MAKE WELL AGREEMENT
This Make Well Agreement (this "Agreement") dated as of March 23, 1998, is
entered into by Xxxxx X. Xxxxxx ("Xxxxxx") in favor of Bank of America National
Trust and Savings Association, as Administrative Agent under the Loan Agreement
described below, and for the benefit of the Lenders party to the Loan Agreement
from time to time. The parties hereto agree with reference to the following
facts:
RECITALS
A. Concurrently herewith, the Administrative Agent is entering into a
Loan Agreement of even date herewith (the "Loan Agreement") with Hard Rock
Hotel, Inc., a Nevada corporation ("Borrower"), pursuant to which Bank of
America National Trust and Savings Association and each Lender which may
hereafter become a party to such Loan Agreement will make Loans to
Borrower. The initial amount of the lending commitment under the loan
agreement is $67,000,000.
B. Borrower has agreed to use the Loans under the Loan Agreement for the
purposes described in Section 5.9 thereof, including financing for the
construction of the Proposed Expansion described below.
X. Xxxxxx is executing this Agreement to induce the Lenders to make Loans
to Borrower under the Loan Agreement.
NOW THEREFORE, Xxxxxx hereby agrees as follows:
1. DEFINITIONS. This is the Make Well Agreement referred to in the Loan
Agreement and is one of the Loan Documents referred to therein. Capitalized
terms used but not defined in this Agreement are used with the meanings set
forth for those terms in the Loan Agreement as in effect on the date hereof, and
as amended by any amendments consented to by Xxxxxx in writing. In addition,
the following terms are used with the meanings set forth after each:
"ADDITIONAL CONTRIBUTIONS" means amounts paid to Borrower by Xxxxxx in cash
in the form (at Xxxxxx'x discretion) of either (a) preferred stock of
Borrower having the characteristics described on Exhibit A hereto, or (ii)
junior subordinated Indebtedness of Borrower of the type described in
Section 6.10(g) of the Loan Agreement, PROVIDED that such Indebtedness may
be incurred by Borrower only if Borrower is unable to obtain approval from
the appropriate Gaming Authorities for the issuance of the preferred stock
contemplated by clause (a), or (c) both of the foregoing (without
duplication).
-1-
"BENEFICIARIES" means the Administrative Agent and the other Creditors
under the Loan Agreement.
"COMPLETION GUARANTY" means the Completion Guaranty of even date herewith
executed by Xxxxxx in favor of the Administrative Agent, for the benefit of
the Lenders and Trustee, for the benefit of the holders of the notes under
the Indenture referred to in the Loan Agreement.
"INSOLVENCY PROCEEDING" means a proceeding under any Debtor Relief Law,
including without limitation any bankruptcy or other voluntary or
involuntary proceeding, in or out of court, for the adjustment of debtor-
creditor relationships.
"LOANS" means, collectively, any cash loans made to Borrower pursuant to
the Loan Agreement, together with any letters of credit and other credit
accommodations granted to Borrower by the Administrative Agent or any
Lender pursuant to the terms of the Loan Documents.
"MAKE WELL PERIOD" means the period from (a) the earlier of August 1, 1999
as such date may be extended with the written approval of the Lenders or
the termination of the Completion Guaranty in accordance with its terms,
through (b) the Release Date.
"OBLIGATIONS" means, collectively, the obligations and indebtedness of
Borrower to the Beneficiaries under the Loan Agreement and the Loan
Documents referred to therein.
"PRO FORMA EFFECT" means, in relation to any Default or Event of Default as
of a particular date of determination under:
(a) the Senior Leverage Ratio covenant contained in Section 6.12 of
the Loan Agreement, that the Additional Contributions made hereunder
are in an amount which is adequate, when subtracted from the numerator
of the Senior Leverage Ratio, to cause Borrower to be in pro forma
compliance with the Senior Leverage Ratio as of such date; and
(b) the Fixed Charge Coverage Ratio covenant contained in Section
6.13 of the Loan Agreement, that the Additional Contributions made
hereunder are in an amount which is adequate, when added to the
numerator of the Fixed Charge Coverage Ratio, to cause Borrower to be
in pro forma compliance with the Fixed Charge Coverage Ratio as of
such date.
"PROPOSED EXPANSION" has the meaning set forth in the Loan Agreement as of
the date hereof, together with any changes consented to by Xxxxxx.
