Exhibit 10.2
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
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THIS SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT (as amended,
supplemented or otherwise modified from time to time, this "Agreement") is made
as of ____________, 2000, by and among _______________________________, a
_________________________________, as trustee (the "Trustee", which term shall
include any affiliate, designee or a nominee of the Trustee acting at the
direction or on behalf of the Trustee from time to time) for the benefit of
itself and the holders (the "Holders") of the Notes (as defined below), and
HYATT GAMING MANAGEMENT, INC., a Nevada corporation (the "Manager").
RECITALS
A. Windsor Woodmont Black Hawk Resort Corp., a Colorado corporation (the
"Company") will issue One Hundred Million Dollars ($100,000,000) principal
amount of its _______% First Mortgage Notes due ____________, 2006, together
with any notes issued in replacement thereof or exchange therefor as any of the
foregoing may be amended, supplemented, modified, renewed or extended from time
to time, the "Notes") pursuant to that certain Indenture dated as of
____________, 2000 (as amended, supplemented or otherwise modified from time to
time, the "Indenture"), by and between the Company and the Trustee. (All initial
capitalized terms used, but not defined, in this Agreement shall have the
meaning set forth in the Indenture).
B. The Manager and the Company are parties to that certain Management
Agreement dated as of February 1, 2000 (as amended, supplemented or otherwise
modified from time to time in accordance with the terms hereof, the "Management
Agreement"), pursuant to which the Company shall pay the Manager a management
fee in consideration of the Manager's services relating to the management and
operation of the Casino.
C. It is a condition to the purchase of the Notes by the Holders and the
execution and delivery of the Management Agreement by the Manager and the
Company that the parties enter into this Agreement.
AGREEMENT
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NOW, THEREFORE, in consideration of the above recitals and the provisions
set forth herein, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the Trustee, the Manager and the
Company hereby agree as follows:
1. Definitions. As used in this Agreement, the following initial
capitalized terms shall have the respective meanings set forth below:
(a) "Lien" shall means any lien, encumbrance, security interest,
charge or claim of any Person with respect to any property.
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(b) "Post-Default Transfer" shall mean a transfer by foreclosure of
the Deed of Trust, power of sale or other similar proceedings brought to enforce
the rights of the holder thereof, by deed or assignment in lieu of foreclosure
or by any other similar method, or through a bankruptcy sale following the
occurrence of an Event of Default.
(c) "Prior Owner" shall mean Company or any other "Owner" under the
Management Agreement prior to Purchaser.
(d) "Purchaser" shall mean the Trustee or any other Person who becomes
the owner of, or succeeds to the interest of the Company in, all or any portion
of the real property comprising a portion of the Trust Property pursuant to, or
in connection with, a Post-Default Transfer.
(e) "Person" shall mean an individual, partnership, corporation,
business trust, joint stock company, trust, unincorporated association, limited
liability company, joint venture, governmental authority or other entity of any
kind, whether acting in its own or a representative capacity.
(f) "Restricted Payment" means any payment in respect of a
Subordinated Obligation to the extent such payment is prohibited under the
Indenture.
(g) "Senior Loan Documents" means the Notes, the Indenture, the Deed
of Trust and the other Collateral Documents, or any other documents, instruments
or agreements executed by the Company in connection with any of the foregoing to
the Trustee or any holder of Notes and their successors and assigns.
(h) "Senior Debt" means (A) all indebtedness, liabilities and
obligations of every kind or nature, absolute or contingent, now existing or
hereafter arising, of the Company, its successors and assigns, under the Senior
Loan Documents and all premiums, fees, charges, expenses and indemnities arising
under or in connection with the Indenture, the Notes or any other Senior Loan
Document, and (B) any modifications or amendments, of any indebtedness or
obligation described in clause (A) above.
(i) "Subordinated Obligations" means (i) the Incentive Fee (as defined
in the Management Agreement), and (ii) any insurance proceeds or condemnation
awards paid to Owner to the extent the same is payable to the Trustee and/or the
Holders under the Senior Loan Documents.
(j) "Unsubordinated Obligations" shall mean the Basic Fee (as defined
in the Management Agreement) and any other amounts due to the Manager pursuant
to the Management Agreement other than the Subordinated Obligations.
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2. Consent. The Manager hereby consents to (i) the financing contemplated
by the Senior Loan Documents, and (ii) the assignment by the Company to the
Trustee, pursuant to the Deed of Trust and certain other of the Collateral
Documents, of the Management Agreement and all right, title and interest of the
Company thereunder, as security for the Senior Debt.
