EXHIBIT 10.54
AMENDMENT TO LICENSE AGREEMENT
& AGREEMENT ON OTHER MATTERS
THIS AMENDMENT TO LICENSE AGREEMENT & AGREEMENT ON OTHER MATTERS
("Amendment") is executed this 30TH day of November, 1999 by and between FULL
HOUSE MISSISSIPPI, LLC ("Licensee") and HARD ROCK CAFE INTERNATIONAL (USA),
INC., a Florida corporation ("Licensor").
WHEREAS, Licensor and Licensee are parties to that certain License
Agreement dated as of November 18, 1998, a copy of which is attached hereto as
Exhibit "A"; and
WHEREAS, Licensor and Licensee wish to modify the License Agreement and
agree to other matters as more particularly set forth herein.
NOW, THEREFORE, in consideration of the foregoing mutual premises
contained herein and other good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, Licensor and Licensee agree as
follows:
1. RECITALS. The foregoing recitals are hereby incorporated by
reference.
2. CONFLICTS. In the event of any conflict or inconsistency between the
terms of this Amendment and the terms of the unamended License Agreement, the
terms of this Amendment shall control.
3. DEFINED TERMS. Unless specifically defined herein, capitalized terms
shall have the meaning ascribed to them in the License Agreement.
4. DEFINITIONS AND INTERPRETATION. Section 1 of the License Agreement
is hereby amended as follows:
A. The definition of "ACHIEVEMENT DATE" is deleted.
B. The definition of "ADJUSTED EBITDA" is deleted.
C. The definition of "COMPETITIVE TERRITORY" in the License
Agreement shall be deleted and, for all purposes under the License Agreement,
"Competitive Territory" shall mean the state of Mississippi.
D. The definition of "EBITDA" is deleted.
E. The definition of "FINANCING RATE" is deleted.
F. The definition of "INVESTMENT AGREEMENT" is deleted.
G. The definition of "LEASE AGREEMENT" is amended to add
Exhibit "X-x" to the definition of the Lease Agreement.
H. The definition of "LICENSING FEE REVENUES" is deleted and
replaced with the following:
"LICENSING FEE REVENUES" shall mean, during the relevant
period, the aggregate of: (a) all revenues, income and
proceeds of any kind from the rental of guest rooms,
conference rooms and meeting rooms at the Hotel/Casino,
excluding any Federal, state and municipal excise, sales,
resort, use and other taxes collected from patrons or guests
as a part of or based upon the sales price of any goods or
services, including, without limitation, gross receipts, room,
bed, admission, cabaret or similar taxes, including, without
limitation, (i) the fair market values of any barter and other
non-cash property and services received as an alternative to
cash payments pursuant to recurring practices that reduce or
offset or substitute for revenues, (ii) the fair value of any
guest rooms offered to guests, customers or clients on a
"complimentary" basis, without charge or for a reduced charge
(other than to Hard Rock executives), whether as part of a
"frequent traveler" program offered by Licensee (except for
programs that grant awards based solely on paid room nights by
a guest at the Hotel/Casino) or for any other reason, (iii)
awards or any other form of incentive payments from any source
whatsoever which are attributable to the rental of guest rooms
the Hotel/Casino, and (b) the proceeds (after deduction from
said proceeds of all necessary expenses incurred in the
adjustment or collection thereof) of business interruption
insurance actually received by Licensee with respect to the
revenue items described in subsection (a) of this definition
with respect to the Project.
Notwithstanding the above, and for the avoidance of doubt, the
parties agree that Licensing Fee Revenues shall not include:
(i) any revenues, receipts and income of any kind received by
Licensee from "gaming" as defined by Miss. Code Xxx.
/section/75- 76-5(l) (as hereafter amended), resulting from
the operation of the Hotel/Casino; (ii) revenues from the
Project's food and beverage operations; (ii) revenues
generated by Licensor at the Hard Rock Cafe and the Hard Rock
Retail Store located at the Project; (iii) revenues from the
parking facility; and (v) revenues from any other ancillary
Project facilities.
