EXHIBIT 10.22
MANAGEMENT FEES SUBORDINATION AGREEMENT
THIS MANAGEMENT FEES SUBORDINATION AGREEMENT (this "Agreement") dated as,
June 16, 2004, is made and entered into by and among THE OLD XXXXXXXXXX XXXXX,
L.L.C., a Louisiana limited liability company ("OED"), and XXXXXXX XX, LLC
(formerly known as Peninsula Gaming Company, LLC), a Delaware limited liability
company ("DJO"; together with OED, hereinafter collectively referred to as, the
"Borrowers" and each individually, a "Borrower"), The Old Xxxxxxxxxx Xxxxx
Capital Corp., a Delaware corporation ("Guarantor"; together with OED,
hereinafter collectively referred to as the "Debtors" and each individually, a
"Debtor"), OED ACQUISITION, LLC, a Delaware limited liability company ("OEDA";
together with DJO, hereinafter collectively referred to as the "Subordinated
Parties" and each individually, a "Subordinated Party"), and XXXXX FARGO
FOOTHILL, INC., a California corporation, as agent for the Lenders (as defined
in the Senior Loan Agreement defined below) (the "Agent").
W I T N E S S E T H:
WHEREAS, the Debtors are indebted and may from time to time in the future
become indebted to a Subordinated Party in respect of certain amounts owing to
the Subordinated Parties pursuant to that certain Amended and Restated
Management Services Agreement (the "Management Agreement"), by and among OED,
OEDA and DJO, dated as of February 25, 2003 (such amounts, together with all
other obligations of the Debtors, or either of them, to each Subordinated Party
arising under the Management Agreement, however evidenced and whether now
existing or hereafter arising, are referred to herein as the "Subordinated
Fees"; and
WHEREAS, the Borrowers, the Agent and the Lenders are parties to that
certain Loan and Security Agreement dated as of even date herewith
(collectively, as amended, restated, supplemented or otherwise modified from
time to time, the "Senior Loan Agreement"), whereby the Borrowers may be
indebted to the Lender Group (as defined in the Senior Loan Agreement) for
certain extensions of credit outstanding from time to time (all such
indebtedness, including, without limitation, principal, interest, fees, costs,
expenses and other sums chargeable to the Borrowers by the Agent or the other
members of the Lender Group (including interest, fees, costs and expenses
accruing after an Insolvency Proceeding (as hereafter defined) commences
regardless of whether such interest, fees, costs and expenses are deemed allowed
or recoverable in any Insolvency Proceeding (as hereinafter defined), and the
Guaranteed Obligations (as defined below), together with any modification,
amendment, refinancing or supplement thereto, and any other obligations of the
Debtors to the Agent or the other members of the Lender Group are hereinafter
referred to as the "Senior Debt"); and
WHEREAS, as an inducement to the Lender Group to enter into the Loan
Agreement and to extend the credit therein, Guarantor has entered into that
certain Guaranty dated as of the date hereof in favor of the Agent, for the
benefit of the Lender Group (the "Guaranty"), whereby Guarantor has guaranteed
the Secured Obligations (as defined in the Guaranty);
WHEREAS, as security for the payment of all liabilities and obligations
due under the Senior Debt, the Debtors, pursuant to the Loan Documents (as
defined in the Senior Loan
Agreement), have granted to the Agent, for the benefit of the Lender Group, a
first priority lien on and unconditional security interest in and to certain
personal and real property assets of the Debtors as set forth in the Loan
Documents (collectively, said interests in and assets of the Debtors are
referred to herein as the "Collateral"; and, collectively said liens and
security interests of the Agent are referred to herein as the "Senior Lien");
and
WHEREAS, as part of the consideration for the Lender Group's extension of
credit to the Borrowers, each Subordinated Party has agreed, among other things,
subject to the terms and provisions of this Agreement, (i) to subordinate the
Subordinated Fees to the Senior Debt, (ii) to subordinate any lien which each
Subordinated Party has or may have in the future in the assets or property of
any Debtor or any Subsidiary or Affiliate of the Debtors (the "Subordinated
Lien") to the Senior Lien, and (iii) to forebear from exercising any creditor's
remedy or taking any action against the Debtors upon any of their obligations to
each Subordinated Party.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
herein contained, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