3. Subordination of Management Agreement
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(a) The Manager hereby acknowledges and agrees that the Management
Agreement, including, without limitation, (i) any right of the Manager to the
payment of any amounts under the Management Agreement, (ii) any other rights and
remedies of the Manager under the Management Agreement, and (iii) any Lien or
other interest the Manager may now or hereafter have against all or any portion
of the Trust Property (as defined in the Deed of Trust) and/or the rents,
issues, profits and income therefrom, is and shall be subject and subordinate to
the Indenture, the Deed of Trust and the other Senior Loan Documents, including,
without limitation, (A) any right of the Trustee or the Holders to the
indefeasible payment in full in cash of the Senior Debt, (B) any Lien created by
any Senior Loan Documents, and any other interest the Trustee or the Holders may
now or hereafter have against all or any portion of the Trust Property and/or
the rents, issues, profits and income therefrom, (C) any right of the Holders or
the Trustee to receive any insurance proceeds or condemnation awards, and (D)
any other rights and remedies of the Trustee or the Holders under the Senior
Loan Documents.
(b) Notwithstanding the foregoing in Section 3(a), the Company may pay
to the Manager, and the Manager may accept payment of, any amounts required to
be paid to the Manager under the Management Agreement when such amounts become
due and payable; provided, however, no such amounts shall be paid to the Manager
in respect of any Subordinated Obligations to the extent such payment would
constitute a Restricted Payment at such time, and the Manager shall not (i) not
ask, demand, xxx for, take or receive from the Company, by set-off or in any
other manner, direct or indirect payment (whether in cash or property), of all
or any portion of such Subordinated Obligations, or any transfer of any property
in payment of or as security for any such Subordinated Obligations, (ii) cause
all or any portion of such Subordinated Obligations to become due under the
Management Agreement, (iii) accept any payment, prepayment, defeasance of all or
any portion of such Subordinated Obligations prior to the date such Subordinated
Obligations otherwise would be due and payable under the Management Agreement,
or (iv) exercise any rights or remedies under the Management Agreement, at law
or in equity, to accelerate the payment of all or any portion of such
Subordinated Obligations. Any Subordination Obligations not paid to the Manager
pursuant to this Section 3(b) shall accrue, together with interest thereon at
the Interest Rate (as defined in the Subordinated Loan Agreement) from the first
date such Subordinated Obligations otherwise would have been due and payable to
the Manager under the Management Agreement until such Subordinated Obligation is
paid. Any such accrued Subordinated Obligations together with interest thereon
shall be due and payable by the Company when the payment of such Subordinated
Obligation would no longer be a Restricted Payment.
(c) The Trustee shall provide written notice to the Manager that the
payment of any Subordinated Obligation would constitute a Restricted Payment
(the "Restricted Payment Notice"), which Restricted Payment Notice shall be
deemed conclusive, except to the extent such Restricted Payment Notice is
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provided to the Manager in bad faith. If, notwithstanding the foregoing, the
Manager shall receive any payment or distribution of any kind in respect of any
Subordinated Obligations (whether from any collateral securing such obligations
or otherwise, or whether such payment was a Restricted Payment when received by
the Manager, but prior to the Manager's receipt of the Restricted Payment
Notice), such payment or distribution shall be received in trust for, and shall
be delivered to the Trustee promptly in precisely the form received (except for
the endorsement or assignment of the Manager where necessary) for application on
the Senior Debt, whether then due or not due. Until so delivered, the payment or
distribution shall be held in trust by the Manager as property of the Holders.
(d) Notwithstanding the foregoing, the Company shall have the right to
pay the Manager, and the Manager shall have the right to accept the payment of,
any amounts in respect of any Unsubordinated Obligations, regardless of whether
the payment of any Subordinated Obligation would be a Restricted Payment at such
time, and the Manager shall not be obligated to relinquish or return any amounts
paid to the Manager in respect of any Unsubordinated Obligations.
(e) This provisions of this Section 3 shall be self-operative and no
further instrument of subordination shall be required. If requested, however,
the Company and the Manager shall execute and deliver such further instruments
as the Trustee may deem reasonably necessary to effectuate this subordination.
4. Non-Disturbance and Attornment
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(a) As long as no default exists, nor any event occurs, which default
or event continues to exist for such period of time (after such notice and grace
period as is required by the Management Agreement), which would entitle the
Company, as the "Owner" under the Management Agreement, to terminate the
Management Agreement or would cause, without further action of the Company, the
termination of the Management Agreement or would entitle the Company to
terminate the Manager's right to operate and manage the Casino thereunder, the
Management Agreement shall not be terminated by the Company or the Trustee, nor
shall the Manager's right to operate and manage the Casino in accordance with
the Management Agreement be interfered with or affected in any other manner, by
any foreclosure upon the security, title or other interest or charge granted by
the Deed of Trust or any other action or proceeding instituted under or in
connection with the Senior Loan Documents or in case the Trustee takes
possession of the Trust Property pursuant to any provisions of the Senior Loan
Documents.
