Exhibit 10.19
CONSENT AND AGREEMENT
(OWNER CONTRACTOR AGREEMENT)
Dated as of January 23, 2004
by
PREMIER ENTERTAINMENT BILOXI LLC,
a Delaware limited liability company,
PREMIER FINANCE BILOXI CORP,
a Delaware corporation,
U.S. BANK NATIONAL ASSOCIATION,
a national banking association,
as Trustee,
and
XXX XXXXXXXX CORP,
a Mississippi corporation
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CONSENT AND AGREEMENT
(OWNER CONTRACTOR AGREEMENT)
This CONSENT AND AGREEMENT (OWNER CONTRACTOR AGREEMENT) (the
"CONSENT"), dated as of January 23, 2004, is executed by XXX XXXXXXXX CORP, a
Mississippi corporation (the "UNDERSIGNED"), PREMIER ENTERTAINMENT BILOXI LLC
(d/b/a Hard Rock Hotel & Casino Biloxi), a Delaware limited liability company
("PREMIER"), and PREMIER FINANCE BILOXI CORP, a Delaware corporation ("PFC,"
jointly and severally with Premier, the "ISSUER"), and U.S. BANK NATIONAL
ASSOCIATION, a national banking association, as trustee under the Indenture (as
defined below) (together with its successors and assigns from time to time under
the Indenture, the "TRUSTEE").
RECITALS
A. THE FACILITY. Premier proposes to develop, construct and operate
the Hard Rock Hotel & Casino Biloxi, a full service gaming, hotel and
entertainment resort and certain related amenities to be developed upon
approximately 8.5 acres along the Mississippi Gulf Coast in Biloxi, Mississippi
(the "FACILITY").
B. FIRST MORTGAGE NOTES. Concurrently herewith, the Issuer is
issuing $160,000,000 aggregate principal amount of its 10 3/4% First Mortgage
Notes due 2012 together with all other notes issued under the Indenture,
including all notes issued in exchange or replacement thereof, the "FIRST
MORTGAGE NOTES"), pursuant to that certain Indenture dated as of January 23,
2004, among the Issuer and the Trustee (as amended, modified or supplemented
from time to time, the "INDENTURE"), to finance Project Costs.
C. SUBORDINATED NOTE. Concurrently herewith, Rank America, Inc.
shall purchase from the Issuer an unsecured subordinated note in the amount of
$10,000,000 (the "SUBORDINATED NOTE"), the proceeds of which will be applied to
finance Project Costs.
D. OWNER CONTRACTOR AGREEMENT. The Undersigned and Premier have
entered into that certain Agreement Between Owner and Contractor dated as of
January 23, 2004 pursuant to which the Undersigned has agreed to design and
construct a hotel, a casino barge and a parking garage in connection with the
Facility (as amended and supplemented or modified from time to time in
accordance with its terms and the terms hereof, the "CONTRACT"), with said
design and engineering responsibilities limited as set out in the Contract.
E. INTERCREDITOR AGREEMENT. Concurrently herewith, the Trustee and
Rank America, Inc. will enter into an Intercreditor Agreement pursuant to which
the parties thereto will agree to certain provisions, including the
subordination of the Subordinated Note, the first priority liens in favor of the
Trustee on behalf of the holders from time to time of the First Mortgage Notes
(collectively, the "SECURED PARTIES") and the limitations on rights of
enforcement upon default and the application of proceeds upon enforcement.
F. SECURITY AGREEMENT. Pursuant to that certain Pledge and Security
Agreement dated as of January 23, 2004 (the "SECURITY AGREEMENT"), by and
between Premier, PFC, the Trustee and the other parties named therein, Premier
has collaterally assigned its interest under the contracts between Premier and
any person pertaining to the construction of the Facility, including the GMP
Contract (the "CONSTRUCTION CONTRACTS") to the Trustee on behalf of the Secured
Parties.
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G. DEFINITIONS. Unless otherwise defined herein, all capitalized
terms used herein which are defined in the Agreement, shall have the meaning
assigned to such terms in the Security Agreement.
AGREEMENT
NOW THEREFORE, the Parties hereby agree as follows:
1. The Undersigned consents to Premier's transfer, assignment, and
grant of a security interest in and to the Contract, as provided for in the
Security Agreement.
