EXHIBIT 4.4
INTERCREDITOR AGREEMENT
dated as of
November 7, 2003
by and among
U.S. Bank National Association, as the Senior Notes Trustee,
Dry Creek Casino, LLC
River Rock Entertainment Authority
and
The Dry Creek Rancheria Band of Pomo Indians
(solely with respect to its obligations under
Section 9)
TABLE OF CONTENTS
Page
1. DEFINITIONS...........................................................4
1.1 DEFINED TERMS.........................................................4
1.2 INDEX OF ADDITIONAL DEFINED TERMS.....................................6
1.3 INTERPRETATION........................................................6
2. THE CREDIT DOCUMENTS..................................................7
2.1 LENDERS' CONFIRMATIONS................................................7
2.2 LOSS PROCEEDS.........................................................7
3. SUBORDINATION PROVISIONS..............................................7
3.1 SUBORDINATION OF NOTE CLAIMS..........................................7
3.2 SUBORDINATION OF LIEN PRIORITY........................................9
4. CONDITIONS............................................................9
4.1 CONDITIONS TO SUBORDINATION..........................................10
4.2 CONDITION TO PAYMENT OF INTEREST UNDER SUBORDINATED NOTE.............10
4.3 CONDITION TO REPAYMENT OF SUBORDINATED NOTE..........................10
4.4 CREDIT ENHANCEMENT FEES..............................................11
4.5 EXCEPTION TO SUBORDINATION...........................................11
4.6 INDEPENDENT CONSTRUCTION CONSULTANT..................................12
5. OWNERSHIP AND ASSIGNMENT OF SUBORDINATED NOTE........................12
6. LEGENDS..............................................................12
7. OBLIGATIONS OF AUTHORITY AND TRIBE ABSOLUTE..........................12
8. TERMINATION OF AGREEMENT.............................................13
9. GOVERNING LAW; JURISDICTION, GOVERNING LAW PROVISIONS................13
9.1 GOVERNING LAW PROVISIONS.............................................13
9.2 WAIVER OF SOVEREIGN IMMUNITY.........................................14
9.3 WAIVER OF TRIBAL COURT...............................................14
9.4 JURISDICTION.........................................................14
9.5 ARBITRATION..........................................................14
9.6 SERVICE OF PROCESS...................................................16
9.7 NON-IMPAIRMENT.......................................................16
9.8 IGRA SAVINGS PROVISIONS..............................................16
10. MISCELLANEOUS........................................................16
10.1 CONDITION WAIVER.....................................................16
10.2 INVALIDITY...........................................................16
10.3 ASSIGNMENT...........................................................16
10.4 TIME.................................................................16
10.5 CHOICE OF LAW........................................................16
10.6 ENTIRE AGREEMENT; AMENDMENTS.........................................17
10.7 NOTICES..............................................................17
10.8 COUNTERPARTS.........................................................17
10.9 RIGHT TO CONSULT COUNSEL.............................................18
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT (this "Agreement") is dated as of November
7, 2003, by and among U.S. Bank National Association, a national banking
association, as trustee under the Senior Notes Indenture (as defined below)
(together with its successors and assigns from time to time under the Senior
Notes Indenture, the "Senior Notes Trustee"), Dry Creek Casino, LLC, a Texas
limited liability company ("Dry Creek"), River Rock Entertainment Authority (the
"Authority"), an unincorporated instrumentality of the Dry Creek Rancheria Band
of Pomo Indians (the "Tribe"), and the Tribe (solely with respect to its
obligations under Sections 7 and 9).
RECITALS
A. Senior Notes. Concurrently herewith, the Authority is issuing
$200,000,000 aggregate principal amount of its 9.75% Senior Notes due 2011
(together with all notes issued in exchange or replacement therefor, the
"Initial Senior Notes") pursuant to the Senior Notes Indenture. In addition, the
Authority may issue additional senior notes (other than the Initial Senior
Notes) pursuant to the Indenture in accordance with the provisions thereof
(collectively with the Initial Senior Notes, the "Senior Notes").
B. Subordinated Note. Dry Creek, as lender, and the Tribe, as borrower,
have entered into that certain Development and Loan Agreement dated as of August
26, 2001 (as amended by that certain Amendment to the Development and Loan
Agreement dated as of April 29, 2002, that certain Second Amendment to
Development and Loan Agreement between the Dry Creek Rancheria Band of Pomo
Indians and Dry Creek Casino, LLC dated as of February 19, 2003, that certain
Third Amendment to Development and Loan Agreement between the Dry Creek
Rancheria Band of Pomo Indians and Dry Creek Casino, LLC dated as of May 29,
2003, that certain Fourth Amendment to Development and Loan Agreement between
The Dry Creek Rancheria Band of Pomo Indians and Dry Creek Casino, LLC dated as
of October 9, 2003, that certain Fifth Amendment to Development and Loan
Agreement between The Dry Creek Rancheria Band of Pomo Indians and Dry Creek
Casino, LLC dated October 9, 2003, and that certain Sixth Amendment to
Development and Loan Agreement between The Dry Creek Rancheria Band of Pomo
Indians and Dry Creek Casino, LLC dated November 7, 2003, the "Loan Agreement"),
pursuant to which Dry Creek and the Tribe further entered into that certain
Security Agreement (as amended by that certain Amendment No. 1 to Security
Agreement dated April 29, 2002, that certain Second Amendment to Security
Agreement dated February 14, 2003, and that certain Third Amendment to Security
Agreement dated May 29, 2003, the "Dry Creek Security Agreement") with respect
to the credit enhancement fee contained in the Loan Agreement (the "Credit
Advancement Fee") and certain Development Advances (as defined in the Loan
Agreement) and a promissory note (the "Subordinated Note") issued in favor of
Dry Creek in accordance therewith. The Dry Creek Security Agreement secured the
prompt and complete payment, observance and performance when due of all of the
obligations with respect to the Credit Enhancement Fee, the Development
Advances, the Subordinated Note and the Dry Creek Security Agreement.
