EXHIBIT 10.13
INTERCREDITOR AND SUBORDINATION AGREEMENT
dated as of June 22, 2006
among
U.S. BANK NATIONAL ASSOCIATION,
as Trustee under the Indenture
GREAT LAKES GAMING OF MICHIGAN, LLC,
as lender under the Lakes Notes and as Manager of the Project
and
U.S. BANK NATIONAL ASSOCIATION,
as Collateral Agent
TABLE OF CONTENTS
Page
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1. Definitions and General Provisions.............................................................. 2
1.1 Definitions............................................................................ 2
1.2 Interpretation......................................................................... 11
2. Deferral and Subordination of Lakes Obligations and Band Obligations............................ 11
2.1 Deferral and Accrual of Lakes Obligations.............................................. 12
2.2 [Intentionally Omitted]................................................................ 12
2.3 Subordination to First Lien Secured Obligations........................................ 12
2.4 Default on First Lien Secured Obligations.............................................. 12
2.5 Deferral Not a Default................................................................. 12
2.6 Continuing Subordination............................................................... 12
2.7 Subordination of the Lakes Obligations upon Insolvency or Liquidation Proceeding....... 12
2.8 [Intentionally Omitted]................................................................ 14
2.9 Judgment Liens......................................................................... 14
2.10 When Proceeds Must be Paid Over........................................................ 14
2.11 Subrogation............................................................................ 14
3. Collateral Agent................................................................................ 14
3.1 Appointment............................................................................ 14
3.2 Nature of Duties....................................................................... 15
3.3 Lack of Reliance on the Collateral Agent............................................... 15
3.4 Certain Rights of the Collateral Agent; Pari Passu in Priority of Liens; Separate
Collateral............................................................................. 15
3.5 Reliance............................................................................... 17
3.6 Indemnification........................................................................ 17
3.7 Collateral Agent in its Individual Capacity............................................ 17
3.8 Holders................................................................................ 17
3.9 Resignation and Removal of the Collateral Agent........................................ 17
4. Collateral, Priority, Subordination and Release of Liens........................................ 17
4.1 Liens and Security Interests........................................................... 18
4.2 Separate Collateral.................................................................... 18
4.3 Confirmation of Liens.................................................................. 19
4.4 Releases............................................................................... 20
5. Rights and Limitation of Actions With Respect to Collateral..................................... 21
5.1 Rights and Limitations Applicable to Second Lien Secured Parties....................... 21
5.2 Rights and Limitations Applicable to the First Lien Secured Parties.................... 22
5.3 Notification of Events of Default...................................................... 23
5.4 Certain Waivers by Second Lien Secured Parties......................................... 23
5.5 Agent for Perfection................................................................... 23
5.6 When Proceeds Must be Paid Over........................................................ 23
6. Rights and Limitations with Respect to Amendments, Waivers and Other Actions Under Facility
Agreements...................................................................................... 24
6.1 Rights and Limitations Applicable to Second Lien Secured Parties....................... 24
6.2 Rights and Limitations Applicable to the First Lien Secured Parties.................... 24
6.3 Waivers and Deferrals of Payments...................................................... 25
6.4 Limitation of Liability................................................................ 25
7. Insolvency or Liquidation Proceedings........................................................... 26
7.1 Right to File Involuntary Bankruptcy................................................... 26
7.2 Certain Agreements and Consents by Second Lien Secured Parties......................... 26
8. Application of Proceeds of Shared Collateral.................................................... 30
8.1 Application of Proceeds Generally...................................................... 30
8.2 Certain Terms.......................................................................... 32
8.3 Sharing of Non-Pro Rata Payments....................................................... 33
8.4 Overpayments........................................................................... 33
8.5 Payment to Class Representatives....................................................... 34
9. Representations and Warranties.................................................................. 34
9.1 Organization........................................................................... 34
9.2 Authorization.......................................................................... 34
9.3 Binding Agreement...................................................................... 34
9.4 No Consent Required.................................................................... 34
9.5 No Conflict............................................................................ 34
10.Miscellaneous Provisions........................................................................ 35
10.1 Notices; Addresses..................................................................... 35
10.2 Further Assurances..................................................................... 36
10.3 Waiver................................................................................. 36
10.4 Entire Agreement....................................................................... 36
10.5 Governing Law.......................................................................... 36
10.6 Severability........................................................................... 36
10.7 Headings............................................................................... 36
10.8 Limitations on Liability............................................................... 37
10.9 Consent of Jurisdiction, Waiver of Immunity............................................ 37
10.10 Successors and Assigns................................................................. 37
10.11 Counterparts........................................................................... 38
10.12 No Third Party Beneficiaries........................................................... 38
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10.13 Co-Collateral Agents; Separate Collateral Agents....................................... 38
10.14 Amendments............................................................................. 40
10.15 Additional Secured Parties............................................................. 40
10.16 Legends................................................................................ 40
10.17 Trust Indenture Act.................................................................... 41
10.18 Reinstatement.......................................................................... 41
10.19 Attorneys' Fees........................................................................ 41
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This Intercreditor and Subordination Agreement (this "AGREEMENT") is dated
as of June 22, 2006 and is by and among U.S. BANK NATIONAL ASSOCIATION, as 2014
Notes Indenture Trustee (the "2014 NOTES INDENTURE TRUSTEE"), Great Lakes Gaming
of Michigan, LLC ("GREAT LAKES"), as lender under the Lakes Notes (as defined
below) and as Manager and Developer (each as defined below) and U.S. BANK
NATIONAL ASSOCIATION, as Collateral Agent.
RECITALS:
A. PROJECT. The Pokagon Gaming Authority (the "BORROWER"), a wholly-owned
unincorporated instrumentality of the Pokagon Band of the Potawatomi Indians, a
federally recognized Indian tribe (the "TRIBE"), is constructing and plans to
own and operate the Four Winds Casino and Resort, a casino, hotel and resort
complex with related ancillary facilities, located in New Buffalo Township,
Michigan.
B. MANAGEMENT AGREEMENT. Lakes Entertainment, Inc., f/k/a Lakes Gaming,
Inc. ("LAKES") and the Tribe entered into the Management Agreement dated as of
July 8, 1999, the rights and obligations of Lakes under which were thereafter
assumed by Great Lakes pursuant to an Assignment and Assumption Agreement dated
October 16, 2000 (as amended, the "MANAGER ASSUMPTION") among the Tribe, Lakes
and Great Lakes (such Management Agreement, as amended and restated on October
16, 2000, December 22, 2004 and January 25, 2006, as amended on June 1, 2006, as
further amended from time to time, and as subject to the Assignment and
Assumption Agreement referred to below, the "MANAGEMENT AGREEMENT"), pursuant to
which Great Lakes as the manager (the "MANAGER") is entitled to receive a
management fee in consideration of its services relating to the management and
operation of the Project and certain indemnification and other payments (the
"MANAGEMENT AGREEMENT OBLIGATIONS").
C. DEVELOPMENT AGREEMENT. Lakes and the Tribe entered into the Development
Agreement dated July 8, 1999, the rights and obligations of Lakes under which
were thereafter assumed by Great Lakes pursuant to the Manager Assumption (such
Development Agreement, as amended and restated on October 16, 2000, December 22,
2004 and January 25, 2006, as amended on June 22, 2006, as further amended from
time to time, and as subject to the Assignment and Assumption Agreement referred
to below, the "DEVELOPMENT AGREEMENT"), pursuant to which Great Lakes as the
developer (the "DEVELOPER") advanced (or has committed to advance) borrowings
under the Lakes Notes to the Tribe for the purposes described in the Development
Agreement.
D. ASSIGNMENT AND ASSUMPTION AGREEMENT. Pursuant to an Assignment and
Assumption Agreement dated May 25, 2006 (the "ASSIGNMENT AND ASSUMPTION
AGREEMENT"), the Tribe assigned, and the Borrower assumed, the rights and
obligations of the Tribe under the Management Agreement, the Development
Agreement and the other Transaction Documents (as defined in the Development
Agreement).
E. GREAT LAKES OBLIGATION TO SUBORDINATE. Under the Management Agreement,
Great Lakes agreed to fully subordinate its rights with respect to its
Management Fee (defined in the Management Agreement) to the 2014 Indenture
Trustee, Collateral Agent and
any other third-party lender or equipment lessor, and under the Development
Agreement, Great Lakes agreed to subordinate its rights to the Borrower's
payment of certain Obligations and its lien on the Collateral to the 2014
Indenture Trustee and equipment lenders or lessors.