(b) Subject to the provisions in Sections 5, 7 and 8, (i) if all or
any portion of the real property comprising a portion of the Trust Property
shall be acquired by a Purchaser pursuant to, or in connection with, a
Post-Default Transfer and the Manager is not in breach or default under the
Management Agreement at the time of the conveyance of such real property to the
Purchaser pursuant to, on in connection with, such Post-Default Transfer (the
"Transfer Date"), then (i) the Management Agreement shall remain in full force
and effect as an agreement between the Manager and the Purchaser on all of the
terms, covenants and conditions of the Management Agreement for the balance of
the term, with the same force and effect as if the Purchaser was the "Owner"
originally named in the Management Agreement, and (ii) the Manager's rights
under the Management Agreement shall remain undisturbed by such Post-Default
Transfer.
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(c) Subject to the provisions in this Section 4(c) and Sections 5, 7
and 8, the Manager does hereby agree to attorn to the Purchaser as the "Owner"
under the Management Agreement, said attornment to be effective and
self-operative without the execution of any other instruments on the part of
either party hereto immediately upon the consummation of the Post-Default
Transfer. Although the foregoing attornment shall be effective and
self-operative without the execution of any other instruments on the part of
either party hereto, upon the written request of the Purchaser, the Manager
shall execute and deliver to the Purchaser (i) an agreement of attornment in
form and content reasonably satisfactory to the Purchaser confirming the
foregoing attornment and agreeing to perform all of the terms, covenants and
conditions of the Management Agreement on the Manager's part to be performed for
the benefit of the Purchaser with the same force and effect as if the Purchaser
was the "Owner" originally named in the Management Agreement, or (ii) a new
management agreement with the Purchaser as owner, for the remaining term of the
Management Agreement and on the same terms and conditions as the original
Management Agreement.
5. Obligations of Purchaser upon Post-Default Transfer
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(a) As a condition to any Purchaser's right to succeed to the rights
of the "Owner" under the Management Agreement, such Purchaser shall pay or cause
to be paid to the Manager any past due Unsubordinated Obligations which have
accrued and are due and payable as of the Transfer Date.
(b) Notwithstanding anything to the contrary in Section 4 or elsewhere
in this Agreement, except for the obligation to pay any accrued Unsubordinated
Obligations pursuant to Section 5(a) and subject to the Manager's rights under
Section 7(e) of this Agreement, the Purchaser shall not be obligated to cure any
default by any Prior Owner first arising or accruing prior to the Transfer Date,
or otherwise assume or be liable for, or take the Management Agreement subject
to, and of the following:
(i) any act or omission of any Prior Owner, the officers,
managers, employees or agents of such Prior Owner or any other Person on behalf
of such Prior Owner;
(ii) any Subordinated Obligations which were not paid to the
Manager and have accrued prior to the Transfer Date;
(iii) except for payment of any past due Unsubordinated
Obligations, any liability or obligation of, or the payment of any amounts due
by, any Prior Owner incurred or accruing prior to the Transfer Date;
(iv) any claim, offset or defense which the Manager might have
against any Prior Owner;
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(v) any assignment or other transfer of any right, title or
interest of any Prior Owner or the Manager under the Management Agreement,
without the prior written consent of the Trustee in each instance, which consent
may be granted or denied by the Trustee in its sole discretion, except to the
extent any such assignment or other transfer by the Manager is expressly
permitted under the Management Agreement without the Prior Owner's prior
consent;
(vi) any amendment, modification, supplement or other change of
or to the Management Agreement, except to the extent expressly permitted under
Section 8;
(vii) any waiver or release of any obligation of the Manager
under the Management Agreement, without the prior written consent of the Trustee
in each instance, which consent may be granted of denied by the Trustee in its
sole discretion;
(viii) any obligation of any Prior Owner under the Management
Agreement to perform or cause to be performed any (A) improvements to the Trust
Property, or (B) maintenance or repairs in or to the Trust Property in the case
of damage or destruction of the Trust Property or any part thereof due to fire
or other casualty or event or by reason of condemnation prior to the Transfer
Date, except to the extent Purchaser receives insurance proceeds or a
condemnation award and the "Owner" otherwise is obligated under the Management
Agreement to perform or cause to be performed such maintenance or repairs.
(c) Notwithstanding anything to the contrary in the Management Agreement or
this Agreement, if the Trustee is the Purchaser pursuant to, or in connection
with, a Post-Default Transfer, the Management Agreement shall be amended
automatically, without further action by the parties, by incorporating the
following provisions only for such period time that the Trustee is the "Owner"
under the Management Agreement:
(i) the Manager's sole recourse against the Trustee for the
recovery of any judgment or damages shall be to the Trustee's right, title and
interest in the Trust Property, and the Manager shall not have recourse to any
other assets of the Trustee, nor to any shareholders, trustees, members,
partners, directors, officers, managers, employees or agents of the Trustee;
provided, however, that the foregoing shall not limit the Manager's right to
seek any recourse against the Purchaser or injunctive relief or specific
performance against the Trustee. The limitation of liability in this Section
5(c)(i) is in addition to, and not in limitation of, any other limitation of
liability available to the Trustee under the Management Agreement or any other
agreement, instrument or applicable law.