I. The definition of "MANAGEMENT AGREEMENT" is deleted.
J. The definition of "MEMORABILIA LEASE" is amended to add the
following at the end of the definition ", except the references to "fifteen
percent (15%)" contained in Section 4(A) thereof shall be changed to "ten
percent (10%)"."
K. The definition of "NET-WIN" is deleted.
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L. The definitions of "OPERATING AGREEMENT" and "OPERATOR" are
hereby deleted.
M. The definitions of "PREFERRED INVESTMENT" and "PRIMARY
DEBT" are deleted.
N. The definitions of "REQUIRED EBITDA"and "TARGET EBITDA" are
deleted.
0. The definition of "TOTAL PROJECT COST" is deleted.
P. Section 1(D) of the License Agreement is deleted.
5. TERM. Section 3(B) of the License Agreement is amended to
delete the last part of the Section commencing with "and (ii) the Continuing
Fees..." through the end of such sentence. Section 3(C) of the License Agreement
is hereby deleted.
6. COMPENSATION TO LICENSOR.
A. Section 4(A)(ii) of the License Agreement is amended to
change "March 31, 1999" to "December 15, 1999".
B. The second sentence of Section 4(A) of the License
Agreement is deleted. "Except as provided in the preceding sentence," is hereby
deleted from the last sentence of Section 4(A) of the License Agreement.
C. Section 4(B) of the License Agreement is amended to change
"five percent (5%)" to "three percent (3%)". Further, the following shall be
added to section 4(B) of the License Agreement: "In no event shall this Section
be construed so as to allow Licensor to share in any revenue generated by the
Licensee's gaming operations at the Hotel/Casino."
D. Section 4(D) of the License Agreement is deleted and
replaced with the following:
ANNUAL FEES. As further consideration for the grant f the
right to use the Licensed Rights as provided herein, Licensee
shall pay Licensor a non-refundable annual fee ("Annual Fee")
in the amount equal to Two Million Five Hundred Thousand
Dollars ($2,500,000.00), Adjusted for Inflation, without
regard to the revenues or financial performance of the
Hotel/Casino. The Annual Fee shall commence on the Opening
Date and continue for each year during the Term. The Annual
Fee shall be payable in equal monthly installments in arrears
within ten (10) days after the end of each calendar month.
E. The following shall be added as Section 5(G) to the License
Agreement:
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OFFSET BY LICENSE. The Lease Agreement requires an Affiliate
of Licensor, Hard Rock Cafe International (STP), Inc.
("HRC-STP) to pay an ongoing rental to Licensee, all as more
particularly described in the License Agreement ("Rental
Payment. In the event HRC-STP does not pay Licensee the Rental
Payment as required by the Lease Agreement, then in such
event, Licensee, in addition to any other remedies it may have
under the Lease Agreement, may offset the unpaid Rental
Payments against the Fees coming due under this License
Agreement.
7. DEVELOPMENT/OPERATION OF HOTEL/CASINO.
A. Section 5(A)(i) of the License Agreement is amended to
delete "as provided in the Management Agreement."
B. Section 5(A)(ii) of the License Agreement is amended to
delete "subject to an aggregate maximum cost of $270,000,000." Further, Section
5(A)(ii) is amended to change "350" to "300" and "500" to "700" in the third
sentence of such subsection.
C. Section 5(P) is amended to delete the last sentence of such
subsection.
8. ADVERTISING. Section 8(F) of the License Agreement is deleted.
9. STANDARDS OF QUALITY AND OPERATION. Section 9(C) of the
License Agreement is amended to delete the first part of the fourth sentence
beginning with 'After the earlier.." through "...equity interests of Operator,".
10. SECTION 12.
A. Section 12(A)(i) of the License Agreement is amended (i) to
delete "detailed"and insert in place thereof "preliminary" and (ii) to delete
"Total Revenues and".
