EXHIBIT 10.3
EXECUTION COPY
AMENDED & RESTATED
PLANET HOLLYWOOD RESORT & CASINO
LICENSING AGREEMENT
THIS AMENDED & RESTATED RESORT & CASINO LICENSING AGREEMENT ("Agreement")
originally dated as of May 7, 2003 (hereinafter referred to as the "Effective
Date") and amended effective this 9th day of August, 2004, by and among Planet
Hollywood International, Inc., a corporation duly organized and existing under
the laws of the State of Delaware, having its principal office and place of
business at 0000 Xxxx Xxxx Xxxx Xxxx, Xxxxxxx, Xxxxxxx 00000, and Planet
Hollywood (Region IV), Inc., a corporation duly organized and existing under the
laws of the State of Minnesota, having its principal office and place of
business at 0000 Xxxx Xxxx Xxxx Xxxx, Xxxxxxx, Xxxxxxx 00000 (hereinafter
collectively referred to as "PHII"), Planet Hollywood Memorabilia, Inc.
(hereinafter referred to as "PHMemo"), a wholly owned subsidiary of PHII duly
organized and existing under the laws of the State of Florida, having its
principal office and place of business at 0000 Xxxx Xxxx Xxxx Xxxx, Xxxxxxx,
Xxxxxxx 00000 and OpBiz, L.L.C., a Nevada limited liability company (hereinafter
referred to as "HOTEL JV") having its principal office and place of business at
000 Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
PREAMBLE
A. PHII owns the "Planet Hollywood" trademarks, design marks, trade name,
Trade Dress (defined below) and service marks (hereinafter collectively referred
to as "THE MARKS") and the domain names that incorporate part or all of any of
THE MARKS (hereinafter referred to as the "DOMAIN NAMES"), as set forth on
EXHIBIT A attached hereto and incorporated herein and which may be updated and
revised from time to time subject to the provisions of this Agreement;
B. PHMemo owns or otherwise has a valid possessory right in an extensive
collection of sports, motion picture and Hollywood memorabilia;
C. HOTEL JV has entered into a Purchase and Sale Agreement (the "Purchase
Agreement"), dated as of April 23, 2003 with Aladdin Gaming, LLC ("Gaming"),
debtor and debtor-in-possession under Title 11 of the Bankruptcy Reform Act of
1978, as amended, 11 U.S.C. Section 101 et seq. (the "Bankruptcy Code"), in
proceedings (the "Bankruptcy Proceedings") before the United States Bankruptcy
Court for the District of Nevada, Southern Division (the "Bankruptcy Court")
pursuant to which HOTEL JV has agreed to purchase from Gaming a complex (the
"Complex") consisting of a 2,567 room hotel, a casino, conference and banquet
facilities, food and beverage operations and retail space (hereinafter referred
to as the "Planet Hollywood Hotel") and a 6,700 seat theater (hereinafter
referred to as the "Theatre for the Performing Arts") all located at 0000 Xxx
Xxxxx Xxxxxxxxx Xxxxx, Xxx Xxxxx, Xxxxxx and
currently known as the "Aladdin Hotel & Casino";
D. HOTEL JV and The Bank of New York, Asset Solutions Division (the
"Agent") and various lenders party thereto (collectively, the "Lenders"), have
negotiated and intend to enter into an Amended and Restated Loan and Facilities
Agreement (the "Loan Agreement"), pursuant to which HOTEL JV has agreed to
borrow (on the terms and conditions set forth in the Loan Agreement) $510
million (the "Loan") in connection with HOTEL JV's acquisition of the Complex;
E. HOTEL JV, MezzCo, L.L.C., ("MEZZCO") the parent of HOTEL JV, Post
Advisory Group, L.L.C. (the "Subordinated Notes Collateral Agent") and various
purchasers party thereto (collectively, the "Purchasers"), have negotiated and
intend to enter into a Securities Purchase Agreement (the "Securities Purchase
Agreement"), pursuant to which MEZZCO has agreed to borrow (on the terms and
conditions set forth in the Securities Purchase Agreement) $87 million (the
"Subordinated Loan") in connection with HOTEL JV's renovations of the Complex;
F. In the event that the transactions contemplated by the Purchase
Agreement , the Loan Agreement, the Securities Purchase Agreement and certain
related documents and agreements are completed, HOTEL JV intends to renovate and
re-theme the Aladdin Hotel & Casino as the "Planet Hollywood Hotel and Casino"
which will include a Planet Hollywood Restaurant and may include one or more
Planet Hollywood Retail Shops (as both of those terms are defined in Section 2.3
below) and to rename the Theatre for the Performing Arts as HOTEL JV shall
determine.
G. HOTEL JV is an indirect, wholly-owned subsidiary of EquityCo, L.L.C., a
Nevada limited liability company formed by affiliates of Xxxxxx Xxxx, Bay
Harbour Management, L.C. and Starwood Hotels & Resorts Worldwide, Inc.
("Starwood") established pursuant to an Amended and Restated Operating
Agreement, dated as of April 22, 2003 (the "Operating Agreement") setting forth
the rules and regulations for the operations of HOTEL JV;
H. HOTEL JV desires to use THE MARKS and the DOMAIN NAMES to identify,
promote, manage and operate the Complex and certain services to be rendered and
the products to be sold thereat including, without limitation, the Planet
Hollywood Restaurant;
I. PHII desires to grant a license to HOTEL JV to use THE MARKS and the
DOMAIN NAMES and to provide certain marketing and promotional services to HOTEL
JV to identify and promote the Complex and, in connection therewith, to provide
certain services to be rendered and certain products to be sold thereat, all
such grants being subject to the terms and conditions contained in this
Agreement; and
J. HOTEL JV desires to license a portion of PHMemo's collection of
memorabilia which shall be established by mutual agreement of the parties hereto
and attached to and incorporated in this Agreement as EXHIBIT B and which shall
be updated and revised from time
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to time subject to the provisions of this Agreement (hereinafter referred to as
"THE MEMO") to display and exhibit THE MEMO in the Complex and PHII and PHMemo
desire to grant a license to HOTEL JV to use THE MEMO in order to display and
exhibit THE MEMO in the Complex subject to the terms and conditions contained in
this Agreement.
NOW, THEREFORE, for good and valuable consideration, and for and in
consideration of the mutual promises, covenants and undertakings herein set
forth, PHII, PHMemo and HOTEL JV agree as follows:
1. LICENSE
1.1. Subject to the provisions of this Agreement, PHII hereby grants to
HOTEL JV an irrevocable license to use and sub-license the use of THE MARKS and
the DOMAIN NAMES in connection with the identification, management, operation,
advertising and promotion of the Complex, including sub-licensing rights
described in Sections 1.3 and 1.4 below, the services rendered thereat and the
products provided, offered and distributed and/or sold to guests and other
customers of the Complex, and for no other business or non-business purposes
whatsoever and no other goods or services whatsoever and solely in accordance
with the Limitations of Use as set forth in Section 4, the Standard of Quality
as set forth in Section 6 and including only the following licensed rights
(hereinafter referred to as the "Licensed Rights"):
(a) Use of THE MARKS as a trade name for the Complex and for business
related to the Complex and the identification, management, operation,
advertising and promotion thereof;
(b) Use of THE MARKS in connection with the identification, management,
operation, advertising and promotion of the Complex including, without
limitation, the casino and/or all gaming and betting, the rental of guest,
conference and banquet rooms at the Complex, the sale of food and beverages
provided by the Complex (including the Planet Hollywood Restaurant and Planet
Hollywood Retail Shop(s) as outlined in detail in Section 2.3 below), and any
and all other services provided by the Complex (hereinafter referred to as
"Licensed Services");
(c) Use of THE MARKS on those goods distributed and/or provided by HOTEL
JV on a complimentary basis or otherwise provided in the ordinary course without
charge in the operation of the Complex, such as articles of clothing and/or
goods including but not limited to stationery, toiletries such as shampoo, soap,
shaving creme, and towels as typically provided for and used by guests,
employees and management of the Complex, including but not limited to goods
located or used in guest rooms, conference rooms, banquet rooms, casinos and
public areas whether such products are provided to guests on a complimentary
basis or otherwise (hereinafter collectively referred to as "Licensed
Complimentary Products") and the advertising and promotion thereof. The Licensed
Complimentary Products bearing THE MARKS distributed and/or provided by HOTEL JV
throughout the Complex may, at the election of Hotel JV, be (i) procured from
and provided by PHII and its respective affiliates to HOTEL JV for distribution
in accordance with the Standard of Quality set forth in Section 6 herein; or
(ii) be produced and
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procured from any third party, provided such production and procurement is in
accordance with the Standard of Quality set forth in Section 6 herein and the
other applicable terms and conditions of this Agreement.
(d) Use of THE MARKS in connection with the advertising and promotion of
the offering for sale of goods and the sale of goods within or in connection
with the Complex, including but not limited to souvenir casino chips, casino
paraphernalia and souvenirs; articles of clothing, such as T-shirts,
sweatshirts, jackets, caps and robes; any and all merchandise of personal
adornment, such as jewelry, pins and sunglasses, as well as any and all
souvenirs, novelties and toys, as provided to HOTEL JV by PHII and/or PHII and
their respective affiliates (hereinafter referred to as "Provided Goods"). HOTEL
JV agrees and acknowledges that, to the extent such Provided Goods bearing THE
MARKS constitute either (i) articles of clothing, or (ii) items as are typically
sold at other Planet Hollywood restaurant and/or retail outlets, said Provided
Goods bearing THE MARKS offered for sale and/or sold throughout the Complex
shall in each instance be procured from PHII or its respective affiliates to
fulfill HOTEL JV's requirements for Provided Goods; provided, that PHII or its
affiliates shall (i) promptly provide such Provided Goods to HOTEL JV in
accordance with the Standard of Quality set forth in Section 6 below, and (ii)
offer such Provided Goods at terms and conditions equal to or better than any
bona fide offer from a third party provider of similar products. In the event
that PHII or its affiliates shall be unable to promptly provide such Provided
Goods in accordance with the terms and conditions of this Section 1.1(d), HOTEL
JV shall have the right to procure such particular Provided Goods from third
party providers; it being the express intent of the parties hereto that, to the
extent that such Provided Goods bearing THE MARKS constitute either (i) articles
of clothing, or (ii) items as are typically sold at other Planet Hollywood
restaurant and/or retail outlets and PHII or its affiliates shall be able to
promptly provide any Provided Goods to HOTEL JV on a commercially competitive
basis, HOTEL JV shall purchase such Provided Goods from PHII or its affiliates.
To the extent (x) any particular Provided Good does not constitute either (i)
articles of clothing, or (ii) items as are typically sold at other Planet
Hollywood restaurant and/or retail outlets or (y) PHII cannot or does not
promptly supply the Provided Goods as and when required by HOTEL JV on a
commercially competitive basis, HOTEL JV may procure such Provided Goods from
third parties, provided such production and procurement is in accordance with
the Standard of Quality set forth in Section 6 herein and the other applicable
terms and conditions of this Agreement.
(e) Use of any and all copyrights in and to the Planet Hollywood design
marks as set forth in EXHIBIT A as well as the use of any and all copyrights in
and to the artwork, printed matter, menus, signage, videos, music jingles and
other copyrightable materials owned by PHII and/or PHMemo for HOTEL JV's use in
the advertising, promotion, management and operation of the Complex. PHII hereby
consents to any reproduction of the Planet Hollywood design marks by HOTEL JV
for the purposes of advertising and promoting the Complex and the business
related thereto and for any other purpose contemplated in this Agreement subject
to the terms and conditions of this Agreement.