that each capitalized term used herein and not defined herein shall have the
meaning ascribed thereto in the Senior Loan Agreement, and further agree as
follows:
1. Priority of Liens; Subordinated Fees. Notwithstanding anything to the
contrary, including, without limitation, the date, time, manner or order of
perfection or attachment of the security interests and liens on the Collateral
granted by the Debtors to the Agent or any Subordinated Party, and
notwithstanding the usual application of the priority provisions of the Uniform
Commercial Code as in effect in any jurisdiction or any other applicable law or
judicial decision of any jurisdiction, or whether such Subordinated Party holds
possession of all or any part of the Collateral, or if the Agent or such
Subordinated Party is perfected without filing or possession in any part of the
Collateral, the Senior Lien shall be a first, senior and prior security interest
in and lien on the Collateral, prior in interest and superior to any
Subordinated Lien. The priority of liens set forth in the previous sentence
states the relative priority of liens of the parties to this Agreement, and no
party hereto represents or warrants to any other party that such other party's
liens are prior to any lien on the Collateral of any person who is not a party
to this Agreement (except that each Debtor represents and warrants to the Agent
that the Senior Lien has been granted in accordance with the terms and
provisions of the Senior Loan Agreement and other Loan Documents). Each
Subordinated Party agrees that if at any time such Subordinated Party shall be
in possession of any assets or properties of the Debtors, then such Subordinated
Party shall hold such assets or properties in trust for the Agent for the
benefit of the Lender Group, so long as any Senior Debt remains outstanding and
until all obligations of the Lenders to make loans and other financial
accommodations to the Borrowers pursuant to the Senior Loan Agreement (the
"Commitments") are terminated. Each Subordinated Party represents that, as of
the date hereof, it does not have a lien on or security interest in any assets
of any Debtor, and agrees that it will not take any such lien or security
interest without the prior written consent of the Agent. Nothing in this
Agreement shall be deemed a consent by the Agent to any such Subordinated Lien.
2
2. Subordination of Subordinated Fees.
(a) Each Subordinated Party hereby subordinates any and all claims
now or hereafter owing to it by the Debtors, or either of them, under all or any
portion of the Subordinated Fees to any and all Senior Debt (including, without
limitation, interest, fees, costs or other payments on the Senior Debt paid or
accrued after the commencement of an Insolvency Proceeding and whether or not
such claims are deemed allowed or recoverable in any Insolvency Proceeding, and
payment of or for adequate protection pursuant to any Insolvency Proceeding),
and agrees, except as provided in Section 2(b) hereof, that all Senior Debt
shall be paid in full in cash to the satisfaction of the Lender Group and the
Commitments shall be terminated before any payment may be made on the
Subordinated Fees.
(b) Except as set forth below in this paragraph (b), each
Subordinated Party agrees not to accept any payment of the Subordinated Fees nor
make any transfer to third parties not party to this Agreement, or take any
other action, designed to secure directly or indirectly from any Debtor or any
other Person any payment on account of the Subordinated Fees, without the
express, prior written consent of the Agent, and, except as set forth below in
this paragraph (b), each Subordinated Party agrees that any funds that may be
received by it as a payment on account of the Subordinated Fees at any time
prior to the termination of this Agreement shall be held in trust for the
benefit of, and shall be immediately paid over and delivered to, the Agent.
Notwithstanding anything contained herein to the contrary, (i) any Debtor may
reimburse Subordinated Parties for "Reimbursables" (as defined in the Management
Agreement) at any time in accordance with the terms of the Management Agreement
provided no Event of Default (as that term is defined in the Indenture) then
exists or would be caused thereby, and (ii) on the date that payment of any fees
or other sums (other than Reimbursables) are owing to Subordinated Parties under
the Management Agreement, any Debtor may pay and each Subordinated Party may
receive payments of, all other Subordinated Fees payable on such date provided
no Event of Default then exists or would be caused thereby.
