exv10w77



 





Exhibit 10.77




ENERGY SERVICES AGREEMENT AMENDMENT NO. 2




This Amendment No. 2 (“Amendment”) is entered into as of this 1st day of July, 2006, by
and among Atlantic-Pacific Las Vegas, LLC, a Delaware limited liability company, (formerly owned by
Sempra, now 100% owned by Thermal Western Holdings, Inc.) (“Seller”), and Venetian Casino Resort,
LLC, a Nevada limited liability company (“Buyer”). Unless otherwise provided herein, capitalized
terms used herein have the same meaning as used in the Agreement defined below.



WITNESSETH:




WHEREAS, Buyer and Seller have entered into an Energy Services Agreement, dated May 1, 1997 (as
amended by Energy Services Agreement Amendment No. 1 dated as of July 1, 1999 and as modified by
the Settlement Agreement dated April 25, 2005, between Buyer, Seller and Sempra Facilities
Management, a California corporation (the “Agreement”); and



WHEREAS, Buyer’s affiliate is constructing a 3,000 room hotel, casino, retail and meeting complex
to be integrated with Buyer’s existing hotel casino resort, together with a commercial mall
facility of approximately 450,000 square feet (collectively, the “Phase II Project”), which will be
located on approximately 14 acres of land adjacent to the existing hotel casino resort;



WHEREAS, Buyer and Seller wish to confirm their common understanding regarding the use of, and
management of, the central plant facility and certain ancillary equipment that supplies, and is
intended to supply, heating and air conditioning to both the existing and the new portions of the
complex, and to make certain amendments to the Agreement as set forth herein;



NOW, THEREFORE, in consideration of the premises and mutual covenants, conditions and agreements
set forth herein and such other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, Buyer and Seller, each intending to be legally bound, do hereby
agree to modify the Agreement as follows:




	1.	 	Article I Definitions. Section 1.1 of the Agreement is hereby amended by adding the
following definition in the appropriate alphabetical order:






“Amendment No. 2 Effective Date” means: July 1, 2006.




	2.	 	Section 13.5 Notice. Section 13.5 of the Agreement is hereby amended by deleting
Seller’s address and replacing it with the following:




General Manager

Atlantic Pacific Las Vegas, LLC

C/O The Venetian Resort-Hotel-Casino

3355 Las Vegas Blvd. So.

Las Vegas, NV 89109


Phone: 702.733.5511




 











 





Fax: 702.733.5394



And to:



General Counsel

The Trigen Companies

99 Summer Street, Suite 900

Boston, MA 02110



Phone: 617.482.8080 ext. 333





	3.	 	Schedule 1.05. Description of Buyer’s Equipment. Schedule 1.05 to the Agreement is
hereby replaced with the attached amended and restated Schedule 1.051






	4.	 	Schedule 3.2A Operation and Maintenance Services. Schedule 3.2A to the Agreement is
hereby amended by deleting the fourth paragraph of Section I, Staffing, and replacing it with
the following: 2






“Seller will execute the work by providing a staff which, as of
the Second Amendment Effective Date, consists of the types and
quantity of the following personnel:



	 	 	 	 	 	 	 	 	 	 	 





	 	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	General Manager
	 	 	1	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Facility Maintenance Manager
	 	 	1	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Central Plant Manager
	 	 	1	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Environ/Safety Manager
	 	 	1	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Instrument & Controls Manager
	 	 	1	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Shift Supervisors
	 	 	4	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Maintenance Clerk
	 	 	1	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Administrative Assistant
	 	 	1	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Senior Facilities Technicians
	 	 	27	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Central Plant Operators
	 	 	10	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 

	 	•
	 	Assistant Plant/Facility Operators
	 	 	4	 	 	 








 




			
	1	 	Schedule describes the equipment owned by Buyer and
maintained by Seller and includes all the equipment other than the equipment
described in Schedule 2.2A and the ancillary equipment described in paragraph
5(b) that will be owned and maintained by Buyer as described in paragraph 5(b).
	 
	2	 	Seller’s staff to include 52 persons.


 



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	5.	 	Acknowledgements and Agreements.






	 	(a)	 	The parties hereto agree that the Contract Year Fee Amount will increase by
$100,000 per year for each year following the opening date of the Phase II Project
Central Plant (payable as follows, starting July 1, 2006, the Contract Year Fee Amount
will increase by $75,000 per year (pro rated for the 2006 Contract Year) and starting
July 1, 2007, the Contract Year Fee Amount will increase by an additional $25,000 per
year (pro rated for the 2007 Contract Year)). Buyer may request that Seller provide
additional services (“Additional Services”) in connection with the operation of any
further expansion to the Central Plant (as such term is defined in the Agreement as
amended by this Amendment) or any other facility. Buyer shall give Seller 20 days
prior written notice of any such request. Seller may, in its sole discretion, agree
or not agree to provide such Additional Services. If Seller agrees to provide such
Additional Services, (i) the Seller and Buyer shall agree on the number and type of
additional employees to be retained by Seller necessary to perform such Additional
Services (“Additional Employees”) and make appropriate modifications to Schedule 3.2A
to the Agreement, as amended in Section 4 of this Amendment, to reflect such
Additional Employees and (ii) the Contract Year Fee Amount shall be increased by an
amount equal to 10% of the annualized Fully Burdened Costs for all such Additional
Employees plus certain corporate general and administrative costs (payroll, HR, etc.)
to be agreed upon by the parties at the time of such change.
	 