1.2. Subject to the provisions of Section 3.1 below, the Licensed Rights
granted herein
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shall be exclusive to HOTEL JV and its permitted successors, assigns and
sublicensees within the territory of Xxxxx County, Nevada (the "Territory").
1.3. Subject to the provisions of this Agreement, HOTEL JV shall have the
right to grant to Starwood or one or more of Starwood's affiliates or
subsidiaries as appropriate or necessary (or any other entity selected by HOTEL
JV and approved by Lender under the Loan Agreement) (hereinafter referred to as
"STARWOOD") a nontransferable, revocable sub-license to use THE MARKS and the
DOMAIN NAMES in connection with the identification, joint management, operation,
advertising and promotion of the Complex and the Time Share Premises (as defined
in the Loan Agreement) and for no other business or non-business purposes
whatsoever and in accordance with Section 7, which sublicense shall be in a form
and content reasonably acceptable to PHII, HOTEL JV, STARWOOD and Lenders.
1.4 Subject to the provisions of this Agreement, HOTEL JV shall have the
right to grant to the "Manager" (as such term is defined in the Loan Agreement)
(and any successor Manager approved by the Lenders under the Loan Agreement) a
nontransferable, revocable sub-license to use THE MARKS and the DOMAIN NAMES in
connection with the identification, management, operation, advertising and
promotion of the Planet Hollywood Hotel and for no other business or
non-business purposes whatsoever and in accordance with Section 7, which
sublicense shall be in a form and content reasonably acceptable to PHII, HOTEL
JV, such Manager and Lenders.
1.5 (a) Subject to Sections 1.1 and 3.8 of this Agreement PHII grants to
HOTEL JV the right, but not the obligation, to use THE MARKS and the DOMAIN
NAMES in connection with the development, operation and maintenance of a "Planet
Hollywood Hotel and Casino" website on the Internet, including but not limited
to the World Wide Web, as developed and maintained by HOTEL JV in its sole
discretion; provided, however, the rights conferred pursuant to this Section
1.5(a) specifically exclude any and all rights to conduct "online gaming" or
other games of lottery or chance on the Internet, including but not limited to
the World Wide Web, whether for a fee or free of charge, but specifically
excepting promotional sweepstakes or contests where no purchase or payment of
any kind is required to participate (collectively, "Online Gaming"), with any
and all such Online Gaming rights being specifically retained by PHII.
(b) Notwithstanding the foregoing, the rights granted pursuant to
Section 1.5(a) are conditioned upon HOTEL JV developing the "Planet Hollywood
Hotel and Casino" website so that it has reciprocal cross links and has, from an
end-user perspective, a "seamless reciprocal integration" with PHII's and HOTEL
JV's existing or future website(s) to the extent that such reciprocal cross
links are permitted by applicable law and regulation including, without
limitation, any rules and regulations imposed by Nevada Gaming regulatory
agencies. For purposes of this Section 1.5(b), the phrase "seamless integration"
shall mean that any end user shall have the ability to access PHII's or HOTEL
JV's, as applicable, existing or future website(s) by performing no greater than
two "clicks" on the Hotel JV or PHII, as applicable website and such other
integrations as are mutually agreed by the parties hereto.
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1.6 Subject to the terms and conditions of this Agreement, PHMemo hereby
grants to HOTEL JV an irrevocable license and the right to use THE MEMO for
displaying and exhibiting THE MEMO for the full term of this Agreement in the
Complex and for no other purposes and subject to the Limitations of Use as set
forth in Section 5.
2. LICENSE FEE
2.1. Commencing upon the occurrence of each of the completion of the
rebranding and the grand reopening of the Complex as a Planet Hollywood using
THE MARKS (the "Grand Reopening"), as consideration for the use of THE MARKS,
the DOMAIN NAMES, THE MEMO and the other contributions of PHII and PHMemo
hereunder, HOTEL JV shall pay PHII an amount (the "Continuing Fee") equal to one
and 75/100 percent (1.75%) of HOTEL JV's Non-Casino Gross Receipts (as such term
is defined in Section 2.2 below) without set-off or deduction therefrom at
PHII's principal place of business in Orlando, Florida (unless otherwise agreed
by PHII); provided, however that for purposes of calculating the Continuing Fee
no more than 22% of revenues from Non-Casino Gross Receipts may consist of
casino "complimentaries" extended to customers. The Continuing Fee shall be paid
quarterly in arrears and shall be due and payable quarterly to PHII on the first
day of each such quarter. Notwithstanding the foregoing, if prior to the Grand
Reopening, HOTEL JV opens an attraction with paid admission using THE MEMO or
THE MARKS, HOTEL JV shall pay to PHII a Continuing Fee (payable quarterly as set
forth above) based solely on the Gross Receipts of such attraction (and
excluding all other "Non-Casino Gross Receipts"(defined below)) until the Grand
Reopening.
2.2. For purposes of this Agreement "Non-Casino Gross Receipts" shall mean
the gross proceeds from sales of any and all items sold on or from the Complex
in the ordinary course of business and shall include and not be limited to the
following:
(a) All cash and cash equivalents and credit transactions, and the
full value of any and all "complimentaries" extended to customers (excluding the
value of complimentary alcoholic and non-alcoholic beverages), of whatever
nature carried out during a calendar quarter in question in connection with the
Complex, and wherever a credit or service card is used by a customer, the amount
for purposes of calculating Gross Receipts shall be the price charged to the
customer and no deduction therefrom shall be permitted;
(b) The price of all goods sold and delivered and any services
performed during such calendar quarter in connection with the Complex (including
the value of any goods or services delivered to affiliates or employees of HOTEL
JV, Manager or any other parties for prices less than those charged to third
parties (subject to Section 2.2(d));
(c) For the avoidance of doubt, it is agreed by the parties hereto
that, except as otherwise expressly excluded below, any and all revenues of any
kind or nature arising, directly or indirectly, out of the operation of the
Complex, including, without limitation, the rental of
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guest rooms, conference rooms and banquet rooms, the sale of any and all retail
products, the sale of food, beverage and alcohol from the premises and catering,
receipts from entertainment events held in connection with the Complex, royalty
and licensing revenue, subleasing and sublicensing revenue (subject to Section
2.2(d)(ii) below) and any other sources of revenue, of whatever kind or nature,
generated by the Complex by HOTEL JV, whether physically generated at the
Complex or otherwise shall be included in the definition of Non-Casino Gross
Receipts and shall be included in calculating the Continuing Fee payable to
PHII.
(d) Non-Casino Gross Receipts shall expressly exclude:
(i) Those revenues arising directly and solely from
conducting casino gambling operations in the Complex;
provided, however, other sources of revenue generated in
connection with casino gambling operations shall be
included. By way of example and not of limitation, a
$1.00 chip placed in a slot machine by a customer on the
Planet Hollywood Hotel casino floor shall not be
included in Non-Casino Gross Receipts; however, any sale
by the HOTEL JV in the casino of food, beverage
(including alcoholic beverages), retail products or
other expenditures made by said customer other than
gambling shall be included in calculating Non-Casino
Gross Receipts. For the avoidance of doubt, the purchase
by the customer of any branded gaming product, by way of
example and not of limitation, branded casino chips
which are usable in the casino, whether or not such
chips are actually utilized in gambling activities,
shall not be included in Non-Casino Gross Receipts;
(ii) Those revenues arising directly from third party
operator retail and restaurant operators, tenants,
licensees or concessions in the Complex where such
operations are not branded with or otherwise utilize THE
MARKS or otherwise incorporate or utilize the PHII
Intellectual Property ("Third Party Operations") shall
not be included in Non-Casino Gross Receipts; provided,
however, any and all revenues received by HOTEL JV
arising from such Third Party Operations shall not be
excluded from the definition of Non-Casino Gross
Receipts.
(iii) Applicable excise, sales, occupancy and use taxes, or
similar government taxes, duties, levies or charges
collected directly from patrons or guests, or taxes as a
part of the sales price of any goods, services, or
displays, including gross receipts, admissions, cabaret
or similar or equivalent taxes;
(iv) Tips or their equivalent;
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(v) Discounts of contracts and early payment discounts to
the extent that such discounts are actually provided;
(vi) Employee meals to the extent that such meals are
provided at HOTEL JV's actual cost;
(vii) Any customer refunds, returns or allowances arising
from credits, rebates and discounts of any nature,
including returned product or defective products or
services or the like, provided, however, that such
refunds or allowances shall not exceed the original
price charged by HOTEL JV therefor and shall only be
deducted from Non-Casino Gross Receipts in the week in
which they are paid or allowed to the customer;
(viii) Those revenues arising directly and solely from the
operation of a Planet Hollywood Restaurant (defined
below) as such revenues are to be utilized in
calculating the royalty revenue set forth in Section
2.3 below;
(ix) any duplicate counting of income in any event;
(x) any time share profits or proceeds;
(xi) credit card processing or service fees actually paid;
(xii) receipts from the financing, sale or other disposition
of capital assets, furniture, fixtures and equipment
and other items not in the ordinary course of HOTEL
JV's operations and income derived from securities and
other property acquired and held for investments;
(xiii) receipts from awards or sales in connection with any
Taking (as such term is defined in the Loan
Agreement), from other transfers in lieu of and under
the threat of any Taking, and other receipts in
connection with any Taking, but only to the extent
that such amounts are specifically identified as
compensation for alterations or physical damage to the
Complex;
(xiv) proceeds of any insurance (excluding business
interruption; provided that such insurance shall be
included in Non-Casino Gross Receipts proportionally
to the period covered by such insurance);
(xv) revenues generated by parking;
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(xvi) security deposits;
(xvii) any contributions by HOTEL JV of any additional
working capital, and any contributions to any
reserve fund (and any interest earned thereon);
(xviii) any refund of taxes that were overpaid in a prior
year;
(xix) any reversal of any contingency or tax reserve;
(xx) any proceeds from the settlement or successful
prosecution of any legal claim (other than for payment
of insurance claims included as Non-Casino Gross
Receipts pursuant to clause (xiv) above);
(xxi) any cash on hand, accounts receivable or closing
adjustments received by HOTEL JV in connection with
HOTEL JV's acquisition of the Complex and any sums
received from any source by HOTEL JV after HOTEL JV's
acquisition of the Complex that are either payable to
the prior owner of the Complex or received or retained
by HOTEL JV to reimburse itself for claims, payable to
creditors of the prior owner of the Complex in
accordance with the Purchase Agreement or closing
adjustments incurred in connection with such
acquisition; and
(xxii) payments of principal and interest received pursuant
to that certain Subordinated Non-Negotiable
Promissory Note dated as of November 20, 2000 by
Aladdin Bazaar, LLC in favor of Aladdin Gaming, LLC
and subsequently endorsed by the payee to HOTEL JV,
as such promissory note may have been or may
hereafter be amended, restated, extended, replaced or
refinanced.