(c) Each Subordinated Party agrees that the priority of the Senior
Debt set forth above shall continue during any insolvency, receivership,
bankruptcy, dissolution, liquidation, or reorganization proceeding, or in any
other proceeding, whether voluntary or involuntary, by or against the Debtors,
or either of them, under any bankruptcy or insolvency law or laws, federal or
state relating to the relief of debtors of any jurisdiction, whether now or
hereafter in effect, and in any out-of-court composition, assignment for the
benefit of creditors, readjustment of indebtedness, reorganization, extension or
other debt arrangement of any kind (collectively, an "Insolvency Proceeding").
In the event of any payment, distribution, division or application, partial or
complete, voluntary or involuntary, by operation of law or otherwise, of all or
any part of the property, assets or business of the Debtors, or the proceeds
thereof, or any securities of the Debtors, to any Subordinated Party, by reason
of any liquidation, dissolution or other winding up of any Debtor or its
business or by reason of any sale or Insolvency Proceeding, then any such
payment or distribution of any kind or character, whether in cash, property or
securities, that, but for the subordination provisions of this Section 2, would
otherwise be payable or deliverable upon or in respect of the Subordinated Fees,
shall instead be paid over or delivered directly to the Agent to be applied as
payment of the Senior Debt, to the
3
extent necessary to repay the Senior Debt remaining unpaid after giving effect
to any concurrent payment or distribution to the Agent.
(d) Subject to the provisions of this Agreement, the Agent shall
have the sole right to control all aspects of liquidation of the Collateral and
disposition of the proceeds thereof, including all proceedings pertaining
thereto under any Insolvency Proceeding and the approval of any plan of
reorganization of the Debtors, or either of them, thereunder.
3. Forbearance from Exercise of Certain Remedies. Until the Senior Debt
has been paid in full in cash and the Commitments have been terminated, no
Subordinated Party shall (a) take any action or exercise any remedy against the
Debtors, or either of them, to enforce all or any portion of the Subordinated
Fees; (b) take any action or exercise any remedy against any guarantor of or
pledgor securing the Senior Debt in order to collect any of the Subordinated
Fees; (c) commence, or join with any other creditor of the Debtors, or either of
them, in commencing any Insolvency Proceeding against the Debtors, or either of
them; or (d) take any action or exercise any remedy against any property or
assets of any guarantor of or pledgor securing the Senior Debt or acquire or
take any lien on or security interest in any of the Collateral. The parties
hereto understand and agree that the Agent shall have the right, but shall have
no obligation, to cure any default with respect to the Subordinated Fees without
the prior written consent of each Subordinated Party. Notwithstanding anything
contained in this Agreement to the contrary, in no event shall any Subordinated
Party be entitled to receive and retain any securities, equity or otherwise, or
other consideration provided for in (i) a plan of reorganization or otherwise in
connection with any bankruptcy or Insolvency Proceeding or (ii) any other
judicial or nonjudicial proceeding for the liquidation, dissolution or winding
up of the Debtors, or any of them, or the assets or properties of the Debtors,
or any of them, in any case unless and until the Senior Debt is paid in full in
cash to the satisfaction of the Lender Group and the Commitments are terminated.
4. Agent's Authority to Act. For so long as any of the Senior Debt shall
remain unpaid, the Agent shall have the right to act as attorney-in-fact for
each Subordinated Party for the purposes specified herein and each Subordinated
Party hereby irrevocably appoints the Agent as such Subordinated Party's true
and lawful attorney, with full power of substitution, in the name of such
Subordinated Party for the use and benefit of the holders of the Senior Debt
without notice to the Subordinated Parties or any of their representatives,
successors or assigns, to perform the following acts, at the option of the
holders of the Senior Debt, at any meeting of creditors of the Debtors or in
connection with any Insolvency Proceeding:
(a) if a proper claim or proof of debt in respect of the
Subordinated Fees has not been filed in the form required in any such Insolvency
Proceeding at least ten (10) Business Days prior to the expiration of the time
for filing such claims, to file an appropriate claim for and on behalf of the
holders of any Subordinated Fees;
(b) to collect any assets of the Debtors distributed, divided or
applied by way of dividend or payment, or any securities issued, on account of
the Subordinated Fees and to apply the same, or the proceeds of any realization
upon the same that the Agent in its discretion elects to effect, to the Senior
Debt until all of the Senior Debt has been paid in full in cash to the
4
satisfaction of the Lender Group and any commitment of the Agent to extend
credit or make other financial accommodations to any Debtor is terminated,
rendering any surplus to the Subordinated Parties if and to the extent permitted
by law; and
(c) generally to take any action in connection with any such
Insolvency Proceeding either in its own name or in the name of each Subordinated
Party (including without limitation, voting on any plan of reorganization) that
the Subordinated Parties would be authorized to take, but for this Agreement, in
the event that the Agent believes such action is necessary to protect its
interests in the Senior Debt and under this Agreement and after first giving
each Subordinated Party five (5) days' written notice of its intent to take such
action (to the extent such notice is practicable), provided that the Agent
agrees to permit such Subordinated Party to take action on such Subordinated
Party's own behalf in connection with any such Insolvency Proceeding as may be
necessary to reasonably protect such Subordinated Party's interests, as long as
such action is not contrary to or in conflict with the actions and interests of
the Agent and such Subordinated Party's interests are always in second position
to the Senior Debt and the Senior Lien.
