EXHIBIT 10.14
WAIVER AGREEMENT
This Waiver Agreement dated as of November 4, 1999 executed with
reference to the Loan Agreement dated as of March 23, 1998, as amended, among
Hard Rock Hotel, Inc., a Nevada corporation ("Borrower"), the Lenders
referred to therein and Bank of America National Trust and Savings
Association (now known as Bank of America, N.A.), as Administrative Agent
with reference to the following facts:
A. Borrower has failed to be in compliance with its obligations under
the Fixed Charge Coverage covenant set forth in Section 6.13 as of the
last day of its Fiscal Quarters ended May 31, 1999 and August 31, 1999,
and with the Senior Leverage covenant set forth in Section 6.12 of the
Loan Agreement as of the last day of its Fiscal Quarter Ended August 31,
1999.
B. Borrower anticipates that it will not be in compliance with such
convenants as of the last day of its Fiscal Quarter ending November 30,
1999.
C. During the period beginning on August 31, 1999, Xxxxx X. Xxxxxx has
purchased $8,000,000 in preferred stock of Borrower. Xxxxx X. Xxxxxx has
also agreed to purchase (or cause an entity to be designated by Xxxxx X.
Xxxxxx to purchase) for cash additional preferred stock of Borrower
(with identical rights and preferences) prior to December 31, 1999, in
the amount of $20,000,000 (for a total of $28,000,000).
D. Borrower has agreed to use the proceeds of issuance of such
additional preferred stock, concurrently with the issuance thereof, to
(i) pay all remaining construction payables associated with the Proposed
Expansion, and (ii) repay and reduce the outstanding Obligations by an
amount not less than $18,000,000. Concurrently therewith, Borrower
shall reduce the Commitment by not less than $15,000,000.
1. DEFINITIONS. Capitalized terms used herein are used with the
meanings set forth for those terms in the Loan Agreement.
2. ADDITIONAL PREFERRED STOCK; COMMITMENT REDUCTIONS. (a) Borrower has
heretofore issued preferred stock in the aggregate amount of $8,000,000 in a
form delivered to the Administrative Agent and its counsel.
(b) Borrower covenants and agrees that it shall issue, not later than
December 31, 1999, an additional $20,000,000 of preferred stock to Xxxxx X.
Xxxxxx (or an entity to be designated by Xxxxx X. Xxxxxx) in exchange for
cash and with identical rights and preferences EXCEPT THAT such additional
preferred stock may provide for a coupon in the amount of twelve percent
(12%) or such higher rate as may be acceptable to the Administrative Agent.
(c) Borrower hereby agrees that concurrently with the issuance to Xxxxx
X. Xxxxxx or his designee of the final $20,000,000 of preferred stock
referred to above, it shall (i) pay all remaining construction payables
associated with the Proposed Expansion, and (ii) repay the outstanding
Obligations by the amount of the net cash proceeds of such issuance (but not
less than $18,000,000). Borrower agrees that, concurrently with the making
of such payment, the Commitment shall be automatically reduced by $15,000,000.
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(d) Provided that the Commitment is so reduced by an amount which is not
less than $15,000,000 on or prior to December 31, 1999, the Lenders hereby
agree that the mandatory reductions to the Commitment of $2,475,000 each
required by Section 2.6 of the Loan Agreement to occur on February 29, 2000,
May 31, 2000, August 31, 2000 and November 30, 2000 shall be waived.
3. REPRESENTATIONS. Borrower represents and warrants to the Lenders
that:
(a) No Default or Event of Default has occurred and remains
continuing which is not cured by this Waiver Agreement;
(b) Before giving effect to the purchases of preferred stock
described in Section 2 of this Amendment, the Senior Leverage Ratio as
of August 31, 1999 is not greater than 4.85:1.00 and the Fixed Charge
Coverage Ratio as of the same date is not less than 0.60:1.00.
4. AUGMENTATION OF ANNUALIZED EBITDA AND WAIVER. Subject to the
accuracy of the representation set forth in Section 3(b) hereof, the Lenders
hereby waive any failure of the Borrower to be in compliance with Sections
6.12 and 6.13 of the Loan Agreement as of the Fiscal Quarters ended May 31,
1999 and August 31, 1999. The Lenders hereby agree that the $8,000,000
amount of the preferred stock heretofore issued by Borrower shall be added to
Annualized EBITDA of Borrower in determining the numerator of the Senior
Leverage Ratio and the Fixed Charge Coverage Ratio for the Fiscal Quarter
ending November 30, 1999 and the three immediately following Fiscal Quarters.
No portion of the additional $20,000,000 in preferred stock proposed to be
issued by Borrower shall be so added.
5. SENIOR LEVERAGE RATIO AS OF NOVEMBER 30, 1999. The Lenders hereby
waive the requirement of Section 6.12 that the Senior Leverage Ratio not be
in excess of 2.35:1.00 as of November 30, 1999, provided that the Senior
Leverage Ratio as of that date is not in excess of 3.00:1.00.
6. FIXED CHARGE COVERAGE RATIO AS OF NOVEMBER 30, 1999. The Lenders
hereby waive the requirement of Section 6.13 that the Fixed Charge Coverage
Ratio be not less than 1.15:1.00 as of November 30, 1999, provided that the
Fixed Charge Coverage Ratio as of that date is not less than 1.05:1.00.
