Document:

Exhibit 10.1

 

PROTECTIVE
ADVANCE AGREEMENT

 

This
PROTECTIVE ADVANCE AGREEMENT (“Agreement”)
is made as of September 11, 2009 by and among WELLS FARGO BANK, N.A., AS
TRUSTEE FOR THE CREDIT SUISSE FIRST BOSTON MORTGAGE SECURITIES CORP. COMMERCIAL
MORTGAGE PASS-THROUGH CERTIFICATES, SERIES 2007-TFL2 (“Lender”),
PH FEE OWNER LLC, a Delaware limited liability company (“Fee Owner”),
OPBIZ, L.L.C., a Nevada limited liability company (“OPBIZ”)
(OPBIZ and Fee Owner are sometimes individually and collectively and jointly
and severally referred to herein as “Borrower”),
PLANET HOLLYWOOD INTERNATIONAL, INC., a Delaware corporation (“PHI”), PLANET HOLLYWOOD (REGION
IV), INC., a Minnesota corporation (“PHIV”),
PLANET HOLLYWOOD MEMORABILIA, INC., a Florida corporation (“PHM”)( PHI, PHIV, and PHM are
sometimes individually and collectively and jointly and severally referred to
as “PH Entity”), TROPHY HUNTER
INVESTMENTS, LTD., a Florida limited partnership (“THI”),
BAY HARBOUR 90-1, LTD., a Florida limited partnership (“BH90-1”),
BAY HARBOUR MASTER LTD., a Cayman Islands exempted company (“BHML”), DOUGLAS TEITELBAUM, an
individual (“Teitelbaum”), ROBERT EARL, an
individual (“Earl”) (THI, BH90-1, BHML,
Teitelbaum, and Earl are sometimes individually and collectively and jointly
and severally referred to as “Guarantor”)
MezzCo, L.L.C., a Nevada limited liability Company, (“MezzCo”)
and TSP Owner LLC, a Delaware limited liability company (“TSP Owner”).
Borrower, PH Entity, Guarantor, MezzCo and TSP Owner are sometimes individually
and collectively and jointly and severally referred to as “Obligors”.

 

RECITALS

 

The following recitals are a
material part of this Agreement:

 

A.                                   Pursuant to
that certain Loan Agreement dated as of November 30, 2006 (together with
all amendments, modifications, or supplements thereto, including the Omnibus
Amendment (as defined below), the 2008 Modification Agreement (defined below)
and the Third Modification Agreement (defined below), collectively, the “Loan Agreement”), Column Financial, Inc.,
a Delaware corporation (“Original Lender”),
made a senior secured loan in the original principal amount of up to
$820,000,000.00 (as such loan was subsequently increased to $860,000,000, the “Loan”) to Borrower.

 

B.                                    The Loan is
further evidenced and secured by various documents including:

 

(i)                                     Amended and
Restated Promissory Note, dated July 17, 2007, in the principal amount of
$860,000,000.00 executed by Borrower in favor of Original Lender (together with
all amendments, modifications, or supplements thereto, collectively, the “Note”);

 

(ii)                                  Deed of Trust,
Security Agreement, Assignment of Leases and Rents, Financing Statement and
Fixture Filing, dated November 30, 2006 (together with all amendments,
modifications, or supplements thereto, including the Modification of Deed of
Trust, Security Agreement, Assignment of Leases and Rents, Financing Statement
and Fixture Filing, dated July 17, 2007 made by

 

 

Borrower and Original
Lender, collectively, the “Security Instrument”),
pursuant to which Borrower granted to Original Lender a first-priority lien on
certain real property described therein; improvements thereon (the “Premises”), and on certain personal
property described therein (collectively, together with the Premises, the “Property”);

 

(iii)                               Assignment of
Leases and Rents, dated November 30, 2006 (together with all amendments,
modifications, or supplements thereto, including the Modification of Assignment
of Leases and Rents dated July 17, 2007 made by Borrower and Lender,
collectively, the “Assignment”),
executed by Borrower in favor of Original Lender and relating to the Premises;

 

(iv)                              Security
Agreement dated November 30, 2006 (together with all amendments,
modifications or supplements thereto, collectively, the “PH
Security Agreement”) executed by PH Entities in favor of
Original Lender;

 

(v)                                 Security
Agreement (Trademarks) dated November 30,2006 (together with all
amendments, modifications or supplements thereto, collectively, the “PHIV Security Agreement”) executed
by PHIV in favor of Original Lender;

 

(vi)                              Security
Agreement (Copyrights) dated November 30, 2006 (together with all
amendments, modifications or supplements thereto, collectively, the “PHI Security Agreement”) executed
by PHI in favor of Original Lender;

 

(vii)                           Pledge and
Security Agreement dated November 30, 2006 (together with all amendments,
modifications or supplements thereto, collectively, the “MezzCo
Pledge Agreement”) executed by MezzCo in favor of Original Lender;

 

(viii)                        Pledge and
Security Agreement dated November 30, 2006 (together with all amendments,
modifications or supplements thereto, collectively, the “Fee Owner
Pledge Agreement”) executed by Fee Owner in favor of Original
Lender; and

 

(ix)                                Collateral
Assignment of Timeshare Project Proceeds dated November 30, 2006 (together
with all amendments, modifications or supplements thereto, collectively, the “Timeshare Collateral Assignment”)
executed by Borrower and TSP Owner in favor of Original Lender.

 

C.                                     The Loan is
also evidenced by a Guaranty Agreement dated November 30, 2006 executed by
THI, BH90-1 and BHML in favor of Original Lender, a Guaranty Agreement dated November 30,
2006 executed by Teitelbaum in favor of Original Lender, a Guaranty Agreement
dated November 30, 2006 executed by Earl in favor of Original Lender, a
Completion Guaranty dated November 30, 2006, executed by THI, BH90-1, BHML
and Earl in favor of Original Lender, a Limited Guaranty dated May 7, 2009
executed by THI in favor of Lender, a Limited Guaranty dated May 7, 2009
executed by BH90-1 in favor of Lender, a Limited Guaranty dated May 7, 2009
executed by BHMC in favor of Lender, a Limited Guaranty dated May 7, 2009
executed by Earl in favor of Lender, a Limited Guaranty dated May 7, 2009
executed by Teitelbaum in favor of Lender

 

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(together
with all amendments, modifications or supplements thereto, including the
Amendment to Completion Guaranty dated August 11, 2008 amount THI, BH90-1,
BHML, Earl and Lender, collectively the “Guaranties”).

 

D.                                    Lender,
Borrower, PH Entity, Guarantor and TSP Owner are parties to a certain letter
agreement dated August 25, 2008 (“Letter  Agreement”)
among the parties, and the terms and provisions of the Letter Agreement
continue in full force and effect, except to the extent they conflict with any
of the terms and provisions of this Agreement, in which case the provisions of
this Agreement shall control.

 

E.                                      The Note, the
Loan Agreement, the Security Instrument, the Assignment, the PH Security
Agreement, the PHIV  Security Agreement, the PHI
Security Agreement, the MezzCo Pledge Agreement, the Fee Owner Pledge
Agreement, the Timeshare Collateral Assignment, the Guaranties, the Letter
Agreement, this Agreement, all other existing or future documents evidencing,
securing, or executed in connection with the Loan, as such documents have been
amended, restated, replaced, supplemented or otherwise modified from time to
time, including pursuant to (i) an Omnibus Amendment of Loan Documents
dated as of July 17, 2007 (the “Omnibus Amendment”),
(ii) a Modification Agreement dated as of August 11, 2008 (the “2008 Modification Agreement”), and (iii) a
Third Modification Agreement dated as of May 7, 2009 (“Third Modification Agreement”) and
all documents that hereafter modify, amend, extend, restate, replace, or
otherwise affect the Loan or any of the foregoing documents are herein
sometimes collectively referred to as the “Loan Documents.”

 

F.                                      Unless the
context clearly requires otherwise, all capitalized terms used in this
Agreement that are not otherwise defined herein shall have the meanings
ascribed to them in the Loan Documents as in effect on the date of this
Agreement, and in the event of any conflict between the provisions of this
Agreement and the provisions of any other Loan Document, the provisions of this
Agreement shall control.

 

G.                                     Original Lender’s
rights and obligations under the Loan Documents have been assigned to Lender
and Lender is the owner and holder of the Loan, the Note and all of the other
Loan Documents.