In no event shall the holder or holders of the Senior Debt be liable to any
Subordinated Party for any failure to prove the Subordinated Fees, to exercise
any right with respect thereto or to collect any sums payable thereon. A
distribution made under this Agreement to holders of Senior Debt that otherwise
would have been made to Subordinated Parties is not, as between the Debtors, or
either of them, its other creditors and any Subordinated Party, a payment by the
Debtors on the Agent, it being understood that the provisions of this Agreement
are solely for the purpose of defining the relative rights of the Subordinated
Parties, on the one hand, and the Senior Debt on the other hand. Each
Subordinated Party represents that such Subordinated Party shall not assign,
participate, pledge, encumber or transfer any of the Subordinated Fees or any
interest therein until the Senior Debt is repaid in full in cash and the
Commitments are terminated. The power-of-attorney granted hereby is coupled with
an interest and shall be irrevocable.
5. Duration and Termination. This Agreement shall constitute a continuing
agreement of subordination, and shall remain in effect until indefeasible
payment in full in cash to the satisfaction of the Lender Group of the Senior
Debt and termination of the Commitments. The holder or holders of Senior Debt
may, without notice to any Subordinated Party extend or continue credit and make
other financial accommodations to or for the account of the Borrowers in
reliance upon this Agreement. The obligations of each Subordinated Party under
this Agreement shall continue to be effective, or be reinstated, as the case may
be, if at any time any payment in respect of any Senior Debt is rescinded or
must otherwise be restored or returned by a holder of Senior Debt by reason of
any Insolvency Proceeding or as a result of the appointment of a receiver,
intervenor or conservator of, or trustee or similar officer for, the Debtors or
any substantial part of any Debtor's property, or otherwise, all as though such
payment had not been made.
6. Subordinated Party's Waivers. All of the Senior Debt shall be deemed to
have been made or incurred in reliance upon this Agreement. Each Subordinated
Party expressly waives all notice of the acceptance by the Agent of the
subordination and other provisions of this Agreement and all other notices not
specifically required pursuant to the terms of this Agreement
5
whatsoever, and each Subordinated Party expressly consents to reliance by the
Agent upon the subordination and other agreements as herein provided. Each
Subordinated Party agrees that the Agent has not made warranties or
representations with respect to the due execution, legality, validity,
completeness or enforceability of the Senior Loan Agreement and other Loan
Documents or the collectibility of the obligations thereunder, that Agent shall
be entitled to manage and supervise its loans in accordance with applicable law
and its usual practices, modified from time to time as it deems appropriate
under the circumstances, and that the Agent shall not have any liability to such
Subordinated Party for, and such Subordinated Party waives any claim (except
with respect to willful misconduct) that such Subordinated Party may now or
hereafter have against Agent arising out of (i) any and all actions that the
Agent takes or omits to take (including, without limitation, actions with
respect to the creation, perfection or continuation of liens or security
interests in the Senior Debt or the Senior Lien, actions with respect to the
occurrence of an Event of Default, actions with respect to the foreclosure upon,
sale, release, or depreciation of, or failure to realize upon, the Collateral
and actions with respect to the collection of any claim for all or any part of
the Senior Debt from any account debtor, guarantor or any other party) with
respect to the documents regarding the Senior Debt or any other agreement
related thereto or to the collection of the Senior Debt or the valuation, use,
protection or release of the Collateral and/or other security for the Senior
Debt, (ii) the Agent's election, in any proceeding instituted under Chapter 11
of Title 11 of the United States Code (11 U.S.C. ss. 101 et seq.) (the
"Bankruptcy Code"), of the application of Section 1111 (b)(2) of the Bankruptcy
Code, and/or (iii) any making of loans to, or grant of a security interest under
Section 364 of the Bankruptcy Code by, the Debtors as debtors-in-possession.