F. 2014 NOTES INDENTURE. Concurrently herewith, the Borrower, the
Guarantors named therein and the 2014 Notes Indenture Trustee have entered into
an Indenture (as in effect on the date hereof, the "2014 NOTES INDENTURE"),
pursuant to which the Borrower will issue the 2014 Notes, as more particularly
described therein.
G. COLLATERAL. In addition to certain other collateral and security
interests, the 2014 Trustee and Great Lakes intend that (a) the 2014 Notes be
secured by a first priority Lien on the 2014 Notes Separate Collateral, the
First Lien Shared Collateral and the Shared Collateral, (b) the First Lien
Secured Obligations be secured by a first priority Lien on the First Lien Shared
Collateral and the Shared Collateral and (c) the Lakes Secured Obligations be
secured by a second priority Lien on the Shared Collateral, all as more
particularly described in Section 3.
H. DISBURSEMENT AGREEMENT. The Borrower, the 2014 Notes Indenture Trustee,
Professional Associates Construction Services, Inc., as the independent
construction consultant, Great Lakes and the Disbursement Agent have entered
into the Cash Collateral and Disbursement Agreement as of even date herewith (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "DISBURSEMENT Agreement"), in order to set forth, among other things,
(a) the mechanics for and allocation of the Borrower's request for advances
under the 2014 Notes and (b) the conditions precedent to the Closing Date, to
the initial advance and to subsequent advances.
I. INTERCREDITOR AND SUBORDINATION AGREEMENT. The parties hereto desire to
enter into this Agreement in order to (a) appoint the Collateral Agent as the
agent for the First Lien Secured Parties to receive, maintain, administer,
enforce and distribute the Shared Collateral and the First Lien Shared
Collateral as provided herein and therein, (b) set forth certain provisions
relating to the Secured Parties' respective rights in the Collateral, the
exercise of remedies upon the occurrence of an event of default, the application
of proceeds of enforcement and certain other matters and (c) set forth certain
provisions relating to the subordination of the Lakes Obligations and certain
other matters with respect thereto.
NOW, THEREFORE, with reference to the foregoing recitals and in reliance
thereon, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto agree as
follows:
1. DEFINITIONS AND GENERAL PROVISIONS.
1.1 DEFINITIONS The following terms have the meanings set forth below:
"2014 NOTEHOLDERS" means the holders, from time to time, of the 2014
Notes.
"2014 NOTES" means all notes issued by the Borrower pursuant to the 2014
Notes Indenture, whether on or after the Closing Date.
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"2014 NOTES INDENTURE" has the meaning given in the recitals hereto.
"2014 NOTES INDENTURE TRUSTEE" has the meaning given in the preamble
hereto.
"2014 NOTES SECURED OBLIGATIONS" means all Obligations of the Borrower and
the Pledgors to, or for the benefit of, the 2014 Notes Indenture Trustee or the
2014 Noteholders under the 2014 Notes Indenture, the 2014 Notes, the First Lien
Security Documents and any other agreement, document or instrument entered into
or delivered by the Borrower and the Pledgors on, prior to, or after the date of
the 2014 Notes Indenture with or to or for the benefit of the Collateral Agent,
the 2014 Notes Indenture Trustee or the 2014 Noteholders in connection with the
financing of the Project.
"2014 NOTES SEPARATE COLLATERAL" means the Construction Disbursement
Account, the Transition Loan Account, the Interest Reserve Account and the
Authority's Payment Account, each as defined in the Disbursement Agreement, and
any other property or assets of the Borrower and the Pledgors (including, but
not limited to net proceeds received from asset sales and insurance and
condemnation events) which has been pledged to secure the 2014 Notes Secured
Obligations but not the Lakes Secured Obligations or Obligations under any
Permitted Additional Senior Secured Debt Agreement, Permitted Additional Junior
Secured Debt Agreement or the Second Lien Secured Obligations; provided that, in
no event shall such collateral include FF&E Collateral so long as any FF&E
Financing secured by such FF&E Collateral is outstanding.
"AGREEMENT" has the meaning given in the preamble hereto.
"ASSET SALE" has the meaning assigned to that term in the 2014 Notes
Indenture.
"ASSIGNMENT AND ASSUMPTION AGREEMENT" has the meaning given in the
recitals hereto.
"BANKRUPTCY LAW" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute, and any
other state or federal insolvency, reorganization, moratorium or similar law for
the relief of debtors now or hereafter in effect.
"BORROWER" has the meaning given in the recitals hereto.
"BUSINESS DAY" has the meaning assigned to that term in the 2014 Notes
Indenture.
"CLASS" shall mean each class of Secured Parties, i.e., (a) the 2014
Noteholders as holders of the 2014 Notes Secured Obligations shall constitute a
"Class" and (b) Great Lakes, as lender under the Lakes Secured Obligations,
shall constitute a "Class".
"COLLATERAL" means the following unique and separate categories of
property encumbered to secure the Obligations to any of the Secured Parties: (a)
the Shared Collateral, (b) the 2014 Notes Separate Collateral and (c) the First
Lien Shared Collateral.
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"CLOSING DATE" means June 22, 2006.
"COLLATERAL AGENT" means U.S. Bank National Association in its capacity as
collateral agent for the benefit of the First Lien Secured Parties, and any
other First Lien Secured Party that from time to time becomes a party hereto in
accordance with Section 10.15, as appointed in the first sentence of Section 3.1
(together with its successors and assigns and any replacement collateral agent
appointed pursuant to the terms hereof).
"DEVELOPER" has the meaning given in the recitals hereto.
"DEVELOPMENT AGREEMENT" has the meaning given in the recitals hereto.
"DIP FINANCING" has the meaning given in Section 7.2.7.
"DISBURSEMENT AGENT" has the meaning assigned to that term in the
Disbursement Agreement.
"DISBURSEMENT AGREEMENT" has the meaning given in the recitals hereto.
"DISCHARGE" means (a) in respect of the 2014 Notes, the satisfaction and
discharge (pursuant to Article 12 of the 2014 Notes Indenture), defeasance
(pursuant to Article 8 of the 2014 Notes Indenture) or other satisfaction in
cash in full of the 2014 Notes Secured Obligations, (b) in respect of the Lakes
Secured Obligations, payment in full in cash of the principal of and interest
and premium (if any) on all Lakes Secured Obligations and the termination of all
Commitments to extend credit under the Second Lien Documents related to the
Lakes Secured Obligations, (c) in respect of any other Class of Secured
Obligations, the termination of all commitments to extend credit under such
Class of Secured Obligations, the discharge, defeasance or payment in full in
cash of the principal of and interest and premium (if any) on all such Secured
Obligations, the termination, cancellation, expiration or cash collateralization
of all letters of credit, if any, issued under any Facility Agreement and the
discharge, defeasance or payment in full in cash of all other Secured
Obligations of such Class that are unpaid at the time the principal and interest
are paid in full in cash, discharged or defeased.
"EVENT OF DEFAULT" means, as the context requires, the occurrence and
continuance of an "Event of Default" (or comparable term) by or with respect to
the Borrower under the applicable Facility Agreement that has not been waived by
the applicable Project Credit Party (it being understood that the provisions of
Section 1.2 shall not apply to any such waiver).
"FACILITY AGREEMENTS" means, collectively, the 2014 Notes Indenture, each
Lakes Note, the Management Agreement, the Development Agreement and each other
Lakes Transaction Document, each Permitted Additional Senior Secured Debt
Agreement and each Permitted Additional Junior Secured Debt Agreement.
"FF&E" means furniture, furnishings or equipment used in the ordinary
course of the business of the Borrower.
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"FF&E COLLATERAL" means collateral consisting of FF&E purchased pursuant
to and securing any FF&E Financing permitted pursuant to the terms of the 2014
Notes Indenture.
"FF&E FINANCING" means Indebtedness (as such term is defined in the 2014
Notes Indenture) the proceeds of which are used solely to finance the
acquisition by the Borrower of, or the entry into a capital lease by the
Borrower with respect to, FF&E (provided that neither such acquisition nor any
such capital lease shall be required to be completed or entered into at the time
of incurrence of such Indebtedness (as such term is defined in the 2014 Notes
Indenture)), in each case as amended, restated, modified, renewed, refunded,
replaced (whether upon or after termination or otherwise) or refinanced in whole
or in part from time to time.
"FIRST LIEN" means a Lien granted by a First Lien Security Document to the
Collateral Agent for the benefit of the First Lien Secured Parties (or any of
them), upon any property or assets of the Borrower to secure First Lien Secured
Obligations.
"FIRST LIEN DOCUMENTS" means, collectively, the 2014 Notes Indenture, the
2014 Notes, each Permitted Additional Senior Secured Debt Agreement, the First
Lien Security Documents, and all other agreements governing, securing or setting
forth the terms of any First Lien Secured Obligations.