C. Proceeds of the Senior Notes. The Authority will use the net
proceeds from the sale of the Initial Senior Notes for (among other things) the
design, development and construction of three parking structures and certain
infrastructure improvements (the "Project") to support an existing gaming
facility (the "Facility") located upon the Tribe's rancheria near Geyserville,
California, and for the repayment of certain preexisting indebtedness of the
Tribe, including without limitation the Development Advances and a portion of
principal and accrued but unpaid interest under the Subordinated Note.
D. Collateral Arrangements. The Senior Notes are secured by all of the
Collateral (as defined below), as set forth in the Senior Notes Indenture,
pursuant to the Collateral Documents (as defined below). The Subordinated Note
Claims are secured by a portion of the Collateral pursuant to the Dry Creek
Security Agreement.
E. Subordination. The Senior Notes Trustee, on behalf of the Senior
Note Holders (as defined below), is willing to fund the proceeds under the
Senior Notes only if Dry Creek shall enter into this Agreement and subordinate,
to the extent and in the manner hereinafter set forth, all claims and rights in
respect of the Subordinated Note, Credit Enhancement Fee and the Subordinated
Note Claims (as defined below) to all Senior Note Obligations (as defined below)
to the extent set forth in this Agreement.
F. Purpose. The parties have entered into this Agreement in order to
(a) provide for the subordination of the obligations and liabilities in respect
of the Subordinated Note Claims to the obligations and liabilities in respect of
the Senior Notes in favor of the Senior Notes Trustee (for the benefit of the
Senior Note Holders) and (b) set forth certain conditions upon which payments
shall be made on the Subordinated Note.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Definitions.
1.1 Defined Terms. The terms defined in this Section 1 shall
have the meanings herein specified:
"Affiliate" has the meaning ascribed thereto in the Senior
Notes Indenture.
"Bankruptcy Law" has the meaning ascribed thereto in the Cash
Collateral and Disbursement Agreement.
"Business Day" has the meaning ascribed thereto in the Senior
Notes Indenture.
"Cash Collateral and Disbursement Agreement" has the meaning
ascribed thereto in the Senior Notes Indenture.
"Cash Equivalents" has the meaning ascribed thereto in the
Senior Notes Indenture.
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"Claim" means any claim, demand, action or cause of action
arising under this Agreement or under the Collateral Documents, as any of the
foregoing may be amended or modified from time to time, or in any way connected
with or related or incidental to any of the foregoing, whether now existing or
hereafter arising and whether sounding in tort, contract or otherwise.
"Collateral" has the meaning ascribed thereto in the Senior
Notes Indenture.
"Collateral Documents" has the meaning ascribed thereto in the
Senior Notes Indenture.
"Credit Enhancement Fee" has the meaning ascribed thereto in
the Loan Agreement.
"Default" has the meaning ascribed thereto in the Senior Notes
Indenture.
"Event of Default" means the occurrence and continuance of an
Event of Default under the Senior Notes Indenture.
"Gaming Assets" has the meaning ascribed thereto in the Senior
Notes Indenture.
"Governmental Action" means any resolution, ordinance,
statute, regulation, order or decision regardless of how constituted having the
force of law or legal authorization of the Tribe, the Authority or any
instrumentality or agency of the Tribe.
"Liquidity Requirement" has the meaning ascribed thereto in
the Cash Collateral and Disbursement Agreement.
"Operating Account" has the meaning ascribed thereto in the
Cash Collateral and Disbursement Agreement.
"Person" has the meaning ascribed thereto in the Senior Notes
Indenture.
"Proceeding" means any (a) insolvency, bankruptcy,
receivership, liquidation, reorganization, readjustment, composition or other
similar proceeding relating to the Authority, its property or its creditors as
such, (b) proceeding for any liquidation, dissolution or other winding-up of the
Authority, voluntary or involuntary, whether or not involving insolvency or
bankruptcy proceedings, (c) assignment for the benefit of creditors of the
Authority or (d) other marshalling of the assets of the Authority.
"Senior Note Holders" means the holders from time to time of
the Senior Notes.
"Senior Note Obligations" means any principal, interest,
premium (if any), penalties, fees, indemnification, reimbursements, damages
(including liquidated damages, if any) and other liabilities payable with
respect to the Senior Notes pursuant to the Senior Notes or the Senior Notes
Indenture and any other obligations of the Authority pursuant to the Senior
Notes Indenture or the Collateral Documents.