-2-
"RELEASE DATE" means the date (which must be a date which is not less than
one full Fiscal Quarter following the Opening of the Proposed Expansion)
upon which each of the following has occurred:
(a) Borrower has delivered a Compliance Certificate under the
Loan Agreement demonstrating to the reasonable satisfaction of the
Administrative Agent that it has achieved, as a Total Leverage Ratio
not greater than 5.55:1.00 as of the last day of such a Fiscal
Quarter;
(b) Borrower has delivered to the Administrative Agent
projections in form, detail and substance reasonably acceptable to the
Administrative Agent demonstrating that the Total Leverage Ratio for
each fiscal quarter in the one year period following the proposed
release date will not exceed 5.55:1.00 (it being understood that such
projections shall not constitute a representation or warranty of the
future financial performance of Borrower, but rather the best estimate
of the senior management of Borrower of probable performance, and
subject to the uncertainty inherent in all financial forecasts);
(c) Concurrently with the delivery of such Compliance
Certificate and projections, Xxxxxx (or Borrower on his behalf) has
requested the release of this Agreement in writing;
(d) The Administrative Agent has delivered such Compliance
Certificate, projections and written release request to the Lenders,
and the Requisite Lenders have not objected thereto (on the basis that
they are in some manner not in conformity with the requirements of
this Section) within five Banking Days of their receipt of such
materials;
(e) As of the date of the delivery of such Compliance
Certificate and projections to the Administrative Agent, and as of the
Release Date, no Default or Event of Default has occurred and remains
continuing; and
(f) The Administrative Agent has notified Xxxxxx and the Lenders
of the date which is the Release Date (which the Administrative Agent
hereby agrees to do if the foregoing conditions are completed in
accordance with this Section).
The determination by the Administrative Agent of the Release Date shall be
presumed correct in the absence of manifest error.
"SUBJECT PROPERTY" means the Property subject to the Deed of Trust
described in the Loan Agreement.
-3-
2. MAKE WELL AGREEMENT. Subject to the terms and conditions hereof,
Xxxxxx hereby absolutely, irrevocably and unconditionally agrees in favor of the
Beneficiaries that:
(a) If at any time and from time to time during the Make Well Period,
Borrower fails to comply with the covenants contained in Sections 6.12 or
6.13 of the Loan Agreement, Xxxxxx shall make Additional Contributions to
Borrower in Cash in the amount which are required, after giving PRO Forma
EFFECT to the making of such Additional Contributions, to cause Borrower to
be in compliance with the covenants contained in those Sections. Borrower
is an intended third party beneficiary of this Agreement, but this
Agreement may be amended or waived by the Administrative Agent (acting with
the consent of the Lenders pursuant to Section 11.2 of the Loan Agreement)
without the approval of Borrower.
(b) Xxxxxx shall make such Additional Contributions no later than
10 Banking Days after (i) the date on which Borrower delivers a Compliance
Certificate pursuant to Section 7.2 of the Loan Agreement demonstrating
Borrower's failure to comply with such Sections or, (ii) if Borrower fails
to deliver a Compliance Certificate by the date required pursuant to
Section 7.2 of the Loan Agreement (or delivers a Compliance Certificate
which is incorrect), on the date upon which Administrative Agent or the
Requisite Lenders determine that the covenants contained in Section 6.12 or
6.13 have not been complied with (which determination shall be presumed
correct unless and until Xxxxxx demonstrates the inaccuracy thereof) and
notify Xxxxxx of the same. If Xxxxxx fails to make Additional
Contributions on the date required, interest shall accrue on the amount of
Additional Contributions at a rate per annum equal to the interest rate set
forth in the Loan Agreement for Base Rate Loans until such Additional
Contributions are made to Borrower; provided that all such interest accrued
to the date such Additional Contributions are made shall be paid to
Borrower together therewith and shall be treated as a cash contribution to
Borrower in exchange for equity of Borrower or subordinated indebtedness
or, without duplication, both.
(c) Borrower agrees to accept Additional Contributions made by Xxxxxx
in the form of preferred stock as described on Exhibit A or (if investments
by means of preferred stock are then prohibited in the manner set forth in
the definition of Additional Contributions), in the form of junior
subordinated indebtedness, and to do all acts and things necessary to
accomplish the purposes of this clause (c).