 

H.                                    On the September 9,
2009 Payment Date, the sum of $10,368,357 was on deposit in the Cash Management
Account and such sum was insufficient to pay in full all of the items required
to be paid on such date pursuant to Section 2.6.4 of the Loan Agreement.
On September 11, 2009, at Borrower’s request, the sum of $9,678,590 was
paid by Lender to the Borrower Disbursement Account to be used by Borrower to
pay that portion of the monthly Cash Expenses set forth in the written request
submitted by Borrower to Lender and itemized in Exhibit A.
Thereafter, with Borrower’s consent: (i) the remaining $689,767 on deposit
in the Cash Management Account was applied to pay a portion of the amount
required to be deposited in the Tax and Insurance Escrow Fund on such Payment
Date; and (ii) $799,563 of the funds then on deposit in the Interest
Reserve Account were applied as follows:  (a) $35,374 was deposited in the Tax and
Insurance Escrow Fund, (b) $714,189 was applied to partial payment of the
monthly Debt Service payment of $2,755,366 that was due on such Payment Date,
and (c) $50,000 was applied

 

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to
payment to Lender of other amounts then due and payable under the Loan
Documents. Events of Default have occurred under the Loan Documents due to
Borrower’s failure to timely pay in full the following payments required to be
paid on such Payment Date: (x) the full amount of monthly Debt Service, (y) the
full amount of monthly Cash Expenses to be paid by Borrower in accordance with
the related Approved Annual Budget, and (z) deposits to the FF&E
Reserve Account.

 

I.                                         The outstanding
principal balance of the Loan as of the date of this Agreement is $860,000,000
such principal amount being exclusive of accruing interest, late charges,
expenses incurred by Lender (including attorneys fees, appraisal costs and
costs incurred in connection with third party and property reports conducted
for the benefit of Lender) and other sums that have or may hereafter become
payable by Borrower under this Agreement or under the other Loan Documents.
From and after September 9, 2009 interest shall accrue on all Debt,
including any and all advances of funds made pursuant to Section 1 of this
Agreement (collectively, the “Protective Advances”),
at the Default Rate.

 

J.                                        Borrower
acknowledges and agrees that (i) Borrower may not have sufficient
available sources of working capital and financing to operate its business in
the ordinary course, (ii) there is an immediate and continuing need for
the Protective Advances as Borrower may, absent the Protective Advances, be
unable to continue its business operations at the Property, and (iii) the
Protective Advances are necessary for the protection of the security of the
Security Instrument as contemplated by Section 7.4 of the Security
Instrument and NRS §106.345 and would not need to have been made by Lender if
Borrower had complied with the terms of all of its obligations under the
Security Instrument as contemplated by NRS §106.345.

 

NOW,
THEREFORE, in consideration of the mutual agreements set forth herein and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties agree as follows:

 

I.                                       Protective
Advances by Lender.

 

(a)                                  Attached to
this Agreement as Exhibit B
is an operating budget (the “Initial Two-Week Budget”)
for the period from September 9, 2009 through and including September 23,
2009 (the “Initial Budget Period”). The
Initial Two-Week Budget reflects, on a line-item basis, anticipated cash
receipts from any source (“Cash Receipts”)]
and Operating Expenses during such time period and includes all necessary and
required Operating Expenses Borrower will be required to pay during such
period. On or before the fifth (5th) Business Day of the Initial Budget Period and
the fifth (5th) Business Day of
each two (2) week budget period thereafter (each a “Budget
Period”), Borrower shall submit to Lender additional operating
budgets (each a ‘‘Two-Week Budget”)
for the next projected two (2) week period of operating the Property. Each
Two-Week Budget shall be subject to Lender’s review and approval (each such
Two-Week Budget, an “Approved Two-Week Budget”)
in each instance.

 

(b)                                 Lender may, in
its sole and absolute discretion, make Protective Advances to Borrower as and
when it deems appropriate to pay amounts equal to the difference between the

 

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Cash
Receipts available to Borrower to pay budgeted items included in the Approved
Budget and the amount budgeted for such items in the Approved Budget.  Protective Advances shall be made by Lender
only after Borrower’s expenditure of all Cash Receipts available to it to pay
items included in the Approved Budget at the time such budgeted item is to be
paid.  Borrower shall use all Protective
Advances in accordance with this Agreement and only as provided and limited in
the applicable Approved Two-Week Budget for protection, preservation and
operation of the Property pursuant to this Agreement.  Lender shall have no obligation to fund any
Protective Advances and funding of Protective Advances by Lender pursuant to
this Agreement may be terminated at any time in Lender’s sole and absolute
discretion.

 

(c)                                 Borrower shall
submit requests for payment of budgeted expenses to Lender (“Request(s) For Payment”).  Each Request For Payment shall
identify, in detail acceptable to Lender in its sole and absolute discretion,
the amount being requested, the payee, the Budget line item detailing the
expenditure, invoices for all proposed payments, and confirmation that the
payment for which the Request For Payment is submitted conforms to the Budget.
The Request For Payment shall be on a form prescribed by Lender from time to
time and shall be certified to Lender as true, accurate, and complete and
correct by Borrower. The Request For Payment form shall constitute a
representation, warranty and covenant as to the matters contained therein.
Requests For Payment may be made daily by Borrower’s submission to Lender of a
fully executed Request For Payment form at or noon. (Kansas City, Missouri
local time) on the business day prior to which Borrower desires the payment to
be made. If  Lender denies
the payment, it will notify Borrower no later than 4:00 p.m. (Kansas City,
Missouri local time) on the following business day. Following disbursement,
Borrower shall promptly furnish to Lender proof of payment satisfactory to
Lender of the items included in the Request for Payment.

 

(d)                                The Protective
Advances shall constitute and be a part of the Debt under the Loan Documents
for all purposes. Interest shall accrue on the Protective Advances at the
Default Rate, and shall be payable from the date of each Protective Advance
until the applicable Protective Advance has been paid in full. Interest shall
be calculated as provided in the Loan Agreement. All Protective Advances
hereunder, together with all accrued interest thereon, are due and payable
immediately on demand.

 

(e)                                 To secure the
repayment of the Protective Advances and all interest, fees, and other amounts
owed by Borrower in connection therewith, Lender shall have and is granted
(effective upon the date of this Agreement and without the necessity of the
recordation of mortgages, security or pledge agreements, financing statements,
or otherwise) valid and perfected senior, first-priority Liens on all
collateral and security for the Loan as provided in the Loan Documents. Lender
shall not be required to file a new mortgage or any modification thereto,
financing statements, or similar instruments with respect to the Property, and
the failure by Borrower to execute any documents relating to the Lien shall in
no way affect the validity, perfection, or priority of the Liens. If,  however, Lender
decides to file any such documents, agreements, or instruments, Borrower shall
cooperate with and assist in that process, including by signing, delivering,
and filing any agreement, document, or instrument or taking any action
requested by Lender or Servicer to effectuate such filing.

 

(f)                                   In addition to
the reporting and related requirements and the other duties and obligations of
Obligors under the Loan Agreement and other Loan Documents, Obligors shall

 

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(i) deliver
to Lender such other financial and other information concerning the Property
and the business operations of the Property and the Obligors as Lender requests
from time to time during the term of this Agreement, and (ii) cooperate
with and permit Lender to conduct other inspections of the Property at any
reasonable times requested by Lender. Borrower shall also provide Lender with (A) a
daily report, with information reasonably satisfactory to Lender, identifying
and differentiating Cash Receipts (including reports of sales) and accounts
receivable, and (B) a weekly variance report of actual expenditures versus
Approved Two-Week Budget expenditures.

 

2.                                       Recitals;
Status and Effect of Loan Documents. Each Obligor acknowledges,
confirms and agrees that the matters stated in the Recitals set forth above are
true and accurate in all respects, are a material part of this Agreement, are
hereby incorporated by reference, and may be relied upon for all purposes by
the parties and that:

 

(a)                                 The Loan
Documents (including this Agreement) have been duly authorized, executed, and
delivered to Lender, remain in full force and effect as originally written or
as modified herein or as previously modified by mutual written agreement of the
parties, and are valid, binding and enforceable against Obligors in accordance
with their respective terms. Each Obligor ratifies and reaffirms the terms and
provisions of the Loan Documents, including Sections 6 and 7 of the Third
Modification Agreement and Section 5.1.26 of the Loan Agreement, and all
of such Obligor’s payment and performance obligations and obligations to
indemnify under each Loan Document to which it is a party, and each Obligor
ratifies and reaffirms its grant of liens on or security interests in its
properties pursuant to such Loan Documents to which it is a party as security
for the obligations under or with respect to the Loan Documents.

 

(b)                                 All liens and
security interests created in favor of Lender under the Loan Documents have
been validly created and duly perfected upon all property and collateral of
Obligors in first priority as represented by Obligors or other persons in the
Loan Documents.

 

(c)                                  All
indebtedness created under the Loan Documents is validly and unconditionally
due and owing in full to Lender, in accordance with the terms thereof, as
modified hereby, without any defense or offset whatsoever, and Obligors have no
defenses, claims, counterclaims, or other rights that could be asserted to
impair, delay, or adversely affect Lender’s receipt of full payment and
performance of all obligations owed to Lender by Obligors with respect to the
Loan, or the same are waived.