"FIRST LIEN SECURED CLAIM REDUCTION" has the meaning given in Section 7.3.
"FIRST LIEN SECURED OBLIGATIONS" means, collectively, (a) the 2014 Notes
Secured Obligations and (b) Obligations of the Borrower and the Pledgors under
any Permitted Additional Senior Secured Debt Agreement.
"FIRST LIEN SECURED PARTIES" means, collectively, the holders of First
Lien Secured Obligations, the 2014 Notes Indenture Trustee, the Collateral Agent
and the holders or representatives for the holders of any Indebtedness under any
Permitted Additional Senior Secured Debt Agreement.
"FIRST LIEN SECURITY DOCUMENTS" means, collectively, the Security
Agreement, the Lakes Dominion Account Agreement, the Notes Dominion Account
Agreement and any guaranties, deeds of trust, security agreements or collateral
account agreements or any other document creating or perfecting a lien, security
interest or other preferential arrangement, and any related documents executed,
filed, recorded or delivered from time to time by the Borrower in favor of the
Collateral Agent to secure the First Lien Secured Obligations.
"FIRST LIEN SHARED COLLATERAL" means all properties and assets of the
Borrower and the Pledgors now owned or hereafter acquired with respect to which
the First Lien Secured Parties are granted as security for any First Lien
Secured Obligations but not the Second Lien Secured Obligations or Obligations
under any Permitted Additional Junior Secured Debt Agreement; provided that, in
no event shall such collateral include FF&E Collateral so long as any FF&E
Financing secured by such FF&E Collateral is outstanding.
"GREAT LAKES" has the meaning given in the preamble hereto.
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"INDEBTEDNESS" means, with respect to any specified Person, any
indebtedness of such Person (excluding accrued expenses and trade payables),
whether or not contingent:
(1) in respect of borrowed money;
(2) evidenced by bonds, notes, debentures or similar instruments or
letters of credit (or reimbursement agreements in respect thereof);
(3) in respect of banker's acceptances;
(4) representing Capital Lease Obligations (as defined in the 2014 Notes
Indenture) or Attributable Debt (as defined in the 2014 Notes Indenture) in
respect of sale and leaseback transactions.
"INSOLVENCY OR LIQUIDATION PROCEEDING" means (a) any case commenced by or
against the Borrower or any Pledgor under any Bankruptcy Law, any other
proceeding for the reorganization, recapitalization or adjustment or marshalling
of the assets or liabilities of the Borrower, any receivership or assignment for
the benefit of creditors relating to the Borrower or any similar case or
proceeding relative to the Borrower or their creditors, as such, in each case
whether or not voluntary; (b) any liquidation, dissolution, marshalling of
assets or liabilities or other winding up of or relating to the Borrower or any
Pledgor, in each case whether or not voluntary and whether or not involving
bankruptcy or insolvency; or (c) any other proceeding of any type or nature in
which substantially all claims of creditors of the Borrower or the Pledgors are
determined and any payment or distribution is or may be made on account of such
claims.
"JOINDER AGREEMENT" has the meaning given in Section 10.15.
"LAKES" has the meaning given in the recitals hereto.
"LAKES DOMINION ACCOUNT" shall mean the account established pursuant to
the Lakes Dominion Account Agreement.
"LAKES DOMINION ACCOUNT AGREEMENT" shall mean shall mean the Lakes
Dominion Account Agreement, dated as of June 22, 2006 (as amended, restated,
amended and restated, or modified from time to time), between the Borrower,
Great Lakes, U.S. Bank National Association, as collateral agent for the holders
of the First Lien Secured Obligations (as defined therein), and Fifth Third
Bank, in its capacity as a "bank" as defined in Section 9-102 of the UCC.
"LAKES NOTES" the Lakes Development Note, the Lakes Facility Note, the
Lakes Working Capital Advance Note, the Minimum Payments Note, the Transition
Loan Note and the Non-Gaming Land Acquisition Line of Credit, each as defined in
the Development Agreement and in each case as in effect on the date of this
Agreement.
"LAKES OBLIGATIONS" means the Lakes Secured Obligations and any present or
future Obligations of the Borrower to or for the benefit of Great Lakes or any
of its Affiliates named by the Borrower pursuant to Section 4.09 of the 2014
Notes Indenture, as each may be refinanced, assumed, transferred or replaced in
accordance with the 2014 Notes Indenture.
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"LAKES SECURED OBLIGATIONS" means all Obligations of the Borrower to or
for the benefit of Great Lakes or any of its Affiliates under the Lakes Notes
and the Second Lien Security Documents related thereto, together with the
Management Agreement Obligations and all other obligations and liabilities of
the Borrower to or for the benefit of Great Lakes or any of its Affiliates under
the Development Agreement or any other Lakes Transaction Documents.
"LAKES TRANSACTION DOCUMENTS" means the Management Agreement, the
Development Agreement, the Lakes Notes, the other Transaction Documents referred
to in the Development Agreement, and other documents, instruments and agreements
subject to the Assignment and Assumption Agreement and any instruments or
agreements executed pursuant thereto or in connection therewith, each as from
time to time amended as permitted by the 2014 Notes Indenture.
"LIEN" means, with respect to any asset, any mortgage, lien, pledge,
charge, security interest or encumbrance of any kind in respect of such asset,
whether or not filed, recorded or otherwise perfected under applicable law.
"MANAGEMENT AGREEMENT" has the meaning given in the recitals hereto.
"MANAGEMENT AGREEMENT OBLIGATIONS" has the meaning given in the recitals
hereto.
"MANAGER" has the meaning given in the recitals hereto.
"MANAGER ASSUMPTION" has the meaning given in the recitals hereto.
"NET LOSS PROCEEDS" has the meaning given to that term in the 2014 Notes
Indenture.
"NET PROCEEDS" has the meaning given to that term in the 2014 Notes
Indenture.
"NOTES DOMINION ACCOUNT" shall mean the account established pursuant to
the Notes Dominion Account Agreement.
"NOTES DOMINION ACCOUNT AGREEMENT" shall mean the Notes Dominion Account
Agreement, dated as of June 22, 2006 (as amended, restated, amended and
restated, or modified from time to time), between the Borrower, Great Lakes,
U.S. Bank National Association, as collateral agent for the First Lien Secured
Parties (as defined therein), and Fifth Third Bank, in its capacity as a "bank"
as defined in Section 9-102 of the UCC.
"OBLIGATIONS" means (i) any principal (including reimbursement obligations
with respect to letters of credit whether or not drawn), interest (including, to
the extent legally permitted, all interest accrued thereon after the
commencement of any Insolvency or Liquidation Proceeding at the rate, including
without limitation any applicable post-default rate, specified in the First Lien
Documents or the Second Lien Documents (as the case may be), even if such
interest is not enforceable, allowable or allowed as a claim in such
proceeding), premium (if any), fees, indemnifications, reimbursements, expenses
and other liabilities payable under the
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documentation governing any Indebtedness and (ii) solely with respect to the
Borrower and no other Person, the Management Agreement Obligations and other
Lakes Secured Obligations.
"PERMITTED ADDITIONAL JUNIOR SECURED DEBT AGREEMENT" shall mean one or
more agreements evidencing secured Indebtedness with, or guaranteed by, the
Borrower, provided that (i) such agreement is permitted to be entered into and
secured with a Second Lien on the Shared Collateral pursuant to the First Lien
Documents and the Second Lien Documents, (ii) the provider of such Indebtedness
becomes a party to this Agreement and agrees to be bound by and comply with all
of the terms and provisions hereof and (iii) if such agreements are entered into
on or before the Discharge of the Lakes Secured Obligations, the holders of the
Lakes Secured Obligations consent in writing prior to the incurrence by the
Borrower of such Indebtedness.
"PERMITTED ADDITIONAL SENIOR SECURED DEBT AGREEMENT" shall mean one or
more agreements evidencing Indebtedness with, or guaranteed by, the Borrower
that is permitted by Section 4.09(b)(1) of the 2014 Notes Indenture and secured
by Liens described in clause (2) of the definition of "Permitted Liens" under
the 2014 Notes Indenture; provided that the provider of any such Indebtedness
becomes a party to this Agreement and agrees to be bound by and comply with all
of the terms and provisions hereof.
"PLEDGORS" means all Guarantors (as defined in the 2014 Notes Indenture)
of the Borrower guaranteeing the Obligations of the Borrower under the 2014
Notes Indenture as specified therein.
"PRIMARY OBLIGATIONS" has the meaning given in Section 8.2.