7. Waiver of Marshaling; No Offset. Each Subordinated Party agrees that
the Agent shall have no obligation to marshal any part of the Collateral or any
such other property, instruments, documents, agreements or guaranties before
enforcing its rights against any other part of the Collateral or its rights
herein as against such Subordinated Party. In the event such Subordinated Party
is or becomes indebted to any Debtor, including, without limitation, under any
documents or instruments evidencing the Subordinated Fees, each Subordinated
Party agrees that it shall pay such indebtedness in accordance with its terms
and shall not deduct from or set off against any amounts owed to such Debtor any
amounts such Debtor claims are due to it with respect to the Subordinated Fees.
8. No Contest of Security Interest. No Subordinated Party shall contest
the validity, perfection or enforceability of any lien or security interest
granted to the Agent by any Debtor, and each Subordinated Party agrees to
cooperate in the defense of any action contesting the validity, perfection or
enforceability of such liens or security interests.
9. Subordination Not Affected, Etc. Nothing in this Agreement shall be
construed as affecting or in any way limiting the extension of new or additional
financial accommodation by the Lender Group to the Borrowers and the terms and
conditions hereof shall apply to such new and additional financial
accommodations. Notwithstanding the preceding sentence or anything contained in
this Agreement to the contrary, none of the provisions of this Agreement shall
be deemed or construed to constitute a commitment or an obligation on the part
of the Lender Group to make any future loans, advances or other extensions of
credit or financial accommodation to the Borrowers. Each Subordinated Party
understands and agrees that all
6
accrued interest, charges, expenses, attorneys' fees and other liabilities and
obligations under the Senior Loan Agreement shall constitute part of the Senior
Debt, and nothing in this Agreement shall be construed as affecting or in any
way limiting any indulgence granted by the Lender Group with respect to any
existing financial accommodation to the Borrowers. The subordinations effected,
and the rights created, hereby shall not be affected by (a) any amendment of or
any addition of or supplement to any instrument, document or agreement relating
to the Senior Debt, (b) any exercise or non-exercise of any right, power or
remedy under or in respect of the Senior Debt or any instrument, document or
agreement relating thereto, (c) the release, sale, exchange or surrender, in
whole or in part, of any part of the Collateral or any additional collateral to
which the Agent may become entitled, (d) any release of any guarantor of or
pledgor securing the Senior Debt or any security for such pledge or guaranty, or
(e) any waiver, consent, release, indulgence, extension, renewal, modification,
delay or other action, inaction or omission in respect of the Senior Debt or any
instrument, document or agreement relating thereto or any security therefor or
pledge or guaranty thereof, whether or not each Subordinated Party shall have
had notice or knowledge of any of the foregoing and regardless of whether each
Subordinated Party shall have consented or objected thereto. Any provision of
any document, instrument or agreement evidencing, securing or otherwise relating
to the Subordinated Fees purporting to limit or restrict in any way any Debtor's
ability to enter into any agreement with the Agent to amend or modify any
document, instrument or agreement evidencing, securing or otherwise relating to
the Senior Debt shall be deemed of no force or effect until the Senior Debt has
been repaid in full in cash to the satisfaction of the Lender Group and the
Commitments have been terminated.