2.3. HOTEL JV shall have the right to construct and operate a "Planet
Hollywood" branded restaurant within the Planet Hollywood Hotel to sell Planet
Hollywood food, beverage and retail products, either within the Planet Hollywood
Hotel or on a catered basis (the "Planet Hollywood Restaurant") and shall have
the right, but not the obligation, to operate one or more branded Planet
Hollywood retail outlets (a "Planet Hollywood Retail Shop"); provided, however,
the rights to the Planet Hollywood Restaurant and any Planet Hollywood Retail
Shops shall be granted pursuant to and subject to the parties hereto entering
into a franchise agreement substantially similar to the Restaurant License
Agreement in a form and substance mutually agreed by the parties hereto, such
Restaurant License Agreement to be attached hereto as EXHIBIT C and incorporated
herein; provided further, that the royalty payable by HOTEL JV to PHII on Gross
Sales (as such term is defined in the Restaurant License Agreement) arising from
the Planet Hollywood Restaurant and any Planet Hollywood Retail Shops shall be
five percent (5%) on Gross Sales (as such term is defined in the Restaurant
License Franchise Agreement) of food
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and beverage and ten percent (10%) on Gross Sales of merchandise (collectively
"Retail Royalties"). The Retail Royalties shall be paid quarterly in arrears and
shall be due and payable quarterly to PHII simultaneously with the payment of
the Continuing Fee. Notwithstanding the foregoing, during the first year of
operation of the Planet Hollywood Restaurant, the payment of Retail Royalties
attributable to the Planet Hollywood Restaurant shall be payable to PHII solely
to the extent that, after such payment, the Planet Hollywood Restaurant shall
have positive cash flow. There shall be no Initial Fee (as such term is defined
in the Site Franchise Agreement) for the granting of the franchise as set forth
in this Section 2.3. The parties agree that, to the extent any ancillary items
conflict with the rights of any Third Party Operations, such ancillary items
will not be available in the Planet Hollywood Restaurant or Planet Hollywood
Retail Shops (by way of example and not of limitation, if a Third Party
Operation has the exclusive right to sell leather coats and jackets within the
Complex, the Planet Hollywood Restaurant shall not sell branded leather coats
and jackets).
3. RESERVATION OF RIGHTS
3.1.During the term hereof, and specifically excepting (a) the
granting of a third party license to THE MARKS in connection with the
development of the approximately 4 acre parcel known as the "Music Parcel"; (b)
the granting of a third party license to THE MARKS to the owners of the Desert
Passage in connection with the re-theming of the Desert Passage; and (c) the
granting of a third party license to THE MARKS in connection with the
development and operation of the TPA, PHII shall not license or otherwise allow
the use or operation of THE MARKS in connection with the operation of a hotel,
casino restaurant or retail shops at any location within the Territory;
provided, however, PHII may license or otherwise allow the use or operation of
THE MARKS in connection with one or more restaurants within the Territory if (i)
HOTEL JV advises PHII in writing (and obtains the advance written consent of the
Lenders to such writing in Lender's sole discretion) that HOTEL JV will not open
a Planet Hollywood Restaurant in the Complex; or (ii) if Lenders terminate the
Restaurant License in accordance with the License Subordination and Cooperation
Agreement of even date herewith (the "Subordination Agreement"); provided
further, PHII may license or otherwise allow the use or operation of THE MARKS
in connection with one or more retail shops within the Territory, if (u) HOTEL
JV advises PHII in writing (and obtains the advance written consent of the
Lenders to such writing in Lenders' sole discretion) that HOTEL JV will not open
a retail shop in the Complex; or (v) if Lenders, in accordance with the terms
and conditions of the Subordination Agreement terminate the Restaurant License
and all Planet Hollywood retail shop(s) within the Complex. In addition, from
the Effective Date until the sooner to occur of (y) one (1) year following the
Grand Reopening or (z) a termination of this Agreement by Lenders under the
Subordination Agreement, other than the Complex. PHII shall not license or
otherwise allow the use or operation of THE MARKS in connection with a hotel
with a gaming casino, other than the Complex, within the State of Nevada or
within the southern portion of the State of California as identified by that
portion of California that lies south of a line of latitude drawn horizontally
from the northernmost point in the County of Ventura, and (d) the Planet
Hollywood restaurant located at 0000 Xxxxx Xxx Xxxxx Xxxx, No G-25 89109 in Las
Vegas, Nevada. Notwithstanding the
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foregoing, but subject to Section 2.6.7 of the Securities Purchase Agreement and
termination of this Agreement by the Lenders under the Subordination Agreement,
until the Obligations (as such term is defined in the Loan Agreement) and the
Noteholder Obligations (as such term is defined in the Securities Purchase
Agreement), including all extensions, modifications, restatements or amendments
thereof, are indefeasibly paid in full and performed, none of Xxxxxx Xxxx, PHII,
PHMemo or Hotel JV (or the holder of any equity interest in HOTEL JV) (except
Sheraton in the ordinary course of its business and subject to the provisions of
Section 2.16.2 of the Management Agreement, in each case other than in
connection with THE MARKS) shall be directly or indirectly involved in the
ownership, operation or management of any Planet Hollywood branded hotel with a
gaming casino other than the Complex; provided, however, nothing contained
herein shall prevent the above parties from licensing the rights to THE MARKS
for purposes not prohibited by this Agreement. Except as otherwise set forth
herein, nothing in this Agreement shall be construed as limiting or preventing
PHII from granting licenses to any third party for the use of the Licensed
Rights or from utilizing the PHII Intellectual Property Rights, in both such
instances including THE MARKS, in any other manner whatsoever.
3.2. Nothing contained in this Agreement shall be construed as an
assignment or grant to HOTEL JV, including any and all of its sub-licensees, of
any ownership right, title, or interest in or to THE MARKS, THE MEMO or the
Licensed Rights.
3.3. Any and all rights granted to HOTEL JV for the use of THE MARKS
under this Agreement shall extinguish and be rendered null and void upon the
expiration or sooner termination of this Agreement in accordance with the terms
hereof.
3.4. At the sole election of HOTEL JV, PHII or its affiliates may
provide to HOTEL JV the Licensed Complimentary Products; provided, however, that
(i) HOTEL JV shall have no obligation to purchase any particular Licensed
Complimentary Products from PHII or its respective affiliates; (ii) the cost of
such Licensed Complimentary Products as provided by PHII or its respective
affiliates will not exceed a commercially competitive price in an arm's length
market transaction; and (iii) such Licensed Complimentary Products provided by
PHII shall in any event be produced in accordance with the Standard of Quality
set forth in Section 6 hereinbelow.
3.5. In accordance with the terms and conditions of Section 1.1(d)
above, PHII or its affiliates may provide to HOTEL JV the Provided Goods;
provided, however, that (i) HOTEL JV shall have no obligation to purchase any
particular Provided Goods from PHII or its affiliates as long as HOTEL JV
complies with Section 1.1(d) with respect to procuring its Provided Goods; (ii)
the cost of Provided Goods provided by PHII will not exceed a commercially
competitive price in an arm's length market transaction; and (iii) the Provided
Goods provided by PHII shall in any event be produced in accordance with the
Standard of Quality set forth in Section 6.
3.6. For facilitating the selection of the Licensed Complimentary
Products and
11
Provided Goods provided by PHII, HOTEL JV and PHII acknowledge and agree that
PHII or its affiliates shall submit to HOTEL JV without charge specimens of such
Licensed Complimentary Products and Provided Goods for HOTEL JV's approval.
After such approval, PHII agrees and acknowledges that the Licensed
Complimentary Products and Provided Goods shall be procured (to the extent
required under this Agreement) from and provided by PHII or its respective
affiliates of a quality consistent with the approved sample and otherwise in
accordance with the Standard of Quality set forth in Section 6 and the other
applicable terms hereof.
3.7. PHII shall have the sole and exclusive right to, and shall
timely, register or otherwise renew each of THE MARKS with any federal, state,
territorial, or provincial governmental agency and shall have the obligation and
responsibility for same at its sole expense, including without limitation any
application for trademark registration, statement of use, declaration of use and
incontestability, registered user registrations, application for registration of
copyright claim, renewal, including all requisite documentation and affidavits,
or other governmental filing of or for any of THE MARKS. HOTEL JV shall execute,
and shall provide for the execution by any sub-licensee of THE MARKS, all
appropriate documents prepared by or for the benefit of PHII reasonably
necessary for such purposes in a reasonably timely manner at PHII' sole expense.
PHII warrants and represents that it has registered THE MARKS and, to the extent
required the DOMAIN NAMES, with all required governmental agencies, has good and
marketable title to THE MARKS, DOMAIN NAMES and THE MEMO, free and clear of all
liens except as shown on Schedule 1, and each of PHII and PHMemo warrant and
represent that they have full power to enter into this Agreement.
3.8. PHII shall have the sole and exclusive right to, and shall
timely, at its sole expense register or otherwise renew each of the DOMAIN NAMES
with Network Solutions, Inc. (hereinafter referred to as "NSI") and/or any
successor entity(ies) which is (are) responsible for the registration of
Internet domain names throughout the world, including, but not limited to,
domain name registrations in the generic top level domains of ".com", ".org",
".net" and ".biz". HOTEL JV shall have the non-exclusive right to use THE MARKS
for up to two (2) domain names for creating Internet websites for the Complex
("Hotel Websites") for the term of this Agreement; provided, however, the
registration, renewal and maintenance fees for the Hotel Websites shall be borne
solely by HOTEL JV.
3.9. PHII acknowledges that it shall maintain and protect THE MARKS
and the DOMAIN NAMES and PHII shall take all necessary actions to meet such
requirements with respect to those goods and services offered in conjunction
with THE MARKS and the DOMAIN NAMES at PHII's sole expense.
3.10. It is expressly understood that the rights and powers retained
by PHII to approve the products, advertising and promotions of HOTEL JV, as
expressly provided herein, are retained because of the necessity of protecting
the PHII Intellectual Property (as defined in Section 3.12) generally, and
specifically to conserve the goodwill and good name of PHII and THE MARKS.
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3.11. PHII and HOTEL JV acknowledge and agree that the services and
sale of goods in connection with THE MARKS shall be appropriate for a first
class themed hotel with a casino, restaurant, bar and related uses and equal to
or better than the level of service and quality prevailing from time to time at
Sheraton-managed hotels (or such other Manager approved by the Lenders under the
Loan Agreement), operated in compliance with applicable laws and governmental
regulations.
3.12 All designs, materials, copyrights, artwork, trade names, Trade
Dress, trademarks, service marks, domain names, derivative works thereof and
works made-for-hire, and all goodwill associated therewith, and all other
intellectual property rights of any kind (collectively referred to hereafter as
the "PHII Intellectual Property") created by or for PHII or any of its
affiliated companies, with respect to the Planet Hollywood Hotel shall remain
proprietary with and owned by PHII or any of its affiliated companies, as the
case may be . The PHII Intellectual Property shall also include any and all
derivatives in and to the copyrights, trade names, Trade Dress, trademarks,
service marks of PHII existing at the time of this Agreement or thereafter,
whether created, designed or developed by PHII, HOTEL JV, Manager or any other
third party and PHII specifically reserves any and all rights in such
derivatives. By way of example and not of limitation, in the event that HOTEL JV
develops a new logo that is a derivative work of, or otherwise incorporates any
of the PHII Intellectual Property, for use in connection with the Planet
Hollywood Hotel, although HOTEL JV shall automatically retain a license to such
logo pursuant to and subject to this Agreement as if such logo were included on
EXHIBIT A as one of THE MARKS. PHII shall retain any and all rights in and to
such derivative work and HOTEL JV shall acquire no proprietary rights therein.
Except as set forth herein, all designs, materials, copyrights, artwork, trade
names, trade dress, trademarks, service marks, domain names, derivative works
thereof and works made-for-hire, and all goodwill associated therewith, and all
other intellectual property rights of any kind owned and/or used by HOTEL JV in
connection with the Complex (except for THE MARKS, the DOMAIN NAMES and the PHII
Intellectual Property or any derivatives thereto) shall remain proprietary with
and owned by HOTEL JV or such sub-licensee, as the case may be (the "HOTEL JV
Intellectual Property"). For purposes of this Agreement, "Trade Dress" is
defined as those elements in which the Planet Hollywood Hotel is packaged which
create the visual image presented to customers and which are capable of
acquiring exclusive legal rights as a type of trademark or identifying symbol of
origin.
