EXHIBIT 10.16
INTERCOMPANY SUBORDINATION AGREEMENT
THIS INTERCOMPANY SUBORDINATION AGREEMENT (this "Agreement") dated as of
September 22, 2003 is made and entered into by and among THE OLD ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, L.L.C., a Louisiana limited liability company ("Parent") and THE OLD
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ CAPITAL CORP., a Delaware corporation (collectively with
Parent, the "Borrowers" and each individually, a "Borrower"), OED ACQUISITION,
LLC, a Delaware limited liability company (the "Subordinated Lender"), and ▇▇▇▇▇
FARGO FOOTHILL, INC., a California corporation with an office in Atlanta,
Georgia, as the arranger and the administrative 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 Borrowers are indebted and may from time to time in the
future become indebted to Subordinated Lender in respect of advances, loans and
other extensions of credit or other financial accommodations made from time to
time by the Subordinated Lender to the Borrowers (such indebtedness together
with all other indebtedness and obligations of the Borrowers, or either of them,
to the Subordinated Lender, however evidenced and whether now existing or
hereafter arising, are referred to herein as the "Subordinated Debt"; provided
that "Subordinated Debt" shall not include payments to the Subordinated Creditor
set forth in that certain Management Fees Subordination Agreement, dated as of
September 22, 2003, among the Borrowers, the Subordinated Lender, the Agent and
Peninsula Gaming Company, LLC); 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 Lenders for certain extensions of credit outstanding from time
to time (all such indebtedness including principal, interest, fees, costs,
expenses and other sums chargeable to the Borrowers by the Agent or the Lenders
(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) together with any modification, amendment,
refinancing or supplement thereto, and any other obligations of the Borrowers to
the Agent or the Lenders are hereinafter referred to as the "Senior Debt"); and
WHEREAS, as security for the payment of all liabilities and obligations
due under the Senior Debt, the Borrowers, pursuant to the Senior Loan Agreement
and the other Loan Documents (as defined in the Senior Loan Agreement), have
granted to the Agent, for the benefit of the Lenders, a first priority lien on
and unconditional security interest in and to certain personal and real property
assets of the Borrowers as set forth in the Senior Loan Agreement (collectively,
said interests in and assets of the Borrowers 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 Lenders' extension of credit
to the Borrowers, the Subordinated Lender has agreed, among other things,
subject to the terms and provisions of this Agreement, (i) to subordinate the
Subordinated Debt to the Senior Debt, (ii) to subordinate any lien which the
Subordinated Lender has or may have in the future in the assets or property of
any Borrower or any Subsidiary or Affiliate of the Borrowers (the "Subordinated
Lien") to the Senior Lien, and (iii) to forebear from exercising any creditor's
remedy or taking any action against the Borrowers upon any of their obligations
to the Subordinated Lender.
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 Debt. 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 Borrowers to the Agent or the Subordinated Lender, 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 the Subordinated Lender holds
possession of all or any part of the Collateral, or if the Agent or the
Subordinated Lender 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 Borrower 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). The Subordinated Lender agrees that if
at any time the Subordinated Lender shall be in possession of any assets or
properties of the Borrowers, then the Subordinated Lender shall hold such assets
or properties in trust for the Agent, for the benefit of the Lenders, 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.
2. Subordination of Subordinated Debt.
(a) The Subordinated Lender hereby subordinates any and all claims
now or hereafter owing to it by the Borrowers, or either of them, under all or
any portion of the Subordinated Debt 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
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allowed or recoverable in any Insolvency Proceeding, and payment of or for
adequate protection pursuant to any Insolvency Proceeding), and agrees that all
Senior Debt shall be paid in full in cash to the satisfaction of the Lenders and
the Commitments shall be terminated before any payment may be made on the
Subordinated Debt, whether of principal or interest or other indebtedness or
other obligations.