(d) This is a continuing agreement, and no Additional Contributions
made in respect of any particular Default or Event of Default under
Sections 6.12 or 6.13 of the Loan Agreement shall be construed to have
applicability to any subsequent Default or Event of Default under those
Sections, PROVIDED that in the event that Borrower is in default of its
obligations under both such Sections as of any date of determination, the
-4-
Additional Contributions made by Xxxxxx in relation to either such default
shall (to the extent that they are adequate to cause PRO FORMA EFFECT
compliance), be construed to be applicable to both such defaults to the
extent that both such defaults are thereby cured.
3. NEGATIVE PLEDGE. Xxxxxx hereby represents and warrants that he has
caused applications to be submitted to the Nevada Gaming Commission seeking all
required governmental approvals to grant a Negative Pledge to the Banks with
respect to his direct and indirect interest in the equity capital of Borrower
and Lily Pond Investments, Inc. (the "Securities") which constitute not less
than 90% of the equity capital thereof), and that until the Release Date, he
shall diligently pursue such approvals by appropriate proceedings. Within five
Banking Days following the granting of all required approvals by the Nevada
Gaming Commission, Xxxxxx agrees that he shall execute and deliver to the
Administrative Agent (and shall cause any Person then owning any of the
Securities to so execute and deliver) a written agreement in the form of Exhibit
B hereto to the Administrative Agent, granting a Negative Pledge to the
Administrative Agent in the Securities, PROVIDED that such agreement will
provide for the termination of the Negative Pledge upon the Release Date.
4. RIGHTS OF THE BENEFICIARIES. Xxxxxx authorizes the Beneficiaries to
perform any or all of the following acts at any time in their sole discretion,
all without notice to Xxxxxx and without affecting Xxxxxx'x obligations under
this Agreement:
(a) The Beneficiaries may alter any terms of any of the Loan
Documents to which Xxxxxx is not a party, including renewing, compromising,
extending or accelerating, or otherwise changing the time for payment of,
or increasing or decreasing the rate of interest on, the Obligations or any
part of them PROVIDED that no alteration of the terms of Section 6.12
or 6.13 of the Loan Agreement, or their constituent definitions, which is
not consented to by Xxxxxx shall result in an increase in the obligations
of Xxxxxx hereunder.
(b) The Beneficiaries may take and hold security for the Obligations
or this Agreement, accept additional or substituted security for either,
and subordinate, exchange, enforce, waive, release, compromise, fail to
perfect and sell or otherwise dispose of any such security.
(c) The Beneficiaries may direct the order and manner of any sale of
all or any part of any security now or later to be held for the Obligations
or this Agreement, and may also bid at any such sale.
(d) The Beneficiaries may apply any payments or recoveries from
Borrower, Xxxxxx or any other source, and any proceeds of any security, to
the Obligations in such manner, order and priority as they may elect,
whether or not those obligations are guarantied by this Agreement or
secured at the time of the application.
-5-
(e) The Beneficiaries may release Borrower or any other Person from
the portion of the Obligations held by them or any portion of them or any
guaranty thereof.
(f) The Beneficiaries may substitute, add or release any one or more
guarantors or endorsers.
(g) The Beneficiaries may extend other credit to Borrower in addition
to the Obligations, and may take and hold security for the credit so
extended, all without affecting Xxxxxx'x liability under this Agreement.
(h) The Administrative Agent and the Lenders may change the terms or
conditions of disbursement of the Loans in accordance with the terms of the
Loan Agreement.
5. AGREEMENT ABSOLUTE. Xxxxxx agrees that until the Release Date, Xxxxxx
shall not be released by or because of:
(a) Any act or event which might otherwise discharge, reduce, limit
or modify Xxxxxx'x obligations under this Agreement;
(b) Any waiver, extension, modification, forbearance, delay or other
act or omission of the Beneficiaries, or any failure to proceed promptly or
otherwise as against Borrower, Xxxxxx or any security or guarantor;
(c) Any action, omission or circumstance which might increase the
likelihood that Xxxxxx may be called upon to perform under this Agreement
or which might affect the rights or remedies of Xxxxxx as against Borrower;
or
(d) Any dealings occurring at any time between Borrower and the
Beneficiaries, whether relating to the Obligations or otherwise.
