Exhibit 10.18
CONSENT AND ACKNOWLEDGEMENT AGREEMENT
This CONSENT AND ACKNOWLEDGEMENT AGREEMENT, dated as of January 23, 2004
(as amended, supplemented, restated or otherwise modified from time to time,
this "AGREEMENT") is made by Hard Rock Hotel Licensing, Inc., a Florida
corporation ("HRL"), and Hard Rock Cafe International (STP), Inc., a New York
corporation (together with HRL, the "LICENSORS"), Premier Entertainment Biloxi
LLC, a Delaware limited liability company ("PREMIER"), Premier Finance Biloxi
Corp., a Delaware corporation (collectively with Premier, the "ISSUERS"), U.S.
Bank National Association, a national banking association (the "TRUSTEE"), GAR,
LLC, a Mississippi limited liability company ("GAR"), AA Capital Biloxi
Co-Investment Fund, L.P., a Delaware limited partnership ("AA CAPITAL BILOXI")
and AA Capital Equity Fund, L.P., a Delaware limited partnership (collectively
with AA Capital Biloxi, "AA CAPITAL").
AGREEMENT
In consideration of the promises contained herein, the parties hereby agree
as follows:
1. DEFINITIONS. Capitalized terms not otherwise defined herein shall have the
meaning ascribed to them in the Security Agreement (as hereinafter
defined).
2. CONSENT TO PLEDGE OF HARD ROCK DOCUMENTS. Licensors hereby consent to the
pledge, collateral assignment and transfer made by Premier in favor of the
Trustee of Premier's right, title and interest in and to the Hard Rock
Documents, pursuant to that certain Pledge and Security Agreement, dated as
of even date herewith (the "SECURITY AGREEMENT").
3. CONSENT TO ADDITIONAL PLEDGE. To the extent Licensors' consent is required
under the Hard Rock Documents, and subject to the terms and conditions of
this Agreement, Licensors hereby consent to: (a) the pledge, collateral
assignment and transfer by Premier of the collateral described in the
following documents: (i) that certain Intercreditor Agreement dated as of
even date herewith by and among the Issuers, the Trustee and Rank America,
Inc., a Delaware corporation (the "INTERCREDITOR AGREEMENT"); (ii) that
certain Construction Deed of Trust, Leasehold Deed of Trust and Fixture
Filing, with Assignment of Leases and Rents on or about the date hereof
(the "DEED OF TRUST"); and (iii) that certain Preferred Ship Mortgage to be
entered into upon completion of the casino vessel (the "SHIP MORTGAGE");
and (b) the pledge of all of the membership interests in Premier (the
"MEMBERSHIP INTERESTS") made by GAR and AA Capital, to the Trustee in
accordance with that certain Membership Interest Pledge and Security
Agreement dated as of even date herewith (the "MEMBERSHIP PLEDGE
AGREEMENT," and together with the Security Agreement, the Intercreditor
Agreement, the Deed of Trust and the Ship Mortgage, the "INDENTURE
TRANSACTION DOCUMENTS").
4. ACKNOWLEDGEMENT OF LICENSORS. Licensors recognize and agree that:
4.1. the Trustee is a Secured Party, as defined in Section 24(A) of the
License Agreement;
4.2. the Trustee is entitled to all rights of a Secured Party pursuant to
Section 24 of the License Agreement;
EXECUTION VERSION
4.3. the Trustee does not assume any of the Issuers' obligations,
liabilities or duties under the Indenture Transaction Documents,
including, but not limited to, any indemnification or other payment
obligations (and the Trustee shall not be liable or responsible for
any of the foregoing) merely by the execution and delivery of this
Agreement;
4.4. to the best of Licensors' actual knowledge, no assignment of the
Indenture Transaction Documents or any interest therein (collaterally
or otherwise) has been made, other than to the Trustee and AA Capital;
and
5. ACKNOWLEDGEMENT OF THE TRUSTEE. The Trustee acknowledges that:
5.1. the Trustee shall not amend or modify the Security Agreement without
the prior written consent of Licensors, which consent shall not be
unreasonably withheld, conditioned or delayed;
5.2. the Trustee shall not assign or otherwise transfer its interest in the
Security Agreement, to the extent the same applies to the Hard Rock
Documents or the rights or interests created therein, without the
prior written consent of Licensors, which consent shall not be
unreasonably withheld, conditioned or delayed;
5.3. neither the Security Agreement nor this Agreement shall cause, result
in or in any way be deemed a subordination of Licensors' rights under
the Hard Rock Documents to the rights of the Trustee. The Security
Agreement and the rights, title and interest of the Trustee therein
are subject in all respects to the terms and conditions of the Hard
Rock Documents, including, but not limited to the Pledge Provisions.