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"Senior Notes Indenture" means the Indenture dated as of the
date hereof, among the Authority, the Tribe and the Senior Notes Trustee, for
the benefit of the Senior Note Holders.
"Subordinated Note Claims" means (a) all Subordinated Note
Obligations, (b) the Credit Enhancement Fee (as defined in the Loan Agreement)
and (c) all other indebtedness, obligations and liabilities of the Authority to
the Subordinated Note Holder, whether now existing or hereafter incurred or
created, under or with respect to the Subordinated Note or the documents and
agreements relating thereto.
"Subordinated Note Event of Default" means an "Event of
Default", as such term is defined in the Dry Creek Security Agreement, or the
failure of the Subordinated Note Holder for 30 days after notice thereof to
perform or comply with any of its obligations under this Agreement.
"Subordinated Note Holder" means Dry Creek or each of the
holders from time to time of the Subordinated Note.
"Subordinated Note Obligations" means any principal, fixed
interest, contingent interest, premium (if any), penalties, fees,
indemnification, reimbursements, damages and other liabilities payable with
respect to the Subordinated Note pursuant to the Subordinated Note.
1.2 Index of Additional Defined Terms. In addition, the terms
listed in the left column below shall have the respective meanings ascribed to
such terms in the Section of this Agreement listed opposite such terms in the
right column below:
Defined Term Section
------------ -------
AAA 9.5
Agreement Introduction
Applicable Courts 9.4
Authority Introduction
Facility C of Recitals
Initial Senior Notes A of Recitals
Permitted Claims 9.2
Senior Note Holders A of Recitals
Senior Notes A of Recitals
Senior Notes Trustee Introduction
Subordinated Note B of Recitals
Tribe Introduction
1.3 Interpretation. Unless otherwise required by the context
in which any term appears, the singular shall include the plural and the
masculine shall include the feminine and neuter. All references to "Sections" or
"Exhibits" shall be to Sections of or Exhibits to this Agreement, and references
to paragraphs shall be to separate paragraphs of the section or subsection in
which the reference occurs. The titles of the Sections herein have been inserted
as a matter of convenience of reference only, and shall not control or affect
the meaning or construction of any of the terms or provisions hereof.
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2. The Credit Documents
2.1 Lenders' Confirmations. The Subordinated Note Holder has
reviewed the Senior Notes Indenture, the Senior Notes and the Collateral
Documents and hereby approves of and consents to the Senior Notes Indenture, the
Senior Notes and the Collateral Documents and the related documents executed in
connection therewith. The Senior Notes Trustee has reviewed the Loan Agreement,
the Subordinated Note and the Dry Creek Security Agreement and hereby approves
of and consents to the Subordinated Note, the Credit Enhancement Fee and the
related documents executed in connection therewith.
2.2 Loss Proceeds. If and to the extent that the Senior Notes
Trustee releases or consents to the release of insurance or condemnation
proceeds pursuant to the Senior Notes Indenture for the purpose of restoring the
Facility and/or the Project, the Subordinated Note Holder shall also release or
authorize the release of such proceeds for such purpose, to the extent, if any,
that the Subordinated Note Holder's consent to such release is necessary under
the Subordinated Note, the Loan Agreement or the Dry Creek Security Agreement.
3. Subordination Provisions.
3.1 Subordination of Subordinated Note Claims.
3.1.1 Subordination of Claims. The Subordinated Note
Holder agrees that any and all Subordinated Note Claims shall be subordinate and
subject in right of payment to all Senior Note Obligations to the extent and in
the manner provided in these subordination provisions, and each holder of the
Subordinated Note Claims (or of any instrument evidencing the same) by
acceptance thereof agrees to be bound by these subordination provisions, until
all of the Senior Note Obligations have been paid in full in immediately
available funds; provided, however, that the Authority may make payments to, on
behalf of or for the benefit of the Subordinated Note Holder in respect of
payments due under the Subordinated Note Claims only under the circumstances and
in the amounts set forth in Section 4 below. If the Authority fails to pay
principal of or interest on the Subordinated Note on the respective due date as
a result of its failure to satisfy the conditions in Sections 4.2 and 4.3, the
failure is still an Event of Default under the Subordinated Note (subject to the
expiration of any applicable grace period, in accordance with the terms of the
Subordinated Note) but exercise of their remedies by the holders of the
Subordinated Note Claims on account of such Event of Default shall be suspended
as herein provided. If the Authority fails to pay an installment of the Credit
Enhancement Fee on its respective due date as a result of a failure to satisfy
the conditions set forth in Section 4.4, such failure is still an Event of
Default under the Loan Agreement (subject to the expiration of any applicable
grace period, in accordance with the terms of the Loan Agreement) but exercise
of their remedies by the holders of the Subordinated Note Claims on account of
such Event of Default shall be suspended as herein provided.
