Exhibit 4.11
INTERCREDITOR AGREEMENT
THIS INTERCREDITOR AGREEMENT, dated as of December 6, 2001
(this "AGREEMENT"), is made by and between THE BANK OF NEW YORK, in its capacity
as trustee under the Indenture (as defined below) and as secured party under the
Pledge Agreement and the Security Agreement (each as defined in the Indenture)
(together with its successors in such capacities, the "TRUSTEE"), and FOOTHILL
CAPITAL CORPORATION, as lender ("FOOTHILL") under the Credit Agreement (as
defined in the Indenture).
RECITALS
WHEREAS, Majestic Investor Holdings, LLC, a Delaware limited
liability company ("COMPANY"), Majestic Investor Capital Corp., a Delaware
corporation ("CAPITAL", and together with Company, the "ISSUERS"), the
Subsidiary Guarantors named therein and the Trustee entered into that certain
Indenture, dated as of December 6th, 2001 (the "INDENTURE"), whereby
indebtedness was incurred by the Issuers, the repayment of which is secured by
security interests in and liens on substantially all of the assets of the
Issuers and their Restricted Subsidiaries (other than Foreign Subsidiaries)
other than the Excluded Assets (the "COLLATERAL"), and guaranteed, on a senior
secured basis, by each of Company's existing and future Restricted Subsidiaries
(the "SUBSIDIARY GUARANTORS");
WHEREAS, as of December 6th, 2001, the Issuers, the Subsidiary
Guarantors, and the Credit Facility Secured Party entered into that certain Loan
and Security Agreement, dated as of December 6th, 2001 (the "CREDIT AGREEMENT"),
whereby the Credit Facility Secured Party (as hereinafter defined) agreed, upon
the terms and conditions stated therein, to make loans and advances to, or to
issue letters of credit (or guaranties in respect thereof) for the account of,
Xxxxxx Nevada Gaming, LLC, Xxxxxx Colorado Gaming, LLC and Xxxxxx Mississippi
Gaming, LLC, in an aggregate principal and undrawn amount not to exceed the
Maximum Amount (as defined below), the repayment of which is secured by security
interests in and liens on the Collateral in accordance with the Credit Agreement
and the collateral security documents, including deeds of trust, instruments and
guaranties executed and delivered in connection therewith by the Issuers and any
Subsidiary Guarantor, and such other agreements, instruments and certificates
entered into in connection with the Credit Agreement (the "LOAN DOCUMENTS");
WHEREAS, one of the conditions of the Credit Agreement is that
the priority of the security interests and liens on the Collateral under the
Credit Facility Loan Documents be senior to the security interests in and liens
on the Indenture Collateral in the manner and to the extent provided for in this
Agreement;
WHEREAS, the Trustee and the Credit Facility Secured Party
desire to enter into this Agreement concerning their respective rights with
respect to the priority of their respective security interests in and liens on
the Indenture Collateral; and
WHEREAS, the terms of the Indenture permit the Issuers and the
Subsidiary Guarantors to enter into the Credit Agreement, and in connection
therewith, authorize and direct the Trustee to enter into an intercreditor
agreement in the form of this Agreement.
NOW, THEREFORE, the Parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. As used in this Agreement, the
following terms shall have the respective meanings set forth below:
"AGREEMENT" means this Intercreditor Agreement.
"CAPITAL" has the meaning set forth in the recitals.
"COLLATERAL" has the meaning set forth in the recitals.
"COMPANY" has the meaning set forth in the recitals.
"CREDIT AGREEMENT" has the meaning set forth in the recitals.
"CREDIT FACILITY INDEBTEDNESS" means all present and future
obligations, contingent or otherwise, of the Issuers and the Subsidiary
Guarantors to the Credit Facility Secured Party arising under or pursuant to the
Credit Facility Loan Documents, including, in each case, interest, fees, and
expenses accruing after the initiation of any Insolvency Proceeding
(irrespective of whether allowed as a claim in such proceeding), and including
the secured claims of the Credit Facility Secured Party in respect of the
Collateral in any Insolvency Proceeding.
"CREDIT FACILITY LOAN DOCUMENTS" means the Credit Agreement
and the Loan Documents as the same may be amended, modified, restated, extended,
renewed, replaced or refinanced.
"CREDIT FACILITY SECURED PARTY" means Foothill and each Person
now or hereafter owning all or part of the Credit Facility Indebtedness.