3.13 PHMemo shall at all times retain sole ownership and title of
THE MEMO, and HOTEL JV shall not have or at any time acquire any right, title,
equity or other interest in THE MEMO, except the license to possess and use THE
MEMO as provided for in this Agreement. THE MEMO is, and shall at all times
remain, the personal property of PHMemo, notwithstanding that any part of it may
now be, or may become, in any manner attached to, or embedded in, real property
or any building with respect to the Planet Hollywood Hotel. HOTEL JV agrees to
indemnify PHMemo and PHII for any loss or expense due to a lien or claim on THE
MEMO by any other lienor or claimant to the extent such lien or claim is caused
by the action or
13
inaction of HOTEL JV.
4. LIMITATIONS OF USE - THE MARKS
4.1.Except as otherwise permitted hereunder:
(a) HOTEL JV shall not use or authorize others to use the PHII
Intellectual Property Rights, the Licensed Rights, the Licensed Complimentary
Products, or the Provided Goods for any other purpose, except as provided below;
(b) HOTEL JV shall only use THE MARKS as shown on EXHIBIT A
and shall use no variations of or make any material changes, additions or
deletions to THE MARKS without PHII's prior written approval which approval may
be withheld in PHII's reasonable discretion; and
(c) Except as otherwise permitted under this Agreement, HOTEL
JV shall not use or authorize others to use THE MARKS, the DOMAIN NAMES or the
PHII Intellectual Property Rights as a trademark and/or service xxxx and/or logo
incorporating any other word, term, xxxx, graphics or designs without PHII's
prior written approval, which approval may be withheld at PHII's reasonable
discretion.
4.2. Notwithstanding the limitations set forth in this Section 4,
PHII acknowledges that in addition to the sublicenses addressed in Sections 1.3
and 1.4 above, HOTEL JV may use or authorize third parties to use the PHII
Intellectual Property, including without limitation THE MARKS, in joint
advertising and promotion of the Planet Hollywood Hotel and the services and
products offered by such third parties provided PHII has given its prior written
approval, which approval shall not be unreasonably withheld, delayed or
conditioned.
4.3. HOTEL JV shall not, either during or after the term of this
Agreement, do anything itself, or aid or assist any other party to do anything
which would infringe, violate, tarnish, dilute, cause a loss of distinctiveness,
harm, or contest the rights of PHII in and to THE MARKS, and/or do anything
which would damage the goodwill or brand image associated with THE MARKS. PHII
shall not, either during or after the term of this Agreement, do anything
itself, or aid or assist any other party to do anything which would infringe,
violate, tarnish, dilute, cause a loss of distinctiveness, harm or contest the
rights of HOTEL JV in and to HOTEL JV's Intellectual Property, and/or do
anything which would damage the goodwill or brand image associated with THE
MARKS, the DOMAIN NAMES or the PHII Intellectual Property which HOTEL JV may use
in conjunction with the services rendered and the goods offered within the
Complex.
4.4. PHII shall designate in writing a representative to which HOTEL
JV shall direct any and all requests for written approval as required by this
Agreement; and for all matters
14
submitted for the written approval of PHII as required by this Agreement, if
PHII does not approve thereof in writing within a fifteen (15) day period
following such submission, such matters shall be deemed approved by PHII.
5. LIMITATIONS OF USE - THE MEMO
5.1. THE MEMO licensed hereunder shall initially consist of those
items of memorabilia requested by HOTEL JV for its use in connection with this
Agreement not to exceed an aggregate fair market value of Twenty Million and
No/100 Dollars ($20,000,000), such amount representing the maximum amount of THE
MEMO that may be licensed to HOTEL JV at any given time, such memorabilia to be
identified on EXHIBIT B attached hereto. PHMemo agrees to make available to
HOTEL JV, at all times, memorabilia having a value of not less than Twenty
Million and No/100 Dollars ($20,000,000) in the aggregate for HOTEL JV's use at
the Complex in Hotel JV's discretion. Within one hundred twenty (120) days
following the reasonable request of HOTEL JV, and at HOTEL JV's sole cost and
expenses, PHMemo shall add and/or subtract memorabilia from the items provided
pursuant to this Agreement in order to rotate a portion of PHMemo's collection
into and out of the Complex (a "Swap Out"); provided, however in no event shall
PHMemo have an obligation to license any PHMemo in excess of an aggregate fair
market value of Twenty Million and No/100 Dollars ($20,000,000), such amount
representing the maximum amount of THE MEMO that may be licensed to HOTEL JV at
any given time. PHMemo shall, at all times during the term of this Agreement,
maintain a reasonable level of memorabilia (which, including THE MEMO, shall
have an aggregate value of not less than Twenty Million and No/100 Dollars
($20,000,000) in its total collection in order to satisfy its Swap Out and other
obligations hereunder and THE MEMO shall be of a type and quality consistent
with memorabilia supplied by PHII and/or PHMemo to its other licensees, lessees
or franchisees. Following a Swap Out or any change, addition or deletion to THE
MEMO pursuant to the terms and conditions of this Agreement, EXHIBIT B shall
automatically be deemed to be revised to reflect such Swap Out, change, addition
or deletion. Notwithstanding the foregoing; (i) HOTEL JV agrees that the
obligations of PHII and PHMemo do not extend to the provision of any casing,
framing or displays for THE MEMO and (ii) PHII and PHMemo agree that, except as
otherwise expressly set forth in this Agreement, the obligations of HOTEL JV
with respect to THE MEMO as set forth herein do not extend to any memorabilia
located at another PHII location other than the Complex. To the extent HOTEL JV
requires casing, framing and displays with respect to all or a portion of THE
MEMO, HOTEL JV may, but shall not be obligated to, purchase such casing, framing
and displays from PHMemo. PHMemo agrees to provide such casing, framing or
displays at a commercially competitive arm's length market price. The cost of
any such casing, framing, displays, installation, supervision and other services
provided by PHII or PHMemo under this Section 5 shall be paid by the HOTEL JV
solely from the $90 Million of "Renovation Capital Expenditures" required to be
made by HOTEL JV under the Loan Agreement. For purposes of this Agreement, it is
agreed by the parties hereto that the "fair market value" of THE MEMO shall be
reasonably determined by PHMemo by (a) appraisals of all or part of items
comprising THE MEMO by independent appraisers, and/or (b) the historical results
of actual sales of items comprising THE MEMO to independent third parties by
15
PHMemo, and any such determination of value shall be subject to the prior
written approval of HOTEL JV and Lenders, such approval not to be unreasonably
withheld.
5.2 HOTEL JV agrees that the installation of THE MEMO requires
specialized skill in the form of riggers and professional installers. HOTEL JV
shall use the services of (i) PHMemo, or (ii) a supervisor designated by HOTEL
JV and reasonably approved by PHMemo in connection with the installation,
removal or movement of any of THE MEMO, whether the initial installation, during
a Swap Out or upon expiration or sooner termination of this Agreement unless
otherwise approved by PHMemo, such approval not to be unreasonably withheld,
delayed or conditioned. PHMemo agrees to provide such services at its actual out
of pocket cost.
5.3 HOTEL JV, without prior written consent of PHMemo, shall not
permit the Property to be removed from the Complex, which consent shall not be
unreasonably withheld, delayed or conditioned; provided, however, that it shall
not be considered an unreasonable condition if PHMemo, acting reasonably,
conditions such removal on PHMemo supervising any movement of THE MEMO at HOTEL
JV's cost (in an amount not to exceed PHMemo's actual out of pocket costs of
providing such service) unless such removal is supervised by an approved third
party supervisor as set forth in Section 5.2 above.
5.4 HOTEL JV shall have absolute supervision and responsibility over
the users of THE MEMO, subject to the restrictions set forth in this Agreement.
THE MEMO shall be used only for the purpose of protected and supervised display
within the Complex absent the prior written approval of PHMemo, such approval
not to be unreasonably withheld, delayed or conditioned.
5.5 HOTEL JV shall use THE MEMO in a careful and proper manner, and
agrees not to permit any of THE MEMO to be used in violation of any applicable
statute, law, ordinance, rule or regulation relating to the possession, use or
maintenance of THE MEMO. HOTEL JV will indemnify and hold PHII and PHMemo
harmless from any liabilities, fines, forfeitures or penalties incurred by PHII
or PHMemo in connection with a violation of any statute, law, ordinance, rule or
regulation of any duly constituted public authority by HOTEL JV related to the
use of THE MEMO. HOTEL JV shall maintain at HOTEL JV's expense all necessary
permits and licenses for the transportation use and display of THE MEMO.
5.6 HOTEL JV shall not use THE MEMO in any manner that will result
in a cancellation of any insurance policy maintained by HOTEL JV on THE MEMO,
even if such use may be in furtherance of HOTEL JV's business purpose.
16
5.7 HOTEL JV shall assume all obligations and liabilities concerning
possession of THE MEMO (except arising from the negligence or willful misconduct
of PHII or PHMemo or as otherwise set forth in Section 14.2) and for its use,
condition and storage during the term of this Agreement, any continuation or
extension thereof, and during its transport of THE MEMO from PHMemo to HOTEL JV
and return. HOTEL JV shall, at HOTEL JV's expense, maintain THE MEMO in the same
condition as it was received.
5.8 Without the prior written consent of PHMemo, which consent shall
not be unreasonably withheld, conditioned or delayed, HOTEL JV shall not make
any alterations, repairs, additions or improvements to THE MEMO. All additions
to and improvements of THE MEMO of any kind shall immediately become PHMemo's
property and subject to the terms of this Agreement. HOTEL JV shall not remove,
alter, disfigure or cover up any numbering, lettering or insignia displayed on
THE MEMO. HOTEL JV shall give PH Memo prompt notice of any need for alteration,
repair, maintenance, conservation work, addition or improvement to THE MEMO.
PHMemo shall have the right to conduct any work done on THE MEMO; provided that
the costs for such work shall not exceed a commercially competitive arm's length
market price.
5.9 It is agreed that PHMemo, at its discretion during HOTEL JV's
regular business hours and following not less than twenty-four hours prior
written notice, has the right to enter the premises where THE MEMO may be
located, for the purpose of inspecting THE MEMO in order to make a determination
of its condition and manner of use. If any of THE MEMO covered is not being
properly maintained or utilized according to the provisions of this Agreement as
reasonably determined by PHMemo, PHMemo has the right, but not the obligation,
if such failure is not cured within thirty (30) days following written notice,
to have it repaired or maintained at a service facility at the expense of HOTEL
JV (not to exceed the actual out of pocket costs of PHII or PHMemo for such
work).
5.10 It is agreed by HOTEL JV that HOTEL JV shall use commercially
reasonable efforts to cause THE MEMO to be equitably and proportionately
distributed and located between the Planet Hollywood Restaurant (to the extent
the Planet Hollywood Restaurant is constructed and operated pursuant to Section
2.3 above) and the remainder of the Complex, and PHII and PHMemo hereby consent
thereto.
5.11. HOTEL JV assumes all risk of loss of and damage to THE MEMO
during the term of this Agreement and during any period of transport or storage
while THE MEMO is in route from PHMemo to HOTEL JV or from HOTEL JV to PHMemo,
from any cause whatsoever. No loss or damage to THE MEMO will impair any
obligation of HOTEL JV, PHII or PHMemo with respect to THE MEMO under this
Agreement, which will continue in full force and effect. If any of THE MEMO is
damaged, lost, stolen or destroyed, HOTEL JV shall promptly notify PHMemo of the
occurrence and shall file all necessary reports, including those required by
applicable law and those required by interested insurance companies.
17
5.12 HOTEL JV shall maintain in full force and effect at all times
during the term of this Agreement and any extensions or renewals thereof,
comprehensive insurance against loss, theft, damage or destruction of THE MEMO
in an aggregate amount of not less than the replacement value, together with
liability coverage and such other coverage as may be reasonably required by
PHMemo. Such insurance providers and policies shall be subject to the prior
written approval of PHMemo and shall name PHMemo and PHII as loss payees. PHII
and PHMemo agree that such insurance may be included as part of HOTEL JV's
overall insurance program.
