ALADDIN GAMING, LLC
By: /s/ Xxxx Xxxxxx
---------------------------
Xxxx Xxxxxx, Chairman
ALADDIN HOLDINGS, LLC
By: /s/ Xxxx Xxxxxx
---------------------------
Xxxx Xxxxxx, Vice President
PLANET HOLLYWOOD INTERNATIONAL, INC.
By: /s/ Xxxxxx Xxxx
--------------------------------------
Xxxxxx Xxxx, Chief Executive Officer