"PRO RATA PAYMENTS" means:
(a) with respect to any amount paid to a First Lien Secured Party on a
given date other than pursuant to Sections 4.10 and 4.30 of the 2014 Notes
Indenture, that the ratio of such payment to the total payments made to all
First Lien Secured Parties on such date is the same as the ratio of (i) the
total principal amount of First Lien Secured Obligations outstanding with
respect to such First Lien Secured Party to (ii) the total principal amount
of First Lien Secured Obligations outstanding with respect to all First Lien
Secured Parties; provided, however, that reimbursement obligations for
outstanding Letters of Credit that are secured by a Lien on the Shared
Collateral ranking pari passu with the Liens securing the First Lien Secured
Obligations shall be considered outstanding First Lien Secured Obligations;
and
(b) with respect to any amount paid to a First Lien Secured Party on a
given date in connection with Sections 4.10 or 4.30 of the 2014 Notes
Indenture, that such payment has been allocated or offered among the First
Lien Secured obligations in accordance with such section of the 2014 Notes
Indenture.
"PRO RATA SHARE" has the meaning given in Section 8.2.
"PROJECT" has the meaning given in the 2014 Note Indenture.
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"PROJECT CREDIT PARTIES" means the 2014 Notes Indenture Trustee, Great
Lakes and any other Persons that from time to time become parties hereto in
accordance with Section 10.15.
"RELEASE" has the meaning given in Section 6.1.
"REQUIRED FIRST LIEN SECURED PARTIES" means, at any time, the holders or
representatives of holders of more than 50% of the sum of:
(a) the aggregate outstanding principal amount of First Lien Secured
Obligations (including outstanding letters of credit issued by the holders
of the First Lien Secured Obligations whether or not then available or
drawn); and
(b) other than in connection with the exercise of remedies, the
aggregate unfunded commitments to extend credit which, when funded, would
constitute First Lien Secured Obligation.
"REQUIRED SECURED PARTIES" shall mean:
(a) for purposes of causing the Collateral Agent to commence enforcement
proceedings against the Shared Collateral or the First Lien Shared Collateral
pursuant to the First Lien Documents, at any time that an Event of Default
has occurred and is continuing under any First Lien Documents, then the
Required First Lien Secured Parties shall constitute the "Required Secured
Parties" for purposes of causing the Collateral Agent to commence enforcement
proceedings pursuant to the First Lien Documents;
(b) for purposes of commencing enforcement proceedings against the 2014
Notes Separate Collateral, the 2014 Notes Indenture Trustee shall constitute
the "Required Secured Parties";
(c) for purposes of directing the manner and method of enforcement
proceedings, once commenced in accordance with clause (a) and (b) above, the
Collateral Agent shall make all decisions that it deems appropriate to
diligently prosecute and complete such proceedings unless instructed to do
otherwise by the Required First Lien Secured Parties.
(d) for purposes of amending, modifying, varying or waiving any provisions
of the First Lien Security Documents with respect to Shared Collateral (other
than the Note Dominion Account Agreement or Lakes Dominion Account Agreement)
or the First Lien Shared Collateral (including any event of default
thereunder), the Required First Lien Secured Parties shall constitute the
"Required Secured Parties" entitled to amend, modify, vary or waive any
provision of such First Lien Security Documents (without the consent of any
other Project Credit Party), and any such amendment, modification, variance
or waiver shall be effective with respect to, and shall automatically apply
to the corresponding provisions of, any Security Document entered into with
respect to any Permitted Additional Senior Secured Debt Agreement; provided,
however, that any Event of Default occurring by reason of a Event of Default
under the 2014 Notes Indenture or a Permitted Additional Senior Secured Debt
Agreement may only be waived by the 2014
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Notes Indenture Trustee or the representative under such Permitted Additional
Senior Secured Debt Agreement, as the case may be, in each case, acting in
such capacity;
(e) For purposes of adjusting settlement of all insurance claims and
condemnation awards in the event of any covered loss, theft or destruction or
condemnation of any Shared Collateral or any First Lien Shared Collateral,
and all claims under insurance constituting Shared Collateral or First Lien
Shared Collateral, the Required First Lien Secured Parties shall constitute
the "Required Secured Parties"; and
(f) Notwithstanding clauses (a) through (e) above, if at the time of an
action by the Required Secured Parties all First Lien Secured Obligations
have been Discharged, then the Required Secured Creditors at such time shall
be the representatives of each Class of any Second Lien Secured Obligations.
"SECOND LIEN DOCUMENTS" means, (i) with respect to Great Lakes, the Lakes
Transaction Documents and the Second Lien Security Documents related thereto and
(ii) with respect other Second Lien Secured Parties, any Permitted Additional
Junior Secured Debt Agreements, the Second Lien Security Documents related
thereto, and all other agreements governing or securing the Second Lien Secured
Obligations entered into or delivered by the Borrower on, prior to, or after the
Closing Date in connection with any of the foregoing.
"SECOND LIEN SECURED OBLIGATIONS" means all Obligations of the Borrower
under the Second Lien Security Documents (including, for the avoidance of doubt,
the Management Agreement Obligations and the other Lakes Secured Obligations).
"SECOND LIEN SECURED PARTIES" means, collectively, the holders of the
Second Lien Secured Obligations, and any representative for the holders of
Indebtedness under any Permitted Additional Junior Secured Debt Agreement
(including any assignee of, or other successor to, Great Lakes under the Lakes
Secured Obligations).
"SECOND LIEN SECURITY DOCUMENTS" means, collectively, the Lakes Dominion
Account Agreement, the Notes Dominion Account Agreement, the Lakes Security
Agreement (as defined in the Indenture), any guaranties, deeds of trust,
security agreements, pledge agreements, collateral agency agreements, or
collateral account agreements or any other document creating or perfecting a
Lien, security interest or other preferential arrangement, and any related
documents executed, filed, recorded or delivered from time to time by the
Borrower in respect of any Second Lien Secured Obligations.
"SECONDARY OBLIGATIONS" has the meaning given in Section 8.2.
"SECURED OBLIGATIONS" means, without duplication, any or all of the First
Lien Secured Obligations and/or the Second Lien Secured Obligations, as the
context requires.
"SECURED PARTIES" means, collectively, the First Lien Secured Parties and
the Second Lien Secured Parties.
"SECURITIES INTERMEDIARY" means any entity acting in its capacity as
securities intermediary under any deposit or securities account agreements.
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"SECURITY DOCUMENTS" means, collectively, the First Lien Security
Documents and the Second Lien Security Documents.
"SHARED COLLATERAL" means all real and personal property encumbered to
secure more than one Class of Secured Obligations including, but not limited to,
(i) the Notes Dominion Account and (ii) the Lakes Dominion Account; provided
that "Shared Collateral" shall exclude (a) the 2014 Notes Separate Collateral,
(b) the First Lien Shared Collateral, (c) after the release of all or any
portion of the Shared Collateral or First Lien Shared Collateral in accordance
with the 2014 Notes Indenture and the terms of this Agreement, such released
Collateral or (d) the FF&E Collateral so long as any FF&E Financing secured by
such FF&E Collateral is outstanding.
"TRIBE" has the meaning given in the recitals hereto.
1.2 INTERPRETATION.
To the extent that reference is made in this Agreement to any term defined
in, or to any other provision of, any other agreement, such term or provision
shall continue to have the original meaning thereof notwithstanding any
termination, expiration or amendment of such other agreement; provided, however,
that to the extent that any agreement to which all of the Project Credit Parties
are parties is amended in accordance with the terms thereof and hereof, then any
references herein to the terms and provisions of such agreement shall be to such
terms or provisions as so amended; and provided, further, that to the extent the
2014 Notes Indenture allows for the amendment of any "Collateral Document" (as
defined in the 2014 Notes Indenture) without the consent of the 2014 Notes
Indenture Trustee, any references herein to the terms and provisions of such
document shall be to such terms or provisions as so amended.