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3.1.2 Distribution of Assets. If all or any part of
the assets of the Authority, or the proceeds thereof, are subject to any
distribution, division or application to the creditors of the Authority, whether
partial or complete, voluntary or involuntary, and whether by reason of
liquidation, bankruptcy, arrangement, receivership, assignment for the benefit
of creditors or any other action or proceeding, or if the business of the
Authority is dissolved or if (except as expressly permitted by the Senior Notes
Indenture) all or substantially all of the assets of the Authority are sold,
then, and in any such event, any payment or distribution of any kind or
character, whether in cash, securities or other investment property, or
otherwise, which shall be payable or deliverable upon or with respect to any
repayment obligations of the Authority or the Tribe to the Subordinated Note
Holder (including but not limited to obligations evidenced by the Subordinated
Note) shall be paid or delivered directly to the Senior Notes Trustee for
application to the Senior Notes, due or to become due, until all of the Senior
Note Obligations shall have been paid in full in immediately available funds
except as otherwise provided in Section 4 below, and thereafter any such amounts
shall be paid for application to the Subordinated Note Claims, due or to become
due, if any, until all of the Subordinated Note Claims have been paid in full in
immediately available funds. Following the payment in full of the Senior Note
Obligations, the following shall apply:
(a) any amounts paid to the Senior Notes
Trustee pursuant to the foregoing paragraph in excess of the amounts required to
pay the Senior Note Obligations in full shall be transferred to the holders of
the Subordinated Note Claims for application to the Subordinated Note Claims due
or to become due, if any; and
(b) any amounts in excess of the amounts
required to pay the Subordinated Note Claims in full, if any, shall be returned
to the Authority.
3.1.3 Appointment of Attorneys-in-Fact; Proofs of
Claim. Until all of the Senior Note Obligations shall have been paid in full in
immediately available funds, the Subordinated Note Holder irrevocably
authorizes, empowers and appoints the Senior Notes Trustee as such Subordinated
Note Holder's attorney-in-fact (which appointment is coupled with an interest
and is irrevocable) to demand, xxx for, collect and receive every such payment
or distribution and give acquittance therefor and to make and present for and on
behalf of such Subordinated Note Holder such proofs of claim and take such other
action, in the Senior Notes Trustee's own name or in the name of such
Subordinated Note Holder or otherwise, as the Senior Notes Trustee may deem
necessary or advisable for the enforcement of this Agreement. Until all of the
Senior Note Obligations shall have been paid in full in immediately available
funds, the Subordinated Note Holder also agrees to execute, verify, deliver and
file any such proofs of claim in respect of the Subordinated Note Claims
requested by the Senior Notes Trustee. Until all of the Senior Note Obligations
shall have been paid in full in immediately available funds, the Senior Notes
Trustee may vote such proofs of claim in any such proceeding (and such
Subordinated Note Holder shall not be entitled to withdraw such vote), receive
and collect any and all dividends or other payments or disbursements made on the
Subordinated Note Claims in whatever form the same may be paid or issued and
apply the same on account of the Senior Notes.
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3.1.4 Receipt of Payments. Until all of the Senior
Note Obligations have been paid in full in immediately available funds, if any
payment, distribution, security or other investment property or instrument or
any proceeds thereof is received by the holders of the Subordinated Note Claims
upon or with respect to the Subordinated Note Claims in violation of the Senior
Notes Indenture or this Agreement, the Subordinated Note Holder shall receive
and hold the same in trust, as trustee, for the benefit of the Senior Notes
Trustee and the Senior Note Holders, and shall forthwith deliver the same to the
Senior Notes Trustee, for the benefit of the Senior Note Holders, in precisely
the form received (except for the endorsement or assignment of such holders of
the Subordinated Note Claims where necessary or advisable in the Senior Notes
Trustee's judgment), for application to any of the Senior Notes, due or to
become due, and, until so delivered, the same shall be segregated from the other
assets of such holders of the Subordinated Note Claims and held in trust by such
holders of the Subordinated Note Claims as the property of the Senior Notes
Trustee, for application to the Senior Notes due or to become due. If the
holders of the Subordinated Note Claims fail to make any such endorsement or
assignment to the Senior Notes Trustee, the Senior Notes Trustee or any of its
officers, employees or representatives are hereby irrevocably authorized to make
the same. Following the payment in full of the Senior Note Obligations, the
following shall apply:
(a) any amounts to be delivered to the
Senior Notes Trustee pursuant to the foregoing paragraph in excess of the
amounts required to pay the Senior Note Obligations in full shall instead be
delivered to the holders of the Subordinated Note Claims for application to the
Subordinated Note Claims due or to become due, if any; and
(b) any such amounts in excess of the
amounts required to pay the Subordinated Note Claims in full, if any, shall be
returned to the Authority.
3.1.5 No Assignment or Modification. The Subordinated
Note Holder and the Authority agree that until all of the Senior Note
Obligations have been paid in full in immediately available funds, neither the
Subordinated Note Holder nor the Authority will (a) assign or transfer, or agree
to assign or transfer (except as otherwise provided in Section 5, if applicable)
to any Person (other than in favor of the Senior Notes Trustee for the benefit
of the Senior Note Holders) any claim such party has or may have against the
Senior Notes Trustee or Senior Note Holders or (b) otherwise amend, modify,
supplement, waive or fail to enforce any provision of this Agreement except as
permitted by Article 9 of the Senior Notes Indenture.
