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CONTRIBUTION AGREEMENT
among
TRUST UNDER ARTICLE SIXTH U/W/O XXXXXXX XXXXXX,
ALADDIN HOLDINGS, LLC,
XXXXXX ENTERPRISES, LLC,
LONDON CLUBS INTERNATIONAL, P.L.C.
and
LONDON CLUBS NEVADA INC.
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CONTRIBUTION AGREEMENT
CONTRIBUTION AGREEMENT, dated as of this 26th day of February, 1998,
between Trust Under Article Sixth u/w/o Xxxxxxx Xxxxxx, a New York Trust (the
"Trust"), Aladdin Holdings, LLC, a Delaware limited liability company ("Aladdin
Holdings"), Xxxxxx Enterprises, LLC, a Nevada limited liability company ("Xxxxxx
Enterprises"), London Clubs International, p.l.c., a company registered in
England and Wales ("LCI"), and London Clubs Nevada Inc., a Nevada corporation
("LCI Nevada").
WHEREAS, Aladdin Gaming, LLC, a Nevada limited liability company
("Aladdin Gaming"), is entering into a Credit Agreement (the "Credit Agreement")
dated as of the date hereof with a syndicate of lenders, including The Bank of
Nova Scotia, Canadian Imperial Bank of Commerce and Xxxxxxx Xxxxx Capital
Corporation (the "Lenders");
WHEREAS, Aladdin Gaming Holdings, LLC, a Nevada limited liability
company ("Gaming Holdings"), the owner of all the issued and outstanding shares
of Aladdin Gaming, is issuing discount notes (the "Discount Notes") as of the
date hereof to certain persons (the "Discount Noteholders");
WHEREAS, in connection with entering into the Credit Agreement and
issuing the Discount Notes and otherwise, (a) the Trust and LCI (the "Comple-
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tion Guaranty Obligors") and Aladdin Bazaar Holdings, LLC, a Nevada limited
liability company ("Bazaar"), are entering into (i) a Guaranty of Performance
and Completion in favor of the Lenders dated as of the date hereof (the "Bank
Completion Guaranty"), (ii) a Guaranty of Performance and Completion in favor of
the Discount Noteholders dated as of the date hereof (the "Discount Note
Completion Guaranty") and (iii) a Guarantee of Performance and Completion to be
entered into in favor of a Contingent Guarantor after the date hereof (the
"Junior Completion Guaranty" and, together with the Bank Completion Guaranty and
the Discount Note Completion Guaranty, the "Completion Guaranties") pursuant to
each of which the Completion Guaranty Obligors and Bazaar have joint and several
obligations for certain payments in connection with the completion of the
redevelopment of the Aladdin hotel and casino by Aladdin Gaming (together with
the obligations of LCI and the Trust pursuant to Section 1(c), the "Completion
Guaranty Obligations") and (b) Aladdin Holdings, LCI (the "Keep Well Obligors",
and, together with the Completion Guaranty Obligors, the "Obligors") and Bazaar
are entering into a Keep-Well Agreement in favor of the Lenders dated as of the
date hereof (the "Keep Well Agreement") pursuant to which the Keep Well Obligors
and Bazaar are jointly and severally liable for making certain payments in
certain circumstances (the "Keep Well Obligations");
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WHEREAS, LCI owns, indirectly (through its wholly owned subsidiary,
London Clubs Holdings Ltd.), 100% of LCI Nevada which as of the date hereof owns
25% of the issued and outstanding Common Shares of Gaming Holdings;
WHEREAS, the Trust owns 95% of Aladdin Holdings, Aladdin Holdings owns
98.67% of Xxxxxx Enterprises, and Xxxxxx Enterprises directly and indirectly
(through its interest in Aladdin Gaming Enterprises, Inc., a Nevada corporation
("Aladdin Enterprises")) owns 72% of the issued and outstanding Common Shares of
Gaming Holdings; and
WHEREAS, the Trust, Aladdin Holdings, Xxxxxx Enterprises, LCI and LCI
Nevada wish to enter into this Agreement to effect a sharing of (a) the
Completion Guaranty Obligations in the proportion of 75% to the Trust and 25% to
LCI and (b) the Keep Well Obligations in the proportion of 75% to Aladdin
Holdings and 25% to LCI.