 

(d)                                 Lender has
given and Obligors have received all notices to which they are respectively
entitled under the Loan Documents with respect to the Events of Default, and
Obligors unconditionally waive any and all such notices that Lender might have
neglected to give. All notice, grace, or cure periods provided for in the Loan
Documents that applied to the Events of Default were duly provided to the
Obligors and have now expired by their terms.

 

(e)                                  Lender has the
unconditional right, subject to compliance with applicable Gaming Laws, at
Lender’s election in Lender’s sole and absolute discretion and without further
notice to Obligors or any other person, to commence and pursue any or all of
the remedies for collection

 

6

 

of the Loan and enforcement
of the Loan Documents that are available to Lender under the Loan Documents or
applicable law, in such order and manner as Lender may elect from time to time.

 

3.                                      Warranties and
Representations. Each of the Obligors confirms that all warranties
and representations previously made by it in the respective Loan Documents to
which it is a party were true as of the time made or deemed made or continued
through the date of the Third Modification Agreement (except to the extent, if
any, that the provisions of this Agreement reflect variances from such existing
warranties and representations with respect to facts and circumstances existing
on the date hereof) and the respective Obligors, each as to itself, further
warrant and represent to Lender that:

 

(a)                                 Each Obligor,
other than Earl and Teitelbuam, is duly organized, validly existing, and in
good standing under the laws of its state of organization and is duly qualified
as a foreign entity and is currently in good standing in each state in which
such qualification is required for the conduct of such Obligor’s business as it
is currently being conducted (including, as applicable, the state where the
Property is located).

 

(b)                                Each Obligor
has full authority and due capacity to execute, deliver, and perform this
Agreement and all documents, instruments and agreements executed in connection
herewith. Such execution, delivery, and performance has been duly authorized as
required under the organizational documents of such Obligor or under applicable
law, and the individuals and entities executing this Agreement on behalf of
such Obligor have been duly authorized and empowered to bind such Obligor by
such execution. The organizational documents of such Obligor have not been
modified since the date of the original Loan closing.

 

(c)                                 This Agreement
has been duly executed and delivered to Lender by each Obligor and is valid,
binding, and enforceable against each of them in accordance with its terms.

 

(d)                                Neither the
execution and delivery of this Agreement nor the performance of its terms and
compliance with its conditions will conflict with or result in a breach of any
of the terms, conditions or provisions of or constitute a violation or default
under any organizational document of any Obligor or any contract, agreement,
applicable law, regulation, judgment, writ, order or decree to which any
Obligor or any property of any Obligor is subject.

 

(e)                                 To such Obligor’s
knowledge, except as previously disclosed to Lender in writing, no actions,
litigation, disputes, suits, or proceedings against or that relate in any
adverse manner to any Obligor relating to the Property are now pending before
any court, arbitrator or governmental or administrative body or agency, and to
the knowledge of Obligors, none is threatened.

 

(f)                                   All documents
and information furnished by any Obligor to Lender with respect to the Loan or
this Agreement are complete and accurate in all material respects, none
contains any misrepresentation or misstatement of a material fact or omits to
state a material fact.

 

(g)                                To their
knowledge, except as previously to disclosed to Lender in writing, each Obligor
is in compliance in all material respects with all federal, state and local
laws, rules, and regulations applicable to their respective properties,
operations, businesses, and finances.

 

7

 

4.                                       Ratification of
Guaranty Obligations. (a) Each Guarantor (i) ratifies the
Guaranties previously executed by him or it and confirms that such Guaranties
and all waivers, covenants and agreements therein remain in full force and
effect for the benefit of Lender, (ii) reaffirms his or its respective
continuing liability for payment and/or performance of all obligations owed to
Lender under the respective Guaranties, without any defense or offset
whatsoever, to the same extent as if such Guarantor had executed and delivered
each such Guaranty to Lender again on the date of this Agreement, and (iii) confirms
that such Guaranties have not been modified or amended and that Guarantor’s
liabilities under such Guaranties have not been limited, impaired or affected
in any manner by any existing or previous event, fact or circumstance.

 

(b)                                 Each Guarantor
further acknowledges and agrees that (i) such Guarantor’s execution of
this Agreement is not required under the Guaranties or under any other Loan
Document, (ii) such Guarantor would remain fully liable to Lender for all
obligations owed under the Guaranties executed by him or it with
respect to the Loan as modified by this Agreement whether or not such Guarantor
executed this Agreement or entered into any of the agreements herein, (iii) Lender
has and shall continue to have the right, but shall not be obligated, to
further modify any or all of the terms of the Loan or the Loan Documents,
extend the maturity of the Loan, obtain or release collateral or security for
the Loan, pursue or forbear in the pursuit of remedies, and take any or all
other actions Lender is authorized to take under the respective Guaranties,
this Agreement or any other Loan Document without giving notice to, obtaining
any consent, approval or agreement from, or obtaining execution of any document
by any Guarantor, (iv) the fact that Lender requested Guarantor’s
execution of this Agreement does not constitute or establish any course of
conduct or course of dealing that modifies any provision of any Guaranty or
affect any Guarantor’s liability thereunder in any manner, and (v) Lender
shall have the full benefit of this Agreement and the Guaranties without any
obligation to obtain any future ratification, reaffirmation, consent, waiver or
other agreement from such Guarantor.

 

5.                                       Ratification by
PH Entities, MezzCo and TSP Owner.

 

(a)                                  Each PH Entity,
MezzCo and TSP Owner (i) ratifies the Loan Documents previously executed
by it and confirms that such Loan Documents and all waivers, covenants and
agreements therein remain in full force and effect for the benefit of Lender, (ii) reaffirms
its continuing liability for payment and/or performance of all obligations owed
to Lender under such Loan Documents, without any defense or offset whatsoever,
to the same extent as if such party had executed and delivered each such Loan
Document to Lender again on the date of this Agreement, and (iii) confirms
that such Loan Documents have not been modified or amended and that such
parties liabilities under such Loan Documents have not been limited, impaired
or affected in any manner by any existing or previous event, fact or
circumstance.

 

(b)                                 Each PH Entity,
MezzCo and TSP Owner further acknowledges and agrees that (i) such party’s
execution of this Agreement is not required under any Loan Document, (ii) it
would remain fully liable to Lender for all obligations owed under the Loan
Documents previously executed by it with respect to the Loan as modified by
this Agreement whether or not it executed this Agreement or entered into any of
the agreements herein, (iii) Lender has and shall continue to have the
right, but shall not be obligated, to further modify any or all of the terms of
the Loan or the Loan Documents, extend the maturity of the Loan, obtain or
release

 

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collateral
or security for the Loan, pursue or forbear in the pursuit of remedies, and
take any or all other actions Lender is authorized to take under any Loan
Document without giving notice to, obtaining any consent, approval or agreement
from, or obtaining execution of any document by such party, (iv) the fact
that Lender requested such party’s execution of this Agreement does not
constitute or establish any course of conduct or course of dealing that
modifies any provision of any Loan Document or affect such party’s liability
thereunder in any manner, and (v) Lender shall have the full benefit of
this Agreement and the other Loan Documents previously executed by it without
any obligation to obtain any future ratification, reaffirmation, consent,
waiver or other agreement from it.

 

6.                                       Joint and
Several Liability of Borrower; Waiver of Suretyship Defenses.

 

(a)                                 Each Borrower
is accepting joint and several liability hereunder and under the other Loan
Documents in consideration of the financial accommodations to be provided by
Lender under this Agreement, for the mutual benefit, directly and indirectly,
of each Borrower and in consideration of the undertakings of each other
Borrower to accept joint and several liability hereunder.

 

(b)                                Each Borrower
agrees that the joint and several liability of Borrower provided for in this
Agreement shall not be impaired or affected by any modification, supplement,
extension or amendment of any contract or agreement to which the other Borrower
may hereafter agree (other than an agreement signed by Lender specifically
releasing or limiting such liability), nor by any delay, extension of time,
renewal, compromise or other indulgence granted by Lender with respect to any
of the obligations, nor by any other agreements or arrangements whatever with
any other Borrower or with anyone else, each Borrower waiving all notice of
such delay, extension, release, substitution, renewal, compromise or other
indulgence, consenting to be bound thereby as fully and effectually as if it
had expressly agreed thereto in advance. The liability of each Borrower is
direct and unconditional as to all of the obligations, and may be enforced
without requiring Lender first to resort to any other right, remedy or
security. Each Borrower expressly waives promptness, diligence, notice of
acceptance and any other notice (except to the extent expressly provided for
herein or in another Loan Document) with respect to any of the obligations
under this Agreement or any other Loan Document and any requirement that Lender
protect, secure, perfect or insure any Lien or any property subject thereto or
exhaust any right or take any action against any Borrower or any other person
or any collateral or security for the Loan. Further, each Borrower waives all
defenses which may be available by virtue of any valuation, stay, moratorium
law or other similar law now or hereafter in effect, any right to require the
marshaling of assets of Borrower and any other person primarily or secondarily
liable with respect to any of the obligations, and all suretyship defenses
generally.