5.13 HOTEL JV shall pay all actual out of pocket shipping costs,
freight permit fees, bonding fees, storage costs and insurance costs incurred
directly in connection with the shipment of THE MEMO from PHMemo to HOTEL JV and
its return.
5.14 On expiration or earlier termination of this Agreement, HOTEL
JV shall, at HOTEL JV's expense, return THE MEMO to PHMemo in the same
conditions as when received, by loading THE MEMO on board such carrier as PHMemo
shall reasonably specify or approve in writing, and shipping the property by
freight to a domestic destination designated by PHMemo. HOTEL JV, at HOTEL JV's
expense, shall fully insure THE MEMO against loss or damage during transport,
with PHMemo and PHII as loss payees.
5.15 PHMemo reserves the absolute right to recover, from time to
time with the prior written reasonable approval of HOTEL JV (and during the
occurrence and continuance of an Event of Default under the Loan Agreement, the
prior written reasonable approval of the Lenders), at PHMemo's expense, any item
of THE MEMO; provided that PHMemo provides HOTEL JV with reasonable prior
written notice and a reasonable substitute item of equal or higher value at the
same time. Such a substitution shall not be considered an amendment of this
Agreement and shall not affect the terms of this Agreement
5.16 In the event that any item(s) of THE MEMO shall (a) be
conclusively determined to not be authentic items of memorabilia as described on
EXHIBIT B as updated and revised from time to time subject to the provisions of
this Agreement, or (b) HOTEL JV, in its reasonable discretion, determines that a
change in public perception with respect to any particular item(s) of THE MEMO
and the continued display of such particular item(s) of THE MEMO shall cause
material and continuing damage to the brand image or goodwill of HOTEL JV,
PHMemo, at PHMemo's expense, shall remove such item(s) of THE MEMO and provide
HOTEL JV with a reasonable substitute item of equal or higher value at the same
time of the removal with the prior written reasonable approval of HOTEL JV (and
following an Event under the Loan Agreement, the prior written reasonable
approval of the Lenders).
6. STANDARD OF QUALITY
6.1.HOTEL JV agrees that all uses of THE MARKS by HOTEL JV and its
sub-licensees and in connection with the operation and promotion of the Planet
Hollywood
18
Hotel, the Licensed Services and the Licensed Complimentary Products and the
Provided Goods shall be of a quality at least as good as and according to the
Standard of Quality established in this Section 6.
6.2.The Licensed Services, Licensed Complimentary Products and
Provided Goods shall comply with, at the minimum, the following Standard of
Quality (hereinafter referred to as "Standard of Quality"):
(a) for facilitating the establishment of the Standard of
Quality with respect to the Licensed Services, HOTEL JV and PHII acknowledge and
agree that such Standard is evidenced, represented, exemplified, and met by the
operation of a first-class hotel with a casino, bar, incidental sundries,
amenities, gift-shops and ancillary and related uses customarily found in a
first class hotel and equal to or better than the level of service and quality
prevailing from time to time at Sheraton-managed hotels (or hotels of a similar
quality operated by another Manager approved by Lenders under the Loan
Agreement); and
(b) for facilitating the establishment of the pertinent
Standard of Quality with respect to Licensed Complimentary Products and Provided
Goods which HOTEL JV may produce and/or procure other than through PHII, HOTEL
JV and PHII acknowledge and agree that such Standard of Quality is evidenced,
represented, exemplified, and met by representative samples of such Licensed
Complimentary Products and Provided Goods which HOTEL JV shall submit to PHII
without charge for PHII's written approval, which shall not be unreasonably
withheld, conditioned or delayed; after approval by PHII of such, any and all
such Licensed Complimentary Products distributed, offered and/or provided by
HOTEL JV on a complimentary basis and any and all such Provided Goods sold
within the Complex shall be of a quality at least as good as the approved
samples;
6.3. The Licensed Complimentary Products and Provided Goods which
PHII to provides to HOTEL JV for the sale or distribution or offer for sale or
distribution shall be of a quality at least as good as the comparable samples
sold by PHII or its affiliated entities and/or franchisees at its respective
themed restaurants as of the date the products are purchased. For any and all
Licensed Complimentary Products and/or Provided Goods for which there is not a
comparable sample sold by PHII or its affiliate entities and/or franchisees,
PHII acknowledges and agrees that such goods will be of a "first rate" quality
as determined by first class hotel industry standards and equal to or better
than the level of service and quality prevailing from time to time at
Sheraton-managed hotels (or other hotels of a similar quality operated by
another Manager approved by Lenders under the Loan Agreement).
6.4. The license granted pursuant to this Agreement shall only
extend to the Licensed Services and Licensed Complimentary Products and Provided
Goods which are either (a) submitted to PHII for the examination, observation,
screening, sampling and/or testing, as provided herein, for compliance with the
Standard of Quality; or (b) provided by PHII or its affiliates to Hotel JV.
Notwithstanding the foregoing, once PHII has approved of a particular
19
Licensed Service, Licensed Complimentary Product or Provided Good, further
approvals of such particular Licensed Service, Licensed Complimentary Product or
Provided Good shall not be required.
6.5. To ensure that the Standard of Quality is being met, PHII or
its representatives shall have the right to conduct inspections of any portion
of the Complex or any location where Licensed Services are being rendered and/or
Licensed Complimentary Products or Provided Goods are being distributed upon
reasonable written notice to Hotel JV (but not less than twenty-four hours
written notice). Such inspections shall be conducted no more than four (4) times
during any given calendar year at no expense to HOTEL JV and during the normal
business hours of HOTEL JV's executive management with no disturbance to the
guests and to the operations of the Complex. Prior to the initial sale,
rendering or offering by HOTEL JV of any Licensed Services or Licensed
Complimentary Products or Provided Goods under or in connection with THE MARKS
or any of the other Licensed Rights, HOTEL JV shall make same available to PHII
for PHII's written approval, which approval shall not be unreasonably withheld,
conditioned or delayed.
7. TRADEMARK NOTICE DESIGNATION AND PROTECTION
7.1. HOTEL JV shall use the expression "the trademark Planet
Hollywood used under License" or any reasonable equivalent thereof as required
by any applicable law and/or whenever such may be used with reasonable
convenience in conjunction with any and all advertising and promotional
materials used in connection with the Complex and the Licensed Services and such
other expressions as may be reasonably requested by PHII or PHMemo in writing in
connection with the display and exhibition of THE MEMO.
7.2. HOTEL JV shall, as noted in EXHIBIT A or when advised by PHII
in writing: (a) use a notice of trademark and/or service xxxx registration
conforming to law directly after THE MARKS (e.g., (R)); (b) use the designation
"SM" or "TM" directly after THE MARKS in connection with any unregistered use of
THE MARKS in conjunction with the Licensed Services, Licensed Complimentary
Products and Provided Goods, as reasonably appropriate; and (c) use the
copyright notice as reasonably appropriate (e.g., (C)). Upon PHII's addition of
any new marks or designs to EXHIBIT A, such marks or designs shall also bear the
appropriate notice.
7.3. HOTEL JV shall give written notice to PHII of any
infringements, dilution or counterfeits of, or any unfair competition affecting
THE MARKS or Intellectual Property Rights in connection with the Complex, the
Licensed Services, the Licensed Complimentary Products and the Provided Goods
known to Hotel JV promptly upon becoming aware of such occurrences and to
cooperate at PHII's sole expense in any action regarding these matters which
PHII may, in its reasonable discretion, deem appropriate. PHII shall take or
institute any action PHII deems advisable regarding such matters at its own
expense and for its own account. In the event PHII prosecutes an action through
to completion either by settlement or adjudication, PHII shall be entitled to
the entirety of any amounts received as compensation for damages. If PHII
20
determines to take no action with respect to said infringements, dilution,
counterfeits or unfair competition, PHII shall provide reasonable written notice
within a reasonable time period to HOTEL JV of such determination, in which
event HOTEL JV may, at its own expense and for its own account, and with PHII's
cooperation (including joining as a party), prosecute said action, in which case
HOTEL JV shall be entitled to the entirety of any amounts received as
compensation for damages thereof.
8. PROMOTIONS AND MARKETING
8.1. At PHII's sole cost, PHII shall provide or cause other
affiliates of PHII to provide for, in good faith and a highly professional
manner, the following marketing and promotional services ("Promotional
Services") to HOTEL JV:
(a) Reasonable assistance regarding the creative aspects,
conceptual planning, design and operation of the Planet Hollywood theme of the
Complex; and
(b) Reasonable assistance regarding public relations
strategies and campaigns to advertise the Complex.
9. AGREEMENT TERM
9.1. Unless sooner terminated pursuant to the terms and provisions
of this Agreement, this Agreement shall be in full force and effect for a term
expiring at midnight on that date which is twenty-five (25) years following the
Effective Date hereof and three (3) automatic ten (10) year renewals provided
that HOTEL JV is not in default of its obligations under this Agreement beyond
any applicable cure period at the expiration of the initial term or any renewal
term.
9.2. Upon the termination or expiration of this Agreement pursuant
to the terms and provisions of this Agreement for any cause, HOTEL JV and its
sub-licensees shall, in a commercially reasonable manner, but in no event to
exceed nine (9) months following such termination or expiration, discontinue all
use of the PHII Intellectual Property, THE MARKS, the DOMAIN NAMES, and THE
MEMO, including without limitation, such indicia on exterior or interior signs,
stationary, operating equipment and furniture, fixtures and equipment
(collectively, the "Proprietary Materials") and discontinue the use of the Hotel
Website; provided, however, that HOTEL JV shall discontinue the use of
consumable supplies (including, without limitation, brochures, promotional
materials and Licensed Complimentary Products) containing Proprietary Materials
within ninety (90) days following such termination or expiration. HOTEL JV shall
have a further obligation to cause all sub-licensees to, in a commercially
reasonable manner, but in no event to exceed nine (9) months following such
termination or expiration, discontinue all use of Proprietary Materials. Until
such time as HOTEL JV and its sub-licensees have discontinued all use of the
Proprietary Materials of the Planet Hollywood Hotel, the Continuing Fee shall
continue to be payable to PHII. In addition, if HOTEL JV or any of its
sub-licensees
21
fails to comply with the foregoing requirements, HOTEL JV shall pay to PHII, in
addition to the Continuing Fee and as liquidated damages, the sum of Two
Thousand Five Hundred Dollars ($2,500) per day for each day that HOTEL JV fails
to comply with the foregoing; and, in addition, PHII shall also be entitled to
damages or relief by injunction, or to any other right or remedy at law or in
equity, and may seek such relief in a court of competent jurisdiction for HOTEL
JV's failure to comply with this Section 9.2.
9.3. If, upon the expiration or earlier termination of this
Agreement, HOTEL JV fails or refuses to return THE MEMO to PHMemo, PHMemo shall
have the right, subject to the provisions of Section 14.2 and due process
limitations under appropriate law, to take possession of THE MEMO and for that
purpose to enter into the premises where THE MEMO is located, without being
liable to HOTEL JV for such removal or any damages occasioned thereby in any
suit, action or other proceedings, unless such damages are caused by PHMemo's
negligence.
10. BOOKS AND ACCOUNTING
10.1. HOTEL JV shall provide to PHII that information as and when
required to be provided Lenders pursuant to Sections 7.2(a); 7.2(b); 7.2(d);
7.2(j); 7.2(k); 7.2(l) and such other financial information as is reasonably
requested by PHII in order for PHII to confirm the payment of the Continuing Fee
and the Retail Royalties.