10. Voided Payments. Notwithstanding anything herein that may be construed
to the contrary, to the extent that any Debtor makes any payment on the Senior
Debt which, within twelve (12) months of the date of such payment, is
subsequently invalidated, declared to be fraudulent, avoidable or preferential,
set aside or is required to be repaid to a trustee, receiver, the estate of such
Debtor or any other party under any bankruptcy act, state or Federal law, common
law or equitable cause (such payment being hereinafter referred to as a "Voided
Payment"), then, to the extent of such Voided Payment, that portion of the
Senior Debt that had been previously satisfied by such Voided Payment shall be
revived and continue in full force and effect as if such Voided Payment had
never been made. In the event that a Voided Payment is sought to be recovered
from the Agent or any other member of the Lender Group under the Senior Loan
Agreement, an "Event of Default" under the Senior Loan Agreement shall be deemed
to have occurred and to be continuing from the date of such recovery from the
Agent or any such other member of the Lender Group of such Voided Payment until
the full amount of such Voided Payment is fully and finally restored to the
Agent or such other member of the Lender Group and until such time the
provisions of this Agreement shall be in full force and effect.
11. Violation of Agreement by Debtors. Each Debtor hereby consents to this
Agreement, agrees to abide by the terms hereof, agrees to make no payments or
distributions contrary to the terms and provisions hereof and to do every act
and thing necessary to carry out such terms and provisions. Each Debtor agrees
that should it make any payment in contravention of any provision of this
Agreement the maturity of said Senior Debt may be accelerated in accordance with
the terms of the Senior Loan Agreement.
7
12. Waiver. Irrespective of the due date of any of the Subordinated Fees,
each Subordinated Party hereby expressly waives (except as expressly provided by
Section 2(b) hereof) any and all rights to payment by any Debtor of the
Subordinated Fees prior to repayment in full in cash of the Senior Debt and
termination of the Commitments.
13. Immediate Effect. This Agreement shall be effective immediately upon
its execution by each of the parties hereto, and there are no conditions
precedent or subsequent to the effectiveness of this Agreement.
14. Inducement. As an inducement to, and part of the consideration for,
the Lender Group's extension of credit to the Borrowers, which each Subordinated
Party and the Debtors acknowledge that the Agent and the other members of the
Lender Group would be unwilling to do without this Agreement, each Subordinated
Party agrees, among other things, (i) to subordinate the Subordinated Lien, if
any, to the Senior Lien, (ii) to subordinate the Subordinated Fees to the Senior
Debt, and (iii) to forebear from exercising any creditor's remedy or taking any
action against any Debtor upon any of its obligations to each Subordinated Party
until the Senior Debt has been paid in full in cash to the satisfaction of the
Lender Group and termination of the Commitments.
15. Successors and Assigns; Continuing Effect, etc. This Agreement is
being entered into for the benefit of, and shall be binding upon, the Agent,
each Subordinated Party, the Debtors and their respective successors and
assigns. The Agent or any other member of the Lender Group under the Senior Loan
Agreement may assign or participate out to other parties any portion of its
interest under the Senior Debt and no such assignee or participant shall be
required to become a signatory hereto. Any assignee or transferee of each
Subordinated Party shall execute and deliver to the other parties hereto an
agreement pursuant to which they will become parties hereto as fully as if they
were signatories hereto and providing for the effectiveness of this Agreement as
to such transferee or assignee and other parties.
16. Notification of Defaults. Each Subordinated Party shall immediately
give written notice to the Agent of a default or an event of default by the
Debtors under the Management Agreement or with respect to the Subordinated Fees.
Each Subordinated Party understands that, subject to any grace or cure period
under such Subordinated Party's agreements with the Debtors, any default by the
Debtors under the Management Agreement is, automatically, an "Event of Default"
of the Debtors under the Senior Debt. Nothing in this Agreement shall be
interpreted to limit or restrict the right of the Agent and each Subordinated
Party to waive any default under their respective documents, and each
Subordinated Party agrees that any waiver by each Subordinated Party will be in
writing and provided to the Agent.
17. Notices. Any notices, consents, requests, demands and other
communications required or permitted to be given hereunder shall be in writing
and shall be deemed to be given to any party or parties (a) upon delivery to the
address of the party or parties set forth below if delivered in person or by
courier or if sent by certified or registered mail (return receipt requested),
or (b) upon dispatch if transmitted by telecopy or other means of facsimile
transmission, in any case to the party or parties at the telecopy numbers set
forth below:
8
If to the Debtors: THE OLD XXXXXXXXXX XXXXX, L.L.C.
c/o Peninsula Gaming Partners, LLC
X.X. Xxx 0000
000 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Fax No. (000) 000-0000
and
THE OLD XXXXXXXXXX XXXXX, L.L.C.
c/o Peninsula Gaming Partners, LLC
00000 Xxxxx Xxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: M. Xxxxx Xxxxxxx
Fax No. (000)000-0000
with copies to: MAYER, BROWN, XXXX & MAW LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxx, Esq.