2. DEFERRAL AND SUBORDINATION OF LAKES OBLIGATIONS AND BAND OBLIGATIONS.
2.1 DEFERRAL AND ACCRUAL OF LAKES OBLIGATIONS.
Each of Great Lakes and each successor, assign and transferee of any
portion of Lakes Obligations agrees that any Lakes Obligations (i) not permitted
be paid pursuant to the 2014 Notes Indenture or (ii) the payment of which will
result in or cause an Event of Default under the 2014 Notes Indenture shall be
deferred and shall accrue and may be paid only at such time as such amounts
would otherwise be permitted to be paid pursuant to the provisions of the 2014
Notes Indenture (and the payment of which shall not result or cause an Event of
Default under the 2014 Notes Indenture), and none of Great Lakes nor any
successor, assign and transferee of any portion of Lakes Obligations will ask,
demand, xxx for, take or receive from the Borrower, by set-off or in any other
manner, direct or indirect payment (whether in cash or property), any such
amounts or any transfer or property in payment of or as security therefor
(provided that Great Lakes and any successor, assign or transferee of any
portion of Lakes Obligations may ask for or demand payments permitted to be paid
pursuant to this Section 2.1, and provided further that Great Lakes and each
successor, assign or transferee of any portion of the Lakes Obligations may make
any demand, give any notice or take any other action permitted by and in
accordance with the terms of the Management Agreement, the Development Agreement
or any other Lakes Transaction Document so long as such action is not prohibited
by this Agreement and the 2014 Notes Indenture). Without limiting the generality
of the foregoing, nothing in the Agreement shall limit, restrict or otherwise
impair any right of Great Lakes or any of its successor, assign and transferee
to terminate the
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Management Agreement, the Development Agreement or any other Lakes Transaction
Document in accordance with the terms thereof.
2.2 [INTENTIONALLY OMITTED].
2.3 SUBORDINATION TO FIRST LIEN SECURED OBLIGATIONS. Notwithstanding
Section 4.07 of the 2014 Notes Indenture and the payment priorities as specified
therein or any provision of the Management Agreement, Development Agreement,
Lakes Notes or any agreement and instruments referred to therein, all Lakes
Obligations shall be subordinate and junior in right of payment, to the extent
and in the manner set forth in this Section 2, to the Discharge of all First
Lien Secured Obligations. For avoidance of doubt, each of the First Lien Secured
Parties agrees that, subject to the provisions of Section 2.4, at any time prior
to the Discharge of the First Lien Secured Obligations, the Borrower may make,
and Great Lakes and each successor, assign or transferee of any portion of the
Lakes Obligations may receive and retain, payments with respect to the Lakes
Obligations, so long as such payments are permitted to be paid pursuant to, and
will not result in or cause an Event of Default under, the 2014 Notes Indenture.
2.4 DEFAULT ON FIRST LIEN SECURED OBLIGATIONS. In the event that any Event
of Default shall occur and be continuing with respect to the 2014 Notes
Indenture, or if any payment of Lakes Obligations would create an Event of
Default under the 2014 Notes Indenture, unless and until the prior Discharge of
all First Lien Secured Obligations, the right of Great Lakes to receive any
payments or other distributions with respect to Lakes Obligations as the case
may be shall be deferred during the continuance of such Event of Default.
2.5 DEFERRAL NOT A DEFAULT. Great Lakes agrees that any deferral pursuant
to this Section 2 of payment of any Lakes Notes shall not constitute a default
under the Management Agreement, Development Agreement, Lakes Notes, or any
agreement and instruments referred to therein so long as the 2014 Notes have not
been accelerated. For avoidance of doubt, the foregoing sentence shall not
limit, restrict or otherwise impair any right of Great Lakes or any of its
successors, assigns or transferees to terminate or exercise any other right or
remedy under the Management Agreement, the Development Agreement or any other
Transaction Documents (as defined in the Development Agreement) in accordance
with the terms thereof, other than as a result of such non-payment under the
Lakes Notes.
2.6 CONTINUING SUBORDINATION. The subordination effected by this Section 2
is a continuing subordination and may not be modified or terminated by Great
Lakes, any of its successors, assigns and transferees until the prior Discharge
of all First Lien Secured Obligations.
2.7 SUBORDINATION OF THE LAKES OBLIGATIONS UPON INSOLVENCY OR LIQUIDATION
PROCEEDING. Without limiting the application of Sections 7 or 8, in the event of
any distribution, division or application, partial or complete, voluntary or
involuntary, by operation of law or otherwise, of all or any part of the assets
of the Borrower or the proceeds thereof to creditors of the Borrower or upon any
Indebtedness of the Borrower, by reason of the liquidation, dissolution or other
winding up, partial or complete, of the Borrower, or any Insolvency or
Liquidation Proceeding, then and in any such event:
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2.7.1.1 The holders of First Lien Secured Obligations shall be
entitled to receive payment in full in cash of all such First Lien Secured
Obligation before Great Lakes, its successors, assigns and transferees shall
be entitled to receive any payment or other distributions on, or with respect
to, the Lakes Obligations;
2.7.1.2 Any payment or distribution of any kind or character, whether
in cash, securities or other property, which but for these provisions would
be payable or deliverable upon or with respect to the Lakes Obligations shall
instead be paid or delivered directly to the Collateral Agent for application
on the First Lien Secured Obligations, whether then due or not due, until
such First Lien Secured Obligations shall have first been Discharged;
2.7.1.3 Each of Great Lakes, its successors, assigns and transferees
hereby irrevocably authorizes and empowers the Collateral Agent, and appoints
the Collateral Agent as attorney-in-fact, to demand, xxx for, collect and
receive every such payment or distribution and give acquittance therefor, and
to file and vote claims (in bankruptcy proceedings or otherwise) and take
such other actions, in the Collateral Agent's own name or otherwise, as the
Collateral Agent may deem necessary or advisable for the enforcement of these
provisions. Great Lakes, its successors, assigns and transferees shall duly
and promptly take such action as may be reasonably requested by the
Collateral Agent to assist in the collection of the Lakes Obligations for the
account of any holder of the First Lien Secured Obligations, and to file
appropriate proofs of claim with respect to the Lakes Obligations and to vote
the same, and to execute and deliver to the Collateral Agent on demand such
powers of attorney, proofs of claim, assignments of claim or other
instruments as may be reasonably requested by the Collateral Agent to enable
the Collateral Agent or any other holder of First Lien Secured Obligations to
enforce any and all claims upon or with respect to the Lakes Obligations and
to collect and receive any and all payments or distributions which may be
payable or deliverable at any time upon or with respect to the Lakes
Obligations. In addition, none of Great Lakes, any of its successors, assigns
or transferees shall take any action (whether oral, written or otherwise) in
contravention of any action of the Collateral Agent duly taken and permitted
hereunder. Such appointment as attorney-in-fact pursuant to this Section
2.7.1.3 is irrevocable and coupled with an interest until payment in full in
cash and complete performance of all the First Lien Secured Obligations. The
Collateral Agent may appoint a substitute attorney-in-fact. Each of Great
Lakes, its successors, assigns and transferees ratifies all actions
reasonably taken by the attorney-in-fact but, nevertheless, if the Collateral
Agent requests, each of them will specifically ratify any action taken by the
attorney-in-fact by executing and delivering to the attorney-in-fact or to
any entity designated by the attorney-in-fact all documents necessary to
effect such ratification;
2.7.1.4 Following any Insolvency or Liquidation Proceedings or Event
of Default under the 2014 Notes Indenture, each of Great Lakes, its
successors, assigns and transferees will forthwith deliver any direct or
indirect payment thereafter made to it upon or with respect to the Lakes
Obligations prior to the Discharge of all First Lien Secured Obligations to
the Collateral Agent in precisely the form received (except for the
endorsement or assignment by Great Lakes and its successors, assigns and
transferees
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where necessary) for application on the First Lien Secured Obligations,
whether then due or not due. Until so delivered, the payment or distribution
shall be held in trust by Great Lakes, its successors, assigns and
transferees as property of the holders of the First Lien Secured Obligations.
In the event of the failure by Great Lakes, its successors, assigns and
transferees to make any such endorsement or assignment, the Collateral Agent,
or any of its officers or employees, are hereby irrevocably authorized to
make the same.
2.8 [INTENTIONALLY OMITTED].
2.9 JUDGMENT LIENS. In the event any of Great Lakes, its successors,
assigns and transferees becomes a judgment Lien creditor in respect of any
assets of the Borrower as a result of its enforcement of its rights as a
creditor with respect to the Lakes Obligations such judgment Lien shall be
subject to the terms of this Agreement for all purposes (including in relation
to the First Lien Secured Obligations) as the other Liens securing the Second
Lien Secured Obligations are subject to this Agreement.
2.10 WHEN PROCEEDS MUST BE PAID OVER. Any payment received by Great Lakes,
its successors, assigns and transferees (including, without limitation, payments
and prepayments made for application against the Lakes Secured Obligations)
prior to the Discharge of all First Lien Secured Obligations when such payment
is not expressly permitted by the terms of this Agreement or the 2014 Notes
Indenture shall be held in trust for the benefit of the holders of First Lien
Secured Obligations and shall be turned over to the Collateral Agent promptly
upon the request of the Collateral Agent.