Xxxxxx hereby expressly waives and surrenders any defense to his liability
under this Agreement based upon any of the foregoing acts, omissions,
agreements, waivers or matters. It is the purpose and intent of this Agreement
that the obligations of Xxxxxx under it shall be absolute and unconditional
under any and all circumstances.
6. XXXXXX'X WAIVERS. Xxxxxx waives:
(a) All statutes of limitations as a defense to any action or
proceeding brought against Xxxxxx by the Beneficiaries, or either of them,
to the fullest extent permitted by Law;
-6-
(b) Any right he may have to require the Beneficiaries to proceed
against Borrower, proceed against or exhaust any security held from
Borrower, or pursue any other remedy in their power to pursue;
(c) Any defense based on any claim that Xxxxxx'x obligations exceed
or are more burdensome than those of Borrower;
(d) Any defense based on: (i) any legal disability of Borrower, (ii)
any release, discharge, modification, impairment or limitation of the
liability of Borrower under the Loan Documents from any cause, whether
consented to by the Beneficiaries or arising by operation of Law or from an
Insolvency Proceeding, (iii) any rejection or disaffirmance of the
Obligations or any security held for the Obligations, in any such
Insolvency Proceeding and (iv) Xxxxxx'x rights under Nevada Revised
Statutes ("NRS") 104.3605, Xxxxxx specifically agreeing that this clause
(iv) shall constitute a waiver of discharge under NRS 104.3605;
(e) Any defense based on any action taken or omitted by the
Beneficiaries in any Insolvency Proceeding involving Borrower, including
any election to have a claim allowed as being secured, partially secured or
unsecured, any extension of credit by the Beneficiaries, or any of them, to
Borrower in any Insolvency Proceeding, and the taking and holding by the
Beneficiaries of any security for any such extension of credit;
(f) All presentments, demands for performance, notices of
nonperformance, protests, notices of protest, notices of dishonor, notices
of acceptance of this Agreement and of the existence, creation, or
incurring of new or additional indebtedness, and demands and notices of
every kind except for any demand or notice expressly provided for in this
Agreement;
(g) Any defense based on or arising out of any defense that Borrower
may have to the payment or performance of the Obligations or any portion of
the Obligations; and
(h) Any defense or benefit based on NRS 40.430 and judicial decisions
relating thereto and NRS 40.451 ET SEQ. and judicial decisions relating
thereto (to the fullest extent that the same may be waived under the NRS),
Xxxxxx agreeing that the waiver in this paragraph (h) is intended to take
advantage of the two waivers permitted by NRS 40.495 to the maximum extent
permitted.
-7-
7. SUBROGATION AND OTHER RIGHTS.
(a) Upon the occurrence of any Event of Default, the Beneficiaries
may, in their sole discretion, without prior notice to or consent of
Xxxxxx: (i) foreclose either judicially or nonjudicially against any real
or personal property security for the Obligations, (ii) accept a transfer
of any such security in lieu of foreclosure, (iii) compromise or adjust the
Obligations or any part thereof or make any other accommodation with
Borrower or Xxxxxx, or (iv) exercise any other remedy against Borrower or
any security. No such action by the Beneficiaries shall release or limit
the liability of Xxxxxx, who shall remain liable under this Agreement after
the action, even if the effect of the action is to deprive Xxxxxx of any
subrogation rights, rights of indemnity, or other rights to collect
reimbursement from Borrower for any sums paid to the Beneficiaries, whether
contractual or arising by operation of Law or otherwise. Xxxxxx expressly
agrees that under no circumstances shall it be deemed to have any right,
title, interest or claim in or to any real or personal property to be held
by the Beneficiaries or any third party after any foreclosure or transfer
in lieu of foreclosure of any security for the Obligations.
(b) Regardless of whether Xxxxxx may have made any payments to the
Beneficiaries, Xxxxxx hereby defers and subordinates, until all obligations
and indebtedness of Borrower to the Beneficiaries are paid in full and in
cash: (i) all rights of subrogation, all rights of indemnity, and any other
rights to collect reimbursement from Borrower for any sums paid to the
Beneficiaries, whether contractual or arising by operation of Law
(including the United States Bankruptcy Code or any successor or similar
statute) or otherwise, (ii) all rights to enforce any remedy that the
Beneficiaries may have against Borrower, and (iii) all rights to
participate in any security now or later to be held by the Beneficiaries.