(b) The Subordinated Lender agrees not to accept, and waives any and
all rights to, any payment of any kind or form of the Subordinated Debt (from
the Borrowers or otherwise) nor make any transfer to third parties not party to
this Agreement or take any other action, in any case, designed to secure
indirectly from the Borrowers any payment on account of the Subordinated Debt
without the express, prior written consent of the Agent, and the Subordinated
Lender agrees to pay over to the Agent any funds that may be received by it from
the Borrowers (i) as a prepayment at any time or (ii) as a payment on account of
the Subordinated Debt at any time until the Senior Debt has been paid in full in
cash to the satisfaction of the Lenders and the Commitments have been
terminated. In case any funds shall be paid or delivered to the Subordinated
Lender under the circumstances described in clause (i) or (ii) of the preceding
sentence before the Senior Debt shall have been paid in full in cash to the
satisfaction of the Lenders and the Commitments have been terminated, such funds
shall be held in trust by the Subordinated Lender for and immediately paid and
delivered to the Agent (in the form received endorsed over to the Agent). The
Subordinated Lender further agrees not to sell, assign, transfer or endorse any
Subordinated Debt to any other Person except subject to the terms and conditions
of this Agreement.
(c) The Subordinated Lender 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 Borrowers,
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 Borrowers, or the proceeds
thereof, or any securities of the Borrowers, to the Subordinated Lender, by
reason of any liquidation, dissolution or other winding up of any Borrower 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 Debt,
shall instead be paid over or delivered directly to the Agent to be applied as
payment of the Senior Debt, to the extent necessary to repay the Senior Debt
remaining unpaid after giving effect to any concurrent payment or distribution
to the Agent. Furthermore, no holder of the Subordinated Debt shall receive any
such payment or distribution or any benefit therefrom until the Senior Debt has
been fully paid in cash to the satisfaction of the Lenders and the Commitments
have
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been terminated, after which time such payments or distributions may be applied
to payment of the Subordinated Debt.
(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 Borrowers, 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, the
Subordinated Lender shall not (a) take any action or exercise any remedy against
the Borrowers, or either of them, to enforce all or any portion of the
Subordinated Debt; (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 Debt; (c) commence, or join with any other creditor of the
Borrowers, or either of them, in commencing any Insolvency Proceeding against
the Borrowers, 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. The parties hereto understand and agree that the Agent shall have
the right, but shall have no obligation, to cure any default under the
Subordinated Debt without the prior written consent of the Subordinated Lender.
Notwithstanding anything contained in this Agreement to the contrary, in no
event shall the Subordinated Lender 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 Borrowers, or any of them, or
the assets or properties of the Borrowers, or any of them, in any case unless
and until the Senior Debt is paid in full in cash to the satisfaction of the
Lenders 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 the
Subordinated Lender and other holders of the Subordinated Debt for the purposes
specified herein and the Subordinated Lender hereby irrevocably appoints the
Agent as the Subordinated Lender's true and lawful attorney, with full power of
substitution, in the name of the Subordinated Lender or in the name of holders
of the Subordinated Debt, for the use and benefit of the holders of the Senior
Debt without notice to the holders of Subordinated Debt 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
Borrowers or in connection with any Insolvency Proceeding:
(a) if a proper claim or proof of debt in respect of the
Subordinated Debt 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 Subordinated Debt;
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(b) to collect any assets of the Borrowers distributed, divided or
applied by way of dividend or payment, or any securities issued, on account of
the Subordinated Debt 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 (including, without limitation, all interest
and other payments accruing or paid on the Senior Debt after the commencement of
any Insolvency Proceeding at the rate specified in the Senior Debt) has been
paid in full in cash to the satisfaction of the Lenders, rendering any surplus
to the holders of Subordinated Debt 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 the Subordinated
Lender (including without limitation voting on any plan of reorganization) that
the holders of Subordinated Debt 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 the Subordinated Lender 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 the Subordinated Lender to take action on the
Subordinated Lender's own behalf in connection with any such Insolvency
Proceeding as may be necessary to reasonably protect the Subordinated Lender's
interests, as long as such action is not contrary to or in conflict with the
actions and interests of the Agent and the Subordinated Lender'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 the
Subordinated Lender or any other holders of the Subordinated Debt for any
failure to prove the Subordinated Debt, 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
holder or holders of Subordinated Debt is not, as between the Borrowers, or
either of them, its other creditors and holder or holders of Subordinated Debt,
a payment by the Borrowers on the Senior Debt, it being understood that the
provisions of this Agreement are solely for the purpose of defining the relative
rights of the holders of Subordinated Debt, on the one hand, and the holders of
Senior Debt on the other hand. The Subordinated Lender represents that the
Subordinated Lender is the sole holder of the Subordinated Debt and, except upon
satisfaction of the conditions set forth in Section 16 hereof, shall not assign,
participate, pledge, encumber or transfer any of the Subordinated Debt 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 Lenders of the Senior Debt
and termination of the Commitments. The holder or holders of Senior Debt may,
without notice to the Subordinated Lender or the other holders of the
Subordinated Debt, 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 the Subordinated Lender and the other
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holders of Subordinated Debt 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 Borrowers or any substantial part of any
Borrower's property, or otherwise, all as though such payment had not been made.