 

(c)                                  The Loan and
all other obligations of Borrower shall constitute general obligations of
Borrower and shall be secured by Lender’s security interest in and lien upon
all of the collateral or security for the Loan, and by all other security
interests and liens now or at any time or times hereafter granted by any
Obligors or any affiliate of any Obligors to Lender.

 

9

 

7.                                       No Waiver of
Events of Default.

 

(a)                                 Obligors
acknowledge that one or more Events of Default now exist under the Loan
Documents and remain uncured as of the date of this Agreement. The description
of Events of Default in this Agreement shall not be deemed to be exclusive or
exhaustive, and if any other Event of Default now exists that is not specified
as an Event of Default in this Agreement, its omission from this Agreement
shall not imply that Lender consents to the continued existence thereof or
waives any of Lender’s rights or remedies relating thereto.

 

(b)                                Lender’s
failure to immediately pursue any of its rights and remedies does not in any
event constitute a waiver of any such rights or remedies. Nothing herein shall
be deemed to (i) waive any condition or requirement contained in any of
the Loan Documents, as modified by this Agreement, or (ii) constitute or
establish a course of conduct or course of dealing with respect to Obligors’
compliance with any such condition or requirement or that varies any provision
of any Loan Document relating to any waiver, approval or consent by Lender
(other than the modifications specified in Section 8 below or other
provisions of this Agreement). Obligors acknowledge and agree that Lender shall
continue to have the right to require strict compliance, and that Obligors
shall comply, with all obligations and covenants contained in the Loan
Documents as modified by this Agreement, including the obligation to pay all
sums when due under the Loan Documents, as modified hereby. No acceptance by
Lender of any partial payment of amounts due in respect of the Loan shall constitute
a waiver of the Events of Default or a waiver, reduction or modification of
amounts due in respect of the Loan except to the extent of such payment
accepted by Lender.

 

(c)                                  Neither the
execution of this Agreement, the execution of any document or instrument
required hereunder, nor the consummation of the transactions and agreements set
forth in this Agreement shall in any manner rescind or cure any Events of
Default under the Loan Documents, reinstate the Loan to a current status,
constitute a novation or an accord and satisfaction, or extend the maturity of
the Loan.

 

8.                                      Modifications
to Loan Documents. The Loan Documents are modified in all respects
necessary to give effect to this Agreement, and only in such respects, and the
provisions of this Agreement shall control over any contrary or inconsistent
provisions of any of the other Loan Documents. In all other respects, all Loan
Documents shall remain in full force and effect as originally written or
previously modified by mutual written agreement of the parties. All of Lender’s
liens, security interests, priorities, rights, and remedies under the Loan
Documents shall continue in full force and effect as security for the Loan
following the modification thereof by this Agreement. All references in any
Loan Document to any other Loan Document shall hereafter be construed to refer
to such other Loan Document as modified by this Agreement.

 

9.                                       Releases and
Indemnifications. Each Obligor for itself and its respective past,
present and future partners, shareholders, members, managers, officers,
directors, employees, agents, attorneys, representatives, successors, assigns,
subsidiaries, affiliates, parents, direct and indirect equity holders, owners,
and predecessors in interest and all persons claiming by, through, or under any
of them (and their respective successors and assigns the “Releasing Parties”) hereby:

 

10

 

(a)           acknowledges, agrees
and affirms that as of the date hereof he or it does not possess (i) any
claims, defenses, offsets, rights of recoupment or counterclaims of any kind or
nature against or with respect to the enforcement or administration of the Loan
or the Loan Documents (including any aspect of the origination, administration
or enforcement thereof) or (ii) any knowledge of any facts or
circumstances that might give rise to or be the basis of any such claims,
defenses, offsets, rights of recoupment or counterclaims;

 

(b)           releases and forever discharges
Lender and any other holder of participation interests in the Loan, and each of
their respective predecessors in interest, affiliates, subsidiaries, or
assigns, and all of their respective past, present, and future shareholders,
members, directors, managers, officers, employees, attorneys, advisers,
consultants, servicers, representatives or agents (collectively, the “Released Parties”)  from
any and all existing, future, or potential liabilities, obligations, actions,
claims, causes of action, suits, proceedings, demands, damages, costs and
expenses of every kind whatsoever, whether known or unknown, arising from or
relating to any alleged or actual act, omission, occurrence, or transaction
prior to the date of this Agreement, including any of the foregoing relating to
making, administration, servicing, enforcement, or collection of the Loan, or
any of the foregoing arising from or relating to any discussions or
negotiations between representatives or affiliates of the Released Parties on
the one hand, and any Obligors on the other hand, in respect of the Loan or
under any theory of “lender liability” arising therefrom (all of the foregoing
released claims are sometimes referred to as the “Released Claims”).

 

(c)           releases and forever discharges each
of the Released Parties from any and all existing, future, or potential
liabilities, obligations, actions, claims, causes of action, suits,
proceedings, demands, damages, costs and expenses of every kind whatsoever,
whether known or unknown, in connection with or in any way arising out of this
Agreement, the Property, the other Loan Documents or the exercise by any of the
Released Parties of any of their rights and remedies under this Agreement or
the other Loan Documents.

 

(d)           agrees that none of the
Released Parties shall be liable, responsible or accountable in damages to
Obligors or any affiliate thereof for any act taken or the failure to take any
such action, in connection with this Agreement, the Property, the other Loan
Documents or the exercise by any of the Released Parties of any of their rights
and remedies under this Agreement or the other Loan Documents.

 

(e)           agrees that it is
the intention of such Releasing Party that the foregoing releases shall be
effective with respect to all matters, past and present, known and unknown,
suspected and unsuspected. Each Releasing Party realizes and acknowledges that
factual matters now unknown to it may have given or may hereafter give rise to
losses, damages, liabilities, costs and expenses which are presently unknown,
unanticipated and unsuspected, and each Releasing Party further agrees that the
waivers and releases in this Agreement have been negotiated and agreed upon in
light of that realization and that such Releasing Party nevertheless hereby
intends to release, discharge and acquit the Released Parties from any such
unknown losses, damages, liabilities, costs and expenses.

 

(f)            agrees to
indemnify, defend and hold harmless each of the Released Parties from and
against any and all other liabilities, obligations, losses, damages, penalties,
actions,

 

11

 

judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including
the reasonable fees and disbursements of counsel for each for the Released
Parties in connection with any investigative, administrative or judicial
proceeding commenced or threatened, whether or not such Released Parties shall
be designated a party thereto), that may be imposed upon, incurred by, or
asserted against any of the Released Parties in any manner in connection with
or in any way directly or indirectly arising out of this Agreement, the
Property, the other Loan Documents and the exercise by any of the Released
Parties of any of their rights and remedies under this Agreement or the other
Loan Documents (the “Indemnified
Liabilities”).  To the extent that the undertaking
to indemnify, defend and hold harmless set forth in the previous sentence may
be unenforceable because such undertaking violates any law or public policy,
each Obligor shall pay the maximum portion that is permitted to be paid to
satisfy the Indemnified Liabilities incurred by the Released Parties.

 

(g)           acknowledges that
Lender is specifically relying upon such Releasing Party’s acknowledgements and
agreements in this Section in executing this Agreement, and that in the
absence of such agreements Lender would be unwilling to agree to the
consideration provided for in this Agreement.

 

(h)           agrees that all
releases and discharges by such Releasing Party in this Agreement shall have
the same effect as if each released or discharged matter had been the subject
of a legal proceeding, adjudicated to final judgment from which no appeal could
be taken and therein dismissed with prejudice.

 

10.           Non-Interference.
No Obligor or any person acting or claiming by, through, under, or in concert
with or for the benefit of any Obligor shall (i) take any action of any
kind or nature whatsoever, directly or indirectly, to delay, oppose, avoid,
contest, impede, obstruct, hinder, enjoin or otherwise interfere in any manner
with Lender’s exercise of its rights and remedies under the Loan Documents or
under applicable law, or (ii) allege, assert or otherwise pursue any
claim, defense, affirmative defense, counterclaim, cause of action, setoff or
other right it may have against Lender relating to Lender’s exercise of its
rights and remedies under the Loan Documents or applicable law, nor shall such
party cause, conspire, collude with, act in concert with, solicit, encourage or
support any other Person in doing or attempting to do any of the foregoing.