"ENFORCEMENT ACTION" means, with respect to any Party, (a)
commencement of any action, whether judicial or otherwise, for the enforcement
of such Party's rights and remedies as a secured creditor with respect to the
Collateral, including commencement of any receivership or foreclosure
proceedings against, or any other sale of, collection on, or disposition of, any
Collateral, or any exercise of remedies with respect to the Collateral under the
Indenture Documents or the Credit Facility Loan Documents; or (b) notifying any
third-party account debtors of the Issuers or any of their subsidiaries to make
payment directly to such Party or to any of its agents or other Persons acting
on its behalf.
"ENFORCEMENT EVENT" means the occurrence and continuance of an
Event of Default.
"ENFORCEMENT EVENT NOTICE" has the meaning set forth in
SECTION 3.2.
"ENTITLED PARTY" has the meaning set forth in SECTION 4.1(a).
"EVENT OF DEFAULT" has the meaning set forth in the Financing
Documents.
"EXPIRY DATE" has the meaning set forth in SECTION 3.2(b)(I).
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"FINANCING DOCUMENTS" means the Indenture Documents and the
Credit Facility Loan Documents.
"FORECLOSURE ACTION" means any action to foreclose upon or
enforce a Lien against any of the Collateral, including (a) commencing judicial
or non-judicial foreclosure proceedings, (b) exercising any rights afforded to
secured creditors in a case under the Bankruptcy Code with respect to the
Collateral, or (c) taking any action under the Bankruptcy Code that directly
relates to or directly affects any such Collateral, other than any such action
that relates to or affects all or substantially all of the property of the
bankruptcy estate.
"FULLY PAID" means the payment in cash or cash equivalents in
full of all obligations (other than indemnity obligations that survive payment
in full) under the Credit Facility Loan Documents or the Indenture Documents, as
the case may be, and in the case of the Credit Facility Loan Documents, at such
time when there shall no longer be any obligation to make loans or advances or
issue letters of credit (or guaranties in respect thereof) thereunder and there
shall no longer be any letter of credit (or guaranty in respect thereof)
outstanding thereunder or such letter of credit (or guaranty in respect thereof)
shall have been fully cash collateralized (in accordance with the provisions of
the Credit Facility Loan Documents).
"HOLDERS" means the holders of the Notes.
"INDENTURE" has the meaning set forth in the recitals.
"INDENTURE DOCUMENTS" means the Indenture, the Notes, the
Security Documents and the Registration Rights Agreement, and such other
agreements, instruments and certificates executed and delivered (or issued) by
the Issuers or the Subsidiary Guarantors pursuant to the Indenture, as any or
all of the same may be amended, restated, supplemented or otherwise modified
from time to time.
"INSOLVENCY PROCEEDING" means any proceeding for the purposes
of dissolution, winding up, liquidation, arrangement or reorganization of either
Issuer, any Subsidiary Guarantor, or any other subsidiary of the Issuers, or
their respective successors or assigns, whether in bankruptcy, insolvency,
arrangement, reorganization or receivership proceedings, or upon an assignment
for the benefit of creditors or any other marshaling of the assets and
liabilities of either Issuer, any Subsidiary Guarantor, or any other subsidiary
of the Issuers, or their respective successors or assigns.
"ISSUERS" has the meaning set forth in the recitals.
"LIEN PRIORITY" means, with respect to any Lien in and to the
Collateral, the order of priority of such Lien as specified in SECTIONS 2.1 and
2.2.
"LOAN DOCUMENTS" has the meaning set forth in the recitals.
"MAXIMUM AMOUNT" has the meaning set forth in SECTION 2.1.
"NOTES" means the senior secured notes issued under the
Indenture.
"PARTY" means any signatory to this Agreement.
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"SECURED LIABILITY" means the Subordinated Lien Indebtedness
and the Credit Facility Indebtedness.
"SUBORDINATED LIEN INDEBTEDNESS" means all present and future
obligations, contingent or otherwise, of the Issuers and the Subsidiary
Guarantors to the Trustee or Holders arising under or pursuant to the Indenture
Documents, including, in each case, interest, fees and expenses accruing after
the initiation of any Insolvency Proceeding (irrespective of whether allowed as
a claim in such proceeding), and including the secured claims of the Trustee or
the Holders in respect of the Collateral in any Insolvency Proceeding.
"SUBSIDIARY GUARANTORS" has the meaning set forth in the
recitals.
"TRIGGER DATE" means the earlier of (i) the date on which an
event contemplated by clause (b) or (c) of the definition of Trigger Event
occurs, (ii) the date on which an Enforcement Event Notice is delivered, and
(iii) the final maturity date of the Credit Facility Indebtedness (after giving
effect to any extensions granted thereunder).