NOW, THEREFORE, in consideration of the premises and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. COMPLETION GUARANTY CONTRIBUTIONS. (a) At any time a payment is
required by a Completion Guaranty Obligor pursuant to a Completion Guaranty (a
"Completion Guaranty Payment"), the Completion Guaranty Obligor receiving the
demand for such payment under a Completion Guaranty (a "Completion Guaranty
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Demand") shall within two business days of the receipt of such Completion
Guaranty Demand give written notice to the other Completion Guaranty Obligor of
the Completion Guaranty Demand and shall include in such written notice a copy
of the Completion Guaranty Demand. Each Completion Guaranty Payment shall be
made by LCI on the one hand, and the Trust on the other hand, in proportion to
their respective Completion Guaranty Contribution Percentages (as provided in
Section 3); PROVIDED that if the Completion Guaranty Payment is required as a
result of an Event of Default (as hereinafter defined) Caused (as hereinafter
defined) by one of the Completion Guaranty Obligors or its Affiliates, the
Completion Guaranty Obligor which Caused (or whose Affiliates Caused) such Event
of Default shall make all of such Completion Guaranty Payment.
(b) In the event that any party hereto shall receive notification from
the Lenders to the effect that EBITDA (as defined in the Credit Agreement) shall
be less than the Minimum EBITDA (as defined in the Credit Agreement) (such
difference being referred to herein as the "EBITDA Shortfall"), LCI on the one
hand, and the Trust on the other hand, shall, unless they otherwise agree, make
payment in an aggregate amount equal to the EBITDA shortfall (the "EBITDA
Shortfall Payment"), in proportion to their respective Completion Guaranty
Contribution Percentages (as provided in Section 3).
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(c) Without limiting Sections 1(a) and 1(b), if a Completion Guaranty
Payment or an EBITDA Shortfall Payment is required and, by reason of a failure
or refusal of a Completion Guaranty Obligor to make its Completion Guaranty
Payment or EBITDA Shortfall Payment as required by Section 1(a) or 1(b), is made
by the other Completion Guaranty Obligor (the "Contributing Completion Guaranty
Obligor") in excess of the amount such Completion Guaranty Obligor is required
to pay pursuant to Section 1(a) or 1(b) (such excess, the "Completion Guaranty
Excess Amount"), from the date such Excess Amount becomes past due, such
Completion Guaranty Excess Amount shall be treated as a loan from the
Contributing Completion Guaranty Obligor to the other Completion Guaranty
Obligor (the "Non-Contributing Completion Guaranty Obligor") and shall accrue
interest as provided in Section 4.
2. KEEP WELL CONTRIBUTIONS. (a) At any time a payment is required
by a Keep Well Obligor pursuant to the Keep Well Agreement (a "Keep Well
Payment"), the Keep Well Obligor receiving the demand for such payment under the
Keep Well Agreement (a "Keep Well Demand") shall within two business days of the
receipt of such Keep Well Demand give written notice to the other Keep Well
Obligor of the Keep Well Demand and shall include in such written notice a copy
of the Keep Well Demand. A Keep Well Payment shall be made by LCI, on the one
hand, and Aladdin Holdings, on the other hand, in proportion to their respec-
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tive Keep Well Contribution Percentages (as provided in Section 3); PROVIDED
that if the Keep Well Payment is required as a result of an Event of Default
Caused by one of the Keep Well Obligors or its Affiliates, the Keep Well Obligor
which Caused (or whose Affiliates Caused) such Event of Default shall make all
of such Keep Well Payment.
(b) If the aggregate distributions at any time on the Series B
Preferred Shares in Gaming Holdings ("Series B Shares") are less than the
aggregate payments which would have been required to be made by Aladdin Gaming
under the Credit Agreement in respect of such amount had such debt under the
Credit Agreement not been repaid or partially repaid pursuant to the Keep Well
Agreement with the amounts in respect of which the Series B Shares were issued
(such shortfall, a "Series B Distribution Shortfall"), the parties acknowledge
that they should bear the economic burden of such Series B Distribution
Shortfall in the proportion of 25 percent for LCI and 75 percent for Aladdin
Holdings. Accordingly, in the event of a Series B Distribution Shortfall,
within thirty days of receipt of written notice from LCI requesting a payment in
respect thereof, Aladdin Holdings shall pay to LCI Nevada 75 percent of (i) the
Series B Distribution Shortfall multiplied by (ii) the number of Series B Shares
held by LCI Nevada, divided by (iii) the total issued and outstanding Series B
Shares, and upon and in consideration for such payment LCI Nevada shall transfer
to Xxxxxx Enterprises one Series B Preferred Share for each
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$100 paid by Aladdin Holdings; PROVIDED that no such payment shall be required
to the extent that the Series B Distribution Shortfall is not paid by Gaming
Holdings due to restrictions on distributions to Gaming Holdings by Aladdin
Gaming in the Credit Agreement or related arrangements with the Lenders or
restrictions on distributions by Gaming Holdings to the members of Gaming
Holdings in the arrangements in respect of the Discount Notes.