2.11 SUBROGATION. With respect to the value of any payments or
distributions in cash, property or other assets that Great Lakes or any of its
successors, assigns and transferees pays over to the Collateral Agent or any of
the First Lien Secured Parties under the terms of this Agreement, Great Lakes
shall be subrogated to the rights of the Collateral Agent or such First Lien
Secured Parties; provided, however, that, Great Lakes and its successors,
assigns and transferees hereby agree not to assert or enforce all such rights of
subrogation it may acquire as a result of any payment hereunder until the
Discharge of all First Lien Secured Obligations has occurred. To the extent
permitted by applicable law, the value of any payments or distributions in cash,
property or other assets received by Great Lakes or its successors, assigns and
transferees that are paid over to the Collateral Agent or any First Lien Secured
Party pursuant to this Agreement shall not reduce any of the Lakes Obligations.
3. COLLATERAL AGENT.
3.1 APPOINTMENT. The 2014 Notes Indenture Trustee hereby designates U.S.
Bank National Association as the Collateral Agent to act as specified herein and
in each of the First Lien Security Documents. Each First Lien Secured Party
hereby irrevocably authorizes, and each holder of any instrument evidencing any
First Lien Obligations by the acceptance of such instrument evidencing any First
Lien Obligations shall be deemed irrevocably to authorize, the Collateral Agent
to take such action on its behalf under the provisions of this Agreement, the
First Lien Security Documents and any other instruments and agreements referred
to herein or therein and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Collateral Agent by the terms hereof and thereof and
14
such other powers as are reasonably incidental thereto. The Collateral Agent may
perform any of its duties hereunder or thereunder by or through its authorized
agents or employees.
3.2 NATURE OF DUTIES. The Collateral Agent shall have no duties or
responsibilities except those expressly set forth herein and in the First Lien
Security Documents. Neither the Collateral Agent nor any of its officers,
directors, employees or agents shall be liable for any action taken or omitted
by it as such hereunder or under the First Lien Security Documents or in
connection herewith or therewith to the maximum extent permitted by law. The
duties of the Collateral Agent shall be mechanical and administrative in nature.
The Collateral Agent shall not have, by reason of this Agreement, the First Lien
Security Documents, any Facility Agreement or any other document or instrument
or otherwise, a fiduciary relationship in respect of any First Lien Secured
Party; and nothing in this Agreement, the First Lien Security Documents, any
Facility Agreement or any other document or instrument, expressed or implied, is
intended to or shall be so construed as to impose upon the Collateral Agent any
obligations in respect of the First Lien Security Documents except as expressly
set forth herein or therein.
3.3 LACK OF RELIANCE ON THE COLLATERAL AGENT. Independently and without
reliance upon the Collateral Agent, each First Lien Secured Party, to the extent
it deems appropriate, has made and shall continue to make (a) its own
independent investigation of the financial condition and affairs of the Borrower
and their Affiliates in connection with the making and the continuance of the
Obligations and the taking or not taking of any action in connection therewith,
and (b) its own appraisal of the creditworthiness of the Borrower and their
Affiliates, and the Collateral Agent shall have no duty or responsibility,
either initially or on a continuing basis, to provide any First Lien Secured
Party with any credit or other information with respect thereto, whether coming
into its possession before the extension of any Obligations, or at any time or
times thereafter. The Collateral Agent shall not be responsible to any First
Lien Secured Party for any recitals, statements, information, representations or
warranties herein or in any document, certificate or other writing delivered in
connection herewith or for the execution, effectiveness, genuineness, validity,
enforceability, perfection, collectibility, priority or sufficiency of the First
Lien Security Documents, the First Lien Shared Collateral or the Shared
Collateral or the financial condition of the Borrower or any of their Affiliates
or be required to make any inquiry concerning either the performance or
observance of any of the terms, provisions or conditions of the First Lien
Security Documents, or the financial condition of the Borrower or their
Affiliates, or the existence or possible existence of any Event of Default.
3.4 CERTAIN RIGHTS OF THE COLLATERAL AGENT; PARI PASSU IN PRIORITY OF
LIENS; SEPARATE COLLATERAL.
3.4.1 Prior to the discharge of the First Lien Secured Obligations, no
Secured Party shall have the right to take any action with respect to (or
against) any Shared Collateral or First Lien Shared Collateral, but instead may
only cause the Collateral Agent to take any action with respect to (or against)
any Shared Collateral or First Lien Shared Collateral in accordance with the
terms and subject to the limitations set forth herein. Notwithstanding the
preceding sentence or any other provision of this Agreement to the contrary, the
2014 Notes Indenture Trustee (acting in accordance with the 2014 Notes
Indenture) shall have the right at any time to exercise any rights or remedies
with respect to the 2014 Notes Separate Collateral. If the Collateral Agent
shall request instructions from the Required Secured Parties with respect to
15
any act or action (including failure to act) in connection with this Agreement
or the First Lien Security Documents, the Collateral Agent shall be entitled to
refrain from such act or taking such action unless and until it shall have
received instructions from the Required Secured Parties and to the extent
requested, appropriate indemnification in respect of actions to be taken, and
the Collateral Agent shall not incur liability to any Secured Party or any other
Person by reason of so refraining. Without limiting the foregoing, no Secured
Party shall have any right of action whatsoever against the Collateral Agent as
a result of the Collateral Agent acting or refraining from acting (i) hereunder
in accordance with the instructions of the Required Secured Parties or (ii)
under any First Lien Security Document as provided for therein.
3.4.2 Notwithstanding anything to the contrary contained in this
Agreement, the Collateral Agent is authorized, but not obligated, (a) to take
any action reasonably required to perfect or continue the perfection of the
Liens on the First Lien Shared Collateral and the Shared Collateral for the
benefit of the First Lien Secured Parties, including entering into any Security
Document with respect to First Lien Shared Collateral or any other document in
connection with a Security Document, as secured party or beneficiary, as
applicable, on behalf of the applicable First Lien Secured Parties (and each
Project Credit Party, on behalf of the First Lien Secured Parties it represents,
agrees to be bound by such documents to the extent the Collateral Agent has
entered into such documents on behalf of such parties), and (b) when
instructions from the Required Secured Parties have been requested by the
Collateral Agent but have not yet been received, to take any action which the
Collateral Agent, in good faith, believes to be reasonably required to promote
and protect the interests of the First Lien Secured Parties in the First Lien
Shared Collateral and the Shared Collateral; provided that once instructions
have been received, the actions of the Collateral Agent shall be governed
thereby and the Collateral Agent shall not take any further action which would
be contrary thereto. In addition, once the Collateral Agent has been instructed
by the Required Secured Parties to commence enforcement proceedings under the
First Lien Security Documents, the Collateral Agent shall in good faith and in
the manner reasonably believed by the Collateral Agent to be in the interest of
the First Lien Secured Parties, promptly commence and diligently pursue to
completion the exercise of all rights and remedies available to the Collateral
Agent under the First Lien Security Documents, subject to the Collateral Agent's
right to request instructions and/or indemnities from the Required Secured
Parties as provided in Sections 3.4.1 and 3.4.3.
3.4.3 Notwithstanding anything to the contrary contained in this
Agreement, the Collateral Agent shall not be required to take any action that
exposes or, in the good faith judgment of the Collateral Agent may expose, the
Collateral Agent or its officers, directors, agents or employees to personal
liability unless the Collateral Agent shall be adequately indemnified as
provided herein or that is, or in the good faith judgment of the Collateral
Agent may be, contrary to the First Lien Security Documents or applicable law.
In addition, none of the provisions of this Agreement shall be construed to
require the Collateral Agent to expend or risk its own funds or otherwise to
incur any personal financial liability in the performance of any of its duties
hereunder or under the First Lien Security Documents, or in the exercise of any
of its rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or inadequate indemnity against such risk or liability
is not reasonably assured to it.
16
3.5 RELIANCE. The Collateral Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or facsimile message, cablegram, order
or other document or telephone message signed, sent or made by a Person believed
by it to be authorized to sign, send or make the same, and, with respect to all
legal matters pertaining to this Agreement or the First Lien Security Documents
and its duties hereunder and thereunder, upon the advice of counsel selected by
it.
3.6 INDEMNIFICATION. To the extent the Collateral Agent is not reimbursed
and indemnified by the Borrower under the respective First Lien Security
Documents to which they are a party, the Collateral Agent shall be entitled to
reimbursement from the proceeds of the First Lien Shared Collateral and the
Shared Collateral, but shall have no claim against any First Lien Secured Party
for reimbursement or indemnification.
3.7 COLLATERAL AGENT IN ITS INDIVIDUAL CAPACITY. The Collateral Agent may
accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with the Borrower or any of their Affiliates as
if it were not performing the duties specified herein or in the First Lien
Security Documents.