"TRIGGER EVENT" means:
(a) the occurrence of an Event of Default,
(b) the acceleration of the maturity of the Credit
Facility Indebtedness by the Credit Facility Secured Party pursuant to the
Credit Agreement, or
(c) the commencement of any action or proceeding by
the Credit Facility Secured Party, whether judicial or otherwise (but excluding
demands for payment or notices of default), for the enforcement of the Credit
Facility Secured Party's rights and remedies under any of the Credit Facility
Loan Documents, including (i) commencement of any receivership or Foreclosure
Action against or any other sale of, collection on or disposition of any
Collateral, including any notification to third parties to make payment directly
to the Credit Facility Secured Party; (ii) exercise of any right of set-off;
(iii) commencement of any Insolvency Proceeding; and (iv) commencement of any
judicial action or proceeding against either Issuer or any Subsidiary Guarantor
to recover all or any part of the Credit Facility Indebtedness.
"TRUSTEE" has the meanings set forth in the preamble.
SECTION 1.2 Indenture Definitions. All other capitalized terms
that are used but not defined herein have the respective meanings ascribed to
such terms in the Indenture. Any modifications to such definitions which
adversely affect the Credit Facility Secured Party under the Indenture after the
date hereof shall not be effective under this Agreement without the consent of
the Credit Facility Secured Party.
SECTION 1.3 Miscellaneous. All definitions herein (whether set
forth herein directly or by reference to definitions in other documents) shall
be equally applicable to both the singular and the plural forms of the terms
defined. The words "hereof," "herein" or "hereunder" and words of similar import
when used in this Agreement shall refer to this Agreement as a whole and not to
any particular provision of this Agreement. Article and section references are
to articles and sections of this Agreement unless otherwise specified. The term
"including" means "including without limitation."
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ARTICLE II
LIEN PRIORITY
SECTION 2.1 Agreement to Subordinate Liens. The Trustee hereby
agrees that the Liens of the Trustee for the benefit of itself and the Holders
in and to the Collateral are and shall be subordinate in priority to the Liens
of the Credit Facility Secured Party in and to the Collateral securing the
Credit Facility Indebtedness up to, but not in excess of, $15,000,000 of
Indebtedness outstanding under the Credit Agreement and related interest, fees,
costs and expenses (the "MAXIMUM AMOUNT"); provided that the rights of the
Credit Facility Secured Party under this Agreement shall be void and of no
further force and effect if, and only to the extent that, the Liens of the
Credit Facility Secured Party in and to the Collateral are avoided, disallowed,
set aside or otherwise invalidated in any action or proceeding by a court,
tribunal or administrative agency of competent jurisdiction. The subordination
of the Liens of the Trustee for the benefit of itself and the Holders in and to
the Collateral in favor of the Credit Facility Secured Party provided for herein
shall not be deemed to (a) subordinate the Liens of the Trustee to the Liens of
any other Person; or (b) subordinate the Subordinated Lien Indebtedness to any
Indebtedness of the Issuers or any of the Subsidiary Guarantors, including the
Credit Facility Indebtedness.
SECTION 2.2 No Contest; Excluded Assets. Each Party agrees
that it will not attack or contest the validity, perfection, priority or
enforceability of the Liens of the other Party or finance or urge any other
Person to do so; provided that either Party may enforce its rights and
privileges hereunder without being deemed to have violated this provision. Any
provision contained in this Agreement to the contrary notwithstanding, the terms
and conditions of this Agreement shall not apply to any property or assets
(including property or assets that do not constitute Collateral) that one Party
has a Lien on and the other Party does not.
SECTION 2.3 Exercise of Rights.
(a) The Trustee may exercise, and nothing herein
shall constitute a waiver of, any right it may have at law or in equity to
receive notice of, or to commence or join with any creditor in commencing any
Insolvency Proceeding; provided that the exercise of any such right by the
Trustee shall be (i) subject to the Lien Priority and the application of
proceeds of Collateral under SECTION 3.4, and (ii) subject to the provisions of
SECTIONS 3.1 and 3.2.
(b) Notwithstanding any other provision hereof, the
Trustee may make such demands or file such claims as may be necessary to prevent
the waiver or bar of such claims under applicable statutes of limitations or
other statutes, court orders or rules of procedure.
SECTION 2.4 Priority of Liens. Irrespective of the order of
recording of mortgages, financing statements, security agreements or other
instruments, and irrespective of the descriptions of Collateral contained in the
Financing Documents, including any financing statements, the Parties agree among
themselves that their respective Liens in the Collateral shall be governed by
the Lien Priority, which shall be controlling in the event of any conflict
between this Agreement and any of the Financing Documents.