(ii) The Trustee shall not be obligated to indemnify or hold
harmless the Manager for any liability, damage, loss, cost or expense incurred
by the Manager, except to the extent the same arises solely from the gross
negligence or intentional misconduct of the Trustee or its officers, managers or
employees.
(iii) The Trustee shall have no obligation to develop, design,
construct, furnish or equipment the Casino (as defined in the Management
Agreement), or perform any other obligations of the "Owner" under the Management
Agreement with respect thereto, including, without limitation, pursuant to
Sections 1.1, 1.2, 1.3 or 1.4 of the Management Agreement. At Trustee's written
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request, subject to Section 1.7(e) of the Management Agreement, the Manager
shall suspend any of its Pre-Opening Services; provided, however, that the
Purchaser shall pay or cause to be paid to the Manager any expenditures made by
the Manager in respect of such Pre-Opening Services which are not paid at the
time of such suspension.
(iv) If the Manager elects to terminate the Management Agreement,
the notice of termination delivered pursuant to Section 12.2 of the Management
Agreement shall provide for a period of not less than sixty (60) days prior to
effectiveness of such termination.
(v) The Trustee shall have the right to sell, convey and assign
its interest in the Management Agreement to any Person (the "Assignee") without
the Manager's consent; provided, however, that in the Trustee's reasonable
judgment at the time of such sale, conveyance or assignment, such Assignee (i)
has the ability to fulfill the financial obligations of the "Owner" under the
Management Agreement; (ii) has a good business reputation and would not
adversely impact the Manager's gaming licenses in Colorado or any other
jurisdiction; (iii) is not engaged in the management or operation of casinos;
and (iv) expressly assumes in writing the obligations of the "Owner" under the
Management Agreement.
6. Trustee's Rights under Management Agreement Prior to Post-Default
Transfer
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(a) Notwithstanding anything to the contrary in this Agreement, if an
Event of Default shall occur under any of the Senior Loan Documents, then, prior
to a Post-Default Transfer, upon written notice by the Trustee to the Manager
that an Event of Default has occurred under a Senior Loan Document, the Trustee
shall have the right (but shall not be obligated) to exercise all rights of, and
take all actions required or permitted to be taken by, the Company under the
Management Agreement (in lieu of the same being done by the Company), unless and
until the Trustee otherwise notifies the Manager.
(b) The Manager expressly acknowledges that by accepting the
assignment of the Management Agreement or by exercising any of its rights under
the Management Agreement or any of its rights to cure any default by the Company
thereunder pursuant to this Agreement, the Trustee assumes no obligations or
liabilities of the Company under the Management Agreement and that the Trustee
shall have no obligation to the Manager to exercise its rights under, or to
declare a default under, any Senior Loan Document.
7. Manager's Right to Terminate Management Agreement
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(a) The Manager shall provide written notice to the Trustee (a
"Default Notice") of any breach or default by the Company under the Management
Agreement or any failure of the Company to comply with any applicable licenses,
permits or other applicable legal requirements (a "Company Default") promptly
upon determining that such Company Default exists specifying in reasonable
detail (i) the nature of such Company Default, and (ii) the date on which the
Company Default first arose or accrued if the Manager can determine the same.
The Manager agrees that it will not terminate the Management Agreement, cease to
perform any of its services thereunder, or exercise any other remedies, for any
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reason, including, but not limited to, the Company's failure to make any
payments to the Manager or any other breach or default, prior to the expiration
of the Trustee Cure Period. Any termination of the Management Agreement by the
Manager in violation of this Section 5 shall be void ab initio.
(b) The Trustee shall have the right (but shall not be obligated) to
cure the Company Default (i) within thirty (30) days after the later of the
Trustee's receipt of the Default Notice or the expiration of the Company's
applicable cure period, (ii) if such default is of a non-monetary nature and not
capable of being cured within said thirty (30) day period, but is capable of
being cured, commence within said thirty (30) day period (or such longer period
as is reasonable in the event the Trustee intends to pursue a foreclosure or
similar proceeding) and thereafter diligently prosecute to cure the Company
Default (the "Trustee Cure Period"). At any time, the Trustee may, upon notice
to the Manager, but without any liability, discontinue curing any Company
Default, whereupon the Manager shall have no further obligation to forbear from
terminating the Management Agreement under Section 7(a).
(c) Except as otherwise expressly set forth in this Agreement,
including without limitation the limitation on the Manager's rights as set forth
in Section 7(a), the Manager shall not be deemed to have waived any of its
rights to declare a default by the Company under the Management Agreement or to
terminate the Management Agreement after any failure by the Company to cure any
such breach or default under the Management Agreement after expiration of all
applicable cure periods. Any failure by the Manager to provide notice to the
Trustee pursuant to Section 7(a) hereof shall not be deemed to be a waiver by
the Manager of any such default under the Management Agreement as against the
Company or to create any liability of the Manager to the Trustee.