(c) Xxxxxx understands and acknowledges that if the Beneficiaries
foreclose judicially or nonjudicially against any real property security
for the Obligations, that foreclosure could impair or destroy any ability
that Xxxxxx may have to seek reimbursement, contribution or indemnification
from Borrower or others based on any right Xxxxxx may have of subrogation,
reimbursement, contribution or indemnification for any amounts paid by
Xxxxxx under this Agreement. Xxxxxx further understands and acknowledges
that in the absence of this Section 7, such potential impairment or
destruction of Xxxxxx'x rights, if any, may entitle Xxxxxx to assert a
defense to this Agreement. By executing this Agreement, Xxxxxx freely,
irrevocably and unconditionally: (i) waives and relinquishes that defense
and agrees that Xxxxxx will be fully liable under this Agreement even
though the Beneficiaries may foreclose judicially or nonjudicially against
any real property security for the Obligations; (ii) agrees that Xxxxxx
will not assert that defense in any action or proceeding which the
Beneficiaries
-8-
may commence to enforce this Agreement; and (iii) acknowledges and
agrees that the Beneficiaries are relying on this waiver in making
the Obligations, and that this waiver is a material part of the
consideration which they are receiving for making the Obligations.
8. REVIVAL AND REINSTATEMENT. If the Lenders are required to pay, return
or restore to Borrower or any other person any amounts previously paid on the
Obligations because of any Insolvency Proceeding of Borrower, any stop notice or
any other reason, the obligations of Xxxxxx shall be reinstated and revived and
the rights of the Beneficiaries shall continue with regard to such amounts, all
as though they had never been paid.
9. INFORMATION REGARDING BORROWER AND THE SUBJECT PROPERTY. Before
signing this Agreement, Xxxxxx investigated the financial condition and business
operations of Borrower, the present and former condition, uses and ownership of
the Subject Property, and such other matters as Xxxxxx deemed appropriate to
assure himself of Borrower's ability to discharge its obligations under the Loan
Documents. Xxxxxx assumes full responsibility for that due diligence, as well
as for keeping informed of all matters which may affect Borrower's ability to
pay and perform its obligations to the Beneficiaries. The Beneficiaries have no
duty to disclose to Xxxxxx any information which they may have or receive about
Borrower's financial condition or business operations, the condition or uses of
the Subject Property, or any other circumstances bearing on Borrower's ability
to perform its obligations to the Beneficiaries.
10. SUBORDINATION. All rights of Xxxxxx, whether now existing or later
arising, to receive payment on account of any Additional Contributions made
hereunder, and any dividends, interest or other amounts payable by reason
thereof, shall at all times be subordinate as to lien and right of payment and
in all other respects to the full and prior repayment of the Obligations.
Xxxxxx shall not be entitled to enforce or receive payment of any sums hereby
subordinated until the Obligations have been paid and performed in full and any
such sums received in violation of this Agreement shall be received by Xxxxxx in
trust for the Lenders.
11. FINANCIAL INFORMATION. Within ninety days after the end of each
calendar year, Xxxxxx shall deliver to the Administrative Agent a personal
financial statement, including a balance sheet and statement of cash flows as of
the last day of such calendar year and for the year then ended and a Liquidity
Report in the form described in the Loan Agreement as of the date hereof. The
Administrative Agent is authorized to distribute the Liquidity Reports to the
Lenders but shall retain the confidentiality of the annual financial report in
accordance with Section 11.14 of the Loan Agreement (but is authorized to
describe any discrepancies between the Liquidity Report and such financial
statements to the Lenders, without any liability for any failure to do so).
Xxxxxx shall promptly provide the Administrative Agent with such other
information concerning his affairs and properties as the Administrative Agent
may reasonably request.
12. XXXXXX'X REPRESENTATIONS AND WARRANTIES. Xxxxxx represents and
warrants that:
-9-
(a) This agreement is the valid and binding obligation of Xxxxxx,
enforceable in accordance with its terms.