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ARTICLE III
ACTIONS OF THE PARTIES
SECTION 3.1 Limitation on Certain Actions. Subject to SECTION
3.2, until the earlier of (a) the date on which all Credit Facility Indebtedness
is Fully Paid, and (b) the first date following the date on which the Maximum
Amount of Credit Facility Indebtedness is Fully Paid, the Trustee will not,
without the prior written consent of the Credit Facility Secured Party, take any
Enforcement Action.
SECTION 3.2 Standstill Period.
(a) If an Enforcement Event has occurred and is
continuing, the Trustee, on behalf of the Holders, will give the Credit Facility
Secured Party written notice thereof (an "ENFORCEMENT EVENT NOTICE").
(b) The Trustee may, subject to the Lien Priority and
the application of all proceeds of the Collateral in accordance with SECTION
3.4, take one or more Enforcement Actions so long as:
(i) (A) an Enforcement Event is continuing for
more than 180 consecutive days after the delivery of such Enforcement
Event Notice (the "EXPIRY DATE"); (B) the Credit Facility Secured Party
has not, on or before the Expiry Date, commenced one or more
Enforcement Actions, and (C) the Issuer or the Subsidiary Guarantor
against which the Trustee's proposed Enforcement Action is to be taken
is not the subject of an Insolvency Proceeding; or
(ii) (A) the Credit Facility Secured Party has
commenced any Enforcement Action on or prior to the Expiry Date and, at
any time after the Expiry Date, is no longer pursuing any Enforcement
Actions, (B) no Insolvency Proceeding is pending against Borrower or
the Subsidiary Guarantor against which the Trustee's proposed
Enforcement Action is to be taken, and (C) the Enforcement Event that
was the subject of, or existing on the date of, the Enforcement Event
Notice is then continuing.
(c) Except as expressly provided for in this
Agreement, nothing in this Agreement shall prevent the Parties hereto from
exercising any other remedy, or taking any other action, under any of the
Financing Documents.
SECTION 3.3 Foreclosure. Any Party taking a permitted
Foreclosure Action may enforce its Financing Documents independently as to each
Issuer and each Subsidiary Guarantor and independently of any other remedy or
security such Party at any time may have or hold in connection with its Secured
Liabilities, and it shall not be necessary for such Party to marshal assets in
favor of the other Party or any other Person or to proceed upon or against or
exhaust any other security or remedy before proceeding to enforce the Financing
Documents. Each of the Trustee (for so long as the Credit Facility Indebtedness
is not Fully Paid) and the Credit Facility Secured Party (for so long as the
Trustee and the Holders are owed any Subordinated Lien Indebtedness) expressly
waives any right to require the other Party to marshal assets in its favor or to
proceed against any Collateral provided by either Issuer or any Subsidiary
Guarantor, or any other property, assets, or collateral provided by either
Issuer, any Subsidiary
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Guarantor, or any other Person, and agrees that the Party taking such permitted
Foreclosure Action may proceed against either Issuer, any Subsidiary Guarantor,
any Collateral or other property, assets, or other collateral provided by any of
them or by any other Person, in such order as it shall determine in its sole and
absolute discretion. The foregoing notwithstanding: (a) with respect to the sale
or other disposition of any Collateral governed by Article 9 of the Uniform
Commercial Code, the Party conducting such sale or other disposition agrees in
favor of the other Party that every aspect of such sale or other disposition,
including the method, manner, time, place, and terms, must be commercially
reasonable; (b) with respect to the sale or other disposition of any other
Collateral, the Party conducting such sale or other disposition agrees in favor
of the other Party that such sale or other disposition shall be conducted
according to the normal practices of commercial real property secured lenders
generally; (c) with respect to the sale or other disposition of any Collateral
by either Party, such Party agrees to provide the other Party with such written
notice as it is required by applicable law (including, if applicable, the
Uniform Commercial Code) to provide to the Issuers or the Subsidiary Guarantors
(without regard to whether the Issuers or the Subsidiary Guarantors have waived
their entitlement to receive such notice); and (d) the Credit Facility Secured
Party agrees that, at such time as all Credit Facility Indebtedness is Fully
Paid, the Credit Facility Secured Party thereupon promptly shall cease all
further Foreclosure Actions.