3.8 HOLDERS. The Collateral Agent may deem and treat the registered owner
of any 2014 Note as the owner thereof for all purposes hereof unless and until a
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Collateral Agent. Any request, authority
or consent of any person or entity who, at the time of making such request or
giving such authority or consent, is the registered owner of any 2014 Note shall
be final and conclusive and binding on any subsequent holder, transferee,
assignee or endorsee, as the case may be, of such 2014 Note.
3.9 RESIGNATION AND REMOVAL OF THE COLLATERAL AGENT.
3.9.1 The Collateral Agent may resign from the performance of all of
its functions and duties under the First Lien Security Documents at any time by
giving 30 days' prior written notice to the Borrower and each First Lien Secured
Parties and may be removed at any time, with or without cause, by the Required
First Lien Secured Parties.
3.9.2 Upon receiving notice of any such resignation or removal, a
successor Collateral Agent shall be appointed by the Required First Lien Secured
Parties; provided, however, that such successor Collateral Agent shall be (a) a
bank or trust company having a combined capital and surplus of at least
$500,000,000 subject to supervision or examination by a federal or state banking
authority, (b) authorized under the laws of the jurisdiction of its
incorporation or organization to assume the functions of the Collateral Agent
and (c) not disqualified to act in such capacity pursuant to applicable gaming
laws and regulations. If the appointment of such successor shall not have become
effective (as provided in Section 3.9.3) within such 30 day period after the
Collateral Agent shall have given such notice, then the Required First Lien
Secured Parties may petition a court of competent jurisdiction for the
appointment of a successor Collateral Agent. Such court shall, after such notice
as it may deem proper, appoint a successor Collateral Agent meeting the
qualifications specified in this Section 3.9.2. The First Lien Secured Parties
hereby consent to such petition and appointment so long as such criteria are
met.
17
3.9.3 The resignation of a Collateral Agent shall become effective on
the date specified in the notice provided in accordance with Section 3.9.1. The
removal of a Collateral Agent shall become effective only upon the execution and
delivery of such documents or instruments as are necessary to transfer the
rights and obligations of the Collateral Agent under the First Lien Security
Documents and the recording or filing of such documents, instruments or
financing statements as may be necessary to maintain the priority and perfection
of any security interest granted by any First Lien Security Document. Copies of
each such document or instrument shall be delivered to each Project Credit
Party. The appointment of a successor Collateral Agent pursuant to Section 3.9.2
shall become effective upon the acceptance of such appointment (and execution by
such successor of the documents, instruments or financing statements referred to
above) and such successor Collateral Agent shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Collateral
Agent and shall be deemed to be the "Collateral Agent" hereunder.
3.9.4 After any resignation or removal hereunder of the Collateral
Agent, the indemnification provisions of this Agreement shall continue to inure
to its benefit as to any actions taken or omitted to be taken by it in
connection with its agency hereunder while it was Collateral Agent.
4. COLLATERAL, PRIORITY, SUBORDINATION AND RELEASE OF LIENS.
4.1 LIENS AND SECURITY INTERESTS. The Project Credit Parties agree that
each Secured Party shall have the benefit of the following Liens on and security
interests in the Collateral:
4.1.1 COLLATERAL FOR 2014 NOTES SECURED OBLIGATIONS. The 2014 Notes
Secured Obligations shall be secured by a first priority Lien on and security
interest in the 2014 Notes Separate Collateral, the First Lien Shared Collateral
and the Shared Collateral, which first priority Lien and security interest in
the First Lien Shared Collateral and the Shared Collateral shall be pari passu
in priority with the Lien and security interest in the First Lien Shared
Collateral and the Shared Collateral securing the Obligations securing any
Permitted Additional Senior Secured Debt Agreement, subject to the sharing of
proceeds provisions hereof.
4.1.2 COLLATERAL FOR OTHER PERMITTED ADDITIONAL SENIOR SECURED DEBT.
The Permitted Additional Senior Secured Debt Agreements shall be secured by a
first priority Lien on and security interest in the First Lien Shared Collateral
and the Shared Collateral, which first priority Lien and security interest in
the First Lien Shared Collateral and the Shared Collateral shall be pari passu
in priority with the Lien and security interest in the First Lien Shared
Collateral and the Shared Collateral securing the 2014 Notes Secured
Obligations, subject to the sharing of proceeds provisions hereof.
4.1.3 COLLATERAL FOR LAKES SECURED OBLIGATIONS. The Lakes Secured
Obligations shall be secured by a second priority Lien on and second priority
security interest in the Shared Collateral, which second priority Lien and
second priority security interest in the Shared Collateral shall be pari passu
in priority with the Lien and security interest in the Shared Collateral
securing the Obligations securing any Permitted Additional Junior Secured
18
Debt Agreement, subject to the sharing of proceeds provisions hereof, and
subject and subordinate to the Lien and security interest in the Shared
Collateral securing the First Lien Secured Obligations.
4.1.4 COLLATERAL FOR PERMITTED ADDITIONAL JUNIOR SECURED DEBT. Any
Permitted Additional Junior Secured Debt Agreements shall be secured by a second
priority Lien on and security interest in the Shared Collateral, which second
priority Lien and security interest in the Shared Collateral shall be pari passu
in priority with the Lien and security interest in the Shared Collateral
securing the Lakes Secured Obligations, subject to the sharing of proceeds
provisions hereof and subject and subordinate to the Lien and security interest
in the Shared Collateral securing the First Lien Secured Obligations.
4.2 SEPARATE COLLATERAL. The 2014 Notes Separate Collateral secures only
the 2014 Notes Secured Obligations, and no other Secured Party shall have any
Liens thereon or any security interest therein. The First Lien Shared Collateral
secures only the First Lien Secured Obligations, and no other Secured Party
shall have any Liens thereon or any security interest therein.
4.3 CONFIRMATION OF LIENS. Each Secured Party hereby confirms and agrees
that the Liens and security interests held by or for the benefit of such Secured
Party in the Collateral, as provided for in the preceding provisions of this
Section 4, shall secure all Obligations of the Borrower now or hereafter owing
to such Secured Party in connection with the applicable Facility Agreement
throughout the term of this Agreement, in each case with the priority specified
in Section 4.1, notwithstanding (a) the availability of any other collateral to
any Secured Party, (b) the execution, delivery, recording, filing or perfection
of any of the Security Documents, or the order of such execution, delivery,
recording, filing or perfection or the priorities which would otherwise result
therefrom, (c) the fact that any Lien or security interest created by any of the
Security Documents, or any claim with respect thereto, is or may be
subordinated, avoided or disallowed in whole or in part under any Bankruptcy
Law, (d) the taking of possession of any Shared Collateral or any First Lien
Shared Collateral by any Project Credit Party (and such possession to be deemed
to be on behalf of all Project Credit Parties for purposes of perfecting the
security interest or Lien of each therein) or (e) any other matter whatsoever.
All provisions of this Agreement, including but not limited to, all matters
relating to the creation, validity, perfection, priority, subordination and
release of the Liens and security interests intended to be created by any
Security Document and all provisions regarding the allocation and priority of
payments with respect to any Class of Secured Obligations shall survive any
Insolvency or Liquidation Proceeding and be fully enforceable by and against
each Project Credit Party during any such proceeding. In the event of an
Insolvency or Liquidation Proceeding, each Secured Party further confirms and
agrees that the Obligations due and outstanding under and with respect to each
Class of Secured Obligations shall include all principal, additional advances
permitted thereunder, interest, default interest, London Interbank Offered Rate
(LIBOR) breakage and swap breakage, post petition interest and all other amounts
due thereunder, for periods before and for periods after the commencement of any
such proceedings, even if the claim for such amounts is disallowed pursuant to
applicable law, and all proceeds from the sale or other disposition of the
Collateral shall be paid to the Secured Parties in the order and priority
provided for in this Section 4 notwithstanding the disallowance of any such
claim or the invalidity or subordination of any Lien on or security interest in
the
19
Collateral under applicable law and further notwithstanding any release of any
such Lien or security interest pursuant to Section 4.4.
4.4 RELEASES
4.4.1 Great Lakes hereby represents and warrants that it has released
all Liens on collateral securing Lakes Secured Obligations not constituting the
Shared Collateral prior to the date hereof; Great Lakes further represents and
agrees that it shall not allow any collateral not constituting the Shared
Collateral to secure the Lakes Secured Obligations prior to the Discharge of the
First Lien Secured Obligations.