To the extent of any conflict or inconsistency between the terms and
conditions of the Security Agreement and those of the Hard Rock
Documents, the terms of the Hard Rock Documents shall prevail. In all
events, the Security Agreement shall be interpreted and construed in a
manner which gives full and complete meaning to each provision of the
Hard Rock Documents;
5.4. all receivers appointed by the Trustee in accordance with Section 7 of
the Security Agreement are subject to the prior written consent of
Licensors, which consent shall not be unreasonably withheld,
conditioned or delayed;
5.5. during the term of the License Agreement, the licensee under the
License Agreement, the lessee under the Memorabilia Lease, the
Landlord under the Cafe Lease Agreement and the Retail Store Lease
Agreement, and the owner of the Project (as defined in the License
Agreement) shall be the same "PERSON" (as defined in the License
Agreement) or an entity controlled by such Person;
5.6. in the event of a foreclosure and subsequent sale or deed in lieu of
foreclosure to the Trustee or another Person of the Membership
Interests pursuant to the Membership Pledge Agreement (the Person
(including the Trustee) so acquiring Premier's interest in the License
Agreement being referred to herein as the "PURCHASER"), an "Event of
Default" shall be deemed to have occurred under the License Agreement,
unless all of the following conditions are met:
EXECUTION VERSION
2
(i) the Purchaser meets all of the following criteria (any
Purchaser meeting all of the following criteria shall be referred to
herein as an "APPROVED PURCHASER"):
(a) the Purchaser has a net worth of at least ten million
dollars ($10,000,000.00);
(b) the Purchaser (and its constituent partners, major
shareholders (defined as holding at least ten percent (10%) of
the voting securities of the Purchaser), senior executive
officers and other controlling Persons, if appropriate) has not
been convicted of a felony, and no such Person has been refused a
gaming license (and not subsequently revoked) or had a gaming
license revoked (and not subsequently restored) in any
jurisdiction of the United States; and
(c) neither the Purchaser nor any of its Affiliates or any
of their respective constituent partners, major shareholders,
senior executive officers and other controlling Persons, if
appropriate is an HRL Competitor (as defined in the License
Agreement); and
(ii) the Purchaser possesses management ability and experience
and a well-established reputation for quality management in the
hotel/gaming industry as determined by HRL in its reasonable
discretion, or, within ninety (90) days after foreclosure or transfer
in-lieu of foreclosure of the Membership Interests, has entered into a
contract for the management of the Project (as such term is defined in
the License Agreement) by a Person who possesses such ability,
experience and reputation, in accordance with the standards set forth
in Section 5(Q) of the License Agreement, which is reasonably
acceptable to HRL.
Upon such "Event of Default" under the License Agreement, after
providing written notice to the Purchaser, but not an opportunity to
cure, HRL will be entitled to exercise all of its remedies under the
License Agreement.
5.7. Except as permitted in Section 16 of the License Agreement and Section
5.6 of this Agreement, any assignment, sale or other transfer of the
Membership Interests shall be deemed null and void and of no force or
effect.