2. The Trustee shall be entitled (but not obligated) to cure any
defaults of Premier under the Contract. Upon receipt of notice from the Trustee,
the Undersigned agrees to accept such cure by the Trustee. The Undersigned
agrees to make all payments (if any) to be made by it under the Contract,
directly to the Trustee for the benefit of the Secured Parties upon receipt of
the Trustee's written instructions.
3. The Undersigned will not, without the prior written consent of
the Trustee, (i) cancel or terminate the Contract except as provided in the
Contract and in accordance with Section 4 hereof, or consent to or accept any
cancellation, termination or suspension thereof by Premier, or (ii) sell or
assign any part of its interest in the Contract. Neither the Undersigned nor
Premier will amend or modify the Contract in any respect unless a Construction
Contract Amendment Certificate has been delivered by Premier pursuant to Section
5.2 of the Cash Collateral and Disbursement Agreement entered into among the
Issuer, the Trustee, such construction consultant and a disbursement agent
thereunder (the "DISBURSEMENT AGREEMENT"); PROVIDED, HOWEVER, that (i) this
shall not prohibit Premier and the Undersigned from entering into Change Orders
(as defined in the Contract) that do not constitute Material Construction
Contract Amendments (as defined in the Disbursement Agreement), (ii) this shall
not prohibit the Undersigned from complying with the requirements of any
construction change directive issued by Premier under the Contract, and (iii)
this shall not limit the Undersigned's rights to or claims for a Change Order
under the Contract or to stop work as and when permitted under the Contract as
to issues related to same. The Undersigned agrees to deliver duplicates or
copies of all notices of default received or delivered under or pursuant to the
Contract to the Trustee promptly upon receipt or delivery, as the case may be,
thereof.
4. The Undersigned will not terminate the Contract on account of any
default or breach of Premier thereunder without written notice to the Trustee
and first providing to the Trustee (i) ninety (90) days from the date notice of
default or breach is delivered to the Trustee to cure such default if such
default is the failure to pay amounts to the Undersigned which are due and
payable under the Contract or (ii) a reasonable opportunity, but not fewer than
one hundred twenty (120) days, to cure such breach or default if the breach or
default cannot be cured by the payment of money to the Undersigned. If
possession of the Facility is necessary to cure such breach or default and the
Trustee or its designee(s) or assignee(s) declare Premier in default and
commence foreclosure proceedings, the Trustee or its designee(s) or assignee(s),
will be allowed a reasonable period to complete such proceedings. If the Trustee
or its designee(s) or assignee(s) are prohibited by any court order or
bankruptcy or insolvency proceedings from curing the default or from commencing
or prosecuting foreclosure proceedings, the foregoing time periods shall be
extended by the period of such prohibition, but such extension not to exceed one
hundred and fifty (150) days beyond the time frames set out in clause (ii) of
the first sentence of this Section 4.
5. The Undersigned consents to the transfer of Premier's interest
under the Contract to (i) the Secured Parties or any of them or (ii) a purchaser
or grantee at a foreclosure sale by judicial or
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nonjudicial foreclosure and sale or by a conveyance by Premier in lieu of
foreclosure (any such purchaser or grantee, other than the Secured Parties,
shall be referred to herein as a "THIRD PARTY TRANSFEREE"). The Undersigned
agrees that upon such foreclosure, sale or conveyance, the Undersigned shall
recognize such Secured Party or Third Party Transferee as the applicable party
under the Contract (provided that such Secured Party or Third Party Transferee
assumes the obligations of Premier under the Contract and provided further that
such Secured Party or Third Party Transferee is creditworthy). "Assume the
obligations of Premier under the Contract" shall mean the assumption by such
Secured Party or Third Party Transferee of all obligations of Premier under the
Contract, regardless of whether for past or future matters, and specifically,
but not by way of limitation, shall require simultaneous payment of all amounts
owed and acknowledgement of liability for all amounts becoming owed, all as a
condition of the Undersigned's obligation to accept such assumption and to
accept instructions from such Secured Party or Third Party Transferee. A Third
Party Transferee or Secured Party shall be deemed creditworthy if either (a) it
has a net worth of at least $20 million dollars (calculated in accordance with
generally accepted accounting principals in effect from time to time in the
United States); or (b) it has been approved as creditworthy by Undersigned, it
being understood that Undersigned shall not unreasonably withhold, delay or
condition its approval and shall take into account the net worth of such Secured
Party or Third Party Transferee and any letter of credit or other credit
instrument proposed to be made available as security for the performance of such
Third Party Transferee.