 

11.          Additional
Documents / Further Assurances. Obligors shall at any time, and from time
to time, upon the written request of Lender, sign and deliver such further
documents and do such further acts and things as Lender may reasonably request
to effect the purposes of this Agreement.

 

12.           Time is of the
Essence. Time is of the essence with respect to all agreements and obligations
of Obligors contained herein.

 

13.           Entire Agreement;
Written Modifications Only. This Agreement, the exhibits attached hereto,
and the documents referred to, contemplated, or required herein, constitute the
sole and entire agreement between the parties with respect to the subject
matter hereof, and there are no other covenants, promises, agreements or
understandings regarding the same. This Agreement, including the provisions
of this Section, may not be modified except by written

 

12

 

amendment to this Agreement signed by the parties affected by the same,
and the parties: a) expressly agree that it shall not be reasonable for any of
them to rely on any alleged, non-written amendment to this Agreement; b) waive
any and all right to enforce any alleged, non-written amendment to this
Agreement; and c) expressly agree that it shall be beyond the scope of
authority (apparent or otherwise) for any of their respective agents to agree
to any non-written modification of this Agreement.

 

14.           No Third-Party
Beneficiaries. This Agreement is solely for the benefit of the parties
hereto and no persons other than the undersigned and the Released Parties shall
be entitled to claim or receive any benefit by reason of this Agreement.

 

15.           Due Diligence Performed; Parties
Fully Informed; No Right to Rely. Each Obligor warrants, represents and
agrees that it has, by itself and with the assistance of counsel (or, if
without the assistance of counsel, such party having of its own volition chosen
not to seek such assistance), performed any and all due diligence and
investigation it deems necessary or desirable in connection with making a fully
informed decision to enter into and sign this Agreement. Obligors are relying
on their own investigations and their own decision-making processes in
determining to sign this Agreement, are not relying on the representations or
omissions of each other or of Lender in so doing, and fully understand the
terms and provisions of this Agreement and of the documents contemplated
hereby.

 

16.           Severability.
If any one or more of the provisions of this Agreement are deemed
unenforceable, the remainder of this Agreement shall, at the option of Lender,
remain enforceable in accordance with its original terms to the fullest extent
possible.

 

17.           Delay Not a Waiver. Neither
the failure nor any delay on the part of Lender to exercise any right, power or
privilege under this Agreement or under any document executed in connection
herewith shall operate as a waiver of such right, power or privilege and any
single or partial exercise of any such right, power or privilege shall not
preclude any other or further exercise thereof.

 

18.           Successors and
Assigns. This Agreement shall be binding on and shall inure to the benefit
of each party’s successors and permitted assigns.

 

19.           Construction of
Provisions. The following rules of construction are applicable for the
purposes of this Agreement and all documents and instruments supplemental
hereto unless the context clearly requires otherwise:

 

(a)           All references
herein to numbered sections or to lettered exhibits are references to the
sections hereof and the exhibits annexed hereto.

 

(b)           The terms “include,”
“including,” and similar terms shall be construed as if followed by the phrase “without
being limited to” or the phrase “without limitation,” as the context may
require.

 

(c)           Words of masculine,
feminine or neutral gender shall mean and include the correlative words of the
other genders, and words importing the singular number shall mean and include
the plural, and vice versa.

 

13

 

(d)           No inference in
favor of or against any party hereto shall be drawn from the fact that such
party has drafted any portion of this Agreement or any other Loan Document.

 

(e)           All references to
the Loan Documents shall be deemed to include all existing or future
modifications, amendments, extensions, restatements, or replacements of the
Loan Documents made by mutual written agreement of the parties.

 

(f)            The terms “person”
and “party” shall mean any individual, sole proprietorship, partnership,
limited liability company, joint venture, trust, unincorporated organization,
association, corporation, institution, entity or government (whether federal,
state, county, city, municipal or otherwise, including an instrumentality,
division, agency, body or department thereof).

 

(g)           Section headings
are included in this Agreement for convenience of reference only and shall not
constitute part of this Agreement for any other purpose.

 

(h)           The term “or” has,
except where otherwise indicated, the inclusive meaning represented by the
phrase “and/or.”

 

20.           Counterparts.
This Agreement may be executed in more than one counterpart, each of which
shall be deemed an original and all of which together shall constitute one and
the same document, binding upon all the parties hereto notwithstanding that all
such parties are not signatories to the same counterpart. This Agreement shall
become effective when all parties hereto have executed a counterpart hereof. A
signature of a party by facsimile or other electronic transmission shall be
deemed to constitute an original and fully effective signature of such party.

 

21.           Costs and Expenses. Without
limiting any other provision of this Agreement or any other Loan Document
relating to payment of expenses, Borrower shall pay or reimburse Lender and any
participants in the Loan and servicers or similar parties with respect thereto,
promptly after demand, for all reasonable out-of-pocket costs and expenses,
including attorneys fees, incurred by Lender in connection with the
negotiation, drafting, implementation, or enforcement of this Agreement. Any
payment or reimbursement made by Borrower contemporaneously with the execution
and delivery of this Agreement shall not be deemed to limit Borrower’s
obligations to pay or reimburse all such expenses reasonably incurred by
Lender, any participants in the Loan and servicers or similar parties after the
date hereof.

 

22.           Governing Law.
This Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New York applicable to contracts made and
performed in such state without regard to principles of conflicts of laws,
except that at all times the Gaming Laws shall govern where applicable and the
provisions for the creation, perfection an enforcement of the Liens and
security interests created pursuant to this Agreement and pursuant to the other
Loan Documents shall be governed by and construed according to the law of the
state in which the Property is located.

 

23.           Conflict. In the event of
any conflict between the provisions of this Agreement and the provisions of any
Loan Document, the provisions of this Agreement shall control.

 

14

 

24.           No Joint Venture,
Partnership or Mortgagee-in-Possession.  Nothing in this Agreement, the transactions to
be carried out pursuant to this Agreement or the Loan Documents is intended to
create a joint venture, partnership, tenancy-in-common, or joint tenancy
relationship between or among Borrower and Lender. Borrower agrees and
acknowledges that it is in sole possession and control of the Property. Nothing
in this Agreement or the transactions to be carried out pursuant to this
Agreement is intended to, nor shall be deemed to, make or cause Lender to
become a mortgagee-in-possession of the Property, in whole or in part.

 

25.           Waiver of Jury Trial. THE
PARTIES HERETO EACH HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE ANY
RIGHT IT MAY HAVE TO A TRIAL BY JURY WITH RESPECT TO ANY CONTROVERSY OR
CLAIM, WHETHER ARISING IN TORT OR CONTRACT, BASED HEREON, OR ARISING OUT OF,
UNDER OR IN CONJUNCTION WITH, THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS
(INCLUDING THE VALIDITY, INTERPRETATION, COLLECTION OR ENFORCEMENT HEREOF OR
THEREOF), OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY IN CONNECTION HEREWITH OR THEREWITH.
EACH PARTY ACKNOWLEDGES AND AGREES THAT NO REPRESENTATIONS OF FACT OR OPINION
HAVE BEEN MADE BY AN PERSON TO INDUCE THIS WAIVER
OF TRIAL BY JURY OR TO IN ANY WAY MODIFY OR NULLIFY ITS EFFECT. THIS PROVISION
IS A MATERIAL INDUCEMENT FOR LENDER’S ENTERING INTO THIS AGREEMENT AND LENDER
WOULD NOT HAVE ENTERED INTO THIS AGREEMENT WITHOUT THIS WAIVER. LENDER IS
HEREBY AUTHORIZED TO FILE A COPY OF THIS SECTION IN ANY PROCEEDING AS
CONCLUSIVE EVIDENCE OF THIS WAIVER OF JURY TRIAL.

 

26.           Notices. All
notices, consents, approvals and requests required or permitted under the Loan
Documents shall be given in accordance with Section 10.6 of the Loan
Agreement addressed as follows (or at such other address as shall be designated
from time to time by any party hereto, as the case may be, in a notice to the
other parties hereto in the manner provided in said Section 10.6):

 

	
  If to Lender:

  	
  Wells Fargo Bank, N.A., as
  trustee

  
	
   

  	
  for the Credit Suisse
  First Boston

  
	
   

  	
  Mortgage Securities Corp.
  Commercial

  
	
   

  	
  Mortgage Pass-Through
  Certificates, Series 2007-TFL2

  
	
   

  	
  c/o KeyBank Real Estate
  Capital

  
	
   

  	
  8115 Preston Road,
  Suite 800

  
	
   

  	
  Dallas, Texas 75225

  
	
   

  	
  Fax: 800-393-0181

  
	
   

  	
  Attn: Meade Hubby

  
	
   

  	
   

  
	
  With a copy to:

  	
  Daniel Flanigan

  
	
   

  	
  Polsinelli Shughart PC

  
	
   

  	
  700 W. 47th Street,
  Suite 1000

  
	
   

  	
  Kansas City, Missouri
  64112

  
	
   

  	
  Fax: 816-753-1536

  

 

15

 

	
  If to Borrower:

  	
  c/o OpBiz, L.L.C.