3.2 Subordination of Lien Priority. The Subordinated Note
Holder acknowledges that (i) prior to the payment in full of the Senior Note
Obligations, any lien, charge, and interest that such Subordinated Note Holder
may acquire in the Collateral, and any ownership of the Collateral to which such
Subordinated Note Holder may succeed by exercise of rights and remedies under
the Subordinated Note and/or the Dry Creek Security Agreement, is subject and
subordinate to the rights of the Senior Notes Trustee and the Senior Note Holder
in the Collateral and (ii) such Subordinated Note Holder shall have no right to
possession of any such assets or to foreclose upon, or exercise any other remedy
in respect of, any such assets, whether by judicial action or otherwise, unless
and until all of the Senior Note Obligations shall have been paid in full in
immediately available funds. If the Senior Notes Trustee or a purchaser at a
foreclosure sale held by the Senior Notes Trustee acquires title to the
Collateral, then such title shall be free and clear of, and absolutely not
subject to, any claim, right, title or interest of the Subordinated Note Holder.
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4. Conditions.
4.1 Condition to Subordination. The obligations of the
Subordinated Note Holder under this Agreement shall not become effective unless
the Subordinated Note Obligations shall as of the date of this Agreement have
been reduced to $10,000,000 or to any lesser amount, the Development Advances
shall have been paid in full and all accrued Credit Enhancement Fees shall have
been paid in full. The parties hereto contemplate that proceeds from the
issuance of the Senior Notes shall be used by the Authority to pay down such
Subordinated Note Claims in order to satisfy the foregoing condition. To the
extent any proceeds from the issuance of the Senior Notes are used to pay down
the Development Advances and the balance of the Subordinated Note Obligations
(whether under this Section 4.1, under Section 4.3 below or otherwise), the
Senior Notes Trustee shall be subrogated to all of the rights of the
Subordinated Note Holder under the Loan Agreement, the Subordinated Note, the
Dry Creek Security Agreement and any other document or instrument relating
thereto, including without limitation the perfection and continuing first
priority of all security interests created under the Dry Creek Security
Agreement.
4.2 Condition to Payment of Interest under Subordinated Note.
The Senior Notes Trustee and the Subordinated Note Holder agree that so long as
no Default or Event of Default has occurred and is continuing, the Authority
shall pay current installments of interest under the Subordinated Note to the
Subordinated Note Holder out of the Operating Account.
4.3 Condition to Repayment of Subordinated Note. All payments
with respect to the Subordinated Note Claims shall be subject to the terms and
conditions of this Agreement and to the terms and conditions of Section 4.2.4 of
the Cash Collateral and Disbursement Agreement, which provides in pertinent part
as follows:
4.2.4 Disbursements from Construction Escrow Account.
In the event all of the funds in the Construction Disbursement Account have been
disbursed in accordance with the provisions of Sections 4.2.1 and 4.2.2 above,
but subject to the provisions of Section 4.2.3 above, the Authority shall have
the right from time to time during the Construction Period to submit to the USB
Disbursement Agent a request for the disbursement of funds from the Construction
Escrow Account to fund Construction Expenses that exceed the amounts set forth
in the Authority Budget for such Construction Expenses ("Construction Cost
Overruns"), together with the exhibits attached thereto. Such request shall be
supported by a certificate from the Independent Construction Consultant stating
the amount of the Construction Cost Overruns and confirming that the amount
requested has been incurred for legitimate Construction Expenses and that
following disbursement pursuant to such request the Available Construction Funds
will exceed the Remaining Costs. In addition to the foregoing:
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(a) If no Default or Event of Default has
occurred and is then continuing or if the Authority shall neither have requested
nor received funds for Construction Cost Overruns from the Construction Escrow
Account on or before the 45th day (or such later date upon which all pending
Defaults or Events of Default have been cured) following Substantial Completion
of the first parking structure comprising a portion of the Project, the
Authority shall, pursuant to an Officer's Certificate, instruct the USB
Disbursement Agent to disburse an amount equal to $5,000,000 to the holder of
the Subordinated Note for application against the then-outstanding principal
balance thereof in accordance with the terms of the Intercreditor Agreement; and
(b) If no Default or Event of Default has
occurred and is then continuing and if any funds remain in the Construction
Escrow Account on the 75th day (or such later date upon which all pending
Defaults or Events of Default have been cured) following Substantial Completion
of the Project, the Authority shall, pursuant to an Officer's Certificate,
instruct the USB Disbursement Agent to disburse an amount equal to the lesser of
$10,000,000 or the balance of the funds remaining in the Construction Escrow
Account to the holder of the Subordinated Note for application against the
then-outstanding principal balance thereof in accordance with the terms of the
Intercreditor Agreement, in either case reduced by any disbursement made
pursuant to the preceding paragraph (a);
provided, however, that in no event shall the holder of the Subordinated Note be
entitled to receive any amount in excess of the balance of the Subordinated Note
after reduction by payment from any and all sources and provided further that
such excess, if any, shall be transferred to the Operating Account.