(c) Without limiting Sections 2(a) and (b), if a Keep Well Payment is
required and, by reason of a failure or refusal of a Keep Well Obligor to make
its Keep Well Payment as required by Section 2(a), is made by the other Keep
Well Obligor (the "Contributing Keep Well Obligor") in excess of the amount such
Keep Well Obligor is required to pay pursuant to Section 2(a) (such excess, the
"Keep Well Excess Amount"), from the date such Excess Amount becomes past due,
such Keep Well Excess Amount shall be treated as a loan from the Contributing
Keep Well Obligor to the other Keep Well Obligor (the "Non-Contributing Keep
Well Obligor") and interest shall accrue as provided in Section 4.
(d) Notwithstanding any other provision of this Agreement, in no event
shall this Agreement create any liability or obligation whatsoever on the part
of the Trust in respect of the Keep Well Obligations.
3. CONTRIBUTION PERCENTAGE As used in this Agreement, the
"Contribution Percentage" shall mean for all purposes hereof, and whether or not
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there are changes in the Percentage Interests (as defined in the Operating
Agreement of Gaming Holdings) of LCI Nevada or Xxxxxx Enterprises (a) 75% in the
case of the Trust or Aladdin Holdings (as the case may be) and (b) 25% in the
case of LCI.
4. INTEREST. (a) Any Completion Guaranty Excess Amount or Keep Well
Excess Amount (an "Excess Amount") not paid by the Non-Contributing Completion
Guaranty Obligor or Non-Contributing Keep Well Obligor (a "Non-Contributing
Obligor") on or before the time that the relevant Completion Guaranty Payment or
Keep Well Payment is due (the "Due Date") shall, without limiting any rights of
the Contributing Completion Guaranty Obligor or Contributing Keep Well Obligor
(a "Contributing Obligor") or its Affiliates to recover such Excess Amount, be
treated as a loan from the Contributing Obligor to the Non-Contributing Obligor
and shall be subject to interest from the Due Date at the rate of twenty percent
per annum; PROVIDED that no such interest shall accrue during any period that
there is an Event of Default in existence which was Caused by the Contributing
Obligor or its Affiliates.
(b) Any payment from the Non-Contributing Obligor or its Affiliates to
the Contributing Obligor or its Affiliates under this Agreement shall be first
be applied to payment of any interest accrued under this Section 4 on the
relevant loan and then to payment of the principal of such loan.
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5. SECURITY INTEREST. (a) As security for the prompt and complete
payment and performance in full of the obligations of a Non-Contributing Obligor
under this Agreement, in addition to any security interest granted under the
Operating Agreement of Gaming Holdings, to the extent permitted by the
arrangements with the Lenders in respect of the Credit Agreement, the
arrangements with the Discount Noteholders in respect of the Discount Notes, and
related arrangements in respect of each of the foregoing and otherwise at law
(including, without limitation, the Nevada gaming laws):
(i) in respect of when LCI is the Non-Contributing Obligor, LCI Nevada
hereby grants to the Contributing Obligor a security interest in and continuing
lien on all of LCI Nevada's rights to distributions on any common shares in
Gaming Holdings; and
(ii) in respect of when the Trust or Aladdin Holdings is the
Non-Contributing Obligor, Xxxxxx Enterprises hereby grants to the Contributing
Obligor a security interest in and continuing lien on all of Xxxxxx Enterprises'
rights to distributions on any common shares in Gaming Holdings and all of
Xxxxxx Enterprises' rights to distributions on any class A voting common stock
or class B non-voting common stock in Aladdin Enterprises;
PROVIDED that such security interest and continuing lien shall be (A)
subordinated to the security interests and liens granted in favor of the Lenders
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pursuant to the Loan Documents (as defined in the Credit Agreement) and by its
signature below, the Contributing Obligor hereby agrees that it will not enforce
any such security interest or continuing lien until all Loans (as defined in the
Credit Agreement) and other Obligations (as defined in the Credit Agreement)
have been paid in full in cash, all Letters of Credit (as defined in the Credit
Agreement) have been terminated or expired and all Commitments (as defined in
the Credit Agreement) have been terminated under the Credit Agreement (PROVIDED
that to the extent any distributions on any relevant shares or membership
interests are permitted to be made to the holder(s) thereof under the Loan
Documents, the Contributing Obligor shall be permitted to enforce its security
interest and continuing lien thereon, including, without limitation, diverting
distributions thereon to the Contributing Obligor), and (B) suspended for any
period in which an Event of Default exists which was Caused by the Contributing
Obligor or its Affiliates.