SECTION 3.4 Distribution. Each Party agrees that, upon any
distribution as a result of a Foreclosure Action, or the receipt of any other
payment or distribution with respect to the Collateral, the proceeds thereof
shall be distributed in the order of, and in accordance with, the following
priorities:
(a) FIRST:
(i) if the Foreclosure Action is taken by the
Credit Facility Secured Party, to the payment of all reasonable costs
and expenses, commissions and taxes of the Credit Facility Secured
Party incurred in connection with taking any such Foreclosure Action or
other realization, including all reasonable expenses (including
attorneys' fees and expenses), liabilities and advances made or
incurred by the Credit Facility Secured Party in connection therewith;
(ii) if the Foreclosure Action is taken and
entitled to be taken hereunder by the Trustee, to the payment of all
reasonable costs and expenses, commissions and taxes of the Trustee
incurred in connection with taking any such Foreclosure Action or other
realization, including all reasonable expenses (including attorneys'
fees and expenses), liabilities and advances made or incurred by the
Trustee in connection therewith;
(b) SECOND, to the Credit Facility Secured Party,
until the earlier of (i) the Credit Facility Indebtedness being Fully Paid, and
(ii) the first time following the date at which the Maximum Amount of Credit
Facility Indebtedness is Fully Paid;
(c) THIRD, to the Trustee, until all Subordinated
Lien Indebtedness is Fully Paid; and
(d) FOURTH, to the Credit Facility Secured Party
until all outstanding Credit Facility Indebtedness in excess of the Maximum
Amount is Fully Paid.
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SECTION 3.5 Notice of Certain Events. Each Party agrees that
it will notify the other Party, in writing, if it receives actual notice of the
occurrence of a Trigger Event or Enforcement Event, not later than 30 days after
the date of actual notice of any such occurrence. The Trustee agrees that it
will provide the Credit Facility Secured Party at least 15 days prior to
exercising any remedies with respect to any portion of the Collateral. The
Credit Facility Secured Party will provide the Trustee with such advance written
notice as is reasonably practicable under the circumstances prior to exercising
any remedies with respect to any portion of the Collateral. Notwithstanding the
foregoing, (a) the Credit Facility Secured Party shall not be obligated to
provide such prior written notice if exigent circumstances require that the
Credit Facility Secured Party act immediately in order to preserve, protect, or
obtain possession or control over the Collateral or any portion thereof or such
notice is not reasonably practicable in the circumstances; provided that if the
Credit Facility Secured Party does not provide any advance written notice prior
to exercising any remedies with respect to any portion of the Collateral, the
Credit Facility Secured Party agrees to provide the Trustee with written notice
as soon as practicable following the Credit Facility Secured Party first
exercising any of its secured creditor remedies with respect to the Collateral;
and (b) no Party shall incur any liability to the other under this SECTION 3.5
as a result of the failure of such Party to provide any such notice so long as
the failure to so provide such notice was not the result of willful misconduct,
bad faith or gross negligence.
ARTICLE IV
ENFORCEMENT OF PRIORITIES
SECTION 4.1 In Furtherance of Lien Priorities. Each Party
agrees as follows:
(a) All payments or distributions of or with respect
to the Collateral that are received by any Party contrary to the provisions of
this Agreement shall be segregated from other funds and property held by such
Party and shall be held in trust for the Party entitled thereto (the "ENTITLED
PARTY") in accordance with the provisions of SECTION 3.4 and such Party shall
forthwith pay over such remaining proceeds to the Entitled Party in the same
form as so received (with any necessary endorsement) to be applied (in the case
of cash) or held as Collateral (in the case of non-cash property or securities)
in accordance with the provisions hereof and the provisions of the applicable
Financing Documents.
(b) After the earlier of (i) the date on which all
Credit Facility Indebtedness is Fully Paid, and (ii) the first date following
the Trigger Date on which the Maximum Amount of Credit Facility Indebtedness is
Fully Paid, the Credit Facility Secured Party will promptly execute and deliver
all further instruments and documents, and take all further acts that may be
necessary, or that the Trustee may reasonably request, to permit the Trustee to
evidence the termination of the Lien Priority hereunder, or in furtherance
thereof; provided that (x) the Credit Facility Secured Party shall not be
required to pay over any payment or distribution, execute any instruments or
documents, or take any other action referred to in this SECTION 4.1(b) to the
extent that such action would contravene any law, order or other legal
requirement, and in the event of a controversy or dispute, the Credit Facility
Secured Party may interplead any payment or distribution in any court of
competent jurisdiction; and (y) the Credit Facility Secured Party shall not
incur any liability to the Trustee for failure to provide any such further
instruments
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and documents or take any further acts, so long as the failure to provide any
such further instruments and documents or take any such further act was not the
result of malfeasance, willful misconduct or gross negligence.