	 	(b)	 	Notwithstanding anything to the contrary contained in Schedule 3.2.A, the
parties hereto agree that Buyer or one of its wholly-owned subsidiaries will hire
approximately 32 additional employees who will maintain, operate and repair certain
ancillary HVAC equipment primarily relating to the Phase II Project described in the
following sentence (the “Ancillary Equipment”). The Ancillary Equipment consists
primarily of the HVAC equipment located in the podium (including the Phase II Mall
component thereof) and the tower of the Phase II project commonly referred to as The
Palazzo and the Shoppes at the Palazzo. The parties hereto understand that the
Ancillary Equipment will be installed and located outside of the Central Plant, but
connected to the Central Plant by appropriate plumbing and electrical connections.
For clarity, the Ancillary Equipment will not include any HVAC equipment outside of
the Central Plant which is being maintained, operated and repaired by Seller as of the
date of this Amendment (such equipment being all HVAC equipment described on amended
Schedule 1.05). The parties hereto acknowledge that Buyer or an affiliate of Buyer
owns the Ancillary Equipment and the equipment described on amended Schedule 1.05.
	 
	 	(c)	 	Buyer and Seller will work together in good faith to coordinate what their
respective employees do on a day-to-day basis as contemplated by the Agreement and
this Amendment. In this regard, Seller will permit Buyer’s
personnel access to the building management system to make changes





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	 	 	 	deemed necessary
or desirable by such personnel to the Ancillary Equipment which services the
portion of the property maintained by Buyer’s staff.
	 
	 	(d)	 	Buyer agrees that if it exercises its purchase option under Section 2.5(a) of
the Agreement, and determines in its sole discretion, to hire any of the personnel
then employed by Seller who are providing services to Buyer under the Agreement, Buyer
will give full credit to the seniority of such employees based on their start dates
with Seller providing services to Buyer on site at the complex under the Agreement.
	 
	 	(e)	 	Seller agrees that pursuant to the Agreement, as amended hereby, it will
cause to be provided from the Central Plant steam for heating, and chilled water for
air conditioning, to the new portions of the complex located in the podium (including
the Phase II Mall component thereof) and the tower of the Phase II project, commonly
referred to as The Palazzo and the Shoppes at the Palazzo. Seller also agrees that
pursuant to the Agreement, as amended hereby, it will continue to cause the Central
Plant to provide steam for heating, and chilled water for air conditioning, to all of
the portions of the complex to which the Central Plant is providing such services as
of the date this Amendment. Notwithstanding anything to the contrary herein, Seller
shall solely control the operation and dispatch of the Central Plant for the provision
of all services to be rendered pursuant to the Agreement as amended hereby.






	6.	 	Miscellaneous. This Amendment shall be governed by and interpreted in accordance
with the laws of the State of Nevada, without reference to any choice of law principles. This
Amendment may be executed in counterparts, each of which shall be deemed an original, and all
of which together shall constitute one document.




IN WITNESS WHEREOF, the undersigned have caused this Amendment No. 2 to be duly executed and
delivered and effective as of the Amendment No. 2 Effective Date.





	 	 	 	 	 	 	 
	Venetian Casino Resort, LLC (“Buyer”)	 	Atlantic Pacific Las Vegas, LLC (“Seller”)
	 
	 	 	 	 	 	 
	By:

	 	/s/ Robert G. Goldstein
	 	By:
	 	/s/ Joseph A. Steinmehek
	 

	 	 
	 	 	 	 
	Name:

	 	Robert G. Goldstein
	 	Name:
	 	Joseph A. Steinmehek
	Title:

	 	President
	 	Title:
	 	Vice President






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Schedule 1.05




Buyer’s Equipment includes:



All that certain equipment added to the Central Plant during:




	 	-	 	Phase II as part of The Palazzo project (sometimes also referred to
as Phase IIC); and
	 
	 	-	 	The Phase IA additions to the Central Plant;





Certain equipment added to the complex outside the Central Plant as part of:




	 	-	 	The Phase IA additions to the garage including the transfer level
between the garage;
	 
	 	-	 	The Phase IA tower;
	 
	 	-	 	The Phase IA tower roof;
	 
	 	-	 	Other equipment in the Phase IA tower other than in the guest rooms;
	 
	 	-	 	The Guggenheim area added in 2001;
	 
	 	-	 	The Corporate and other administrative offices;
	 
	 	-	 	The Paiza Club added in 2005;
	 
	 	-	 	The Pool Deck added in 2005 and 2006,
	 
	 	-	 	The Phase IIA 2003 additions to the casino level of the meeting room
complex;
	 
	 	-	 	The Phase IIB additions to the meeting room complex consisting of an
additional 3 levels above the Phase IIA addition to the meeting room complex and
completed in 2005 and 2006;
	 
	 	-	 	The Blue Man and Phantom Theatres in 2006.





Stated differently, Buyer owns and Sellers maintain all equipment other than that set forth on
Schedule 2.2A and that to be added in Phase II outside the central plant (defined elsewhere as the
Ancillary Equipment).




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