6. All parties acknowledge that several of the provisions herein
delay and otherwise limit the Undersigned's termination rights under the
Contract, thereby creating an additional period before the Undersigned can
terminate the Contract, and further obligate the Undersigned to recognize
certain successors-in-interest to Premier under the Contract. Notwithstanding
the preceding acknowledgement, the Undersigned shall have the right to stop work
as allowed by the Contract, unless and until such Trustee or one or more of the
creditworthy Secured Parties, or a creditworthy Third Party Transferee, as
applicable, agree (with the Trustee and the Secured Parties or any Third Party
Transferee having no obligation to agree) to pay the Undersigned all previously
unpaid amounts owed to the Undersigned under the Contract and to pay the
Undersigned for all work, labor and materials rendered during any of such
additional period (being any such additional period called for herein prior to
termination) in accordance with the Contract and to pay all considerations due
and owing under the Contract for performance thereafter as and when required
under the Contract.
7. If the Trustee gives written notice to the Undersigned that
Premier has defaulted under any of the agreements with the Secured Parties (the
"TRANSACTION DOCUMENTS") and requests that the Undersigned continue its
performance under the Contract, then the Undersigned shall thereafter perform
for the Secured Parties under the Contract in accordance with its terms so long
as the Undersigned shall be paid all amounts as and when required under the
Contract, including payment of any sums due to the Undersigned for work
performed up to and including the date of Premier's default and thereafter, with
said request constituting such an agreement by the Trustee on behalf of one or
more of the Secured Parties to so pay the Undersigned in accordance with the
Contract. The Undersigned shall have the right to refuse to continue performance
of the Contract unless and until the Undersigned has been paid in full for all
amounts then due under the Contract and the Undersigned shall render such
performance to the Secured Parties notwithstanding any contrary directions,
instructions or assertions from Premier and Premier hereby authorizes and
directs the Undersigned to render such performance to the Secured Parties as
contemplated herein.
8. In the event that the Contract is rejected by a trustee or
debtor-in possession in any bankruptcy or insolvency proceeding, and if, within
sixty (60) days after such rejection, the Secured Parties or their successors or
assigns shall so request, the Undersigned will execute and deliver to the
Secured Parties or their designee or assignee (if creditworthy as defined
herein) a new Construction Contract, which Construction Contract shall be on the
same terms and conditions as the original Contract,
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subject to such extensions of time and additional compensation as may be
appropriate under the circumstances. However, any such new Construction Contract
must as condition precedent thereof require such Secured Parties to immediately
pay all previously unpaid sums owed to the Undersigned under the original
Contract.
9. The parties recognize and agree that the events contemplated in
Sections 1, 2, 3, 4, 5, 6, 7 and 8 may lead to or involve time delays and
increased costs as to the Undersigned's performance under the Contract, and,
therefore, the Undersigned must be granted such extensions of time and
additional compensation as may be appropriate due to actual impacts of the
circumstances contemplated herein.
10. In the event the Secured Parties or their designee(s) or
assignee(s) elect to perform Premier's obligations under the Contract and cure
any default by Premier under the Contract as provided in Sections 2 and 4 above
(and not under Sections 5, 6, 7, 8 or 11 herein), the Secured Parties, their
designee(s) and assignee(s), shall have no personal liability to the Undersigned
for the performance of such obligations, and the sole recourse of the
Undersigned in seeking the enforcement of such obligations shall be to such
parties' interest in the Facility; however, this limitation on personal
liability shall not apply as to actions by the Secured Parties or their
designee(s) or assignee(s) under Sections 5, 6, 7, 8 or 11 herein.
Notwithstanding the foregoing or any foreclosure of the Facility by the Secured
Parties, the Undersigned shall retain any and all of its rights and claims
against Premier.
11. In the event the Secured Parties or their designee(s) or
assignee(s) succeed to Premier's interest under the Contract, the Secured
Parties shall have the right to assign all or a pro rata interest in the
Contract or a new Construction Contract entered into pursuant to Section 8 to a
person or entity to whom the Facility is transferred, provided such transferee
assumes the obligations of Premier (or the Secured Parties) under the Contract.