7. MAINTENANCE CAPITAL EXPENDITURES. The Lenders hereby waive the
failure of Borrower to comply with Section 6.14(b)'s limitation on the amount
of Maintenance Capital Expenditures which may be made by Borrower during any
Fiscal Year with respect to the Fiscal Year ending November 30, 1999 only,
and provided that such Maintenance Capital Expenditures do not exceed
$7,500,000 during such Fiscal Year.
8. ACKNOWLEDGMENT REGARDING RELEASE OF MAKE-WELL AGREEMENT. It is
acknowledged and agreed that, in determining whether the "Release Date"
referred to in the Make-Well agreement has occurred, no portion of the
proceeds of preferred stock issued by Borrower shall be deemed to increase
Annualized EBITDA.
9. CONDITIONS PRECEDENT. As conditions precedent to the effectiveness
hereof, the Administrative Agent shall have received:
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(a) Written consents hereto executed by each of the Lenders; and
(b) a written consent and reaffirmation executed by Xxxxx X. Xxxxxx
in the form of Exhibit A hereto, pursuant to which he shall confirm his
agreement to purchase Acceptable Preferred Stock as aforesaid.
6. CONFIRMATION. In all other respects, the Loan Agreement and the
other Loan Documents are hereby confirmed.
IN WITNESS WHEREOF, the parties hereto have executed this Waiver
Agreement as of the date first written above by their duly authorized
representatives.
HARD ROCK HOTEL, INC.
By: /s/ Xxxxx Xxxxxx
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Title: President
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BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ Xxxxxx Xxxxxxx
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Xxxxxx Xxxxxxx, Vice President
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CONSENT OF LENDER
The undersigned Lender is a party to the Loan Agreement dated as of
March 23, 1998, as amended, among Hard Rock Hotel, Inc., a Nevada corporation
("Borrower"), the Lenders referred to therein and Bank of America National
Trust and Savings Association (now known as Bank of America, N.A.), as
Administrative Agent, and hereby consents to the execution and delivery of
a proposed Waiver Agreement, substantially in the form of a draft provided to
the undersigned.
BANK OF AMERICA, N.A.
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[Name of Lender]
By: ILLEGIBLE
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Title: Managing Director
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CONSENT OF LENDER
The undersigned Lender is a party to the Loan Agreement dated as of
March 23, 1998, as amended, among Hard Rock Hotel, Inc., a Nevada corporation
("Borrower"), the Lenders referred to therein and Bank of America National
Trust and Savings Association (now known as Bank of America, N.A.), as
Administrative Agent, and hereby consents to the execution and delivery of
a proposed Waiver Agreement, substantially in the form of a draft provided to
the undersigned.
BANK OF SCOTLAND
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[Name of Lender]
By: /s/ Xxxxx Xxxxx
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Title: Xxxxx Xxxxx, Senior Vice President
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CONSENT OF LENDER
The undersigned Lender is a party to the Loan Agreement dated as of
March 23, 1998, as amended, among Hard Rock Hotel, Inc., a Nevada corporation
("Borrower"), the Lenders referred to therein and Bank of America National
Trust and Savings Association (now known as Bank of America, N.A.), as
Administrative Agent, and hereby consents to the execution and delivery of
a proposed Waiver Agreement, substantially in the form of a draft provided to
the undersigned.
Imperial Bank
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[Name of Lender]
By: /s/ Xxxxxx X. Xxxxxxx
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Title: SVP - Imperial Bank
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CONSENT OF LENDER
The undersigned Lender is a party to the Loan Agreement dated as of
March 23, 1998, as amended, among Hard Rock Hotel, Inc., a Nevada corporation
("Borrower"), the Lenders referred to therein and Bank of America National
Trust and Savings Association (now known as Bank of America, N.A.), as
Administrative Agent, and hereby consents to the execution and delivery of
a proposed Waiver Agreement, substantially in the form of a draft provided to
the undersigned.
PNC Bank, National Association
/s/ Xxxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx
Vice President
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CONSENT OF LENDER
The undersigned Lender is a party to the Loan Agreement dated as of
March 23, 1998, as amended, among Hard Rock Hotel, Inc., a Nevada corporation
("Borrower"), the Lenders referred to therein and Bank of America National
Trust and Savings Association (now known as Bank of America, N.A.), as
Administrative Agent, and hereby consents to the execution and delivery of
a proposed Waiver Agreement, substantially in the form of a draft provided to
the undersigned.
Xxxxx Fargo Bank N.A.
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[Name of Lender]
By: ILLEGIBLE
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Title: Relationship Manager
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Exhibit A
CONSENT OF XXXXX X. XXXXXX
This consent is delivered with reference to the Loan agreement dated as
of March 23, 1998, as amended, among Hard Rock Hotel, Inc., a Nevada
corporation ("Borrower"), the Lenders referred to therein and Bank of America
National Trust and Savings Association (now known as Bank of America, N.A.),
as Administrative Agent. The undersigned hereby consents to the execution,
delivery and performance of a proposed Waiver Agreement dated as of August
31, 1999, substantially in the form delivered to the undersigned as a draft.
The undersigned further confirms for the benefit of the Lenders that (a) he
has agreed to make an additional purchase of $20,000,000 in Acceptable
Preferred Stock (as described in the Waiver Agreement) on or before December
31, 1999, and (b) giving effect to the Amendment, the Completion Guaranty and
the Make Well Agreement referred to in the Loan Agreement remain in full
force and effect.
It is acknowledged and agreed that, in determining whether the "Release
Date" referred to in the Make-Well Agreement has occurred, no portion of the
proceeds of Acceptable Preferred Stock shall be deemed to increase Annualized
EBITDA.
/s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx
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