10.2. HOTEL JV shall keep accurate books of account and records
covering all transactions relating to the license hereby granted, and PHII and
its duly authorized representatives shall have the right, no more frequently
than four (4) times in any calendar year, to an examination of said books of
account and records and of all other relevant documents and materials in the
possession or under the control of HOTEL JV with respect only to the subject
matter and terms of this Agreement upon five (5) business days' written notice.
Any such examination shall be conducted on reasonable notice and during normal
business hours of HOTEL JV's executive management with no disturbance to guests
or to the operations of the Complex. All books of account and records with
respect to each calendar year shall be kept available for at least three (3)
years after such calendar year. In the event that PHII's duly authorized
representative shall discover an underpayment of fees of two percent 2% or more
pursuant to any such examination, HOTEL JV shall pay to PHII the reasonable cost
of such examination. Fees found to be due as a result of PHII's examination of
HOTEL JV's books of account shall be paid within thirty (30) days of the
completion of the audit with interest calculated in the manner described above
with interest at ten percent (10%) per annum from the date the amount should
have been paid to PHII, up to and including the month of payment. Any
overpayment by HOTEL JV to PHII shall promptly be reported and paid by PHII to
HOTEL JV after PHII's discovery of such discrepancy.
10.4. PHII shall at its own expense provide to HOTEL JV within
ninety (90) days after the completion of each fiscal year a statement certified
by PHII's Chief Financial Officer of all Licensed Complimentary Products and
Provided Goods provided to Hotel JV.
22
11. COMPLIANCE WITH LAWS
11.1. HOTEL JV shall be responsible for compliance with applicable
federal, state, local and municipal rules, laws and regulations regarding any
and all operations of the Complex, the Licensed Services and the manufacture,
distribution and sale of any and all Licensed Complimentary Products and
Provided Goods to the extent not provided to HOTEL JV by PHII or its affiliates.
11.2. Neither HOTEL JV nor any of its sub-licensees shall violate
any applicable law, regulation, or court order in conjunction with its use of
THE MARKS or THE MEMO.
11.3. PHII shall be responsible for compliance with applicable
federal state, local and municipal rules, laws and regulations regarding the
manufacture, distribution, delivery and sale of any and all Provided Goods or
Licensed Complimentary Products sold or distributed by PHII or its affiliates
pursuant to this Agreement and the promotions and marketing services provided
pursuant to Section 8 of this Agreement.
11.4. PHII shall not, nor shall PHII permit any of its sub-licensees
to violate any law, regulation, or court order in conjunction with its use of
THE MARKS or THE MEMO.
12. TERMINATION
12.1. This Agreement shall terminate immediately and automatically
by its own force without notice (other than a required notice expressly set
forth below) on the date specified below in the event that PHII, PHMemo or HOTEL
JV, as applicable, shall have given written notice to the other parties stating
that a material breach or default has occurred and is continuing under this
Agreement (a "Default Notice"):
(i) With respect to the payment of any Continuing Fees, or other
amounts owed to PHII, or with respect to any payment owed to HOTEL JV by PHII or
PHMemo, five (5) business days following receipt of such written Default Notice;
(ii) With respect to any other default other than a default pursuant
to Section 12.1(i) above, PHII, PHMemo or HOTEL JV, as applicable, thirty (30)
days of receipt of such Default Notice if PHII, PHMemo or HOTEL JV, as
applicable, fail to cure such default within such period; provided that if such
default is not reasonably capable of being cured within such thirty (30) day
period, the party in default commences such cure within such thirty (30) day
period and thereafter diligently cures such default as soon as possible, but not
greater than one hundred twenty (120) days following the occurrence of such
default; or
(iii) If HOTEL JV causes the direct or indirect transfer of all or
part of (i) HOTEL JV's ownership interests in the Complex, or (ii) the ownership
interests in HOTEL JV of the Complex to a third party or (iii) otherwise assigns
this Agreement to any party (other than the
23
Lender or other Purchaser as defined in the Subordination Agreement in
accordance therewith) (in each instance a "Sale" and in each instance in
accordance with the terms and conditions of the Loan Agreements), HOTEL JV shall
have the right to terminate this Contract as set forth below.
(a) If a Sale of the Complex by HOTEL JV occurs before the
third (3rd) anniversary of the Grand Opening, then this Agreement may not be
terminated incident to or as a result of any such sale of the Complex except as
is otherwise set forth in the Licensor Subordination and Cooperation Agreement
attached hereto as Exhibit D.
(b) If a Sale of the Complex by HOTEL JV occurs at any time after
the third (3rd) anniversary of the Grand Opening and on or before the sixth
(6th) anniversary of the Opening Date, then HOTEL JV or, if the Sale of the
Complex is to a Competitor, PHII may terminate this Agreement by giving written
notice to the other party on or prior to the Sale of the Complex. Termination
shall be effective upon the Sale of the Complex unless HOTEL JV and PHII agree
otherwise. In the event of such a termination, HOTEL JV shall pay PHII a
termination fee equal to: (i) the number of months (prorating partial months on
the actual number of days elapsed) between the Sale of the Complex and the sixth
(6th) anniversary of the Opening Date; (ii) multiplied by two (2) times the
Continuing Fee and Retail Royalties earned by PHII during the most recent twelve
(12) full calendar months preceding the Sale of the Complex; (iii) divided by
twelve (12).
(c) If a Sale of the Complex by HOTEL JV occurs at any time
after the sixth (6th) anniversary of the Opening Date, then this Agreement may
be terminated (i) by HOTEL JV if the Sale of the Complex is not to a Competitor
or (ii) by either HOTEL JV or PHII if the Sale of the Complex is to a
Competitor. Termination under this subsection shall be effected by giving
written notice to the other party on or prior to the Sale of the Complex unless
Owner and Manager agree otherwise. No termination fee or other similar fee or
compensation is payable for a termination implemented under this subsection.
For purposes of this Section 12.1(iii) , the term "Competitor" shall mean an
entity directly or indirectly engaged, whether by direct or indirect ownership
or management, of themed restaurants. Nothing contained in this Section
12.1(iii) shall impair any rights of the Lender under Section 17.5 and the
Subordination Agreement, including, without limitation the right, but not the
obligation, to terminate this Agreement without the payment of any fees
following the occurrence and continuation of an Event of Default (as set forth
the Loan Agreement) as is outlined in Section 17.5 and the Subordination
Agreement attached hereto as Exhibit D.
Notwithstanding the foregoing, other than the ability of PHII to terminate this
Agreement in the event of a Sale to a Competitor, the provisions of this Section
12.1(iii) shall not be effective, and shall be of no force and effect (and,
other than unpaid OpBiz Accruals (as such term is defined in the License
Subordination Agreement) shall not give rise to any claim in any bankruptcy or
other proceeding by or against HOTEL JV) until (1) the Obligations (as such term
is defined in the Loan Agreement) and the Noteholder Obligations (as such term
is defined in the Securities Purchase Agreement), including all extensions,
modifications, restatements or amendments
24
thereof, are indefeasibly paid in full and performed, (2) the Warrants (as such
term is defined in the Securities Purchase Agreement) have been exercised in
full or otherwise retired, and (3) after the conditions set forth in clauses (1)
and (2) have been satisfied, (A) if a Qualified Public Offering has not
occurred, the date on which the Warrants and the Warrant Interests beneficially
owned (as such term is defined in Rule 13d-3 under the Securities Exchange Act
of 1934) by the Noteholders is, in the aggregate, on an as exercised basis less
than 10% of the outstanding equity interests in MEZZCO on a fully-diluted basis,
and (B) if a Qualified Public Offering has occurred, the date that is nine
months following the consummation of such Qualified Public Offering (the time at
which the conditions set forth in clauses (1), (2) and (3) above are met, the
"Effective Time"), it being expressly understood and agreed that the provisions
of this Section 12.1(iii) shall automatically be deleted (and shall be of no
force or effect) upon the occurrence of any foreclosure or transfer in lieu of
foreclosure under the Loan Agreement or the Securities Purchase Documents (as
defined in the Securities Purchase Agreement).
12.2 Until the Effective Time, it is expressly agreed by the parties
hereto that the commencement of any administrative, legal or equitable action or
proceeding against HOTEL JV or its property seeking any reorganization,
arrangement, composition, readjustment, liquidation, bankruptcy or any other
action involving the readjustment of all or any part of its indebtedness, or
other similar relief under the United States Bankruptcy Code or any present or
future state or foreign statute, law or regulation relative to HOTEL JV or its
properties or any proceedings for voluntary liquidation, dissolution or other
winding up of HOTEL JV's business, or the appointment of any trustee, receiver
or liquidator for HOTEL JV or any part of its properties or any assignment for
the benefit of creditors or any marshaling of assets of HOTEL JV by or against
HOTEL JV (each, a Proceeding") shall not constitute a default triggering the
termination provisions of Section 12.1 above.
12.3 Until the Effective Time, it is further expressly agreed by the
parties hereto that a "Change of Control" (as defined in the Securities Purchase
Agreement), whether as a result of a Proceeding or otherwise, shall not
constitute a default triggering the termination provisions of Section 12.1
above. PHII, PHMemo and HOTEL JV further agree to execute and deliver all such
assignments, consents, instruments and other documents as may be reasonably
necessary to confirm that the Licensed Rights vest with any successor entity.
12.4. The rights with respect to THE MARKS and THE MEMO granted to HOTEL
JV under this Agreement are, and shall otherwise be deemed to be, for the
purposes of Section 365(n) of the Bankruptcy Code, an exclusive license of
"intellectual property" rights as defined in Section 101(35)(A) of the
Bankruptcy Code. Notwithstanding anything to the contrary in this Agreement,
HOTEL JV as the exclusive licensee of rights under this Agreement, may fully
exercise all of its rights for itself under the Bankruptcy Code, including, but
not limited to, its rights to continue to exercise its rights licensed
hereunder. Specifically and for the avoidance of doubt, the parties hereby agree
that in the event of a bankruptcy of HOTEL JV, prior to the Effective Time, PHII
and PHMemo will consent to the assumption or assumption and assignment of this
Agreement by or to: (a) HOTEL JV as debtor or debtor-in-possession (or any
trustee appointed in respect thereof); or (b) HOTEL JV's parent EquityCo, L.L.C.
or any wholly
25
owned subsidiary of EquityCo, L.L.C. It is further agreed that PHII and PHMemo
waive any and all rights under Section 365(c)(1) of the Bankruptcy Code that
would otherwise preclude performance of HOTEL JV's obligations hereunder by a
third party or the assumption or assignment of this Agreement.
12.5. It is the express intention of the parties hereto that a default
under this Agreement shall not constitute a default under the Restaurant License
Agreement and that a default under the Restaurant License Agreement shall not
constitute a default under this Agreement.
12.6 If HOTEL JV abandons the acquisition of the Complex for any reason
(including, without limitation, termination of the Purchase Agreement,
non-approval of HOTEL JV's purchase of the Complex by the Bankruptcy Court,
failure to enter into the Loan Agreement or the failure of the Loan Agreement to
close, construction nonfeasibility, environmental conditions, general economic
conditions, or a force majeure event), HOTEL JV (with the prior written consent
of the Lenders to the extent such consent is required by the Purchase and Sale
Agreement or the Loan Agreement) shall have the right to terminate this
Agreement and the Restaurant License Agreement by written notice to PHII and PH
Memo in connection with such abandonment, without payment of any damages,
termination fees or other compensation to PHII and PH Memo under this Agreement.
If HOTEL JV recommences the acquisition of the Premises, at the option of PHII
and PH Memo to be exercised by giving written notice to HOTEL JV within thirty
(30) days after PHII and PH Memo obtains actual knowledge of such
recommencement, this Agreement shall be reinstated.