4.4 Credit Enhancement Fees. The Senior Notes Trustee and the
Subordinated Note Holder agree that so long as no Default or Event of Default
has occurred and is continuing and so long as the Authority is in compliance
with the Liquidity Requirement, the Authority shall pay current installments of
the Credit Enhancement Fee under the Loan Agreement to the Subordinated Note
Holder out of the Operating Account. In the event a Default or Event of Default
has occurred and is continuing or the Authority is not in compliance with the
Liquidity Requirement, the Credit Enhancement Fee shall not be paid to the
Subordinated Note Holder but shall be suspended until the Authority shall have
made all payments of interest due under the Senior Notes, at which time the
Authority shall pay all delinquent and then current installments of the Credit
Enhancement Fee to the Subordinated Note Holder out of the Operating Account so
long as the Liquidity Requirement remains satisfied following such payment.
4.5 Exception to Subordination. Notwithstanding anything
contained herein to the contrary, in the event and to the extent the
Subordinated Note Holder pays rent to Sprung Instant Structures, Inc. ("Sprung")
under that certain Guaranty of Lease given by Subordinated Note Holder with
respect to the Tribe's obligation to pay rent to Sprung pursuant to that certain
Lease Agreement dated May 30, 2002, between Sprung as lessor and the Tribe as
lessee, the Subordinated Note Holder shall be subrogated to the rights and
interest of Sprung under the Lease Agreement in and to two sprung structures
more particularly described in such Lease Agreement, which rights and interest
shall be senior and prior to any security interest in such sprung structures in
favor of the Senior Notes Trustee.
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4.6 Independent Construction Consultant. Any certificates or
reports issued to the Disbursement Agent or Trustee pursuant to the Cash
Collateral and Disbursement Agreement shall be simultaneously delivered to the
Subordinated Note Holder.
5. Ownership and Assignment of Subordinated Note . The Subordinated
Note Holder represents and warrants that it is the lawful owner of the
Subordinated Note Claims and that no part thereof has been assigned to or
subordinated or subjected to any other security interest in favor of anyone
other than the Senior Notes Trustee (for the benefit of the Senior Note
Holders); provided, however, that the Subordinated Note Holder has prior to the
date hereof pledged the Subordinated Note to a third party lender ("Pledgee") to
secure certain payment obligations of Subordinated Note holder to Pledgee. The
Senior Notes Trustee and the Subordinated Note Holder agree that the
Subordinated Note Holder may not assign, or subject to any security interest all
or any portion of the Subordinated Note or any interest therein in favor of any
person or entity other than Pledgee, without the prior written consent of the
Senior Notes Trustee in each instance, such consent not to be unreasonably
withheld.
6. Legend. Each instrument evidencing any Subordinated Note Claim,
including, without limitation, the Subordinated Note, shall contain the
following legend conspicuously noted on the face thereof: "THIS NOTE AND THE
RIGHTS OF ANY HOLDER OF THIS NOTE ARE SUBJECT TO THE TERMS OF THE INTERCREDITOR
AGREEMENT DATED AS OF NOVEMBER 7, 2003, BY AND AMONG U.S. BANK NATIONAL
ASSOCIATION, AS TRUSTEE UNDER THAT CERTAIN SENIOR NOTES INDENTURE DATED
CURRENTLY THEREWITH, DRY CREEK CASINO, LLC, RIVER ROCK ENTERTAINMENT AUTHORITY,
A WHOLLY OWNED UNINCORPORATED INSTRUMENTALITY OF THE DRY CREEK RANCHERIA BAND OF
POMO INDIANS (THE "TRIBE"), AND THE TRIBE PURSUANT TO WHICH THIS NOTE AND SUCH
RIGHTS ARE MADE EXPRESSLY SUBORDINATE TO THE RIGHTS OF THE SENIOR NOTES TRUSTEE
AND THE SENIOR NOTE HOLDERS (EACH AS DEFINED THEREIN). EACH HOLDER OF THIS NOTE,
BY ACCEPTANCE HEREOF, AGREES TO BE SUBJECT TO THE TERMS OF THE INTERCREDITOR
AGREEMENT" and shall specifically state that a copy of this Agreement is on file
with the Authority and is available for inspection at the Authority's offices.
7. Obligations of Authority and Tribe Absolute. Nothing contained
herein shall impair, as between the Authority and the Tribe and the holder of
any Subordinated Note Claim only, the obligation of the Authority and the Tribe
to pay to the holder thereof all amounts payable in respect of such Subordinated
Note Claim as and when the same shall become due and payable in accordance with
the terms thereof, or, except as expressly provided herein, prevent the holder
of any Subordinated Note Claim from exercising all rights, powers and remedies
otherwise permitted by applicable law or upon a default or event of default
under a Subordinated Note Claim or any documents or agreements related thereto,
all subject to the rights of the holders of the Senior Note Obligations as set
forth in this Agreement.
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8. Termination of Agreement. This Agreement shall terminate
automatically upon payment in full in immediately available funds of the Senior
Note Obligations.
9. Governing Law; Jurisdiction; Governing Law Provisions.
9.1 Governing Law Provisions. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE PRINCIPLES OF CONFLICTS OF LAW
TO THE EXTENT THAT THE APPLICATION OF THE LAW OF ANOTHER JURISDICTION WOULD BE
REQUIRED THEREBY. THE AUTHORITY, THE TRIBE, AND THE TRUSTEE AGREE THAT THE
TRANSACTIONS UNDER THIS AGREEMENT, INCLUDING THE EXECUTION OF THIS AGREEMENT,
THE LENDING OF MONEY AND THE ISSUANCE OF THE SENIOR NOTES, OCCURRED OUTSIDE THE
TRIBE'S RESERVATION, IN THE STATE OF NEW YORK.