(d) Except as otherwise expressly set forth in this Agreement, nothing
in this Agreement shall be deemed to constitute a waiver by the Manager of (i)
the Purchaser's obligation to perform the obligations of the "Owner" under the
Management Agreement first arising after a Post-Default Transfer, (ii) the
Purchaser's obligation to pay any past due Unsubordinated Obligations as set
forth in Section 5(a), (iii) any right that the Manager may have under the
Management Agreement to terminate the Management Agreement before or after any
Post-Default Transfer for defaults of Owner occurring before or after any
Post-Default Transfer which are not cured in accordance with the terms of the
Management Agreement or this Agreement, (iv) any right that the Manager may have
to pursue the Company for its failure to perform obligations under the
Management Agreement or to repay any deferred Subordinated Obligations after the
Senior Debt has been indefeasibly paid in full in cash, or (v) any right that
the Manager may have under the Management Agreement to collect, from cash
derived from Casino operations prior to or after any Post-Default Transfer, any
fees or other amounts to which it is entitled under the terms of the Management
Agreement, other than any Subordinated Obligations which were unpaid during any
Restricted Payment Period and accrued prior to the Transfer Date.
(e) While nothing in this Agreement shall be deemed to obligate the
Trustee or any Purchaser to perform the obligations of the Company under the
Management Agreement first arising prior to any Post-Default Transfer (except as
otherwise expressly provided in this Agreement), the Trustee acknowledges and
agrees that under the terms of the Management Agreement a cure of any such prior
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default(s) by the Company may be required in order to avoid a termination of the
Management Agreement by the Manager pursuant to its terms prior to, on or after
any Post-Default Transfer. The Manager agrees, however, that if a Purchaser
succeed to the interest of the Company in the Trust Property pursuant to a
Post-Default Transfer, the Manager will waive any such prior default by the
Company under the Management Agreement which (i) is incapable of being cured by
the Purchaser such as the insolvency or bankruptcy of, or an assignment for the
benefit of creditors by, the Company, or (ii) if not cured would not have a
material adverse affect on the Manager's operation or management of the Casino.
8. Amendment to Management Agreement. The Manager shall not change, amend,
modify or supplement the Management Agreement without the written consent of the
Trustee written approval in each instance, which consent may be given are denied
by the Trustee in its sole discretion; provided that the Manager shall be
entitled to make, without obtaining the Trustee's consent, amendments to the
Management Agreement that (i) are required to be made under applicable Gaming
Laws, (ii) do not materially and adversely affect the Company, the Trustee or
the Holders; provided, however, that no such amendments shall increase the Basic
Fee or Incentive Fee (as such terms are defined in the Management Agreement) or
any other amounts payable to the Manager under the Management Agreement. If the
Manager changes, amends, modifies or supplements in violation of this Section 8,
then such change, amendment, modification or supplement shall be void ab initio.
9. Subrogation. The Manager hereby waives all rights of subrogation to the
rights of the Trustee and/or to the Holders to receive payments or
distributions, and any rights of subrogation to any collateral for the Senior
Debt, until the Senior Debt shall have been indefeasibly paid in full in cash.
10. Representations and Warranties
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(a) The Company hereby represents and warrants that (a) the document
attached hereto as Exhibit A is a true, correct and complete copy of the
Management Agreement, including all changes, supplements, amendments and
modifications thereto, if any, (b) the Management Agreement is in full force and
effect, (c) the Company is not in default under the provisions of the Management
Agreement and there is no condition which, with the giving of notice and/or the
lapse of time, would constitute such a default, (d) to the best of the Company's
knowledge, the Manager is not in default under the provisions of the Management
Agreement and there is no condition which, with the giving of notice and/or the
lapse of time, would constitute such a default, (e) the execution and delivery
of this Agreement and the performance by the Company of its obligations
hereunder do not and will not contravene or conflict with any provision of law
or of any indenture, instrument or other agreement to which the Company is a
party or by which it or its property may be bound or affected or result in or
require the creation or imposition of any mortgage, lien, pledge, security
interest, charge or other encumbrance in, upon or of any of its properties or
assets under any such indenture, instrument or other agreement, (f) the Company
has full corporate power, authority and legal right to make and perform this
Agreement, (g) the Company has obtained all consents and approvals necessary for
it to enter into this Agreement and (h) this Agreement is the legal, valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms.
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(b) The Manager hereby represents and warrants that (a) the document
attached hereto as Exhibit A is a true, correct and complete copy of the
Management Agreement, including all changes, supplements, amendments and
modifications thereto, if any, (b) the Management Agreement is in full force and
effect, (c) the Manager is not in default under the provisions of the Management
Agreement and there is no condition which, with the giving of notice and/or the
lapse of time, would constitute such a default, (d) to the best of the Manager's
knowledge, the Company is not in default under the provisions of the Management
Agreement and there is no condition which, with the giving of notice and/or the
lapse of time, would constitute such a default, (e) the execution and delivery
of this Agreement and the performance by the Manager of its obligations
hereunder do not and will not contravene or conflict with any provision of law
or of any indenture, instrument or other agreement to which the Manager is a
party or by which it or its property may be bound or affected or result in or
require the creation or imposition of any mortgage, lien, pledge, security
interest, charge or other encumbrance in, upon or of any of its properties or
assets under any such indenture, instrument or other agreement, (f) the Manager
has full corporate power, authority and legal right to make and perform this
Agreement, (g) the Manager has obtained all consents and approvals necessary for
it to enter into this Agreement and (h) this Agreement is the legal, valid and
binding obligation of the Manager, enforceable against the Manager in accordance
with its terms.