(c) Each Party is hereby authorized to demand
specific performance of this Agreement, whether or not either Issuer or any
Subsidiary Guarantor shall have complied with any of the provisions hereof
applicable to it, at any time when either Party shall have failed to comply with
the provisions of this Agreement applicable to it; provided that the remedy of
specific performance shall not be available, and the asserting Party shall be
free to assert any and all legal defenses it may possess, if such remedy would
result in, or otherwise constitute, a violation of the Employee Retirement
Income Security Act of 1974, as amended. Each Party hereby irrevocably waives
any defense based on the adequacy of a remedy at law, which might be asserted as
a bar to such remedy of specific performance.
(d) This Agreement shall continue to be effective or
be reinstated, as the case may be, if at any time any payment of any of the
Secured Liabilities is, other than as a result of any intentional fraud or gross
negligence of the applicable Party, rescinded or must otherwise be returned by
the applicable Party upon the insolvency, bankruptcy or reorganization of either
Issuer or any Subsidiary Guarantor or otherwise, all as though such payment had
not been made.
SECTION 4.2 Perfection of Possessory Security Interests. For
the limited purpose of perfecting the security interests of the Parties in those
types or items of Collateral in which a security interest only may be perfected
by possession or control, each Party hereby appoints the other as its
representative for the limited purpose of possessing on its behalf any such
Collateral that may come into the possession or control of such other Party from
time to time, and each Party agrees to act as the other's representative for
such limited purpose of perfecting the other's security interest by possession
or control through a representative, provided that neither Party shall incur any
liability to the other by virtue of acting as the other's representative
hereunder. In this regard, any Party that is in possession or control of any
such item of Collateral agrees that if it elects to relinquish possession or
control of such item of Collateral it shall deliver possession or control
thereof to the other Party; provided, that no Party shall be required to deliver
any such item of Collateral or take any other action referred to in this section
to the extent that such action would contravene any law, order or other legal
requirements, and in the event of a controversy or dispute, such Party may
interplead any item of Collateral in any court of competent jurisdiction.
SECTION 4.3 Control of Dispositions of Collateral and Effect
thereof on Junior Liens.
(a) Each Party hereby agrees that any collection,
sale, or other disposition of Collateral (whether under the applicable Uniform
Commercial Code or otherwise) by the Credit Facility Secured Party shall be free
and clear of any Lien of the Trustee in such Collateral; provided that the
Trustee shall retain a Lien (having the same priority as the Lien it previously
had on the item of Collateral that was collected, sold or otherwise disposed of)
on the proceeds of such collection, sale, or other disposition (except to the
extent such proceeds are applied to the Credit Facility Indebtedness in
accordance with SECTION 3.4).
(b) To the extent reasonably requested by the Credit
Facility Secured Party, the Trustee will cooperate in providing any necessary or
appropriate releases to permit a
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collection, sale, or other disposition of Collateral, as provided in SECTION
4.3(A), by the Credit Facility Secured Party therein free and clear of the
Trustee's junior Lien.
ARTICLE V
MISCELLANEOUS
SECTION 5.1 Rights of Subrogation. The Trustee agrees that no
payment or distribution to the Credit Facility Secured Party pursuant to the
provisions of this Agreement shall entitle the Trustee to exercise any rights of
subrogation in respect thereof until the earlier of (a) the date on which all
Credit Facility Indebtedness is Fully Paid and (b) the Maximum Amount of Credit
Facility Indebtedness shall have been Fully Paid.
SECTION 5.2 Further Assurances. The Parties will, at their own
expense and at any time and from time to time, promptly execute and deliver all
further instruments and documents, and take all further reasonable action
(including the recordation of a subordination agreement in the appropriate
recorder's office), that may be necessary or desirable, or that either Party may
reasonably request, in order to protect any right or interest granted or
purported to be granted hereby or to enable such Party to exercise and enforce
its rights and remedies hereunder; provided that no Party shall be required to
pay over any payment or distribution, execute any instruments or documents, or
take any other action referred to in this SECTION 5.2 to the extent that such
action would contravene any law, order or other legal requirement binding upon
such Party, and in the event of a controversy or dispute, any Party may
interplead any payment or distribution in any court of competent jurisdiction,
without further responsibility in respect of such payment or distribution under
this SECTION 5.2.