Upon such assignment, the Trustee and, if applicable, the Secured Parties
(including their agents and employees) shall be released from any further
liability thereunder to the extent of the interest assigned, upon the following
conditions: (i) the assignee must be a party as to whom the Undersigned does not
have a reasonable objection, including, but not limited to, as to the
creditworthiness (as defined in Section 5 above) of the assignee; (ii) all sums
due to the Undersigned as of the time it received notice of that assignment or
as of the time such assignment takes place (whichever is later) are paid in
full; and (iii) the assignee must acknowledge, upon terms and conditions
acceptable to Undersigned, liability for all sums due and owing and becoming due
and owing thereafter and for all other obligations under the Contract,
including, but not limited to obligations as to the issues addressed by
Section 9.
12. The warranties provided by the Undersigned under the Contract
shall continue in full force and effect (until the expiration of the warranty
periods set forth in the Contract) in the event that the Secured Parties or
their designee(s) or assignee(s) succeed to Premier's interest in the Contract
(whether by foreclosure, sale or other assignment) and upon the further
assignment or sale of the Contract by the Secured Parties or their designee(s)
or assignee(s).
13. The Undersigned hereby assigns to Premier (and Premier's assigns)
all its interest in any subcontracts and purchase orders now existing or
hereinafter entered into by the Undersigned for performance of any part of the
Undersigned's obligations under the Contract (the "SUBCONTRACTS"). Such
assignment shall be effective only upon the termination of the Contract for the
default of the Undersigned, and then only as to those Subcontracts which Premier
(or its assigns) at such time accepts in writing. The Undersigned also grants a
security interest to Premier (and Premier's assigns) in all of its interest in
such Subcontracts as security for the Undersigned's obligations under the
Contract. The Undersigned further assigns to Premier (and Premier's assigns) all
of its rights with respect to any warranties under the Subcontracts to the
extent, but only to the extent, that such warranty is of the
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kind to be assigned to Premier under Section 19.1.3 of the Contract, and, as to
such warranties, such assignment shall be effective only at the time provided
for in said Section 19.1.3 or, if earlier, upon the termination of the Contract
for the default of the Undersigned. The Undersigned shall use reasonable efforts
to see that each Subcontract hereinafter entered into by the Undersigned shall
contain a consent by the subcontractor thereunder to the foregoing assignments
set forth in this Section 13 and the foregoing assignments shall not apply to
any Subcontract for which the applicable subcontractor consent has not been
received (despite the Undersigned's reasonable efforts). The Undersigned shall
not be required to obtain such a consent from Corn Island Shipyard, Inc.
14. The Undersigned hereby agrees (i) to cooperate with Professional
Associates Construction Services, Inc. or any other person designated from time
to time by the Trustee to serve as construction consultant under the
Disbursement Agreement (the "INDEPENDENT CONSTRUCTION CONSULTANT") to facilitate
performance of its duties to monitor the progress of the construction of the
Facility, (ii) to, upon request, deliver to the Independent Construction
Consultant copies of all notices and progress reports delivered to Premier
pursuant to the Contract, (iii) to meet with the Independent Construction
Consultant to discuss the status and progress of construction of the Facility
whenever reasonably requested by the Independent Construction Consultant and
(iv) allow the Independent Construction Consultant the opportunity to be
included in all material meetings with Premier related to the development and
construction of the Facility. However, this shall not prohibit the Undersigned
from moving forward with any meeting when the circumstances surrounding such
meeting make it unreasonable to await involvement by the Independent
Construction Consultant.
15. The Undersigned hereby represents, warrants and certifies that:
(a) The execution, delivery and performance by the Undersigned
of the Contract and this Consent has been duly authorized by all necessary
corporate action, and does not and will not require any further consents or
approvals which have not been obtained, or violate any provision of any
law, regulation, order, judgment, injunction or similar matters or breach
any agreement presently in effect with respect to or binding on the
Undersigned (except as to assignments of Subcontracts set forth in Section
13).
(b) This Consent and the Contract are legal, valid and binding
obligations of the Undersigned, enforceable against the Undersigned in
accordance with their respective terms.
(c) All government approvals necessary for the execution,
delivery and performance by the Undersigned of its obligations under the
Contract have been obtained and are in full force and effect.
(d) The Undersigned has delivered to the Trustee a true and
correct copy of the Contract including all amendments and modifications
thereto, up to the date hereof. As of the date hereof, the Contract is in
full force and effect and constitutes the only agreement between the
Undersigned and Premier with respect to the matters and interest described
therein.
(e) The Undersigned has fulfilled all of its obligations under
the Contract due as of the date hereof. To the Undersigned's knowledge,
Premier has fulfilled all of its obligations under the Contract to the date
hereof and there are no breaches or unsatisfied conditions presently
existing (or which would exist after the passage of time and/or giving of
notice) that would allow the Undersigned to terminate the Contract.