11. Distributions in Liquidation and Bankruptcy. In the event of any
distribution, division or application, partial or complete, voluntary or
involuntary, by operation of law or otherwise, of all or any part of the assets
of the Company or the proceeds thereof (including any assets now or hereafter
securing any Subordinated Obligations) to creditors of the Company or upon any
indebtedness of the Company, by reason of the liquidation, dissolution or other
winding up, partial or complete, of the Company, or any receivership, insolvency
or bankruptcy proceeding, or assignment for the benefit of creditors or
marshalling of assets, or any proceeding by or against the Company for any
relief under any bankruptcy or insolvency law or laws relating to the relief of
debtors, readjustment of indebtedness, arrangements, reorganizations,
compositions or extensions, or sale of all or substantially all of the assets of
the Company, then and in any such event:
(a) The Holders shall be entitled to receive payment in full in cash
of all Senior Debt before the Manager shall be entitled to receive any payment
or other distributions on, or with respect to, the Subordinated Obligations.
(b) Any payment or distribution of any kind or character, whether in
cash, securities or other property which, but for these provisions would be
payable or deliverable upon or with respect to the Subordinated Obligations
shall instead be paid or delivered directly to the Trustee for the benefit of
the Holders for application on the Senior Debt, whether then due or not due,
until the Senior Debt shall have first been fully and indefeasibly paid in cash;
provided that nothing in this Section 11(b) or otherwise in this Agreement shall
relieve the Company of its obligations to pay the Subordinated Obligations after
such satisfaction of the Senior Debt.
(c) The Manager hereby irrevocably authorizes and empowers the
Trustee, and appoints the Trustee as attorney-in-fact, to demand, xxx for,
collect and receive every such payment or distribution and give acquittance
therefor, and to file and vote claims (in bankruptcy proceedings or otherwise)
and take such other actions, in the Trustee's own name or otherwise, as the
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Trustee may deem necessary or advisable for the enforcement of these provisions.
In addition, the Manager shall take no action (whether oral, written or
otherwise) in contravention of any action of the Trustee duly taken and
permitted hereunder. Such appointment as attorney-in-fact pursuant to this
Section 11(c) is irrevocable and coupled with an interest until payment in full
and complete performance of the Senior Debt. The Trustee may appoint a
substitute attorney-in-fact. The Manager ratifies all actions taken by the
attorney-in-fact but, nevertheless, if the Trustee requests, the Manager will
specifically ratify any action taken by the attorney-in-fact by executing and
delivering to the attorney-in-fact or to any entity designated by the
attorney-in-fact all documents necessary to effect such ratification.
(d) If any direct or indirect payment is made to the Manager upon or
with respect to the Subordinated Obligations prior to the payment in full of the
Senior Debt in accordance with these provisions, the Manager will forthwith
deliver the same to the Trustee in precisely the form received (except for the
endorsement or assignment of the Manager where necessary) for application on the
Senior Debt, whether then due or not due. Until so delivered, the payment or
distribution shall be held in trust by the Manager as property of the Holders.
In the event of the failure of the Manager to make any such endorsement or
assignment, the Trustee, or any of its officers or employees, are hereby
authorized and empowered to make the same, and the Manager hereby appoints the
Trustee as attorney-in-fact for such purpose, which appointment is irrevocable
and coupled with an interest until payment in full and complete performance of
the Senior Debt.
(e) Each of the parties hereby agrees that it shall be bound by the
terms and provisions hereof, notwithstanding the confirmation of a plan of
reorganization of the Company under Section 1129(b) of the Bankruptcy Code.
12. Bankruptcy. Until the Senior Debt shall have been indefeasibly paid in
full in cash, the Manager will not, without the prior written consent of the
Trustee, which consent may be granted or denied in the Trustee's sole
discretion, commence, or join with any other person in commencing, any
proceeding against any Person with respect to the Subordinated Obligations under
any bankruptcy, reorganization, readjustment of debt, dissolution, receivership,
liquidation or insolvency law or statute now or hereafter in effect in any
jurisdiction; provided that, nothing herein shall restrict or apply to the
Manager's or its affiliates rights as a creditor in any other capacity.
13. Continuing Subordination. The subordination effected by the provisions
in this Agreement, including, without limitation, Sections 3 and 15, is and
shall be a continuing subordination and may not be amended, modified or
terminated by the Manager or any other holder of any Subordinated Obligations
until all of the Senior Debt shall have been indefeasibly paid in full in cash.
