Exhibit 10.24
HET SUBORDINATED LENDER SUBORDINATION AGREEMENT
(Convertible Junior Subordinated Debenture)
THIS HET SUBORDINATED LENDER SUBORDINATION AGREEMENT (as
amended, modified or supplemented from time to time, this "Agreement"), dated as
of October 30, 1998, is entered into by and among XXXXXX'X ENTERTAINMENT, INC.,
a Delaware corporation ("HET"), XXXXXX'X OPERATING COMPANY, INC., a Delaware
corporation ("HOCI") and NORWEST BANK MINNESOTA, NATIONAL ASSOCIATION, as
Trustee (together with any successor, the "Trustee") under the Indenture (as
defined below). Except as otherwise defined herein, terms used herein and
defined in the Indenture referred to below are used herein as so defined.
RECITALS
X. Xxxxxx'x Jazz Company, a Louisiana general partnership
("HJC"), filed a voluntary petition for relief under Chapter 11 of the United
States Bankruptcy Code on November 22, 1995, which case is now pending in the
United States Bankruptcy Court for the Eastern District of Louisiana, Case No.
95-14545.
B. HJC has submitted, and the United States Bankruptcy Court
for the Eastern District of Louisiana has confirmed, a plan of reorganization
(the "Plan").
C. As contemplated by the Plan, Jazz Casino Company, L.L.C., a
Louisiana limited liability company (the "Company"), has succeeded to all the
rights and obligations of HJC.
D. Contemporaneously herewith, pursuant to the Plan, the
Company, JCC Holding Company, a Delaware corporation ("JCC Holding"), and the
Trustee, have entered into that certain indenture (the "Indenture"), pursuant to
which the Company has issued $27,287,500 principal amount of its 8% Convertible
Junior Subordinated Debentures (the "Securities").
E. HET, HOCI and the Company have entered into that certain
Subordinated Loan Agreement pursuant to the Plan (as amended from time to time
the "Subordinated Credit Facility").
F. The Trustee desires that HET and HOCI enter into this
Agreement in respect of the Subordinated Credit Facility, which together with
all principal, interest, fees, indemnities and other amounts owing with respect
thereto or with respect to any related promissory notes or other related
documents, are herein called the "Subordinated Obligations".
G. As a condition to the issuance of the Securities, the
parties hereto (including HET and HOCI) are required to execute and deliver this
Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the
mutual agreements herein contained, the parties hereto agree as follows:
1. SUBORDINATION
1.1. Definitions. For purposes of this Agreement, the term
"Subordinated Debenture Noteholders" shall mean the Holders (as defined in the
Indenture) from time to time of the Securities, and the term "Subordinated
Debenture Notes Obligations" shall mean (a) the principal of, and premiums, if
any, and interest (including, without limitation, post-petition interest at the
rate provided in the Indenture whether or not such post-petition interest is an
allowed claim against the debtor in any bankruptcy or similar proceeding) and
(b) all other Obligations (as defined in the Indenture) of the Company under the
Indenture and the Securities to the Subordinated Debenture Noteholders and the
Trustee.
1.2. Subordination of Liabilities. Each of HET and HOCI, for itself,
its successors and assigns, covenants and agrees that upon, and only upon, the
event of a dissolution, winding up, liquidation or reorganization of the
Company, the payment of the Subordinated Obligations is hereby expressly
subordinated, to the extent and in the manner hereinafter set forth, to the
prior payment in full in cash of all Subordinated Debenture Notes Obligations.
The provisions of this Section 1 shall constitute a continuing offer to all
Persons who, in reliance upon such provisions, become or continue to remain
Subordinated Debenture Noteholders and such provisions are made for the benefit
of the Subordinated Debenture Noteholders and such Subordinated Debenture
Noteholders are hereby made obligees hereunder the same as if their names were
written herein as such, and they and/or each of them may proceed to enforce such
provisions.
1.3. Company Not to Make Payments with Respect to Subordinated
Obligations in Certain Circumstances.
(a) Upon, and only upon, the event of a dissolution, winding
up, liquidation or reorganization of the Company, no payment or distribution of
any kind or character (whether in cash, property, securities or otherwise) shall
be made in respect of any Subordinated Obligations until all Subordinated
Debenture Notes Obligations shall have been paid in full in cash, except that
for any period that cash interest is being paid pursuant to the Indenture, cash
interest may be paid on the Subordinated Obligations for such period.