5.8. Except as expressly set forth herein with respect to the pledge of the
Membership Interests, no provision in the Ship Mortgage, Deed of Trust
or Membership Pledge Agreement shall amend, alter, abridge or suspend
any of the terms and conditions of the Hard Rock Documents.
6. ONE-TIME RIGHT TO ELECT NOT TO FORECLOSE ON THE LICENSE AGREEMENT, CAFE
LEASE AGREEMENT, RETAIL LEASE AGREEMENT AND MEMORABILIA LEASE.
6.1. Notwithstanding any provision to the contrary contained in Section 24
of the License Agreement or this Agreement, if the Trustee desires to
the foreclose any of the security interests or liens on some or all of
the Collateral or the Land, the Trustee shall have the right to elect
not to foreclose on the License Agreement and the Memorabilia Lease by
providing written notice to HRL (an "ELECTION NOTICE") of such
election prior to the
EXECUTION VERSION
3
publication of notice pursuant to Mississippi Code Section 89-1-55 (or
any successor statute, as amended from time to time) of an intent to
non-judicially foreclose, or filing of the first foreclosure action by
the Trustee to judicially foreclose, its interest in any or all of the
Collateral (a "FORECLOSURE COMMENCEMENT"). If the Trustee fails to
provide an Election Notice prior to a Foreclosure Commencement, and
the Trustee subsequently completes a foreclosure on any of the
Collateral or the Land, then the Trustee shall be obligated to
foreclose on the License Agreement and the Memorabilia Lease in
accordance with this Agreement. If the Trustee timely provides an
Election Notice: (i) Trustee's right to foreclose on the License
Agreement and the Memorabilia Lease, and all restrictions or
prohibitions contained in this Agreement and/or Section 24 of the
License Agreement related to the right of HRL to terminate the License
Agreement and the Memorabilia Lease, enter into a new lease, terminate
or xxxxx any other right of HRL under the License Agreement and the
Memorabilia Lease or otherwise provide an accommodation to the Trustee
shall be deemed null and void, unless such foreclosure action is
dismissed, abandoned or is otherwise resolved without title to the
Facility being conveyed by foreclosure, non-judicial foreclosure, in
lieu of foreclosure or otherwise, and (ii) upon conveyance of the
Facility in connection with such foreclosure action by judicial or
non-judicial foreclosure, by conveyance in lieu of foreclosure or
otherwise, all right, title and interest of the Trustee in the License
Agreement and the Memorabilia Lease and the right of the Trustee to
foreclose thereon and all restrictions or prohibitions contained in
this Agreement and/or Section 24 of the License Agreement related to
the right of HRL to terminate the License Agreement, enter into a new
lease, terminate or xxxxx any other right of HRL under the License
Agreement or otherwise provide an accommodation to the Trustee, shall
be deemed null and void.
6.2. If the Trustee provides an Election Notice and title to the Facility
is conveyed by judicial or non-judicial foreclosure or conveyance in
lieu of foreclosure, then no later than thirty (30) days after title
to the Facility is conveyed by or in lieu of foreclosure, then the
Person who succeeds to the interests of the owner of the Facility
shall, at the its sole cost and expense (i) perform the obligations of
the Licensee under Sections 15(B) and (C) of the License Agreement,
and (ii) record among the public records of Xxxxxxxx County,
Mississippi, a document prohibiting the Property from being used or
operated, in whole or in part, by a HRL Competitor for a period of two
(2) years following the date of conveyance of title to the Facility.
The form and content of the document creating such restriction shall
be subject to the prior written approval of HRL, which approval shall
not be unreasonably withheld. If such successor fails to perform
either of the foregoing obligations within the time period specified
above, HRL shall have the right to perform such actions on behalf of
such successor, whereupon such successor shall reimburse HRL for 115%
of the actual cost so incurred by HRL.