SECTION 5.3 Defenses Similar to Suretyship Defenses. All
rights, interests, agreements and obligations of each of the Parties under this
Agreement shall remain in full force and effect irrespective of:
(a) any change in the time, manner or place of
payment of, or in any other term of, all or any of the Secured Liabilities, or
any other amendment or waiver of or any consent to departure from the Financing
Documents; provided that this SECTION 5.3(a) shall not apply to, and the
Trustee's Liens on the Collateral shall not be subordinated in priority by
virtue of this Agreement to, the Credit Facility Secured Party's Liens thereon
if and to the extent that the Credit Facility Indebtedness is increased, without
the express written consent of the Trustee, to an amount in excess of the
Maximum Amount;
(b) any exchange, release, non-enforcement or
non-perfection of any Party's Liens with respect to any Collateral, or any
release, amendment or waiver of or consent to departure from any guaranty, for
all or any of the Secured Liabilities; or
(c) any failure by any Party to marshal assets in
favor of any other Party or any other Person or to proceed upon or against or
exhaust any security or remedy before proceeding to enforce the Financing
Documents.
SECTION 5.4 Amendments, Etc. No amendment or waiver of any
provision of this Agreement and no consent to any departure by any Party shall
be effective
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unless the same is in writing and signed by each Party, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 5.5 Addresses for Notices. All demands, notices and
other communications provided for hereunder shall be in writing, and if to the
Trustee, mailed, sent by facsimile or delivered to it at the following address:
The Bank of New York
0 Xxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx Xxxxxxxxxx
and if to the Credit Facility Secured Party, mailed, sent by facsimile or
delivered to it at the following address:
Foothill Capital Corporation
Xxx Xxxxxx Xxxxx
Xxxxx 0000
Xxxxxx, Xxxxxxxxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Business Finance Division Manager
with copies to the Issuers, mailed, sent by facsimile or delivered to them at
the following address:
Majestic Investor Holdings, LLC
Majestic Investor Capital Corp.
Xxx Xxxxxxxxxx Xxxxxx Xxxxx
Xxxx, Xxxxxxx 00000
Facsimile: (000) 000-0000
Attention: Xxxxxxx X. Xxxxx
or as to any Party at such other address designated by such Party in a written
notice to the other Party complying as to delivery with the terms of this
SECTION 5.5. All such demands, notices and other communications shall be
effective: (a) if mailed, two business days after deposit in the mails, postage
prepaid; (b) if sent by facsimile, when receipt is acknowledged by the receiving
facsimile equipment (or at the opening of the next business day if receipt is
after normal business hours); or (c) if by other means, when delivered.
SECTION 5.6 No Waiver of Remedies. No failure on the part of
any Party to exercise, and no delay in exercising, any right hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right hereunder preclude any other or further exercise thereof or the exercise
of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.
SECTION 5.7 Termination of Agreement. This Agreement shall (a)
be binding upon the Parties and their successors and assigns (including, without
limitation, all parties that become lenders or participants under the Credit
Facility); (b) inure to the benefit of and be enforceable by the Parties and
their respective successors, transferees and assigns; and (c) terminate upon the
Credit Facility Indebtedness or the Subordinated Lien Indebtedness being
11
Fully Paid; provided that the obligations of the Parties under SECTIONS 4.1 and
5.2 shall survive this Agreement.
SECTION 5.8 Governing Law; Entire Agreement. This Agreement
shall be governed by, and construed in accordance with, the laws of the State of
New York applicable to contracts made and to be performed in New York, including
Sections 5-1401 and 5-1402 of the New York General Obligations Law. This
Agreement constitutes the entire agreement and understanding among the Parties
with respect to the subject matter hereof and supersedes any prior agreements,
written or oral, with respect thereto.
SECTION 5.9 Counterparts. This Agreement may be executed in
any number of counterparts, and it is not necessary that the signatures of all
Parties be contained on any one counterpart hereof, each counterpart will be
deemed to be an original, and all together shall constitute one and the same
document.
SECTION 5.10 No Third Party Beneficiary. This Agreement is
solely for the benefit of the Parties (and their successors and assigns) and the
holders of the Secured Liabilities (including the Credit Facility Secured Party
and the Holders). No other Person (including either Issuer, any Subsidiary
Guarantor or any subsidiary or affiliate of the Issuers) shall be deemed to be a
third party beneficiary of this Agreement or shall have any rights to enforce
any provisions hereof.
SECTION 5.11 Headings. The headings of the articles and
sections of this Agreement are inserted for purposes of convenience only and
shall not be construed to affect the meaning or construction of any of the
provisions hereof.
SECTION 5.12 Severability. If any of the provisions in this
Agreement shall, for any reason, be held invalid, illegal or unenforceable in
any respect, such invalidity, illegality or unenforceability shall not affect
any other provision of this Agreement and shall not invalidate the Lien Priority
or any other priority set forth in this Agreement.