At any time and from time to time, without consent of or notice to the Manager
or any other holder of Subordinated Obligations, and without impairing or
affecting the obligations of any of them hereunder:
(a) The time for the Company's performance of, or compliance with, any
of its agreements contained in the Indenture, the Notes or the other Senior Loan
Documents, or any other agreement, instrument or document relating to the Senior
Debt, may be modified or extended or such performance or compliance may be
waived.
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(b) The Trustee may exercise or refrain from exercising any rights
under the Indenture, the Notes or the other Senior Loan Documents, or any other
agreement, instrument or document relating to the Senior Debt.
(c) The Indenture, the Notes or the other Senior Loan Documents, or
any other agreement, instrument or document relating to the Senior Debt, may be
revised, amended or otherwise modified for the purpose of adding or changing any
provisions thereof (including, but not limited to, an increase in the interest
charges), or changing in any manner the rights of the Trustee or the Company.
(d) The maturity of the Senior Debt may be accelerated, and any
collateral security therefor or any other rights of the Trustee may be
exchanged, sold, surrendered, released or otherwise dealt with in accordance
with the terms of any present or future agreement with the Company and any other
agreement of subordination (and the debt covered thereby) may be surrendered,
released or discharged, or the terms thereof modified or otherwise dealt with in
any manner.
(e) Any person liable in any manner for payment of the Senior Debt may
be released by holders of Senior Debt.
(f) Notwithstanding the occurrence of any of the foregoing, these
subordination provisions shall remain in full force and effect with respect to
the Senior Debt, as the same shall have been amended or modified.
14. Certain Waivers by Manger. The Manager hereby waives, and agrees not
assert with respect to the Subordinated Obligations, (a) any right, now or
hereafter existing, to require the Trustee to proceed against or exhaust any
collateral at any time securing the Senior Debt, or to marshal any assets in
favor of the Manager or any other holder of any Subordinated Obligations; (b)
any notice of the incurrence of Senior Debt, it being understood by the Manager
that advances may be made under the Indenture, or any other agreement, document
or instrument now or hereafter relating to the Senior Debt, without notice to or
authorization of the Manager in reliance upon the subordination provisions in
this Agreement.
15. Lien Subordination. Any Lien of the Manager on or in any assets or
property of the Company or any proceeds or revenues therefrom which the Manager
may have at any time as security for any Subordinated Obligations shall be, and
hereby is, subordinated to all Liens now or hereafter granted to the Trustee by
the Company or available at law or in equity, notwithstanding the date or order
of attachment or perfection of any such Lien or the provision of any applicable
law or in equity. Until all holders of Senior Debt have received indefeasible
payment in full in cash of the Senior Debt, the Manager agrees that the Manager
will not assert or seek to enforce against the Company the Subordinated
Obligations or any Lien or other interest of the Manager in any collateral for
any portion of the Subordinated Obligations and that the Trustee may dispose of
any or all of the collateral for the Senior Debt free of any and all Liens,
12
including, but not limited to, Liens created in favor of the Manager, through
judicial or non-judicial proceedings, in accordance with applicable law,
including, without limitation, taking title to any such collateral, after five
(5) days written notice to the Manager. The Manager hereby acknowledges that
such notice is given five (5) days prior to such disposition of any of all of
the collateral for the Senior Debt is sufficient and commercially reasonable.
The Manager hereby agrees that any such sale or the disposition of so much of
the collateral for the Senior Debt as is necessary to satisfy in full in cash
all of the Senior Debt shall be free and clear of any security interest granted
to the Manager in respect of the Subordinated Obligations; provided that the
entire proceeds (after deducting reasonable expenses of sale) are applied in
reduction of the Senior Debt. Upon the Trustee's request, the Manager shall
execute and deliver any releases or other documents and agreements that the
Trustee in its reasonable discretion deems necessary to dispose of the
collateral for the Senior Debt free of the Manager's Liens or other interests in
such collateral in respect of the Subordinated Obligations. The Manager retains
all of its rights as a junior secured creditor with respect to the surplus, if
any, arising from any such disposition of the collateral for the Senior Debt.
16. Subordination Not Impaired by the Company. No right of any Holder to
enforce the subordination of the Subordinated Obligations shall be impaired by
any act or failure to act by the Company or by its failure to comply with the
provisions in this Agreement.
17. No Waiver by Trustee. No failure on the part of the Trustee or any
Purchaser to exercise, no delay in exercising, and no course of dealing with
respect to, any right or remedy hereunder will operate as a waiver of such right
or remedy, nor will any single or partial exercise of any right or remedy
hereunder preclude any other or further exercise thereof or the exercise of any
other right or remedy.
18. Successors and Assigns. This Agreement, and the terms, covenants and
conditions hereof and obligations imposed hereby, shall be binding upon and
inure to the benefit of the parties hereto, and their respective successors and
assigns.
19. Governing Law. THIS AGREEMENT WILL BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE INTERNAL LAW OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO
CHOICE OF LAW PRINCIPLES.