7. TERMINATION RIGHTS. If HRL intends to exercise its rights to terminate the
License Agreement under Section 14(A)(xiii) of the License Agreement
because Premier is in default under any obligation to a Secured Party, HRL
must first provide the Trustee a written notice of HRL's intent to exercise
such rights (the "DEFAULT NOTICE"). HRL shall not exercise its rights to
terminate the License Agreement under Section 14(A)(xiii) of the License
Agreement unless: (a) the Trustee shall have delivered an Election Notice
to HRL; or (b) both of the following circumstances exist:
EXECUTION VERSION
4
(i) such default by Premier under any obligation to a Secured Party
shall be continuing; and
(ii) any of the following circumstances exists:
(A) on or after the sixtieth (60th) day after Trustee receives
the Default Notice (the date upon which Trustee receives the
Default Notice being the "Default Notice Date"):
(1) a Foreclosure Commencement has not occurred; and
(2) Trustee has not been enjoined or stayed from causing a
Foreclosure Commencement to occur within fifty-five
(55) days after the Default Notice Date; or
(B) at any time after a Foreclosure Commencement has occurred,
but before title to the Facility is conveyed by judicial or
non-judicial foreclosure or deed in lieu of foreclosure,
Trustee ceases to use diligent good faith efforts to cause
title to the Facility to be conveyed by judicial or
non-judicial foreclosure or deed in lieu of foreclosure; or
(C) on or after, the day that is eleven (11) months after the
Default Notice Date, title to the Facility has not been
conveyed as permitted herein by judicial or non-judicial
foreclosure or deed in lieu of foreclosure.
In no event shall this paragraph 7 restrict HRL's right to terminate the
License Agreement under any provision of the License Agreement other than
Section 14(A)(xiii), including, for example, when Premier's uncured breach
of any obligation to HRL under the License Agreement is also a default by
Premier under any obligation to a Secured Party.
8. NO ABRIDGEMENT OF RIGHTS. Nothing contained in this Agreement shall be
construed so as to affect the rights of the Licensors, or either of them,
to pursue any claims or to assert any rights or defense which they may have
involving any of the Hard Rock Documents.
9. NOTICES. All notices required by this Agreement shall be given in writing
and shall be deemed to have been duly given for all purposes when:
9.1. deposited in the United States mail (by registered or certified mail,
return receipt requested, postage prepaid); or
9.2. deposited with a nationally recognized overnight delivery service such
as Federal Express or Airborne
Each notice must be directed to the party to receive it at its address
stated below or at such other address as may be substituted by notice given
as provided in this section.
The addresses are:
EXECUTION VERSION
5
TRUSTEE: U.S. BANK NATIONAL ASSOCIATION
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, XX 00000-0000
Attn: Xxxxx Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
LICENSORS: HARD ROCK HOTEL LICENSING, INC.
0000 Xxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Vice President, Business Affairs
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
With a copy to:
Akerman Senterfitt
Citrus Center, 17th Floor
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxx X. Xxxxx, Esquire
HARD ROCK CAFE INTERNATIONAL (STP), INC.
0000 Xxx Xxxx Xxxx
Xxxxxxx, Xxxxxxx 00000
Attention: Xxx X. Xxxxxxxxx, Esquire
Vice President and General Counsel
With a copy to:
Akerman Senterfitt
Citrus Center, 17th Floor
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx 00000-0000
Attn: Xxxx X. Xxxxx, Esquire
AA CAPITAL: AA CAPITAL EQUITY FUND, L.P.
00 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xx. Xxxxxxx X. Xxxx Xx., Managing Director,
Telephone: 000-000-0000
AA CAPITAL BILOXI CO-INVESTMENT FUND, L.P.