(b) In the event that, notwithstanding the provisions of the
preceding subsection (a) of this Section 1.3, (i) the Company or any of its
Subsidiaries shall make any payment to HET or HOCI on account of the
Subordinated Obligations, which payment is not permitted by said subsection (a),
or (ii) HET or HOCI receives any payment or distribution from any enforcement or
other action in respect of the Company or any of its Subsidiaries, which payment
is not permitted by said subsection (a), such payment or other distribution
shall be held by HET or HOCI, as the case may be, subject to the prior rights of
any obligations that are senior in lien priority to the Securities, in trust for
the benefit of, and shall be paid forthwith over and delivered to the Trustee,
for application pro rata to the payment of all Subordinated Debenture
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Notes Obligations remaining unpaid to the extent necessary to pay the
Subordinated Debenture Notes Obligations in full in cash in accordance with the
terms of the Subordinated Debenture Notes Obligations, after giving effect to
any concurrent payment or distribution to or for the Subordinated Debenture
Noteholders.
1.4. Subordination to Prior Payment of All Senior Indebtedness on
Dissolution, Liquidation or Reorganization of Company. Upon any distribution of
assets of the Company upon dissolution, winding up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or otherwise):
(a) the Subordinated Debenture Noteholders shall first be
entitled to receive payment in full in cash of all Subordinated Debenture Notes
Obligations (including, without limitation, post-petition interest at the rate
provided in the Subordinated Debenture Notes Documents whether or not such
post-petition interest is an allowed claim against the debtor in any bankruptcy
or similar proceeding) before HET and HOCI are entitled to receive any payment
of any kind or character with respect to any Subordinated Obligations, other
than any payments permitted under the Indenture;
(b) any payment or distributions of assets of the Company of
any kind or character, whether in cash, property, securities or otherwise to
which HET and HOCI would be entitled but for the provisions of this Section 1.4,
shall be paid by the liquidating trustee or agent or other person making such
payment or distribution, whether a trustee in bankruptcy, a receiver or
liquidating trustee or other trustee or agent, directly to the Subordinated
Debenture Noteholders or to the Trustee to the extent necessary to make payment
in full in cash of all Subordinated Debenture Notes Obligations remaining
unpaid, after giving effect to any concurrent payment or distribution to the
Subordinated Debenture Noteholders; and
(c) in the event that, notwithstanding the foregoing
provisions of this Section 1.4, any payment or distribution of assets of the
Company of any kind or character, whether in cash, property, securities or
otherwise, shall be received by HET or HOCI on account of Subordinated
Obligations before all Subordinated Debenture Notes Obligations are paid in full
in cash, which payment or distribution is not permitted by preceding subsections
(a) and (b) of this Section 1.4, subject to any rights of any senior
indebtedness or obligations, such payment or distribution shall be received and
held in trust for and shall be paid over to the Subordinated Debenture
Noteholders or to the Trustee for application to the payment of such
Subordinated Debenture Notes Obligations until all Subordinated Debenture Notes
Obligations shall have been paid in full in cash, after giving effect to any
concurrent payment or distribution to the Subordinated Debenture Noteholders.
1.5. Effect of Subordination on Obligations Pursuant to Subordinated
Credit Facility. HET and HOCI hereby agree for the benefit of the Company, the
Trustee, and the Subordinated Debenture Noteholders that to the extent that and
for so long as any payment or distribution in respect of Subordinated
Obligations is not permitted to be made pursuant to the provisions of this
Agreement, then, and notwithstanding anything to the contrary contained in the
Subordinated Credit Facility or any other agreement, the Subordinated
Obligations shall not be payable by the
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Company until they are permitted to be paid in accordance with the terms of this
Agreement. To the extent that any such Subordinated Obligations are not payable
by the Company pursuant to this Agreement, HET and HOCI shall forbear from
exercising any right to accelerate the Company's obligations under the
Subordinated Credit Facility as a result thereof so long as the Indenture or
this Agreement shall continue to prohibit the Company from making any such
payments or distributions. Without limiting the foregoing, no action shall be
taken by HET or HOCI to enforce the payment of any Subordinated Obligations by
the Company until all Subordinated Debenture Notes Obligations shall have been
paid in full in cash.