Fax No. (000) 000-0000, Esq.
Fax No. (000) 000-0000
If to the
Subordinated
Parties: OED ACQUISITION, LLC
c/o Peninsula Gaming Partners, LLC
X.X. Xxx 0000
000 X. Xxxxx Xxxxxx
Xxxxxxx, Xxxx 00000
Attention: Xxxxxxx Xxxxxxx
Fax No. (000) 000-0000
and
OED ACQUISITION, LLC
c/o Peninsula Gaming Partners, LLC
00000 Xxxxx Xxxxxx Xxxxxxxxx, 00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: M. Xxxxx Xxxxxxx
Fax No. (000) 000-0000
9
with copies to: MAYER, BROWN, XXXX & MAW LLP
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxx Xxxxx, Esq.
Fax No. (000) 000-0000
If to Agent: XXXXX FARGO FOOTHILL, INC.
0000 Xxxxxxxx Xxxxxx, Xxxxx 0000 Xxxx
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention: Business Finance Division Manager
Fax No. (000) 000-0000
with copies to: PAUL, HASTINGS, XXXXXXXX & XXXXXX LLP
000 Xxxxxxxxx Xxxxxx, XX, Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attention: Xxxxx X. X. Xxxxx, Esq.
Fax No. (000) 000-0000
Any party hereto may designate any other address or telecopy number, as
applicable, to which any notices or other communications shall be given by
notice duly given hereunder; provided, however, that any such notice of other
address or telecopy number shall be deemed to have been given hereunder only
when actually received by the party to which it is addressed.
18. Amendments; Modifications. This Agreement may not be modified, altered
or amended except by an agreement in writing executed by all of the parties
hereto.
19. Amendment of Management Agreement. Except to the extent expressly
provided in the Senior Loan Agreement, each Subordinated Party and the Debtors
agree to forbear from (a) modifying, altering or amending any term of the
Management Agreement, and (b) from granting (in the case of the Debtors) and
receiving (in the case of any Subordinated Party) any collateral or other
security of any nature to secure the Subordinated Fees.
20. Cost and Expenses of Enforcement. Each Subordinated Party agrees to
pay all costs and expenses including, without limitation, attorneys',
paralegals' and other professionals' fees of every kind, paid or incurred by the
Agent in enforcing its rights hereunder against each Subordinated Party,
including, but not limited to, litigation instituted in a state or federal
court, as hereinafter provided (including proceedings under the Bankruptcy Code)
in endeavoring to collect the Senior Debt or in so enforcing this Agreement, or
in defending against any defense, cause of action, counterclaim, setoff or cross
claim based on any act of commission or omission by the Agent with respect to
the Senior Debt promptly on demand of the Agent or other person paying or
incurring the same.
21. Jurisdiction. TO INDUCE THE AGENT AND THE OTHER MEMBERS OF THE LENDER
GROUP TO AFFORD FINANCIAL ACCOMMODATIONS TO THE BORROWERS, EACH SUBORDINATED
PARTY IRREVOCABLY AGREES THAT ALL ACTIONS ARISING DIRECTLY OR INDIRECTLY AS A
RESULT OR IN CONSEQUENCE
10
OF THIS AGREEMENT SHALL BE INSTITUTED AND LITIGATED ONLY IN COURTS HAVING SITUS
IN THE CITY OF NEW YORK, NEW YORK AND EACH SUBORDINATED PARTY HEREBY CONSENTS TO
THE EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT LOCATED AND
HAVING ITS SITUS IN SAID CITY AND STATE. EACH SUBORDINATED PARTY HEREBY WAIVES
ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND EACH SUBORDINATED PARTY HEREBY
WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS. THE PARTIES CONSENT THAT ALL
SUCH SERVICE OF PROCESS MAY BE MADE BY CERTIFIED MAIL, RETURN RECEIPT REQUESTED,
DIRECTED TO THE AGENT OR EACH SUBORDINATED PARTY AT THE ADDRESS OF OEDA SET
FORTH HEREIN IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT,
OR OTHERWISE.