00 Xxxxx XxXxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xx. Xxxxxxx X. Xxxx Xx., Managing Director,
EXECUTION VERSION
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Telephone: 000-000-0000
With a copy to:
Xxxxx Xxxxxx LLP
000 Xxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx, Esq.
Telephone: 000-000-0000
Facsimile: 000-000-0000
GAR: GAR, LLC
00000 Xxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxxxxx 00000
Attn: Mr. Xxx Xxxxxxxx, III, Member
Telephone: 000-000-0000
Facsimile: 000-000-0000
With a copy to:
Xxxxx & Xxxxxxx LLP
0000 Xxxxxx-Xxxxx Xxxxxx
(Post Office Xxx 000)
Xxxxxxxx, Xxxxxxxxxxx 00000 (39502-0130)
Attn: Xxxxx X. Xxx, Esquire
Telephone: 000-000-0000
Facsimile: 888-506-8674
ISSUERS: PREMIER ENTERTAINMENT BILOXI LLC
00000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Xxxxx Xxxxxx LLC
000 Xxxx Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
PREMIER FINANCE BILOXI CORP
EXECUTION VERSION
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00000 Xxxxxxxx Xxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxx Xxxxxxxxx
Telecopy No.: (000) 000-0000
Telephone No.: (000) 000-0000
Copies of notices sent to the parties' attorneys or other parties are
courtesy copies, and failure to provide such copies shall not affect the
effectiveness of a notice given hereunder.
10. COUNTERPART EXECUTION; FACSIMILE COPIES. This Agreement may be executed in
any number of counterparts, each of which when so executed and delivered
shall be an original, but all of which together constitute one and the same
instrument. Fax signatures hereto shall be deemed as legally effective as a
signed original.
11. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon and inure to
the benefit of the permitted assigns or successors in interest of the
Trustee and each Licensor.
12. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the internal laws of the State of Nevada,
without regard to conflicts of law or choice of law principles.
13. RIGHT TO LIEN. If the Trustee, any transferee or any successor fails to
make a payment to either or both of the Licensors on or before the date
specified herein for such person or entity to make such payment, Licensors
shall be entitled to a lien against the Land in the amount of such payment,
together with interest at the maximum rate permitted by law accruing from
the date such payment is due until the date paid. The lien granted herein
shall not be subject to extinguishment by foreclosure or reforeclosure by
Trustee or any transferee or successor.
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EXECUTION VERSION
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IN WITNESS WHEREOF, the parties hereto have caused this Consent and
Acknowledgement Agreement to be duly executed this 23rd day of January, 2004.
TRUSTEE:
U.S. BANK NATIONAL ASSOCIATION,
a national banking association
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
------------------------------
Title: Vice President
-----------------------------
LICENSORS:
HARD ROCK HOTEL LICENSING, INC.,
a Florida corporation
By: /s/ Xxx Xxxxxxxxx
-----------------------------------
Name: Xxx Xxxxxxxxx
------------------------------
Title: Vice President
-----------------------------
HARD ROCK CAFE INTERNATIONAL (STP), INC.,
a New York corporation
By: /s/ Xxx Xxxxxxxxx
-----------------------------------
Name: Xxx Xxxxxxxxx
------------------------------
Title: Vice President
-----------------------------
PLEDGORS:
GAR, LLC,
a Mississippi limited liability company
Name: /s/ Xxx Xxxxxxxx, III
------------------------------
Title: Authorized Member
-----------------------------
EXECUTION VERSION
AA CAPITAL EQUITY FUND, L.P.,
a Delaware limited partnership
By: AA Private Equity Investors Management LLC,
a Delaware limited liability company
Its: General Partner
By: /s/ Xxxx X. Xxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxx
-------------------------
Title: President
------------------------
AA CAPITAL BILOXI CO-INVESTMENT FUND, L.P.,
a Delaware limited partnership
By: AA Private Equity Investors Management LLC,
a Delaware limited liability company
Its: General Partner
By: /s/ Xxxx Xxxxxxxx
------------------------------
Name: Xxxx X. Xxxxxxxx
-------------------------
Title: President
------------------------
EXECUTION VERSION