12.7 Until the Effective Time, neither PHII nor PHMemo shall be entitled
to any claim (other than for unpaid OpBiz Accruals) or payment of any kind upon
the termination of this Agreement for any reason whatsoever whether in a
Proceeding or otherwise, including, without limitation, a termination by PHII in
the event of a Sale to a Competitor.
13. CONFIDENTIALITY
13.1. The parties acknowledge and agree that all information they
obtain from the other party during the term of this Agreement which, by its
nature, is confidential, or which is marked as "confidential" by the other party
will be treated as confidential information. No party shall: (a) acquire any
interest in any other party's confidential information; (b) use any other
party's confidential information in any other business or capacity; or (c) fail
to exert its reasonable efforts to maintain the confidentiality of any other
party's confidential information during and after the term hereof.
13.2. Notwithstanding anything to the contrary contained in this
Agreement, the restrictions on disclosure and use of the aforementioned
confidential information shall not apply to: (a) information, processes or
techniques which are or become generally known to the general public or became
available to a party on a non-confidential basis from a source which is not
known by the other party to be bound by a confidentiality agreement with respect
to such information; (b) disclosure of the confidential information in judicial,
arbitration or
26
administrative proceedings, to the extent that the disclosing party is legally
compelled to disclose such information, provided disclosing party shall have
afforded the applicable other party the opportunity to obtain an appropriate
protective order or other assurance of confidential treatment for the
information required to be so disclosed; or (c) information that a party is
required to disclose in reports filed with the Securities Exchange Commission or
other regulatory bodies (including the Nevada Gaming Authorities) or in their
respective annual reports or financial statements or as otherwise required by
law or regulation, provided that the disclosing party to the extent possible
provides written notice to and consults with the owning party prior to the
making of any such disclosure; (d) disclosure as required pursuant to the terms
of financing agreements between Hotel JV and third parties; (e) disclosure to
any Manager as required to implement the Management Agreement; or (f) disclosure
required to implement development of the Time Share Premises (as such term is
defined in the Loan Agreement).
14. INDEMNIFICATION AND INSURANCE
14.1. HOTEL JV shall indemnify and save harmless PHII and its
shareholders, members, affiliates, officers, employees and agents from all
liability, loss, damage, claim, fines, penalties, cost or expense (including,
without limitation, reasonable attorneys' fees and disbursements, judgments,
fines and amounts paid in settlement) (collectively, "Claims") arising from or
relating to any breach of this Agreement by HOTEL JV or otherwise arising from
or relating to the Complex and its operations, including, without limitation,
the Licensed Services, Licensed Complimentary Products and Provided Goods prior
to termination of this Agreement, except for those liabilities set forth in
Section 14.2 herein or as otherwise directly or indirectly caused solely by
PHII's negligence, willful misconduct or fraud in connection with the
performance of its obligations hereunder. In no event, however, shall this
provision be deemed to create a third-party beneficiary relationship between
HOTEL JV and any third party or give rise to any claim for consequential damages
on the part of PHII. In case of any action, suit or proceeding brought against
PHII, its shareholders, members, affiliates, officers, employees and agents
arising from or relating to the Licensed Services and Licensed Complimentary
Products and Provided Goods, PHII will notify HOTEL JV of such action, suit or
proceeding and HOTEL JV may and, upon PHII's request, shall, at HOTEL JV's sole
cost and expense, defend such action, suit or proceeding, or cause the same to
be defended by counsel designated by HOTEL JV, except for Claims involving
PHII's negligence, willful misconduct or fraud.
14.2. PHII represents and warrants (i) that it or PHMemo, as
applicable, is the rightful owner of the PHII Intellectual Property and other
tangible property that is the subject of this Agreement, including, without
limitation, THE MARKS, the DOMAIN NAMES and THE MEMO; (ii) that THE MARKS and
the DOMAIN NAMES constitute all of the trademarks owned or controlled and used
in connection with the operation of domestic Planet Hollywood restaurants and
retail outlets; (iii) Planet Hollywood International, Inc. is the
successor-in-interest by merger with Planet Hollywood, Inc., a Florida
corporation and Planet Hollywood, Inc., a Delaware corporation and as such is
the owner of all trademarks, design marks, trade names and other intellectual
property registered to or owned by such merged corporations, and (iv) that it
27
has the right to grant the license granted herein. Further, PHMemo represents
and warrants that PHMemo has the right to provide THE MEMO to HOTEL JV for the
purposes set forth in this Agreement and that THE MEMO constitutes those
authentic pieces of memorabilia as described on EXHIBIT B and that THE MEMO, THE
MARKS and the DOMAIN NAMES are free and clear of all liens except as provided in
Schedule 1. PHII hereby indemnifies and saves harmless HOTEL JV and the Lenders
and undertakes to indemnify HOTEL JV and the Lenders and their respective
shareholders, members, affiliates, officers, employees and agents against,
successors and assigns and to hold HOTEL JV and the Lenders harmless from any
Claims, irrespective of whether such Claims are asserted by private or public
parties, arising in whole or in part out of or relating to (a) any breach of
this Agreement by PHII or PHMemo, including, without limitation, the
representations and warranties and covenants set forth herein, or (b) any actual
or alleged trademark infringement and/or dilution, service xxxx infringement
and/or dilution, trade dress infringement and/or dilution, copyright
infringement , unfair competition, deceit or other unfair business practices or
other actual or alleged infringement of the intellectual property rights of any
third party to the extent arising out of (i) the use of THE MARKS, THE MEMO and
the DOMAIN NAMES; (ii) the use of the PHII Intellectual Property in compliance
with the provisions of this Agreement; and/or (iii) a breach by PHII and/or
PHMemo of their respective obligations under this Agreement and (c) the
violation of statute, law, ordinance rule or regulation in connection with THE
MARKS, THE MEMO or the DOMAIN NAMES (not caused by HOTEL JV's use, in which case
the previsions of Section 5.4 shall apply) excepting such Claims arising from
HOTEL JV or the Lenders negligence, willful misconduct or fraud. However, in no
event shall HOTEL JV's right to indemnification as set forth in this subsection
extend to circumstances involving actual or alleged acts of unfair competition
not involving HOTEL JV's use of THE MARKS or PHII's Intellectual Property in
compliance with the provisions of this Agreement committed by HOTEL JV, its
assigns, licensees, and/or sub-licensees.
14.3. In addition to the insurance requirements for THE MEMO as set
out in Section 5.11 of this Agreement, to the extent not equal to or provided
for in the Operating Agreement, the Management Agreement or the Loan Agreement,
HOTEL JV agrees that it shall obtain and maintain, or cause to be maintained, at
its own expense, product liability insurance providing adequate general
liability insurance protection to include without limitation product liability
insurance in the minimum amount of $5,000,000 combined single limit of bodily
injury liability and property damage liability for each occurrence and annual
aggregate, naming PHII as an additional insured, and to provide to PHII as proof
of such insurance certificates of insurance no later than thirty (30) days after
the date this Agreement is executed by HOTEL JV. HOTEL JV shall continuously
keep PHII current as to any modification to each insurance policy. PHII shall be
entitled to a copy of the then prevailing certificate of insurance for each such
insurance, which shall be promptly furnished to PHII by HOTEL JV. Upon written
request, HOTEL JV shall provide PHII with a copy of each such policy of
insurance then in effect. PHII shall be notified by each insurance carrier a
minimum of thirty (30) days before any cancellation or modification to the
particular policy.
28
15. REMEDIES
15.1. (a) Each of HOTEL JV and its sub-licensees recognizes the
great value of the goodwill that is associated with Proprietary Materials, PHII
Intellectual Property Rights, THE MARKS, THE MEMO and the Trade Dress and
acknowledges that such all rights therein and goodwill pertaining thereto,
belong exclusively to PHII, and that the PHII Intellectual Property is expected
to have an established meaning in the mind of the public. Each of HOTEL JV and
its sub-licensees further recognizes and acknowledges that a breach by it of any
of its covenants, agreements, obligations, and/or undertakings hereunder will
cause PHII irreparable damage, which may not be remedied in damages in an action
at law, and may, in addition thereto, constitute an infringement of PHII's
rights in and to the PHII Intellectual Property.
(b) In accordance with the acknowledgements set forth in
Section 15.1(a), PHII shall be entitled to seek from a court of competent
jurisdiction an injunction or restraining order or obtain a decree for specific
performance for the terms of this Agreement; all such remedies sought shall be
in addition to all other rights and remedies of PHII or such rights and remedies
determined by a court of competent jurisdiction to be appropriate under the
circumstances;
15.2. PHII recognizes the great value of the goodwill that is
expected to become associated with the HOTEL JV Intellectual Property and
acknowledge that such HOTEL JV Intellectual Property and all rights therein and
goodwill pertaining thereto, belong exclusively to HOTEL JV. PHII further
recognizes and acknowledges that a breach by it of any of its covenants,
agreements, obligations, and /or undertakings hereunder may cause HOTEL JV
irreparable damage, which may not be remedied in damages in an action at law,
and may, in addition thereto, constitute an infringement of HOTEL JV's rights in
and to the HOTEL JV Intellectual Property whereby HOTEL JV may be entitled to
seek an injunction or restraining order or obtain a decree for specific
performance for the term of this Agreement, as applicable and appropriate. All
such remedies sought shall be in addition to all other rights and remedies of
HOTEL JV or such rights and remedies determined pursuant to this Agreement.
16. NOTICES
16.1. All notices or other communications required or permitted
under this Agreement shall be made in writing and shall be deemed given (a) upon
delivery, if sent by (1) personal delivery, (2) courier (e.g., overnight
delivery) or (3) certified mail, return receipt requested, postage and
registration fees prepaid and correctly addressed to the parties at the
following addresses (b) upon sending, if sent by facsimile to a party at the
number listed below for such party (with a facsimile machine or computer
generated confirmation sheet retained by the sender):
29
If to PHII: Xx. Xxxxxx Xxxx
or PHMemo Chairman and Chief Executive Officer
Planet Hollywood International, Inc.
0000 Xxxx Xxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
with copies to:
Xxxx X. Xxxx, Esq.
Vice President & General Counsel
Planet Hollywood International, Inc.
0000 Xxxx Xxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
If to HOTEL JV: Xx. Xxxxxx Xxxx
Chairman and Chief Executive Officer
Planet Hollywood International, Inc.
0000 Xxxx Xxxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
With a copy to: Xx. Xxxx Xxxxxxxxxx
Bay Harbour Management, LC
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile:(000) 000-0000
With a copy to: Xxxxx Day
0000 Xxxxx Xxxxxxx
Xxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
If to LENDERS: The Bank of New York, Asset Solutions
Division as Agent
000 Xxxx Xxx Xxxxxxx Xxxx.
Xxxxx 0000
Xxxxxx, Xxxxx 00000
Attn: Xx. Xxxxx Xxxxxx
Facsimile:(000) 000-0000
30
With a copy to Xxxx Xxxxxxx, L.L.P.
0 Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
00 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx, Esq.
Facsimile:(000) 000-0000
Attn: Xxxxxxx Xxxxxxx, Esq.
Facsimile: (000) 000-0000
With further copy to: General Electric Capital Corporation
Capital Funding, Inc.
Portfolio Group
000 Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxxxxxxxx 00000
Attention: Xxxxxxxx Xxxx
Xxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
And: Xxxx & Xxxxxxx. Ltd.
000 X. Xxxxxx Xxxxxx, Xxxxxx Xxxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxxxx Xxxxxxx, Esq.
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to the Noteholders: Post Advisory Group, LLC
00000 Xxxxxxxx Xxxx.
Xxxxx 000
Xxx Xxxxxxx, XX 00000
With a copy to Xxxxxxx Procter LLP
Exchange Place
Boston, MA 02109
Attn: Xxxxxx X. Xxxxx, Esq.