1.6. Subrogation. After all Subordinated Debenture Notes Obligations
have been paid in full in cash, HET and HOCI shall have and be entitled to all
rights of subrogation otherwise provided by law in respect of any payment it may
make or be obligated to make under this Agreement with respect to the claims of
the Subordinated Debenture Noteholders against the Company or any other
guarantor of the Subordinated Debenture Notes Obligations.
1.7. Subordination Rights Not Impaired by Acts or Omissions of Company
or Holders of Senior Indebtedness. No right of any Subordinated Debenture
Noteholder or the Trustee to enforce subordination as herein provided shall at
any time in any way be prejudiced or impaired by any act or failure to act on
the part of the Company or by any act or failure to act by any such Subordinated
Debenture Noteholder, or by any noncompliance by the Company with the terms and
provisions of the Subordinated Credit Facility regardless of any knowledge
thereof which any such Subordinated Debenture Noteholder may have or be
otherwise charged with. The Subordinated Debenture Noteholders or the Trustee
may, without in any way affecting the obligations of HET and HOCI with respect
hereto, at any time or from time to time and in their absolute discretion,
change the manner, place or terms of payment of, change or extend the time of
payment of, or renew or alter, any Subordinated Debenture Notes Obligations or
amend, modify or supplement any of the Subordinated Debenture Notes Documents or
exercise or refrain from exercising any other of their rights under the
Subordinated Debenture Notes Obligations including, without limitation, the
waiver of default thereunder and the release of any collateral securing the
Subordinated Debenture Notes Obligations, all without notice to or assent from
HET and/or HOCI.
2. 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 Trustee (with the consent of
Subordinated Debenture Noteholders holding 66-2/3% in principal amount of the
Subordinated Debenture Notes Obligations), HET and HOCI.
3. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK, WITHOUT REFERENCE TO ITS
CONFLICTS OF LAW PRINCIPLES.
4. THIRD PARTY BENEFICIARIES. This Agreement is entered into for the
benefit of Subordinated Debenture Noteholders, and may not be amended or
modified in any respect, or terminated, without the consent of the Trustee as
directed by Subordinated Debenture Noteholders holding 66-2/3% in principal
amount of the Subordinated Debenture Notes
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Obligations. The provisions of this Agreement are continuing provisions and all
Subordinated Debenture Notes Obligations to which they apply shall conclusively
be presumed to have been created in reliance thereon. Except to the extent
provided in Section 1.5 hereof, this Agreement is not entered into for the
benefit of the Company, and the Company 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 of
its obligations pursuant to the Subordinated Credit Facility or to grant the
Company any additional rights under the Subordinated Credit Facility. This
Agreement shall be binding upon and inure to the benefit of the parties hereto
and the Subordinated Debenture Noteholders, and the respective successors and
assigns of the foregoing.
5. TERMINATION. This Agreement shall terminate on the first to occur of
(i) the termination of the Indenture and satisfaction of all obligations to the
Subordinated Debenture Noteholders thereunder or (ii) the termination of the
Subordinated Credit Facility and satisfaction of all obligations to HET, HOCI
and the Trustee thereunder and the obligations of HET and HOCI under this
Agreement (so long as the satisfaction of said obligations does not violate the
terms of this Agreement).
6. SUBORDINATED CREDIT FACILITY
(a) Notwithstanding anything to the contrary contained in the
Subordinated Credit Facility, HET and HOCI hereby agree to forbear from taking
any action in respect of a default by the Company under Section 8 of the
Subordinated Credit Facility, during any period in which the payment of the
Subordinated Obligations is prohibited under the terms of this Agreement.
(b) The subordination and other provisions of this Agreement
apply only to the Subordinated Obligations and shall have no effect on the
rights of HET and HOCI pursuant to the HET/JCC Agreement (as defined in the
Indenture).
7. NOTICES. Except as otherwise specified herein, all notices,
requests, demands or other communications to or upon the respective parties
hereto shall be deemed to have been duly given or made when delivered to the
party to which notice, request, demand or other communication is required or
permitted to be given or made under this Agreement, addressed as follows:
(a) if to HET or HOCI, at:
Xxxxxx'x Entertainment, Inc.
Xxxxxx'x Operating Company, Inc.
0000 Xxxxxx Xxxx
Xxxxxxx, Xxxxxxxxx 00000
Attention: General Counsel
with a copy to the Corporate Secretary at the same address
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(b) if to the Company, at:
Jazz Casino Company, L.L.C.