  
	
   

  	
  3667 Las Vegas Boulevard
  South

  
	
   

  	
  Las Vegas, Nevada 89109

  
	
   

  	
  Attn: Mark Helm

  
	
   

  	
  Fax: (702) 785-5936

  
	
   

  	
   

  
	
  If to PH Entities:

  	
  c/o OpBiz, L.L.C.

  
	
   

  	
  3667 Las Vegas Boulevard
  South

  
	
   

  	
  Las Vegas, Nevada 89109

  
	
   

  	
  Attn: Mark Helm

  
	
   

  	
  Fax: (702) 785-5936

  
	
   

  	
   

  
	
  If to Guarantors:

  	
  c/o OpBiz, L.L.C.

  
	
   

  	
  3667 Las Vegas Boulevard
  South

  
	
   

  	
  Las Vegas, Nevada 89109

  
	
   

  	
  Attn: Mark Helm

  
	
   

  	
  Fax: (702) 785-5936

  
	
   

  	
   

  
	
  If to MezzCo:

  	
  c/o OpBiz, L.L.C.

  
	
   

  	
  3667 Las Vegas Boulevard
  South

  
	
   

  	
  Las Vegas, Nevada 89109

  
	
   

  	
  Attn: Mark Helm

  
	
   

  	
  Fax: (702) 785-5936

  
	
   

  	
   

  
	
  If to TSP Owner:

  	
  c/o OpBiz, L.L.C.

  
	
   

  	
  3667 Las Vegas Boulevard
  South

  
	
   

  	
  Las Vegas, Nevada 89109

  
	
   

  	
  Attn: Mark Helm

  
	
   

  	
  Fax: (702) 785-5936

  

 

27.           Guarantor Liability. Notwithstanding
anything to the contrary herein, including, without limitation, Section 9(f)
and Section 10, the liability of each Guarantor hereunder shall not exceed
such Guarantor’s liability as provided in the related Guarantee.

 

[The remainder of this page intentionally left blank]

 

16

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

 

	
  BORROWER:

  	
  PH FEE OWNER LLC,

  
	
   

  	
  a Delaware limited
  liability company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Helm

  
	
   

  	
  Name:

  	
  Mark Helm

  
	
   

  	
  Title:

  	
  SVP & General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  OPBIZ L.L.C.,

  
	
   

  	
  a Nevada limited liability
  company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donna Lehmann

  
	
   

  	
  Name:

  	
  Donna Lehmann

  
	
   

  	
  Title:

  	
  CFO/EVP

  

 

[Signatures continued on following pages]

 

18

 

IN
WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date
first above written.

 

	
  PH
  ENTITIES:

  	
  PLANET HOLLYWOOD (REGION
  IV), INC., a

  
	
   

  	
  Minnesota corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Avallone

  
	
   

  	
  Name:

  	
  Thomas Avallone

  
	
   

  	
  Title:

  	
  GVP/CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PLANET HOLLYWOOD
  MEMORABILIA, INC.,

  
	
   

  	
  a Florida corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Avallone

  
	
   

  	
  Name:

  	
  Thomas Avallone

  
	
   

  	
  Title:

  	
  GVP/CFO

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  PLANET HOLLYWOOD
  INTERNATIONAL,

  
	
   

  	
  INC., a Delaware
  corporation

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Thomas Avallone

  
	
   

  	
  Name:

  	
  Thomas Avallone

  
	
   

  	
  Title:

  	
  GVP/CFO

  

 

[Signatures continued on following pages]

 

19

 

	
  GUARANTORS:

  	
  TROPHY HUNTER INVESTMENTS,
  LTD, a

  
	
   

  	
  Florida limited
  partnership

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Bay Harbour Holding LLC, a
  Delaware

  
	
   

  	
   

  	
  limited liability company,
  general partner

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Douglas Teitelbaum

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BAY HARBOUR 90-1, LTD, a
  Florida limited

  
	
   

  	
  partnership

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  Bay Harbour Holdings LLC,
  a Delaware

  
	
   

  	
   

  	
  limited liability company,
  general partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Douglas Teitelbaum

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  BAY HARBOUR
  MASTER, LTD., a Cayman

  
	
   

  	
  exempted company

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Douglas Teitelbaum

  
	
   

  	
  Name:

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Douglas Teitelbaum

  
	
   

  	
  DOUGLAS TEITELBAUM, an
  individual

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Robert Earl

  
	
   

  	
  ROBERT EARL, an individual

  
					

 

20

 

	
   MEZZCO:

  	
  MEZZCO, L.L.C., a Nevada
  limited liability

  
	
   

  	
  company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Mark Helm

  
	
   

  	
  Name:

  	
  Mark Helm

  
	
   

  	
  Title:

  	
  SVP & General Counsel

  
	
   

  	
   

  
	
   

  	
   

  
	
  TSP OWNER:

  	
  TSP OWNER LLC, a Delaware
  limited liability

  
	
   

  	
  company

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Donna Lehmann

  
	
   

  	
  Name:

  	
  Donna Lehmann

  
	
   

  	
  Title:

  	
  CFO/EVP

  

 

21

 

Exhibit A

(See Attached)

 

22

 

Exhibit B

(See Attached)

 

23Exhibit 10.2

 

WORLD HEART CORPORATION

 

CHANGE OF CONTROL AND SEVERANCE AGREEMENT

 

This Change of Control and Severance
Agreement (the “Agreement”) is dated as of September 8, 2009, by
and between Alex Martin (“Employee”) and World Heart Corporation (the “Company”).  This Agreement is intended to provide
Employee with certain benefits described herein upon the occurrence of specific
events.

 

RECITALS

 

A.            It is expected that another company
may from time to time consider the possibility of acquiring the Company or that
a change in control may otherwise occur, with or without the approval of the
Company’s Board of Directors. The Board of Directors recognizes that such
consideration can be a distraction to Employee and can cause Employee to
consider alternative employment opportunities. 
The Board of Directors has determined that it is in the best interests
of the Company and its stockholders to assure that the Company will have the
continued dedication and objectivity of the Employee, notwithstanding the
possibility, threat or occurrence of a Change of Control (as defined below) of
the Company.

 

B.            The
Company’s Board of Directors believes it is in the best interests of the
Company and its stockholders to retain Employee and provide incentives to
Employee to continue in the service of the Company.

 

C.            The Board of Directors further
believes that it is imperative to provide Employee with certain benefits upon
termination of Employee’s employment, in connection with a Change of Control
and otherwise, which benefits are intended to provide Employee with financial
security and provide sufficient income and encouragement to Employee to remain
with the Company, notwithstanding the possibility of a Change of Control.

 

D.            To accomplish the foregoing
objectives, the Board of Directors has directed the Company, upon execution of
this Agreement by Employee, to agree to the terms provided in this Agreement.

 

                 Now therefore, in consideration of the mutual promises, covenants and
agreements contained herein, and in consideration of the continuing employment
of Employee by the Company, the parties hereto agree as follows:

 

1.             At-Will Employment.  The Company and Employee acknowledge that
Employee’s employment is and shall continue to be at-will, as defined under
applicable law, and that Employee’s employment with the Company may be
terminated by either party at any time for any or no reason.  If Employee’s employment terminates for any
reason, Employee shall not be entitled to any payments, benefits, award or
compensation other than as provided in this Agreement.  The terms of this Agreement shall terminate
upon the earlier of (i) the date on which Employee ceases to be employed
as an officer of the Company, other than as a result of an 

 

 

involuntary termination by the
Company without Cause (as defined below) or Employee’s resignation for Good
Reason (as defined below); or (ii) the date that all obligations of the
parties hereunder have been satisfied.  A
termination of the terms of this Agreement pursuant to the preceding sentence
shall be effective for all purposes, except that such termination shall not
affect the payment or provision of compensation or benefits on account of a
termination of employment occurring prior to the termination of the terms of
this Agreement.  The rights and duties
created by this Section 1 may not be modified in any way except by a
written agreement executed by an officer of the Company upon direction from the
Board of Directors.