6. Subordinated Lender's Waivers. All of the Senior Debt shall be deemed
to have been made or incurred in reliance upon this Agreement. The Subordinated
Lender 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 whatsoever, and
the Subordinated Lender expressly consents to reliance by the Agent upon the
subordination and other agreements as herein provided. The Subordinated Lender
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 the Subordinated Lender for, and the
Subordinated Lender waives any claim (except with respect to willful misconduct)
that the Subordinated Lender 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
Borrowers as debtors-in-possession.
7. Waiver of Marshaling; No Offset. The Subordinated Lender 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 the Subordinated Lender. In the event the Subordinated Lender
is or becomes indebted to any Borrower, including, without limitation, under any
documents or instruments evidencing the Subordinated Debt, the Subordinated
Lender 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 Borrower
any amounts such Borrower claims are due to it with respect to the Subordinated
Debt.
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8. No Contest of Security Interest. The Subordinated Lender shall not
contest the validity, perfection or enforceability of any lien or security
interest granted to the Agent by any Borrower, and the Subordinated Lender
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 Lenders 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 Lenders to make any future loans, advances or other extensions of credit
or financial accommodation to the Borrowers. The Subordinated Lender understands
and agrees that all 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
Lenders 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
the Subordinated Lender shall have had notice or knowledge of any of the
foregoing and regardless of whether the Subordinated Lender shall have consented
or objected thereto. Any provision of any document, instrument or agreement
evidencing, securing or otherwise relating to the Subordinated Debt purporting
to limit or restrict in any way any Borrower'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 Lenders and the Commitments have been
terminated.
10. Voided Payments. Notwithstanding anything herein that may be construed
to the contrary, to the extent that any Borrower 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
Borrower 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
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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 Lender 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 Lender of such Voided Payment until the full
amount of such Voided Payment is fully and finally restored to the Agent or such
Lender and until such time the provisions of this Agreement shall be in full
force and effect.
11. Violation of Agreement by Borrowers. Each Borrower 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 Borrower 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.
12. Waiver. Irrespective of the due date of any of the Subordinated Debt,
the Subordinated Lender hereby expressly waives any and all rights to payment by
any Borrower of the Subordinated Debt 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 Lenders' extension of credit to the Borrowers, which the Subordinated Lender
and the Borrowers acknowledge that the Agent and the Lenders would be unwilling
to do without this Agreement, the Subordinated Lender agrees, among other
things, (i) to subordinate the Subordinated Lien to the Senior Lien, (ii) to
subordinate the Subordinated Debt to the Senior Debt, and (iii) to forebear from
exercising any creditor's remedy or taking any action against any Borrower upon
any of its obligations to the Subordinated Lender until the Senior Debt has been
paid in full in cash to the satisfaction of the Lenders 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, the
Subordinated Lender, the Borrowers and their respective successors and assigns.
The Agent or any other Lender 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 the Subordinated Lender 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. This Agreement shall be a continuing agreement, shall be
irrevocable and shall remain in full force and effect so long as any of
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the Senior Debt or the Subordinated Debt is outstanding and so long as the
Senior Loan Agreement has not been terminated and the Commitments remain in
place.
16. Notification of Defaults. The Subordinated Lender shall immediately
give written notice to the Agent of a default or an event of default by the
Borrowers under the Subordinated Debt. The Subordinated Lender understands that,
subject to any grace or cure period under the Subordinated Lender's agreements
with the Borrowers, any default by the Borrowers under the Subordinated Debt is,
automatically, an event of default of the Borrowers under the Senior Debt.