16. All Notices required or permitted hereunder shall be in writing
and shall be effective (a) upon receipt if hand delivered, (b) upon receipt if
sent by facsimile and (c) if otherwise
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delivered, upon the earlier of receipt or two (2) Banking Days after being sent
registered or certified mail, return receipt requested, with proper postage
affixed thereto, or by private courier or delivery service with charges prepaid,
and addressed as specified below:
If to the Undersigned:
Xxx Xxxxxxxx Corp
X.X. Xxx 0
Xxxxxxxx, XX 00000
Attn: Xxx Xxxxxxxx III
Telecopy No.: (000) 000-0000
Facsimile No.: (000) 000-0000
If to the Trustee:
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000-0000
Attn: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to Premier:
Premier Entertainment Biloxi LLC
00000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Xxxxx Xxxxxx LLC
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
If to PFC
Premier Finance Biloxi Corp
00000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
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17. This Consent shall be binding upon and inure to the benefit of
the Undersigned, the Trustee, Premier, PFC, the Secured Parties and their
respective successors, transferees and assigns (including without limitation,
any entity that refinances all or any portion of the Obligations). The
Undersigned agrees to confirm such continuing obligation in writing upon the
reasonable request of Premier, PFC, the Trustee, the Secured Parties or any of
their respective successors, transferees or assigns. No termination, amendment,
variation or waiver of any provisions of this Consent shall be effective unless
in writing and signed by the Undersigned, the Trustee, Premier and PFC. This
Consent shall be governed and construed in accordance by the internal laws of
the State of Mississippi.
18. This Consent may be executed in one or more duplicate
counterparts, and when executed and delivered by all the parties listed below,
shall constitute a single binding agreement.
19. All references in this Consent to any document, instrument or
agreement (a) shall include all exhibits, schedules and other attachments
thereto, (b) shall include all documents, instruments or agreements issued or
executed in replacement thereof, and (c) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, modified and
supplemented from time to time and in effect at any given time.
20. The Undersigned has reviewed only this Consent, the Contract; the
Security Agreement and the Disbursement Agreement. The Undersigned has not
reviewed any other of the Transaction Documents, including, but not limited to,
the Indenture, the First Mortgage Notes, the Subordinate Note and the
Intercreditor Agreement, nor any of the other multiple documents referenced in
the foregoing. Notwithstanding anything herein to the contrary, the Undersigned
shall only be bound by this Consent and the Contract (and the Security Agreement
and the Disbursement Agreement to the extent but only to the extent made binding
upon the Contractor pursuant to this Consent and the Contract), and the
Undersigned shall not be bound by and shall not have liability under any of the
other Transaction Documents it has not reviewed.
21. Notwithstanding anything contained herein to the contrary, it is
understood and agreed and made a condition of the Undersigned's execution of
this Consent that nothing contained herein shall be deemed a waiver of or a
limitation upon the Undersigned's right to obtain full compensation for all work
heretofore or hereafter performed under the Contract or a waiver or limitation
of any and all remedies available to the Undersigned.
22. By accepting and utilizing this Consent, the Trustee, Premier,
PFC, and their respective successors and assigns agree to be bound by the terms
and conditions hereof.
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IN WITNESS WHEREOF, the Undersigned by its officer thereunto duly
authorized, has duly executed this Consent as of the date first set forth above.
XXX XXXXXXXX CORP,
a Mississippi Corporation
By: /s/ Xxxxxx X. Xxxxxxxxxxxx
----------------------------------
Name: Xxxxxx X. Xxxxxxxxxxxx
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Title: Chief Financial Officer
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PREMIER ENTERTAINMENT BILOXI LLC,
(d/b/a Hard Rock Hotel & Casino Biloxi),
a Delaware limited liability company
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxxx
----------------------------------
Title: President and COO
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PREMIER FINANCE BILOXI CORP,
a Delaware corporation
By: /s/ Xxxxxx Xxxxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxxxx
----------------------------------
Title: President and COO
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ACKNOWLEDGED AND AGREED:
U.S. BANK NATIONAL ASSOCIATION,
a national banking association,
as Trustee
By: /s/ Xxxxx X. Xxxxxx
------------------------------------
Name: Xxxxx X. Xxxxxx
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Title: Vice President
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