9.2 Waiver of Sovereign Immunity. Each of the Authority and
the Tribe unconditionally and irrevocably waives its sovereign immunity, and the
sovereign immunity of each subdivision, agency, department, board, committee,
commission, instrumentality or entity wholly-owned or wholly-controlled,
directly or indirectly, by the Tribe from any suit, action, proceeding or legal
process of any nature, and any and all defenses based thereon, with respect to
any claim, demand, dispute, action or cause of action related or incidental to
this Agreement, the Senior Notes or the Collateral Documents including the offer
or sale of the Senior Notes, whether now existing or hereafter arising and
whether sounding in tort, contract, or otherwise (collectively "Permitted
Claims"). Such waiver extends (i) to permit the interpretation, enforcement and
the seeking of legal or equitable relief and remedies (whether through an award
or granting of specific performance, injunction, mandamus, damages or otherwise)
through judicial proceedings and other legal process as hereinafter provided,
and (ii) to permit judicial actions in any of the Applicable Courts (as defined
below) to compel, enter judgment upon, enforce, modify or vacate any award or
interim injunctive relief related to such arbitration authorized in this Section
13; provided, however, such waiver shall be subject to the following
limitations: (a) no Person may seek enforcement or recover any damages as a
result of such waiver against any property or rights of the Authority or the
Tribe, except as against Gaming Assets and Gaming Assets distributed to the
Tribe in contravention of the Indenture; (b) no Person will be entitled to
enforce such waiver except the Trustee, holders of the Senior Notes, Persons
entitled to be indemnified under this Agreement, and the successors and assigns
of the Trustee and such holders and Persons (each, a "Permitted Party"); (c) no
Person shall be entitled to assert a claim because of such waiver except a
Permitted Claim; (d) claims permitted by such waiver may be brought only in the
Applicable Courts or in arbitration proceedings as described below; and (e) all
Permitted Claims shall be interpreted and subject to the internal law of the
State of New York.
9.3 Waiver of Tribal Court. Each of the Authority and the
Tribe unconditionally and irrevocably waives the jurisdiction and right of any
tribal court or forum, now or hereafter existing or created, to hear or resolve
any Permitted Claim. Each of the Authority and the Tribe unconditionally and
irrevocably waives the application of any rule or doctrine relating to the
exhaustion of tribal remedies, abstention or comity that might otherwise require
or permit a Permitted Claim to be heard or resolved (either initially or
finally) in a tribal court or other tribal forum.
9.4 Jurisdiction. Each of the Authority and the Tribe
irrevocably consents to arbitration as described below and for the resolution
and enforcement of Permitted Claims and actions permitted by the waivers
described above, to the following courts (the "Applicable Courts"); (a) the
United States District Court for the Southern District of New York and all
courts to which any appeal therefrom may be available; (b) any court of the
State of New York and all courts to which any appeal therefrom may be available;
and (c) any court or other forum of the Tribe (to the extent that a Permitted
Party has commenced or consented to an action in such court or forum).
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9.5 Arbitration. At the election of the Trustee, any
Permitted Claims must be resolved by binding arbitration under the commercial
arbitration rules of the American Arbitration Association (the "AAA"), as
modified by this Agreement. An arbitration proceeding may be commenced only by
the Trustee, or to the extent remedies may be enforced directly by a holder of
Senior Notes, by the holder upon the filing with the AAA of a Statement of Claim
(within the meaning of the AAA rules) and serving a copy thereof on the
Authority and the Tribe. A single arbitrator shall hear the Permitted Claim, and
shall be selected in accordance with the rules of the AAA. No person shall be
eligible to serve as an arbitrator if the person is related to, affiliated with
or has represented in a legal capacity any party to the arbitration proceeding
or any party to this Agreement. The arbitrator shall be an attorney admitted to
practice and in good standing before the highest court of a state, who is
experienced in advising clients in connection with commercial borrowings or the
issuance of debt securities. Any party shall be permitted to engage in any
discovery permitted under the rules of the AAA. However, all discovery shall be
completed within 90 days following the initial filing of the Statement of Claim.
The hearing on the arbitration must be held in the City of Los Angeles,
California, and commence and be completed no more than 30 days after the close
of discovery, and the arbitrator shall render an award in writing within 30 days
of the completion of the hearing, which shall contain findings of facts and
conclusions of law. Any arbitrator appointed hereunder may award interim
injunctive relief before the final arbitration award. Any controversy concerning
whether an issue is arbitrable shall be determined by the arbitrator.
9.6 Service of Process. Service of any process, summons,
notice or document by mail to such party's address set forth above shall be
effective service of process for any suit, action or other proceeding brought in
any proper court.
9.7 Non-Impairment. Neither the Authority nor the Tribe nor
any of their Affiliates will: (a) adopt, enact, promulgate or otherwise place
into effect any law or legal requirement that impairs or interferes, or could
impair or interfere, in any manner, with any right or remedy of another party
hereunder or their successors and assigns (it being understood and agreed that
any such law or legal requirement that is adopted, enacted, promulgated or
otherwise placed into effect without the prior written consent of any affected
party, successor or assign shall be void and of no effect); or (b) demand,
impose or receive any tax, charge, assessment, fee or other imposition or impose
any regulatory or licensing requirement against a party, their successors or
assigns, except in connection with licensing required by the Compact entered
into between the Tribe and the State of California, as amended from time to
time.