(b) All financial statements and other financial information
furnished or to be furnished to the Administrative Agent or the Lenders by
Xxxxxx are true and correct in all material respects and fairly represent
the financial condition of Xxxxxx (including all contingent liabilities);
(c) There has been no material adverse change in Xxxxxx'x financial
condition since the dates of the statements most recently furnished to the
Administrative Agent;
(d) The execution, delivery and performance of this Agreement do not
and will not (i) constitute a default or cause an acceleration of any
obligation under, or result in the imposition or creation of (or the
obligation to create or impose) any Lien with respect to, any material
bond, note, debenture or other evidence of Indebtedness or any indenture,
mortgage, deed of trust or other agreement or instrument to which Xxxxxx is
a party or bound, or to which any properties of Xxxxxx may be subject,
(ii) contravene any order of any court or governmental agency (including,
without limitation, any gaming authority in any state of the United States
or foreign country or body having jurisdiction over Xxxxxx or any of his
properties), or (iii) violate or conflict with any statute, rule or
regulation or administrative or court decree applicable to Xxxxxx or any of
his properties may be subject.
13. EVENTS OF DEFAULT. The Beneficiaries may declare Xxxxxx to be in
default under this Agreement upon the occurrence of any of the following events
("Events of Default"):
(a) Xxxxxx fails to perform any of his obligations under this
Agreement; or
(b) Xxxxxx purports to revoke or rescind this Agreement, denies his
continuing liability hereunder, or fails to reaffirm his obligations
hereunder in writing within five days following a written request to do so
by either Beneficiary; or
(c) Any representation or warranty made or given by Xxxxxx to the
Beneficiaries proves to be false or misleading in any material respect as
of the date when made or reaffirmed; or
(d) Xxxxxx becomes insolvent or the subject of any Insolvency
Proceeding; or
(e) Xxxxxx dies or is declared incompetent by a court of competent
jurisdiction;
-10-
and, in any such case, the Administrative Agent shall be entitled to exercise
all remedies provided hereby.
14. REFERENCE AND ARBITRATION.
(a) JUDICIAL REFERENCE. In any judicial action between or among the
parties, including any action or cause of action arising out of or relating
to this Agreement (including without limitation those based on or arising
from an alleged tort), all decisions of fact and Law shall at the request
of any party be referred to a referee. The parties shall designate to the
court a referee or referee selected under the auspices of the American
Arbitration Association ("AAA") in the same manner as arbitrators are
selected in AAA-sponsored proceedings. The presiding referee of the panel,
or the referee if there is a single referee, shall be an active attorney or
retired judge. Judgment upon the award rendered by such referee or
referees shall be entered in the court in which such proceeding was
commenced.
(b) MANDATORY ARBITRATION. Any controversy or claim between or among
the parties, including those arising out of or relating to this Agreement
and any claim based on or arising from an alleged tort, shall at the
request of any party be determined by arbitration, PROVIDED THAT this
Section shall not limit the right of the Beneficiaries to proceed
judicially to foreclosure under any document providing collateral security
to them. The arbitration shall be conducted in accordance with the United
States Arbitration Act (Title 9, U.S. Code), notwithstanding any choice of
Law provision in this Agreement, and under the Commercial Rules of the AAA.
The arbitrators shall give effect to statutes of limitation in determining
any claim. Any controversy concerning whether an issue is arbitrable shall
be determined by the arbitrators. Judgment upon the arbitration award may
be entered in any court having jurisdiction. The institution and
maintenance of an action for judicial relief or pursuit of a provisional
or-ancillary remedy shall not constitute a waiver of the right of any
party, including the plaintiffs, to submit the controversy or claim to
arbitration if any other party contests such action for judicial relief.
(c) REAL PROPERTY COLLATERAL. Notwithstanding the provisions of
Section 14(b), no controversy or claim shall be submitted to arbitration
without the consent of all parties if, at the time of the proposed
submission, such controversy or claim arises from or relates to an
obligation of Xxxxxx or Borrower to the Beneficiaries which is secured by
real property collateral. If all parties do not consent to submission of
such a controversy or claim to arbitration, the controversy or claim shall
be determined by reference as provided in Section 14(a).
(d) PROVISIONAL REMEDIES, SELF-HELP AND FORECLOSURE. No provision of
this Section 14 shall limit the right of any party to exercise self-help
remedies such as setoff,
-11-
foreclosure against or sale of any real or personal property collateral
or security, or to obtain provisional or ancillary remedies from a court
of competent jurisdiction before, after, or during the pendency of any
arbitration or other proceeding. The exercise of a remedy does not waive
the right of either party to resort to arbitration or reference. At the
relevant Beneficiary's option, foreclosure under a deed of trust or
mortgage may be accomplished either by exercise of power of sale under
the deed of trust or mortgage or by judicial foreclosure.