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attention: President
with a copy to the Corporate Secretary at the same address
(c) if to the Trustee, at:
Norwest Bank Minnesota, National Association
Norwest Center
6th and Marquette
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxx Xxxxxxx - Corporate Trust
Department
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
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IN WITNESS WHEREOF, the Trustee, HOCI and HET have caused this
Agreement to be duly executed and delivered as of the date first written above.
XXXXXX'X ENTERTAINMENT, INC., a
Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
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Title: Vice President and Assistant Secretary
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XXXXXX'X OPERATING COMPANY, INC., a
Delaware corporation
By: /s/ Xxxxxxx X. Xxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
-------------------------------------------
Title: Vice President and Assistant Secretary
------------------------------------------
NORWEST BANK MINNESOTA, N.A., as
Trustee
By: /s/ Xxxxxxx X. Xxxxxxxxxx
---------------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
-------------------------------------------
Title: Vice President
------------------------------------------
Acknowledged and agreed to by:
JAZZ CASINO COMPANY, L.L.C., a Louisiana
limited liability company
By: /s/ L. Xxxxxxx Xxxxxx
-----------------------------------------------------
Name: L. Xxxxxxx Xxxxxx
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Title: Vice President-Finance, Secretary and Treasurer
-------------------------------------------------
STATE OF NEW YORK
COUNTY OF NEW YORK
BE IT KNOWN that on the 29th day of October, 1998, before
me, a Notary Public, duly commissioned and authorized in and for the State and
County aforesaid, personally came and appeared Xxxxxxx X. Xxxxxxxx, who
acknowledged himself to be Authorized Representative of Xxxxxx'x Entertainment,
Inc., a Delaware corporation, and that he, as such officer, being authorized to
do so, executed the foregoing instrument for the purposes therein contained by
signing the name of the corporation by himself as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxxx Xxxxx Xxxx
------------------------------------
Notary Public
[Notarial Seal]
My Commission expires:
SIGNATURE PAGE TO
SUBORDINATED LENDER
SUBORDINATION AGREEMENT
STATE OF NEW YORK
COUNTY OF NEW YORK
BE IT KNOWN that on the 29th day of October, 1998, before
me, a Notary Public, duly commissioned and authorized in and for the State
and County aforesaid, personally came and appeared Xxxxxxx X. Xxxxxxxxxx, who
acknowledged himself to be Vice President of Norwest Bank Minnesota, National
Association, and that he, as such officer, being authorized to do so,
executed the foregoing instrument for the purposes therein contained by
signing the name of the company by himself as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxx X. Xxxxxxx
------------------------------------
Notary Public
[Notarial Seal]
My Commission expires:
SIGNATURE PAGE TO
SUBORDINATED LENDER
SUBORDINATION AGREEMENT
STATE OF NEW YORK
COUNTY OF NEW YORK
BE IT KNOWN that on the 29th day of October, 1998, before me,
a Notary Public, duly commissioned and authorized in and for the State and
County aforesaid, personally came and appeared Xxxxxxx X. Xxxxxxxx, who
acknowledged himself to be Authorized Representative of Xxxxxx'x Operating
Company, Inc., a Delaware corporation, and that he, as such officer, being
authorized to do so, executed the foregoing instrument for the purposes therein
contained by signing the name of the corporation by himself as such officer.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxxx Xxxxx Xxxx
------------------------------------
Notary Public
[Notarial Seal]
My Commission expires:
SIGNATURE PAGE TO
SUBORDINATED LENDER
SUBORDINATION AGREEMENT
STATE OF NEW YORK
COUNTY OF NEW YORK
BE IT KNOWN that on the 29th day of October, 1998, before
me, a Notary Public, duly commissioned and authorized in and for the State
and County aforesaid, personally came and appeared L. Xxxxxxx Xxxxxx, who
acknowledged himself to be Vice President-Finance, Secretary and Treasurer of
Jazz Casino Company, L.L.C., a Louisiana limited liability company, and that
he, as such officer, being authorized to do so, executed the foregoing
instrument for the purposes therein contained by signing the name of the
corporation by himself as such officer on behalf of such company.
IN WITNESS WHEREOF, I hereunto set my hand and official seal.
/s/ Xxxxx Xxxxx Xxxx
------------------------------------
Notary Public
[Notarial Seal]
My Commission expires:
SIGNATURE PAGE TO
SUBORDINATED LENDER
SUBORDINATION AGREEMENT