B. Section 12(A)(ii) of the License Agreement is amended to
delete "and (F)" in the last line of such subsection.
C. Section 12(E) of the License Agreement is amended to add
"as it relates to documenting Licensing Fee Revenues" after "Hotel/Casino".
11. TERMINATION.
A. Section 14(A)(7) of the License Agreement is amended to
delete "the Management Agreement".
B. Section 14(B)(4)(a) of the License Agreement is deleted.
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12. NON-COMPETITION. Section 17(B) of the License Agreement is
amended to delete the second paragraph.
13. SECTION 21. Section 21 of the License Agreement is deleted.
14. SECTION 22.
A. Section 22(A) of the License Agreement is amended to delete
"the Management Agreement, the Operating Agreement, the Investment Agreement,"
from the first sentence of such Section, and add 'the Termination Agreement
between the parties dated as of the date of this Amendment' in place thereof.
B. Section 22(B) is amended to change Licensor's notice
address to:
Hard-Rock Cafe International (USA), Inc.
0000 Xxx Xxxx Xxxx
Xxxxxxx, XX 00000
Telephone No.: (000)-000-0000
Facsimile No.: (000) 000-0000
Attention: General Counsel
C. Section 22(M) of the License Agreement is deleted and
replaced with the following:
(M) INFLATION ADJUSTMENT. Whenever any provision of this
Agreement or the Exhibits hereto requires that an amount be
Adjusted for Inflation, such adjustment shall be based upon
the "Inflation Index" (as defined below). Adjustments of
amounts required to be Adjusted for Inflation under this
Agreement shall be made every five (5) years on the
anniversary date of this Agreement and shall be determined by
multiplying the amount which is the subject of the escalation
by a fraction the denominator of which is the "Inflation
Index" for November 1999 (the "BASE MONTH"), and the numerator
of which is the "Inflation Index" for the month immediately
prior to the adjustment date (the "ADJUSTMENT MONTH"),
provided that if the percentage change from the Base Month to
the Adjustment Month is negative, no adjustment shall be made
hereunder. Notwithstanding the above, the adjustments provided
for above shall not exceed an annualized rate of two and
one-half percent (2.5%) on a cumulative basis for the first
five (5) years of the term of this Agreement and thereafter
shall not exceed an annualized rate of three percent (3%) on a
cumulative basis.
For purposes of this paragraph, the Inflation Index shall mean
the U.S. City Average Price Index for All Urban Consumers for
All Items (Base Year 1982
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-1984) as published by the United States Department of Labor,
Bureau of Labor Statistics; provided that if such index is
discontinued or is unavailable, then the parties will
substitute therefor a comparable index for use in calculating
changes in the cost of living or purchasing power of consumers
published by any other governmental agency, major bank,
financial institution or university or by another recognized
financial publication, with such adjustments as shall be
reasonably necessary to produce substantially the same results
as would have been obtained under the unavailable index.
D. Section 22(U) of the License Agreement is amended to change
"Florida" to "Nevada".
The following Sections shall be agreements between the parties on matters other
than the amendment of the License Agreement:
15. FRANCHISE LAWS. Licensee and/or its Affiliates and/or its
principals are sophisticated entities engaged in the business of operating
hotels and/or casinos throughout the United States and have significant
experience in the business of developing and operating hotels and/or casinos.
Licensee and its Affiliates shall not initiate any claim or proceeding or take
any action under, or with respect to, the franchise laws or regulations of any
jurisdiction, with respect to the negotiation, execution delivery and
performance of the License Agreement and this Amendment and the consummation of
the transactions contemplated thereby. It is the intention of Licensor and
Licensee that the negotiation execution, delivery and performance of the License
Agreement as modified by this Amendment and the consummation of the transaction
not trigger or be subject to the franchise laws and regulations of any
jurisdiction, and benefits of the protection of any such laws is hereby
expressly waived by Licensee.