 

2.             Benefits  Upon Termination of Employment; Change of Control Benefits.

 

(a)           Termination In
Connection with or Following a Change of Control.  In the event that Employee’s employment is
terminated as a result of an involuntary termination other than for Cause (and
other than as a result of death or disability as disability is defined for
purposes of the Company’s long-term disability policies) or if Employee resigns
for Good Reason, as of, immediately prior to or at any time within twelve (12)
months following the effective date of a Change of Control, then Employee will
be entitled to receive severance benefits as follows: (i) a lump sum
severance payment equal to twelve (12) months of the base salary which Employee
was receiving immediately prior to the Change of Control plus 100% of Employee’s
target annual bonus as in effect immediately prior to the Change of Control,
which shall be paid on the date that is sixty (60) days after the effective
date of the termination, (ii) continuation of the health insurance
benefits provided to Employee for Employee and Employee’s eligible dependents
immediately prior to the Change of Control at Company expense pursuant to the
terms of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended
(“COBRA”) or other applicable law until the earlier of the date twelve
(12) months after the effective date of the termination or the date upon which
Employee is no longer eligible for such COBRA or other benefits under
applicable law, and (iii) each stock option to purchase the Company’s
common shares (“Common Stock”) and all shares of restricted stock
granted to Employee over the course of Employee’s employment with the Company
and held by Employee on the date of termination of employment shall become
immediately vested as to 100% of the then unvested options and shares.  In addition, Employee will receive payment(s) for
all accrued and unpaid salary, bonuses and PTO as of the date of Employee’s
termination of employment.

 

(b)           Termination Not In
Connection with or Following a Change of Control.  In the event that Employee’s employment is
terminated as a result of an involuntary termination other than for Cause (and
other than as a result of death or disability as disability is defined for
purposes of the Company’s long-term disability policies) or if Employee resigns
for Good Reason at any time other than as of, immediately prior to, or within
twelve (12) months following, the effective date of a Change of Control, then
Employee will be entitled to receive severance benefits as follows: (i) severance
payments during the period from the date of Employee’s termination until the
date twelve (12) months after the effective date of the termination (the “Benefit
Period”) equal to the base salary which Employee was receiving immediately
prior to the termination date, which shall be paid during the Benefit Period in
equal installments in accordance with the Company’s standard payroll practices,
except that any and all payments that would otherwise have been made before the
sixtieth (60th) day after the date of Employee’s effective date of termination
(the “First Payment Date”) shall be made on the First

 

2

 

Payment Date, (ii) continuation
of the health insurance benefits provided to Employee and Employee’s eligible
dependents immediately prior to the termination date at Company expense
pursuant to COBRA or other applicable law until the earlier of the date twelve
(12) months after the effective date of the termination or the date upon which
Employee is no longer eligible for such COBRA or other benefits under
applicable law, and (iii) if Employee holds any outstanding options that
have not reached the option’s one-year cliff vesting requirement, the Company
will waive the one-year cliff vesting requirement of each such option and
Employee will be credited with vesting on the Employee’s termination date equal
to 1/48th of the option shares multiplied by each full
month of Employee’s employment since the vesting commencement date of the
option.  In addition, Employee will
receive payment(s) for all accrued and unpaid salary, bonuses and PTO as
of the date of Employee’s termination of employment.  Notwithstanding the foregoing, no severance
benefits shall be paid under this Section 2(b) if at or prior to the
time of the Employee’s termination or if in connection with the Employee’s
termination, the Company (i) is in a bankruptcy proceeding, whether
voluntary or involuntary, (ii) is in the process of liquidating or
dissolving, whether voluntary or involuntary, or (iii) the Board of
Directors has approved the liquidation, dissolution or winding down of the
Company.

 

(c)           Termination for Cause
or Voluntary Resignation other than for Good Reason.  If Employee’s employment is terminated for
Cause at any time or if Employee voluntarily resigns from the Company at any
time for any reason other than Good Reason, then Employee shall not be entitled
to receive payment of any severance benefits under this Agreement.  Employee will receive payment(s) for all
accrued and unpaid salary and PTO as of the date of Employee’s termination of
employment and Employee’s benefits will be continued under the Company’s then
existing benefit plans and policies in accordance with such plans and policies
in effect on the date of termination and in accordance with applicable law.

 

3.               Definition of Terms.  The following terms referred to in this
Agreement shall have the following meanings:

 

(a)           Change of Control.  “Change of Control” shall mean the
occurrence, in a single transaction or in a series of related transactions, of
any one or more of the following events: 
(i)  a sale or other disposition of all or
substantially all, as determined by the Board of Directors of the Company in
its sole discretion, of the consolidated assets of the Company and its
subsidiaries; (ii) a
merger, consolidation or similar transaction following which the Company is not
the surviving corporation; or (iii) a
merger, consolidation or similar transaction following which the Company is the
surviving corporation but the shares of the Company’s Common Stock outstanding
immediately preceding the merger, consolidation or similar transaction are
converted or exchanged by virtue of the merger, consolidation or similar
transaction into other property, whether in the form of securities, cash or
otherwise.  Notwithstanding the foregoing, a Change of Control shall not be deemed to
occur (A) on account of the acquisition of securities of the Company by an
investor, any affiliate thereof or any other person that acquires the Company’s
securities in a transaction or series of related transactions the primary
purpose of which is to obtain financing for the Company through the issuance of
equity securities or (B) on account of a sale of assets, merger or
other transaction effected exclusively for the purpose of changing the domicile
of the Company.

 

3

 

(b)           Cause.  “Cause” shall mean the occurrence of
any one or more of the following: (i) Employee’s conviction of any felony
or crime involving fraud, dishonesty or moral turpitude; (ii) Employee’s
participation in a fraud or act of dishonesty against the Company, an affiliate
of the Company or any successor to the Company that results in material harm to
the business of the Company, an affiliate of the Company or any successor to
the Company; or (iii) Employee’s intentional, material violation of any
contract between the Company, an affiliate of the Company or any successor to
the Company and Employee or any statutory duty Employee owes to the Company, an
affiliate of the Company or any successor to the Company that Employee does not
correct within thirty (30) days after written notice thereof has been provided
to Employee.

 

(c)           Good
Reason.  “Good Reason”
for Employee’s resignation of Employee’s employment will exist following the
occurrence of any of the following without Employee’s consent:  (i) a material diminution of Employee’s
authority or responsibilities as President and Chief Executive Officer; (ii) a
material decrease of Employee’s compensation or benefits, unless the decrease
is proportional to an across-the-board decrease affecting all senior
executives; (iii) a material breach by the Company of any material
provision of this Agreement or any written employment agreement with Employee;
or (iv) an involuntary relocation of Employee’s principal work location
for the Company outside of Salt Lake City, Utah.  Before any resignation for Good Reason,
Employee will provide the Company with specific written notice about the
circumstances allegedly constituting Good Reason within ninety (90) days after
the occurrence of the circumstances, and the Company will have thirty (30) days
to cure, if such conduct is reasonably susceptible to being cured.  A resignation for Good Reason must take place
within sixty (60) days after the end of the cure period.

 

4.             Parachute
Payments.  In the event that the acceleration and
severance benefits provided for in this Agreement (A) constitute “parachute
payments” within the meaning of Section 280G of the Internal Revenue Code
of 1986, as amended (the “Code”) and (B) but for this paragraph,
would be subject to the excise tax imposed by Section 4999 of the Code,
then Employee’s benefits hereunder shall be payable either: (X) in full,
or (Y) as to such lesser amount which would result in no portion of such
severance benefits being subject to excise tax under Section 4999 of the
Code, whichever of the foregoing amounts, taking into account the applicable
federal, state and local income taxes and the excise tax imposed by Section 4999,
results in the receipt by Employee on an after-tax basis, of the greatest
amount of benefits hereunder, notwithstanding that all or some portion of such
benefits may be taxable under Section 4999 of the Code.  Any determination required under this
paragraph shall be made in writing by the public accountants designated by the
Company (the “Accountants”), whose determination shall be conclusive and
binding upon Employee and the Company for all purposes.  For purposes of making the calculations
required by this paragraph, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of Section 280G and 4999
of the Code.  The Company and Employee
shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under this
paragraph.  The Company shall bear all
costs the Accountants may reasonably incur in connection with any calculations
contemplated by this paragraph.  In the
event that a reduction in payments and/or benefits is required under this
section 4, such reduction shall occur in the 

 

4

 

following
order: (1) reduction of cash payments; (2) reduction of acceleration
of vesting of options and shares; and (3) reduction of other benefits paid
to Employee. If the acceleration of vesting of options and shares is to be
reduced, such acceleration of vesting shall be cancelled in the reverse order
of the highest price option grant or highest purchase price per share down to
the lowest priced option grant or lowest purchase price per share.

 

5.             Limitations and
Conditions on Benefits

 

(a)           Income and Employment Taxes.  Employee agrees that
Employee shall be responsible for any applicable taxes of any nature (including
any penalties or interest that may apply to such taxes) that the Company
reasonably determines apply to any payment made hereunder, that Employee’s
receipt of any benefit hereunder is conditioned on Employee’s satisfaction of
any applicable withholding or similar obligations that apply to such benefit,
and that any cash payment owed hereunder will be reduced to satisfy any such
withholding or similar obligations that may apply.