Nothing in this Agreement shall be interpreted to limit or restrict the right of
the Agent and the Subordinated Lender to waive any default under their
respective documents, and the Subordinated Lender agrees that any waiver by the
Subordinated Lender 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:
If to Borrower: THE OLD ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, L.L.C.
c/o Peninsula Gaming Partners, LLC
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
and
THE OLD ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, L.L.C.
c/o Peninsula Gaming Partners, LLC
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: M. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
with copies to: ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, PLLC
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Esq.
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Subordinated
Lender: PENINSULA GAMING COMPANY, LLC
c/o Peninsula Gaming Partners, LLC
▇▇▇ ▇. ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
and
PENINSULA GAMING COMPANY, LLC
c/o Peninsula Gaming Partners, LLC
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: M. ▇▇▇▇▇ ▇▇▇▇▇▇▇
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
If to Senior
Lender: ▇▇▇▇▇ FARGO FOOTHILL, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: SFG
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
with additional
copies to: PAUL, HASTINGS, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇. ▇▇▇▇▇, Esq.
Fax No. (▇▇▇) ▇▇▇-▇▇▇▇
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 Loan Documents. The Subordinated Lender and the Borrowers
agree to forbear from (a) modifying, altering or amending any payment term of
any loan document or any other document, instrument or agreement evidencing the
Subordinated Debt, (b) modifying, altering or amending any other term of any
loan document or any other document, instrument or agreement evidencing the
Subordinated Debt in any manner adverse to either the Borrowers or the Agent,
and (c) from granting
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(in the case of the Borrowers) and receiving (in the case of the Subordinated
Lender) any collateral or other security of any nature to secure the
Subordinated Debt.
20. Cost and Expenses of Enforcement. The Subordinated Lender 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 the Subordinated Lender,
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. TO INDUCE THE AGENT AND THE OTHER LENDERS TO AFFORD FINANCIAL
ACCOMMODATIONS TO THE BORROWERS, THE SUBORDINATED LENDER IRREVOCABLY AGREES THAT
ALL ACTIONS ARISING DIRECTLY OR INDIRECTLY AS A RESULT OR IN CONSEQUENCE OF THIS
AGREEMENT SHALL BE INSTITUTED AND LITIGATED ONLY IN COURTS HAVING SITUS IN THE
CITY OF NEW YORK, NEW YORK AND THE SUBORDINATED LENDER HEREBY CONSENTS TO THE
EXCLUSIVE JURISDICTION AND VENUE OF ANY STATE OR FEDERAL COURT LOCATED AND
HAVING ITS SITUS IN SAID CITY AND STATE. THE SUBORDINATED LENDER HEREBY WAIVES
ANY OBJECTION BASED ON FORUM NON CONVENIENS, AND THE SUBORDINATED LENDER 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 THE SUBORDINATED LENDER AT THE RESPECTIVE ADDRESSES SET
FORTH HEREIN IN THE MANNER PROVIDED BY APPLICABLE STATUTE, LAW, RULE OF COURT,
OR OTHERWISE.
22. Waiver of Claims; Trial by Jury. THE SUBORDINATED LENDER WAIVES EVERY
DEFENSE, CAUSE OF ACTION, COUNTERCLAIM OR SETOFF, THAT THE SUBORDINATED LENDER
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 THE SUBORDINATED LENDER, AND EACH ONE OF THEM, KNOWINGLY, VOLUNTARILY
AND INTENTIONALLY WAIVE IRREVOCABLY, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
THE RIGHT EITHER 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
11
COURSE OF CONDUCT OR COURSE OF DEALING, IN WHICH THE AGENT AND THE SUBORDINATED
LENDER ARE ADVERSE PARTIES. THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE
AGENT 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 the Subordinated Lender, 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.
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), the Subordinated Lender 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, the Subordinated Lender 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, the Subordinated Lender 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]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Borrowers: THE OLD ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, L.L.C.,
a Louisiana limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
THE OLD ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
CAPITAL CORP., a Delaware corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
Subordinated Party: OED ACQUISITION, LLC,
a Delaware limited liability company
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Chief Financial Officer
Agent: ▇▇▇▇▇ FARGO FOOTHILL, INC.,
a California corporation
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Senior Vice President