16. RELEASES.
A. Licensee and its Affiliates (including, but not limited to,
Full House Resorts, Xxxxx X. Xxxxxxx, AEP & FHR, LLC), do hereby release, remise
and forever discharge Licensor and its Affiliates (including, but not limited
to, Hard Rock Cafe International (STP), Inc.), and each of their respective
stockholders, members, directors, officers, employees and agents (the "Hard Rock
Releasees"), from any and all claims, causes of action, controversies, damages,
debts, demands, disputes, liabilities, settlements, or understandings,
whatsoever, known or unknown, which such parties, or any of them, have as of the
date of this Amendment against the Hard Rock Releasees arising out of or
relating to the License Agreement, including any claims under applicable
franchise laws. Notwithstanding the foregoing, the obligations of the Hard Rock
Releasees to Licensee and its Affiliates under the terms and conditions of the
License Agreement (as amended by this Amendment), the agreements contained in
Sections 15-18 hereof, and the Termination Agreement between the parties dated
of even date hereof shall continue in full force and effect from and after the
date hereof.
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B. Licensor and its Affiliates, (including, but not limited
to, Hard Rock Cafe International (STP), Inc.) do hereby release, remise and
forever discharge Licensee and its Affiliates (including, but not limited to,
Full House Resorts, Xxxxx X. Xxxxxxx, AEP & FHR, LLC), and each of their
respective stockholders, members, directors, officers, employees and agents (the
"Full House Releasees"), from any and all claims, causes of action,
controversies, covenants, damages, debts (excluding the unpaid Territory Fee),
demands, disputes, settlements, or understandings, whatsoever, know or unknown,
which the such parties, or any of them, have as of the date of this Amendment
against the Full House Releasees arising out of or relating to the License
Agreement. Notwithstanding the foregoing, the obligations of the Full House
Releasees to Licensor and its Affiliates under the terms and conditions of the
License Agreement (as amended by this Amendment), the agreements contained in
Sections IS- 1 8 hereof, and the Termination Agreement between the parties dated
of even date hereof shall continue in full force and effect from and after the
date hereof.
17. RATIFICATION. The License Agreement as modified by this
Amendment is hereby ratified and confirmed, and as of the date hereof the
License Agreement is in full force and effect. All provisions of the License
Agreement not specifically modified herein remain in full force and effect.
18. COUNTERPARTS. This Amendment may be executed in any number of
counterparts, each of which shall be an original as against any party whose
signature appears thereon, and all of which shall constitute one and the same
agreement.
IN WITNESS WHEREOF, Licensor and Licensee have executed this Amendment
as of the date and year first above written.
[SIGNATURES ON FOLLOWING PAGE)
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LICENSOR
HARD ROCK CAFE INTERNATIONAL
(USA), INC.
By:_____________________________________________
Name:___________________________________________
Its:____________________________________________
LICENSEE
FULL HOUSE MISSISSIPPI, LLC
By: AEP & FHR LLC, its sole member
By: Full House Resorts, Inc., a member
By: /s/ XXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: President
By: Xxxxx X. Xxxxxxx, a member
/s/ XXXXX X. XXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxx
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The foregoing parties are executing this Amendment for the sole purpose
of acknowledging and agreeing to the releases provided in Section 16 of this
Amendment.
HARD ROCK CAFE INTERNATIONAL (STP), INC.
By:_____________________________________________
Name:___________________________________________
Its:____________________________________________
FULL HOUSE RESORTS, INC.
By: /s/ XXXXX X. XXXXXXXX
------------------------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: President
/s/ XXXXX X. XXXXXXX
------------------------------------------------
Xxxxx X. Xxxxxxx
AEP & FHR LLC
By: Full House Resorts, Inc., a member
By: /s/ XXXXX X. XXXXXXXX
---------------------------------
Name: Xxxxx X. Xxxxxxxx
Its: President
By: Xxxxx X. Xxxxxxx, a member
/s/ XXXXX X. XXXXXXX
---------------------------------------
Xxxxx X. Xxxxxxx
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