20. Severability. The invalidity, illegality or unenforceability in any
jurisdiction of any provision in or obligation under this Agreement shall not
affect or impair the validity, legality or enforceability of the remaining
provisions or obligations under this Agreement or of such provision or
obligation in any other jurisdiction.
21. Amendment. No modification, amendment, waiver or release of any
provision of this Agreement or of any right, obligation, claim or cause of
action arising hereunder shall be valid or binding for any purpose whatsoever
unless in writing and duly executed by the Manager and the Trustee.
22. Termination. This Agreement shall terminate on the first to occur of
(i) indefeasible payment in full in cash of the Senior Debt or (ii) the
termination of the Management Agreement and satisfaction of all obligations of
13
the Company and the Manager under the Management Agreement and all obligations
of the Manager under this Agreement (so long as, in the case of both clauses (i)
and (ii) above, the satisfaction of said obligations does not violate the terms
of this Agreement).
23. Third Party Beneficiaries. This Agreement is entered into for the
benefit of the Trustee and the Holders. This Agreement is not entered into for
the benefit of the Company or any third party, and the Company and third parties
shall not be a third party beneficiary of this Agreement. Except as otherwise
expressly set forth herein, no provision of this Agreement shall be deemed to
modify, or release the Company from, any obligations under the Management
Agreement or to grant the Company any additional rights against the Manager
under the Management Agreement.
24. Notices. All notices, requests, demands or other communications to or
upon the respective parties hereto (each, a "Notice") shall be made in writing
and delivered to the following address or facsimile number for the respective
parties:
(a) if to the Manager, at:
Hyatt Gaming Management, Inc.
Madison Plaza - 39th Floor
000 X. Xxxxxxx Xxxxxx
Xxxxxxx, XX 00000
Attention: General Counsel
Facsimile No.
------------------------------
(b) if to the Trustee at:
--------------------------------------------
--------------------------------------------
--------------------------------------------
--------------------------------------------
Facsimile No.
------------------------------
(c) if to the Company at:
Windsor Woodmont Black Hawk Resort Corp.
0000 Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxxxx Xxxxxxxxxx
Facsimile No.
------------------------------
or at such other address or facsimile number as shall have been delivered in
writing by any Person described above to the party required to give Notice
hereunder. Any Notice pursuant to this Section 24 shall be deemed to have been
received by the party to whom such Notice is sent upon (i) delivery to the
14
address or facsimile number of the recipient party, provided that such delivery
is made prior to 5:00 p.m. (local time for the recipient party) on a Business
Day, otherwise the following Business Day, or (ii) the attempted delivery of
such Notice if (A) such recipient party refuses delivery of such Notice, or (B)
such recipient party is no longer at such address or facsimile number, and such
recipient Party failed to provide the sending party with its current address or
facsimile number.
25. Trustee Exculpation. Purchaser acknowledges and agrees that the name
"____________________" is a designation of a trust and its trustees, not
personally, but solely in their capacity as trustees, and all persons dealing
with such trust shall look solely to such trust's assets for the enforcement of
any claims against such trust, and the trustees, directors, officers, employees,
agents and security holders of such trust assume no personal liability for the
liabilities and obligations entered into by such trust, and their respective
individual assets shall not be subject to the claims of any Person relating to
such liabilities and obligations.
26. Order of Precedence
-------------------
(a) Notwithstanding anything herein to the contrary, if there is a
conflict between this Agreement and the Intercreditor Subordination and
Collateral Agreement dated as of even date herewith by and among the Trustee,
the Company and Hyatt (the "Other Agreement"), this Agreement shall control with
respect to matters relating to the Subordinated Obligations, the Unsubordinated
Obligations and the Management Agreement, and the Other Agreement shall control
with respect to matters relating to the Subordinated Debt, the Subordinated
Transaction Documents and the Collateral, as such terms are defined in the Other
Agreement.
(b) Notwithstanding anything herein to the contrary in this Agreement
or the Management Agreement, if there is a conflict between the covenants and
obligations of the Trustee under this Agreement and the covenants and
obligations of the Trustee as the "Owner" under the Management Agreement, this
Agreement shall control.
27. Entire Agreement. This Agreement sets forth the entire understanding
and agreement of the Trustee and the Manager with respect to the subject matter
of this Agreement, and shall supersede any other agreements and understandings
(written or oral) between the Trustee and the Manager on or prior to the date of
this Agreement with respect to the subject matter of this Agreement.
28. 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.
[Signature page follows]
15
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
"Trustee"
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
"Manager"
HYATT GAMING MANAGEMENT, INC., a Nevada corporation
By:
-------------------------------------------------
Name:
-----------------------------------------------
Title:
----------------------------------------------
Acknowledged and Agreed to as
of this _____ day of ______________, 2000.
"Company"
WINDSOR WOODMONT BLACK HAWK RESORT CORP.,
a Colorado corporation
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
S-1
EXHIBIT A
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MANAGEMENT AGREEMENT
A-1