15. ADDITIONAL AND INDEPENDENT OBLIGATION. Xxxxxx'x obligations under
this Agreement are in addition to his obligations under the Completion Guaranty
and any future agreements which may be entered into among Xxxxxx and either
Beneficiary. Xxxxxx'x obligations under this Agreement are independent of those
of Borrower under the Loan Agreement, the other Loan Documents. The
Beneficiaries may bring a separate action, or commence a separate reference or
arbitration proceeding against Xxxxxx without first proceeding against Borrower,
any other person or any security that the Beneficiaries may hold, and without
pursuing any other remedy. The rights under this Agreement shall not be
exhausted by any action by the Beneficiaries until the Obligations have been
paid and performed in full or this Agreement is terminated in accordance with
its terms.
16. NO WAIVER; CONSENTS; CUMULATIVE REMEDIES. Each waiver by the
Beneficiaries must be in writing, and no waiver shall be construed as a
continuing waiver. No waiver shall be implied from any delay by the
Beneficiaries in exercising or failure to exercise any right or remedy against
Borrower, Xxxxxx or any security. Consent by the Beneficiaries to any act or
omission by Borrower or Xxxxxx shall not be construed as a consent to any other
or subsequent act or omission, or as a waiver of the requirement for their
consent to be obtained in any future or other instance. All remedies of the
Beneficiaries against Borrower and Xxxxxx are cumulative.
17. SUCCESSORS AND ASSIGNS; PARTICIPATIONS. The terms of this Agreement
shall bind and benefit the legal representatives, successors and assigns of the
Beneficiaries and Xxxxxx; provided, however, that Xxxxxx may not assign this
Agreement, or assign or delegate any of his rights or obligations under this
Agreement, without the prior written consent of the Beneficiaries in each
instance. The Beneficiaries may sell or assign participations or other
interests in the Obligations and their respective rights under this Agreement,
in whole or in part, all without notice to or the consent of Xxxxxx and without
affecting Xxxxxx'x obligations under this Agreement. Without notice to or the
consent of Xxxxxx, the Beneficiaries may disclose any and all information in
their possession concerning Xxxxxx, this Agreement and any security for this
Agreement to any actual or prospective purchaser of the Obligations or their
rights hereunder or to any participant therein (provided in each case that such
disclosure is subject to a written confidentiality agreement).
-12-
18. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the local Laws of the State of Nevada without reference to the
conflicts of laws or choice of laws provisions thereof.
19. COSTS AND EXPENSES. If any lawsuit, reference or arbitration is
commenced which arises out of, or which relates to this Agreement, the
prevailing party shall be entitled to recover from each other party such sums as
the court, referee or arbitrator may adjudge to be reasonable attorneys' fees
(including reasonably allocated costs for services of in-house counsel of the
Administrative Agent) in the action or proceeding, in addition to costs and
expenses otherwise allowed by Law. In all other situations, including any
Insolvency Proceeding, Xxxxxx agrees to pay all of the Beneficiaries' reasonable
costs and expenses, including reasonable attorneys' fees (including reasonably
allocated costs for services of their respective in-house counsel of the
Administrative Agent) which may be incurred in any effort to collect or enforce
the terms of this Agreement. From the time incurred until paid in full, all
sums shall bear interest at the Default Rate.
20. CONSIDERATION. Xxxxxx acknowledges that it expects to benefit from
the extension of the Obligations to Borrower because of his relationship to
Borrower, and that it is executing this Agreement in consideration of that
anticipated benefit.
21. INTEGRATION; MODIFICATIONS. This Agreement (a) integrates all the
terms and conditions mentioned in or incidental to this Agreement, (b)
supersedes all oral negotiations and prior writings with respect to its subject
matter, and (c) is intended by Xxxxxx and the Beneficiaries as the final
expression of the agreement with respect to the terms and conditions set forth
in this Agreement and as the complete and exclusive statement of the terms
agreed to by Xxxxxx and the Beneficiaries with respect to the subject matter of
this Agreement. No representation, understanding, promise or condition shall be
enforceable against any party unless it is contained in this Agreement.
22. WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT HEREBY
EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR
RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTY HERETO OR ANY OF THEM WITH
RESPECT TO THE THIS AGREEMENT, THE LOAN AGREEMENT AND ANY OTHER LOAN DOCUMENT,
OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR
HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR OTHERWISE; AND
EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND, ACTION OR
CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY
PARTY TO THIS AGREEMENT MAY FILE ORIGINAL COUNTERPART OR A COPY OF THIS SECTION
WITH ANY
-13-
COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO
THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
23. NOTICES. Notices hereunder shall be in writing and shall be delivered
in the manner prescribed for notices in the Loan Agreement to the address for
each party set forth in the signature pages to this Agreement.
24. MISCELLANEOUS. The illegality or unenforceability of one or more
provisions of this Agreement shall not affect any other provision.
25. TIME OF THE ESSENCE. Time is of the essence of this Agreement.
IN WITNESS WHEREOF, Xxxxxx has executed this Agreement as of the date first
written above.
/s/ Xxxxx X. Xxxxxx
------------------------------------
Xxxxx X. Xxxxxx, an individual
Address for Notices
Hard Rock Hotel and Casino
--------------------------------------------------
000 X. Xxxxxxxxx Xxxx.
--------------------------------------------------
Xxx Xxxxxxx, XX 00000
--------------------------------------------------
Telephone (000) 000-0000
----------------------------------------
Telecopier (000) 000-0000
----------------------------------------
Accepted:
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as
Administrative Agent
By: /s/ Xxxxx Xxxxx
-------------------------------
Title: Vice President
----------------------------
Address for Notices:
000 X. Xxxxxx Xx.
--------------------------------------
Xxx Xxxxxxx, XX 00000
--------------------------------------
--------------------------------------
Telephone (000) 000-0000
---------------------------
Telecopier (000) 000-0000
---------------------------
-14-
By executing this Agreement in the space
provided below, the Borrower consents to the
terms hereof, and agrees that it shall not take any
action which is in contravention of the terms of
this Agreement.
HARD ROCK HOTEL, INC.
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Title: President
----------------------------
-15-
EXHIBIT A - DESCRIPTION OF PREFERRED STOCK
-16-
EXHIBIT B - NEGATIVE PLEDGE AGREEMENT
_________, ______
Xx. Xxxxxx Xxxxxxx
Vice President - Agency Specialist
USCG - Agency Management Los Angeles 20529
Bank of America National Trust and Savings Association
000 Xxxxx Xxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Re: NEGATIVE PLEDGE
Dear Xx. Xxxxxxx:
This letter is delivered to you in connection with the Make Well
Agreement dated as of March 23, 1998 made by Xxxxx X. Xxxxxx in favor of Bank of
America National Trust and Savings Association. Capitalized terms used in this
are used with the meanings set forth in the Loan Agreement referred to in the
Make Well Agreement.
The undersigned hereby certifies to each of the Creditors under the
Loan Agreement that it has received all necessary consents and approvals of the
Nevada Gaming Commission and all other relevant governmental agencies to the
execution, delivery and performance of this letter. By this letter the
undersigned hereby agrees that he shall not create, incur, assume, or suffer to
exist any Lien or Right of Others with respect to his direct or indirect
interest in Hard Rock Hotel, Inc., a Nevada corporation and Lily Pond
Investments, Inc. a ________ corporation (collectively, the "Stock") nor grant
any Negative Pledge to any other creditor which prohibits the granting of Liens
or Negative Pledges to the Creditors under the Loan Agreement with respect to
any of the Stock.
The Stock constitutes not less than 90% of the equity capital of each
of Hard Rock Hotel, Inc and Lily Pond Investments, Inc.
It is understood and agreed that (i) the provisions of this letter
shall not apply to any Stock which is sold by the undersigned to a person which
is not an affiliate of the undersigned in a BONA FIDE transaction for arm's
length value which does not constitute a Change
-17-
in Control under the Loan Agreement and (ii) that, concurrently with the
transfer of any Stock to an Affiliate, the undersigned will cause that
Affiliate to execute a letter providing the same benefits as this letter to
the Administrative Agent with respect to the Stock so transferred.
This letter supplements the Make Well Agreement, and the provisions of
the Make Well Agreement (including each of the suretyship waivers and consents
set forth therein) are hereby incorporated by this reference. This letter shall
terminate concurrently with the Make Well Agreement.
-------------------------------
Xxxxx X. Xxxxxx
-18-