(b) In connection with the security interests referred to in Section
5(a), the Non-Contributing Obligor hereby irrevocably appoints the Contributing
Obligor, and any of the Contributing Obligor's respective agents, officers, or
employees, as the Non-Contributing Obligors' attorney(s)-in-fact, with full
power to prepare, execute, acknowledge, and deliver, as applicable, all
documents, instruments, and/or agreements memorializing and/or securing such
loan(s) including, without limitation, such Uniform Commercial Code financing
and continuation
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statements, pledge and/or security agreements, mortgages and other security
instruments as may be reasonably appropriate to perfect and continue the
security interest in favor of the Contributing Obligor to the extent permitted
in subclause (A) of the proviso to Section 5(a) and by the Nevada gaming laws.
6. RIGHT OF SET OFF. The parties agree that the Completion Guaranty
Obligors and the Keep Well Obligors shall be entitled to set off any obligation
under this Agreement (the "Payment Obligations") (including loans hereunder)
from any other Completion Guaranty Obligor or Keep Well Obligor in whole or
partial satisfaction of a Payment Obligation they have such other Completion
Guaranty Obligor or Keep Well Obligor under this Agreement. Any such set off
shall discharge the relevant obligations of such parties to the extent of such
set off.
7. AMENDMENT AND WAIVER. Any provision of this Agreement may be
amended or waived only by an amendment or waiver in writing signed by the
parties hereto making express reference to this Agreement and expressly stating
that it is an amendment or waiver, as the case may be, of this Agreement.
8. SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall
be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns and, in the event of the dissolution of the
Trust, the remaindermen thereof.
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9. NO THIRD-PARTY BENEFICIARIES. This Agreement is for the sole
benefit of the parties hereto and their permitted assigns and nothing herein
express or implied shall give or be construed to give to any person, other than
the parties hereto and such assigns, any legal or equitable rights hereunder.
10. DEFINITIONS. In this Agreement (a) "Affiliate" means, with
respect to a specified person, any other person who or which is directly or
indirectly controlling, controlled by, or under common control with the
specified person or any member, stockholder, director, officer, manager,
relative or spouse of the specified person; PROVIDED that neither Gaming
Holdings nor Aladdin Gaming shall be an Affiliate of Aladdin Gaming Enterprises,
Inc., Xxxxxx Enterprises, Aladdin Holdings, the Trust, LCI or LCI Nevada (b)
"Caused" means, with respect to a person, that such person has caused an Event
of Default by breach or non-performance of a term, provision or covenant of any
of the Keep Well Agreement, the Completion Guaranties or the Credit Agreement;
PROVIDED that a person shall not be found to have caused an Event of Default as
result of such Person's or its Affiliates' control of Gaming Holdings or Aladdin
Gaming; (c) "control" means the possession, directly or indirectly, of the power
to cause the direction of the management or policies of a person, whether
through ownership of voting securities, by contract or otherwise, and
"controlling" and "controlled" shall have corresponding meanings; and (d) "Event
of Default" means (i) an Event of Default under the Credit Agreement; (ii) a
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Specified Event under the Keep Well Agreement or any Completion Guaranty; or
(iii) any breach or default under the Keep Well Agreement or any Completion
Guaranty, in each case pursuant to which the Lenders, the Discount Noteholders
or the Contingent Guarantor (as the case may be) have exercised rights or
remedies under any of the Credit Agreement, the Completions Guaranties or the
Keep Well Agreement, but shall exclude any of the forgoing events which only
gives rise to a payment by LCI pursuant to Section 13 of the Keep Well
Agreement.