 

(b)           Code Section 409A. 
All severance benefits to be paid upon a termination of employment under
this Agreement may be made only upon a  “separation
of service” within the meaning of Section 409A of the Code and the
Department of Treasury regulations and other guidance promulgated thereunder (a
“Separation from Service”). 
Notwithstanding any provision to the contrary in this Agreement, if
Employee is deemed by the Company at the time of Employee’s Separation from
Service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of
the Code, to the extent delayed commencement of any portion of the benefits to
which Employee is entitled under this Agreement is required in order to avoid a
prohibited distribution under Section 409A(a)(2)(B)(i) of the Code,
such portion of Employee’s benefits will not be provided to Employee prior to
the earlier of (i) the expiration of the six-month period measured from
the date of the Employee’s Separation from Service or (ii) the date of
Employee’s death.  Upon the first
business day following the expiration of the applicable Code Section 409A(a)(2)(B)(i) period,
all payments deferred pursuant to this Section 5(b) will be paid in a
lump sum to Employee (or Employee’s estate or beneficiaries), and any remaining
payments due under the Agreement will be paid as otherwise provided
herein.  For purposes of Section 409A
of the Code, Employee’s right to receive the payments of compensation pursuant
to the Agreement will be treated as a right to receive a series of separate
payments and accordingly, each payment will at all times be considered a
separate and distinct payment.  This
paragraph is intended to comply with the requirements of Section 409A of
the Code so that none of the severance payments and benefits to be provided
hereunder will be subject to the additional tax imposed under Section 409A
of the Code and any ambiguities herein will be interpreted to so comply.  Employee and the Company agree to work
together in good faith to consider amendments to this Agreement and to take
such reasonable actions which are necessary, appropriate or desirable to avoid
imposition of any additional tax or income recognition prior to actual payment
to Employee under Section 409A of the Code.

 

(c)           Release Prior to Receipt of Benefits.  The Company’s obligation to make the payments
and provide the benefits hereunder shall be conditioned upon (i) Employee’s
execution and delivery to the Company of a release of all claims that Employee
then may have, in standard form and content, within fifty (50) days following
Employee’s Separation from

 

5

 

Service and (ii) such release shall not have been revoked by
Employee within any period permitted under applicable law.

 

6.             Conflicts. 
Employee represents that Employee’s performance of all the terms of
this Agreement will not breach any other agreement to which Employee is a
party.  Employee has not, and will not
during the term of this Agreement, enter into any oral or written agreement in
conflict with any of the provisions of this Agreement.  Employee further represents that Employee is
entering into or has entered into an employment relationship with the Company
of Employee’s own free will.

 

7.             Successors.  Any successor to the Company (whether direct
or indirect and whether by purchase, lease, merger, consolidation, liquidation
or otherwise) to all or substantially all of the Company’s business and/or
assets shall assume the obligations under this Agreement and agree expressly to
perform the obligations under this Agreement in the same manner and to the same
extent as the Company would be required to perform such obligations in the
absence of a succession.  The terms of
this Agreement and all of Employee’s rights hereunder and thereunder shall
inure to the benefit of, and be enforceable by, Employee’s personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

 

8.             Notice.  Notices and
all other communications contemplated by this Agreement shall be in writing and
shall be deemed to have been duly given when personally delivered or when
mailed by U.S. registered or certified mail, return receipt requested and
postage prepaid.  Mailed notices to
Employee shall be addressed to Employee at the home address which Employee most
recently communicated to the Company in writing.  In the case of the Company, mailed notices
shall be addressed to its corporate headquarters, and all notices shall be
directed to the attention of its Secretary.

 

9.             Miscellaneous
Provisions.

 

(a)           No Duty to Mitigate.  Employee shall not be required to mitigate
the amount of any payment contemplated by this Agreement (whether by seeking
new employment or in any other manner), nor shall any such payment be reduced
by any earnings that Employee may receive from any other source.

 

(b)           Waiver.  No provision of this Agreement shall be
modified, waived or discharged unless the modification, waiver or discharge is
agreed to in writing and signed by Employee and by an authorized officer of the
Company (other than Employee).   No
waiver by either party of any breach of, or of compliance with, any condition
or provision of this Agreement by the other party shall be considered a waiver
of any other condition or provision or of the same condition or provision at
another time.

 

(c)           Whole
Agreement.  No agreements,
representations or understandings (whether oral or written and whether express
or implied) which are not expressly set forth in this Agreement have been made
or entered into by either party with respect to the subject matter hereof.  This Agreement supersedes any agreement
concerning similar subject matter dated prior

 

6

 

to
the date of this Agreement and by execution of this Agreement both parties
agree that any such predecessor agreement shall be deemed null and void.

 

(d)           Choice
of Law.  The validity,
interpretation, construction and performance of this Agreement shall be
governed by the laws of the State of Utah without reference to conflict of laws
provisions.

 

(e)           Severability.  If any term or provision of this Agreement or
the application thereof to any circumstance shall, in any jurisdiction and to
any extent, be invalid or unenforceable, such term or provision shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without invalidating or rendering unenforceable the remaining
terms and provisions of this Agreement or the application of such terms and
provisions to circumstances other than those as to which it is held invalid or
unenforceable, and a suitable and equitable term or provision shall be
substituted therefor to carry out, insofar as may be valid and enforceable, the
intent and purpose of the invalid or unenforceable term or provision.

 

(f)            Arbitration.  To ensure the rapid and economical resolution
of any and all disputes that arise in connection with this Agreement or
Employee’s termination with the Company, Employee and the Company agree that
any and all disputes, claims, or causes of action, in law or equity, arising
from or relating to the enforcement or interpretation of this Agreement or the
termination of Employee’s employment (collectively, “Claims”), will be
resolved to the fullest extent permitted by law exclusively by final, binding,
and confidential arbitration in Salt Lake City, Utah, conducted by the American
Arbitration Association (“AAA”) or its successors, under the then
applicable AAA rules by a single arbitrator.  Claims subject to this arbitration provision
will (i) include, but not be limited to, Claims pursuant to any federal,
state or local law or statute, including (without limitation) the Age
Discrimination in Employment Act, as amended; Title VII of the Civil Rights Act
of 1964, as amended; the Americans With Disabilities Act of 1990; the federal
Fair Labor Standards Act; and state anti-discrimination statutes; and Claims
pursuant to any common law, tort law or contract law, including (without
limitation) breach of contract or other promise, discrimination, harassment,
retaliation, wrongful discharge, fraud, misrepresentation, defamation, and
emotional distress; and (ii) exclude Claims that by law are not subject to
arbitration.  The arbitrator will:  (1) have the authority to compel
adequate discovery for the resolution of all Claims and to award such relief as
would otherwise be permitted by law; and (2) issue a written arbitration
decision including the arbitrator’s essential findings and conclusions and a
statement of the award.  The Company will
pay all of the arbitrator’s fees.  Employee and the Company acknowledge that, by agreeing to this
arbitration procedure, both Employee and the Company waive the right to resolve
any Claims through a trial by jury or judge or by administrative proceeding.  Nothing in this Agreement is intended to
prevent Employee or the Company from obtaining injunctive relief in court if
the award to which such party might obtain in arbitration may be rendered
ineffectual without provisional relief. 
As provided in the AAA rules, any arbitration award may be enforced by
any court of competent jurisdiction.

 

(g)           Legal
Fees and Expenses.  The
parties shall each bear their own expenses, legal fees and other fees incurred
in connection with the execution of this Agreement.

 

7

 

(h)           No
Assignment of Benefits. 
The rights of any person to payments or benefits under this Agreement
shall not be made subject to option or assignment, either by voluntary or
involuntary assignment or by operation of law, including (without limitation)
bankruptcy, garnishment, attachment or other creditor’s process, and any action
in violation of this Section 9(h) shall be void.

 

(i)            Assignment
by Company.  The Company
may assign its rights under this Agreement to an affiliate, and an affiliate
may assign its rights under this Agreement to another affiliate of the Company
or to the Company.   In the case of any
such assignment, the term “Company” when used in a section of this Agreement
shall mean the corporation that actually employs the Employee.

 

(j)            Counterparts.  This Agreement may be executed in
counterparts, each of which shall be deemed an original, but all of which
together will constitute one and the same instrument.

 

The parties
have executed this Agreement on the date first written above.

 

	
   

  	
  WORLD
  HEART CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Michael Sumner Estes

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   Chairman, Board of Directors

  
	
   

  	
   

  	
   

  
	
   

  	
  Address:

  	
   1173 Brown Avenue, Lafayette, CA 94549

  
	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  ALEX
  MARTIN

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Signature:

  	
  /s/
  Alex Martin

  
	
   

  	
  Address:

  	
  4750 Wiley Post Way,
  Suite #120, Salt Lake City, UT

  
	
   

  	
  84116

  
							

 

8

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