SECTION 5.13 Trustee Status. Notwithstanding any term herein
to the contrary, it is hereby expressly agreed and acknowledged that the
subordination and related agreements set forth herein by the Trustee are made
solely in its capacity as trustee and secured party under the Indenture
Documents and with respect to the Notes (and not in its individual commercial
capacity, except to the extent that it is or becomes a Holder). The Trustee
shall not have any duties, obligations, or responsibilities to the Credit
Facility Secured Party under this Agreement except as expressly set forth
herein. Nothing in this Agreement shall be construed to operate as a waiver by
the Trustee, with respect to the Issuers or any holder of any Subordinated Lien
Indebtedness, of the benefit of any exculpatory provisions, presumptions,
indemnities, protections, benefits, immunities or reliance rights contained in
the Indenture, and, by their acknowledgment hereof, the Issuers expressly agree
that as between them and the Trustee, the Trustee shall have such benefit with
respect to all actions or omissions by the Trustee pursuant to this Agreement.
For all purposes of this Agreement, the Trustee may (a) rely in good faith, as
to matters of fact, on any representation of fact believed by Trustee to be true
(without any duty of investigation) and that is contained in a written
certificate of any authorized representative of the Issuers or of the Credit
Facility Secured Party; (b) rely in good faith, as to matters of law, on any
advice received from its legal counsel or an opinion of its counsel, counsel to
the Issuers or counsel to the Credit Facility Secured Party, and shall have no
liability for any action or omission taken in reliance thereon; and (c) assume
in good faith (without any duty of investigation), and rely upon, the
genuineness, due authority, validity, and accuracy of any certificate,
instrument,
12
notice, or other document believed by it in good faith to be genuine and
presented by the proper person.
SECTION 5.14 Gaming Laws and Liquor Laws.
(a) The Trustee and the Credit Facility Secured Party
acknowledge, understand and agree that the Gaming Laws and Liquor Laws may
impose certain licensing or transaction approval requirements prior to the
exercise of the rights and remedies granted to them under this Agreement with
respect to the Collateral subject to the Gaming Laws and Liquor Laws.
(b) If any consent under the Gaming Laws or Liquor
Laws is required in connection with the taking of any of the actions which may
be taken by either the Trustee or the Credit Facility Secured party in the
exercise of their rights hereunder, then each agrees to use its best efforts to
secure such consent and to cooperate with the other party in obtaining any such
consent. Upon the occurrence and during the continuation of any Event of
Default, each party shall promptly execute and/or cause the execution of all
applications, certificates, instruments, and other documents and papers that the
Trustee or the Credit Facility Secured Party may be required to file in order to
obtain any necessary approvals under the Gaming Law and Liquor Laws.
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IN WITNESS WHEREOF, each Party has caused this Agreement to be
duty executed and delivered as of the date first above written.
CREDIT FACILITY SECURED PARTY:
FOOTHILL CAPITAL CORPORATION
By: /s/ Xxxxx X. Xxxxx
---------------------------
Name: Xxxxx X. Xxxxx
Title: Sr. Vice President
TRUSTEE:
THE BANK OF NEW YORK
By: /s/ Xxxxxx X. Xxxxxxxxxx
---------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President
ACKNOWLEDGMENT
Each of the undersigned hereby acknowledges that (a) it has
received a copy of the foregoing Intercreditor Agreement and consents thereto,
and agrees to recognize all rights granted hereby to the parties thereto, and
will not do any act or perform any obligation which is not in accordance with
the agreements set forth in such Intercreditor Agreement, and (b) it is not an
intended beneficiary or third-party beneficiary under the Intercreditor
Agreement.
Dated as of December 6, 2001.
MAJESTIC INVESTOR HOLDINGS, LLC
By: /s/ Xxx X. Xxxxxx
---------------------------
Name: Xxx X. Xxxxxx
Title: Manager
MAJESTIC INVESTOR CAPITAL CORP.
By: /s/ Xxx X. Xxxxxx
---------------------------
Name: Xxx X. Xxxxxx
Title: President
XXXXXX NEVADA GAMING, LLC
By: /s/ Xxx X. Xxxxxx
---------------------------
Name: Xxx X. Xxxxxx
Title: President
XXXXXX MISSISSIPPI GAMING, LLC
By: /s/ Xxx X. Xxxxxx
---------------------------
Name: Xxx X. Xxxxxx
Title: Manager
XXXXXX COLORADO GAMING, LLC
By: /s/ Xxx X. Xxxxxx
---------------------------
Name: Xxx X. Xxxxxx
Title: Manager
MAJESTIC INVESTOR, LLC
By: /s/ Xxx X. Xxxxxx
---------------------------
Name: Xxx X. Xxxxxx
Title: Manager
Intercreditor Acknowledgment