11. NOTICES. All notices provided for in this Agreement shall be
deemed to have been given when received and shall be in writing, duly signed by
the party giving such notice, and shall be hand delivered, faxed or mailed by
registered or certified mail or overnight courier service, as follows:
(a) if to Aladdin Holdings, the Trust or Xxxxxx Enterprises:
Aladdin Holdings, LLC
0000 Xxxx Xxxxxxxxxx Xxxxxxxxx
Xxxxx 00
Xxx Xxxxx, Xxxxxx 00000-0000
Telephone: 000-000-0000
Telecopier: 000-000-0000
Attention of Xxxx Xxxxxx
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with a copy to:
Xxxxxxx Xxxxxx Properties
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
Attention of Xxxxxx Xxxxxxx
and
Xxxxxxx Xxxxxx
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxx, Xxxxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
Attention of Xxxxx X. Xxxxxxx, Esq.
and
Skadden, Arps, Slate, Xxxxxxx & Xxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
Attention of Xxxxxxx X. Xxxxxxxx, Esq.
(b) if to LCI or LCI Nevada:
London Clubs International, plc
00 Xxxxx Xxxxxx
Xxxxxx X0X 0XX, Xxxxxxx
Telephone: 000-00-000-000-0000
Telecopier: 011-44-171-493-6981
Attention of Xxxxx X. Xxxxxx
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with a copy to:
Ohrenstein & Xxxxx, LLP
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
Attention of Xxxxx X. Xxxxxxx, Esq.
and
Lionel, Xxxxxx & Xxxxxxx
000 Xxxxx 0xx Xxxxxx
Xxxxx 0000
Xxx Xxxxx, Xxxxxx 00000
Telephone: 000-000-0000
Telecopier: 000-000-0000
Attention of P. Xxxxxxx Xxxxxxxx, Esq.
12. TERM. This Agreement, as it may be amended, supplemented or
otherwise modified from time to time, shall remain in effect until (i) the
termination or expiration of each of the Completion Guaranties and the Keep Well
Agreement, (ii) termination or expiration of the Completion Guaranty Obligations
and the Keep Well Obligations and (iii) the payment in full of all amounts due
under the Completion Guaranties and the Keep Well Agreement and hereunder,
including, without limitation, any loans hereunder.
13. COUNTERPARTS. This Agreement may be executed in counterparts,
each of which shall constitute an original and all of which together shall
constitute one and the same instrument.
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14. APPLICABLE LAW AND JURISDICTION. This Agreement and the rights
and obligations of the parties hereto shall be interpreted and enforced in
accordance with and governed by the laws of the State of Nevada without regard
to the conflict laws of that State.
15. TIMELY NOTICE. The failure of a party to give timely notice
hereunder shall not relieve the other party of its obligations hereunder.
16. COMPLIANCE WITH GAMING LAWS. Notwithstanding any other provision
of this Agreement, no shares or other ownership interests in any entity shall be
issued or transferred, encumbered or disposed of, and no rights to distributions
on any shares or other ownership interests in any entity shall be transferred,
encumbered or otherwise disposed of in any manner pursuant to this Agreement
except in compliance with the provisions of the Nevada Gaming Control Act (or
any successor statute) and the rules or regulations promulgated thereunder.
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IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their respective duly authorized officers as of the
date first above written.
TRUST UNDER ARTICLE SIXTH u/w/o
XXXXXXX XXXXXX
By: /s/ Xxxxx Xxxxxx
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Xxxxx Xxxxxx, as trustee and not individually
By: /s/ Xxxx Xxxxxx
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Xxxx Xxxxxx, as trustee and not individually
By: /s/ Xxxxxx Xxxxxxxxx
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Xxxxxx Xxxxxxxxx, as trustee and not individually
ALADDIN HOLDINGS, LLC
By: Aladdin Management Corporation, its manager
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: President
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Vice President
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XXXXXX ENTERPRISES, LLC
By: /s/ Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
Title: Manager
LONDON CLUBS INTERNATIONAL, P.L.C.
By: /s/ Xxxxx Xxxxx
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Name: Xxxxx Xxxxx
Title: Finance Director
LONDON CLUBS NEVADA INC.
By: /s/ Xxxxx Xxxxxx
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Name: Xxxxx Xxxxxx
Title: Assistant Secretary
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