22. Waiver of Claims; Trial by Jury. EACH SUBORDINATED PARTY WAIVES EVERY
DEFENSE, CAUSE OF ACTION, COUNTERCLAIM OR SETOFF, THAT EACH SUBORDINATED PARTY
MAY NOW HAVE, OR HEREAFTER MAY HAVE, TO ANY ACTION BY THE AGENT IN ENFORCING
THIS AGREEMENT AND RATIFIES AND CONFIRMS WHATEVER THE AGENT MAY DO PURSUANT TO
THE TERMS HEREOF AND AGREES THAT THE AGENT SHALL NOT BE LIABLE FOR ANY ERRORS OF
JUDGMENT OR MISTAKE OF FACT OR LAW EXCEPT FOR WILLFUL MISCONDUCT OF AGENT. THE
AGENT AND EACH SUBORDINATED PARTY, KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE IRREVOCABLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE RIGHT ANY ONE
OF THEM MAY HAVE TO TRIAL BY JURY WITH RESPECT TO ANY LEGAL PROCEEDING BASED
HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT AND ANY
AGREEMENT CONTEMPLATED TO BE EXECUTED IN CONJUNCTION HEREWITH OR ANY COURSE OF
CONDUCT OR COURSE OF DEALING, IN WHICH THE AGENT AND EACH SUBORDINATED PARTY ARE
ADVERSE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDER GROUP TO
MAKE LOANS AND OTHER FINANCIAL ACCOMMODATIONS TO THE BORROWERS.
23. Governing Law; Benefit of Agreement. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of New York,
without regard to the conflict of law, principles thereof other than Sections
5-1401 and 5-1402 of the New York General Obligations Law. All of the
understandings, agreements, covenants and representations contained herein are
solely for the benefit of the Agent and each Subordinated Party, and there are
no other persons who are intended to be benefited in any way whatsoever by this
Agreement.
24. Severability. In the event any one or more of the provisions contained
herein shall for any reason be held to be invalid, illegal or unenforceable in
any respect by a court of competent jurisdiction, such invalidity, illegality or
unenforceability shall not affect any other provision hereof, and this Agreement
shall be construed as if such invalid, illegal or unenforceable provision had
never been contained herein.
11
25. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, and all of which taken
together shall constitute one and the same instrument. Delivery of an executed
counterpart of this Agreement by facsimile transmission shall be as effective as
delivery of a manually executed counterpart hereof.
26. Perfection and Release of Liens. Upon the Agent's reasonable request
(which request shall be in writing), each Subordinated Party hereby agrees to
execute and deliver such documents, instruments, lien releases, assignments and
financing statements and do such acts as may be necessary in order for the Agent
to establish and maintain a first, valid, prior and perfected security interest
in the Collateral. In the event of any sale or other disposition of all or any
part of the Collateral prior to payment in full of the Senior Debt, upon request
by the Agent, each Subordinated Party shall execute releases, assignments, UCC
terminations and other similar agreements that are reasonably requested by the
Agent from time to time. Until payment and satisfaction in full of the Senior
Debt, each Subordinated Party shall cooperate fully in releasing the
Subordinated Lien, if in existence at such time, as soon as practicable upon the
reasonable request of the Agent.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
12
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
DEBTORS: THE OLD XXXXXXXXXX XXXXX, L.L.C.,
a Louisiana limited liability company
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
THE OLD XXXXXXXXXX XXXXX CAPITAL
CORP., a Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
SUBORDINATED PARTIES: OED ACQUISITION LLC,
a Delaware limited liability company
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
XXXXXXX XX, LLC (FORMERLY KNOWN AS PENINSULA
GAMING COMPANY, LLC), a Delaware limited
liability company
By: /s/ Xxxxxxx X. Xxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Chief Financial Officer
AGENT: XXXXX FARGO FOOTHILL, INC.,
a California corporation
By: /s/ Xxxx X. Xxxxxxxx
---------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Vice President