9.8 IGRA Savings Provisions. It is not the intent of the
parties hereto that this Agreement, whether considered alone, or together with
any other one or more documents, constitute a management contract within the
meaning of IGRA. Accordingly, to the extent any reasonable basis exists
therefore, each and every provision hereof shall be interpreted in a manner that
does not cause this Agreement to constitute a management contract, whether
considered alone, or together with any other one or more documents. In no event
shall any provision of this Agreement be applied, or deemed in effect or
enforceable, to the extent such provision allows any action or influence by the
Trustee or any other person that constitutes management of gaming in violation
of IGRA. Notwithstanding any other provision herein, if any term or condition
herein should cause this Agreement, alone, or together with any one or more
other documents, to constitute a management contract within the meaning of IGRA,
such provision shall be null and void without any further force and effect, with
all other provisions not similarly null and void remaining in full force and
effect. This Section shall survive as an agreement separate and apart from the
remainder of this Agreement in the event of any determination that any provision
of this Agreement causes the Agreement to constitute a management contract
within the meaning of IGRA.
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10. Miscellaneous.
10.1 Waiver. Any party hereto may specifically waive any
breach of this Agreement by any other party, but no such waiver shall be deemed
to have been given unless such waiver is in writing, signed by the waiving party
and specifically designates the breach waived, nor shall any such waiver
constitute a continuing waiver of similar or other breaches.
10.2 Invalidity. If, for any reason whatsoever, any one or
more of the provisions of this Agreement shall be held or deemed to be
inoperative, unenforceable or invalid in a particular case or in all cases, such
circumstances shall not have the effect of rendering any of the other provisions
of this Agreement inoperative, unenforceable or invalid, and the inoperative,
unenforceable or invalid provision shall be construed as if it were written so
as to effectuate, to the maximum extent possible, the parties' intent.
10.3 Assignment. This Agreement is personal to the parties
hereto and, except as expressly permitted under Section 5, the rights and duties
of any party hereunder shall not be assignable except with the prior written
consent of the other parties. In any event, this Agreement shall inure to and be
binding upon the parties and their successors and permitted assigns.
10.4 Time. Time is of the essence of each provision of this
Agreement.
10.5 Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.
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10.6 Entire Agreement; Amendments. This Agreement, together
with the Senior Notes Indenture and the Collateral Documents, contains the
entire agreement among the parties with respect to the subject matter hereof and
supersedes any and all prior agreements, understandings and commitments, whether
oral or written. This Agreement may be amended only by a writing signed by duly
authorized representatives of all parties (other than the Authority and the
Tribe).
10.7 Notices. All notices and other communications required or
permitted to be given or made under this Agreement shall be in writing and shall
be deemed to have been duly given and received, regardless of when and whether
received, either: (a) on the day of hand delivery; or (b) on the day sent, when
sent by United States certified mail, postage and certification fee prepaid,
return receipt requested, or via facsimile, addressed as follows:
To the Senior Notes Trustee:
U.S. Bank National Association
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Corporate Trust Department
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Subordinated Note Holder:
Dry Creek Casino, LLC
c/o Nevada Gold & Casinos, Inc.
0000 Xxxx Xxx Xxxxxxxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
To the Authority and the Tribe:
River Rock Entertainment Authority
0000 Xxxxxxx 000 Xxxx
Xxxxxxxxxxx, Xxxxxxxxxx 00000
Attention: Tribal Chairperson
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
or at such other address as the specified entity most recently may have
designated in writing in accordance with this Section to the others.
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10.8 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
10.9 Right to Consult Counsel. The Senior Notes Trustee may,
if it deems necessary or appropriate, consult with and be advised by counsel in
respect of their duties hereunder. The Senior Notes Trustee shall be entitled to
rely upon the advice of its counsel in any action taken in its capacity as the
Senior Notes Trustee hereunder and shall be protected from any liability of any
kind for actions taken in reasonable reliance upon such opinion of its counsel.
The Authority agrees to pay all such reasonable counsel fees.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have each caused this Agreement
to be duly executed by their duly authorized officers, all as of the day and
year first above written.
U.S. BANK NATIONAL ASSOCIATION,
as the Senior Notes Trustee
By: /s/ Xxxxx Xxxxxx
---------------------------
Name: Xxxxx Xxxxxx
Title: Vice President
DRY CREEK CASINO, LLC
By: /s/ X.X. Xxxx
---------------------------
Name: X.X. Xxxx
Title: Manager
RIVER ROCK ENTERTAINMENT AUTHORITY
By: /s/ Xxxxxxxxx Xxxxx XxXxxxx
---------------------------
Name: Xxxxxxxxx XxXxxxx
Title: Chairperson
THE DRY CREEK RANCHERIA BAND OF POMO INDIANS
By: /s/ Xxxxxxxxx Xxxxx XxXxxxx
---------------------------
Name: Xxxxxxxxx XxXxxxx
Title: Chairperson
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