Facsimile:(000) 000-0000
or to such other address or facsimile number as either party hereto may
designate by written notice. The parties shall acknowledge in writing any notice
given by personal delivery.
31
17. MISCELLANEOUS
17.1. (a) This Agreement and the Restaurant License Agreement set
forth the entire agreement and understanding between the parties and supersede
and terminate all prior agreements, if any, relating in any way to the use of
THE MARKS, the DOMAIN NAMES and the MEMO by the parties, or to any other subject
matter contained herein, and merges all prior discussions between them. Neither
party has made or is making any representation or warranty (express or implied)
to the other with respect to the subject matter hereof, or to any of their
respective affiliates, agents, employees or consultants, except for those
expressly set forth in this Agreement. This Agreement shall not be construed
more strictly against one party than against the other merely by virtue of the
fact that this Agreement may have been physically prepared by one of the
parties, or such party's counsel, it being agreed that all parties and their
respective counsel have mutually participated in the negotiation and preparation
of this Agreement. Neither of the parties shall be bound by any definition,
condition, warranty or representation other than as expressly stated in this
Agreement. In the event of any inconsistency between this Agreement and the
Restaurant License Agreement, the provisions of this Agreement shall prevail.
(b) This Agreement may not be amended or modified except by a
written instrument signed by all of the parties and executed on behalf of PHII
by their chief executive officer, executive vice president, corporate secretary
or general counsel. Further, apart from immaterial modifications, this Agreement
may not be amended or modified without the consent of (y) the Majority Holders
(as defined in the Securities Purchase Agreement), which consent shall not be
unreasonably withheld or delayed so long as any such amendment or modification
does not adversely affect the interests of the Noteholders (as defined in the
Securities Purchase Agreement), and (z) the Required Term Loan A Lenders (as
defined in the Loan Agreement), which consent shall not be unreasonably withheld
or delayed so long as any such amendment or modification does not adversely
affect the interests of the Required Term Loan A Lenders.
17.2. Except as expressly provided herein, neither party shall use
the name or credit of the other in any manner whatsoever, nor incur any
obligation in the other's name, nor be held liable or accountable for any
obligations incurred by the other party. Nothing herein contained shall be
construed to constitute the parties as joint venturers or partners, nor shall
any similar relationship be deemed to exist between them. Nothing contained in
this Agreement shall be construed as constituting either party as the other's
agent without the first party's special authorization in writing; it is
specifically understood and agreed that under no circumstance shall any power
granted, or which may be deemed to be granted to either party, be deemed to be
coupled with an interest; and it is further specifically understood and agreed
that the respective businesses of each of the parties shall be operated separate
and apart from the other party.
17.3. No covenant or condition of this Agreement can be waived
except by the written agreement of the parties, executed on behalf of PHII by
their chief executive officer, executive vice president, corporate secretary or
general counsel. Forbearance or indulgence by a
32
party in any regard whatsoever shall not constitute a waiver of the covenant or
condition to be performed by the other party to which the same may apply, and,
until complete performance by the obligated party of such covenant or condition,
the benefiting party shall be entitled to invoke any remedy available to it
under this Agreement or at law or in equity, despite such forbearance or
indulgence.
17.4. The terms and provisions of this Agreement shall bind any
assigns and successors of a party; provided, however, that any such assignee
shall assume all of the duties, obligations, rights, liabilities, agreements,
covenants and responsibilities of the assigning party hereunder. An assigning
party shall not be released from any such duty, obligation, liability,
agreement, covenant or responsibility to the other party as a result of any
assignment permitted by this Section, unless and to the extent the same shall
have been fulfilled by such assignee, and the assigning party shall continue to
remain primarily liable to the other party under this Agreement.
17.5. Each party hereby agrees that this Agreement and the licenses
granted hereby are not assignable or transferable, without the prior written
consent of the Required Lenders (as such term is defined in the Loan Agreement)
and the Majority Holders (as such term is defined in the Securities Purchase
Agreement), which consent shall not be unreasonably withheld, delayed or
conditioned, except that no consent of the Majority Holders shall be required if
the Lenders succeed, by foreclosure or assignment in lieu of foreclosure, to the
interests of HOTEL JV hereunder upon or after an Event of Default under the Loan
Agreement or to the interests of PHII or PH Memo upon or after an Event of
Default or under the Planet Hollywood Security Agreement (as defined in the Loan
Agreement). PHII may assign this Agreement in whole to any Person which is
controlled by PHII. HOTEL JV may assign its interest in and rights under this
Agreement and the licenses granted hereunder to the Lenders or to any Person
designated by the Lenders. PHII and PHMemo agree to execute an "Assignment of
Contract" substantially in the form of Exhibit P to the Loan Agreement and
Licensor Subordination and Cooperation in the form of the attached Exhibit D,
which provides, among other things, that following the occurrence and
continuance of an Event of Default under the Loan Agreement, the Lenders may (a)
terminate this Agreement without payment of any penalty or termination fees or
(b) succeed to the interests of HOTEL JV and either retain or sell such interest
to a third party assignee in connection with the Complex without the payment of
any fees (other than the continuation of Continuing Fees, Retail Royalties and
other fees and charges set forth in this Agreement payable during the period of
time Lenders had title to the Complex); provided, however, that any third party
shall assume all of the duties, obligations, rights, liabilities, agreements,
covenants and responsibilities of HOTEL JV hereunder; provided further, however,
that if the Lenders succeed to HOTEL JV's interest in the Complex and License
and this Agreement is not terminated, the Lenders shall recognize this Agreement
and perform the obligations of the License during such period that Lenders own
the Complex (but shall have no obligation to assume this Agreement).
17.6. The parties hereto, when requested by another party, shall
give all
33
reasonable and necessary cooperation with respect to any reasonable matters
relating to the transactions contemplated by this Agreement.
17.7. This Agreement is for the benefit of, and may be enforced only
by, the parties signing this Agreement and their respective successors and
permitted assignees, and is not for the benefit of, and may not be enforced by,
any third party.
17.8. The parties agree that this Agreement, all questions with
respect to the construction of this Agreement shall be governed by and
determined in accordance with the laws of the State of New York applicable to
agreements entered into and performed entirely within the State of New York
without giving effect to the choice or conflicts of laws provisions thereof.
Each of the parties hereto (i) irrevocably submits itself to the jurisdiction of
either the United States District Court for New York or the New York State
Courts, for the purposes of any suit, action or other proceeding brought by the
other, or its respective successors or assigns, with respect to this Agreement,
and (ii) to the extent permitted by applicable law, hereby waives, and agrees
not to assert, by way of motion, as a defense or otherwise in any such suit,
action or proceeding, any claim that it is not personally subject to the
jurisdiction of the above-named courts, that the suit, action or proceeding is
brought in an inconvenient forum, or that the venue of the suit, action or
proceeding is improper in such courts.
17.9. If any section (or part thereof) of this Agreement is found by
a court of competent jurisdiction to be contrary to, prohibited by,
unenforceable or invalid under any applicable law, such court may modify such
section (or part thereof) to achieve the parties' apparent objective in
connection therewith to the fullest extent possible, so, as modified, such
section (or part thereof) will be valid, legal and enforceable in such
jurisdiction. The validity, legality and enforceability of such provision shall
not in any way be affected or impaired thereby in any other jurisdiction. If
such provision cannot be amended by said court without materially altering the
intention of the parties, the parties shall negotiate an amendment to such
provision within ninety (90) days, failing which such provision shall be
stricken and the remainder of this Agreement shall continue in full force and
effect.
17.10. Unless the context of this Agreement clearly requires
otherwise: (i) references to the plural include the singular and vice versa;
(ii) references to any person include such person's successors and assigns but,
if applicable, only if such successors and assigns are permitted by this
Agreement; (iii) references to one gender include all genders; (iv) "including"
is not limiting; (v) "or" has the inclusive meaning represented by the phrase
"and/or"; (vi) the words "hereof", "herein", "hereby", "hereunder" and similar
terms in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement; (vii) section, subsection, clause,
schedule and exhibit references are to this Agreement unless otherwise
specified; (viii) reference to any agreement (including this Agreement),
document or instrument means such agreement, document or instrument as amended
or modified and in effect from time to time in accordance with the terms thereof
and, if applicable, the terms hereof; and (ix) general or specific references to
any law means such law as amended, modified, codified or re-enacted,
34
in whole or in part, and in effect from time to time.
17.11. All monetary amounts expressed in this Agreement and all
payments required by this Agreement are and shall be in United States dollars.
17.12 In the event that the Senior Debt (as defined in the
Securities Purchase Agreement) is paid in full (and not refunded, refinanced or
replaced), subject to reinstatement as provided in the Intercreditor Agreement
(Senior Debt) (as defined below) all references to "Lenders" in this Agreement
shall instead be deemed a reference to "Noteholders" (as defined in the
Securities Purchase Agreement), with the effect being that all rights and
remedies in this Agreement reserved for the Lenders will instead be rights and
remedies of the Noteholders. In furtherance thereof, all references to the terms
"Loan Agreement" and "Obligations" will instead be deemed to be references to
"Securities Purchase Agreement" and "Noteholder Obligations", respectively.
17.13 This Agreement and all rights, remedies, powers and privileges
of PHII and PHMemo hereunder are and shall be subject in all respects to the
License Subordination Agreement dated as of August 9, 2004 and entered into
among Post Advisory Group, L.L.C., as collateral agent, PHII, PHMemo and
consented to by HOTEL JV (the "License Subordination Agreement"). The License
Subordination Agreement provides, among other things, that notwithstanding
anything in this Agreement to the contrary, that upon the occurrence and during
the continuance of certain Defaults or Events of Default under the Securities
Purchase Agreement, no cash payments may be made by HOTEL JV to PHII or PHMemo
in respect of any amounts due and owing pursuant to this Agreement, including,
without limitation, in respect of the Continuing Fee, Retail Royalties,
liquidated damages pursuant to Section 9.2 hereof, or interest on overdue
payments pursuant to Section 10.2 hereof.
17.14. This Agreement and all rights, remedies, powers and
privileges of the Collateral Agent and the Noteholders hereunder are junior and
subject to the rights of the Lenders under (i) the Subordination Agreement dated
as of August 9, 2004 by and among The Bank of New York Asset Solutions Division,
as agent and the Noteholders (the "Intercreditor Agreement (Senior Debt)"). (ii)
the Planet Hollywood Security Agreement (as defined in the Loan Agreement), and
(iii) the Subordination Agreement.
This Agreement may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
35
IN WITNESS WHEREOF, the parties have hereunto signed this Agreement
the day and year first written herein.
PLANET HOLLYWOOD
INTERNATIONAL, INC.,
a Delaware corporation
By: /s/ Xxxxxx Xxxx
---------------------------------
Name: Xxxxxx Xxxx
Title: President
PLANET HOLLYWOOD
MEMORABILIA, INC.,
a Florida corporation
By: /s/ Xxxxxx Xxxx
---------------------------------
Name: Xxxxxx Xxxx
Title: President
PLANET HOLLYWOOD
(REGION IV), INC.,
a Minnesota corporation
By: /s/ Xxxxxx Xxxx
---------------------------------
Name: Xxxxxx Xxxx
Title: President
[SIGNATURE PAGE TO AMENDED AND RESTATED LICENSING AGREEMENT]
OPBIZ, L.L.C.
a Nevada limited liability company
By: MezzCo, L.L.C.,
a Nevada limited liability company
its sole member
By: EquityCo, L.L.C.,
a Nevada limited liability company,
its sole member
By: /s/ Xxxxxxx X. Xxxxxxxxxx
-------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Manager
[SIGNATURE PAGE TO AMENDED AND RESTATED LICENSING AGREEMENT]