4.4.2 If in connection with the exercise of the First Lien Required
Secured Party's remedies in respect of any Shared Collateral as provided for in
Section 5.2, the Collateral Agent, on behalf of the First Lien Secured Parties,
releases its Liens on any part of the Shared Collateral, then the Liens of the
Second Lien Secured Parties on the Shared Collateral sold or disposed of in
connection with such exercise, shall be automatically, unconditionally and
simultaneously released. The Second Lien Secured Parties promptly shall execute
and deliver to the Collateral Agent such termination statements, releases and
other documents as the Collateral Agent may request to effectively confirm such
release.
4.4.3 If in connection with any sale, lease, exchange, transfer or
other disposition of any Shared Collateral permitted under Section 4.10 of the
2014 Notes Indenture, the Collateral Agent, on behalf of the Required First Lien
Secured Parties, releases its Liens on any part of the Shared Collateral, then
the Liens of the Second Lien Secured Parties on such Shared Collateral shall be
automatically, unconditionally and simultaneously released. The Second Lien
Secured Parties promptly shall execute and deliver to the Collateral Agent such
termination statements, releases and other documents as the Collateral Agent may
request to effectively confirm such release.
4.4.4 If in connection with the distribution by the Borrower of Net
Loss Proceeds (as defined in the 2014 Notes Indenture) from any Event of Loss of
any Shared Collateral as required under Section 4.30 of the 2014 Notes
Indenture, the Collateral Agent, on behalf of the Required First Lien Secured
Parties, releases its Liens on any part of the Shared Collateral, then the Liens
of the Second Lien Secured Parties on such Shared Collateral shall be
automatically, unconditionally and simultaneously released. The Second Lien
Secured Parties promptly shall execute and deliver to the Collateral Agent such
termination statements, releases and other documents as the Collateral Agent may
request to effectively confirm such release.
4.4.5 Until the Discharge of First Lien Secured Obligations shall
occur, each of the Second Lien Secured Parties hereby irrevocably constitutes
and appoints the Collateral Agent as its true and lawful attorney-in-fact with
full irrevocable power and authority in the place and stead of each of the
Second Lien Secured Parties for the purpose of carrying out the terms of this
Section 4.4, to take any and all appropriate action and to execute any and all
documents and instruments which may be necessary to accomplish the purposes of
this Section 4.4, including any endorsements or other instruments of transfer or
release.
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4.4.5 Notwithstanding the release of any Lien in accordance with this
Section 4, the proceeds of any Collateral released in accordance with this
Section 4 by any Secured Party or any successor, assign or transferee shall be
distributed in accordance with the terms of this Agreement.
5. RIGHTS AND LIMITATION OF ACTIONS WITH RESPECT TO COLLATERAL.
5.1 RIGHTS AND LIMITATIONS APPLICABLE TO SECOND LIEN SECURED PARTIES.
5.1.1 Subject to Section 5.1.2, at any time prior to the Discharge of
all First Lien Secured Obligations, the Second Lien Secured Parties shall not,
and shall not authorize or direct any other Person acting for them or to,
exercise any right or remedy with respect to any Collateral (including any right
of set-off) or take any action to enforce, collect or realize upon any
Collateral, including, without limitation, any right, remedy or action to:
(a) take possession of or control over any Collateral;
(b) exercise any collection rights in respect of any Collateral;
(c) exercise any right of set-off against any property subject to any
Lien securing any First Lien Secured Obligations;
(d) foreclose upon any Collateral or take or accept any transfer of
title in lieu of foreclosure upon any Collateral;
(e) enforce any claim to the proceeds of insurance upon any Collateral;
(f) deliver any notice, claim or demand relating to the Collateral to
any Person (including any securities intermediary, depositary bank
or landlord) in the possession or control of any Collateral or
acting as bailee, custodian or agent for any of the First Lien
Secured Obligations in respect of any Collateral;
(g) otherwise enforce any remedy available upon default for the
enforcement of any Lien upon any Collateral;
(h) deliver any notice or commence any proceeding for any of the
foregoing purposes;
(i) seek relief in any Insolvency or Liquidation Proceeding permitting
it to do any of the foregoing; or
(j) retain any proceeds of accounts and other obligations receivable
paid to it directly by any account debtor.
5.1.2 Notwithstanding the foregoing, nothing in this Section 5.1 shall
prohibit, limit or restrict Great Lakes or any successor, assign or transferee
of any portion of the Lakes Obligations from applying funds comprising
Collateral as contemplated by the Lakes
21
Transaction Documents, so long as such application is permitted by the 2014
Notes Indenture and this Agreement.
5.1.3 Notwithstanding Section 5.1.1, any right or remedy set forth in
clauses (a) through (j) thereof may be exercised and any such action may be
taken, authorized or instructed by the Second Lien Secured Parties as necessary
to redeem any Collateral in a creditor's redemption permitted by law or to
deliver (subject to the prior Discharge of the First Lien Secured Obligations)
any notice or demand necessary to enforce any right to claim, take or receive
proceeds of Collateral remaining after the Discharge of the First Lien Secured
Obligations in the event of foreclosure or other enforcement of any Lien
securing the First Lien Secured Obligations, so long as the enforcement of any
such Lien securing the First Lien Secured Obligations is not adversely affected
or delayed.
5.1.4 Notwithstanding Section 5.1.1, any right or remedy set forth in
clauses (a) through (j) thereof may be exercised and any such action may be
taken, authorized or instructed by the Second Lien Secured Parties:
(a) as necessary to perfect a Lien upon any Shared Collateral by any
method of perfection except through possession or control; or
(b) as necessary to create, prove, preserve or protect (but not enforce)
the Liens upon any Shared Collateral securing the Second Lien
Secured Obligations.
5.1.5 Nothing in this Agreement or any other Facility Agreement shall
affect the relative rights of the Second Lien Secured Parties, collectively, vis
a vis creditors of the Borrower (other than the First Lien Secured Parties).
5.2 RIGHTS AND LIMITATIONS APPLICABLE TO THE FIRST LIEN SECURED PARTIES.
5.2.1 At all times until Discharge of all First Lien Secured
Obligations, the Collateral Agent at the direction of the Required Secured
Parties shall have the exclusive right to manage, perform and enforce the terms
of the First Lien Security Documents with respect to all Shared Collateral and
to exercise and enforce all privileges and rights thereunder according to its
discretion and exercise of its business judgment, including, without limitation,
the exclusive right to take the actions enumerated in clauses (a) through (j) of
Section 5.1.1.
In connection therewith, provided that each of the First Lien Secured
Parties acts in a commercially reasonable manner and otherwise in accordance
with applicable law, each Second Lien Secured Party waives any and all rights to
affect the method or challenge the appropriateness of any action by the First
Lien Secured Parties and hereby consents to each of the First Lien Secured
Parties exercising or not exercising such rights and remedies as if no Lien
securing any Second Lien Secured Obligations existed, except only that the
Second Lien Secured Parties reserve all rights granted by law (i) to request or
receive notice of any sale of Shared Collateral in foreclosure of any Lien
securing the First Lien Secured Obligations and (ii) to redeem any Shared
Collateral or enforce any right to claim, take or receive proceeds of Shared
Collateral remaining after the Discharge of the First Lien Secured Obligations
as provided in Section 5.1.3.
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5.3 NOTIFICATION OF EVENTS OF DEFAULT. Each Project Credit Party hereby
agrees, for the benefit of each other Project Credit Party, to use its best
efforts to provide written notice to each other Project Credit Party within 10
Business Days after obtaining actual knowledge of the occurrence or assertion of
an Event of Default under their respective Facility Agreements. No Project
Credit Party shall have any liability to the other for failing to provide any
such notice.
5.4 CERTAIN WAIVERS BY SECOND LIEN SECURED PARTIES. To the fullest extent
permitted by law, the Second Lien Secured Parties waive and agree not to assert
or enforce, at any time prior to the Discharge of all First Lien Secured
Obligations:
(a) any right of subrogation to the rights or interests of the First
Lien Secured Parties or any claim or defense based upon impairment
of any such right of subrogation (it being understood and agreed
that the Second Lien Secured Parties shall have such subrogation
rights as substantially provided in Section 2.11);
(b) any right of marshalling accorded to a junior lienholder, as against
a priority lienholder, under equitable principles; and
(c) any statutory right of appraisal or valuation accorded to a junior
lienholder in a proceeding to foreclose a senior Lien;
in each case, that otherwise may be enforceable in respect of any Lien securing
any of the Second Lien Secured Obligations as against the First Lien Secured
Parties.
5.5 AGENT FOR PERFECTION. Each of the Project Credit Parties agrees to
hold all Collateral that is part of the Shared Collateral in its respective
possession, custody, or control (or in the possession, custody, or control of
agents or bailees for either, as applicable) as agent for itself and the other
Project Credit Parties solely for the purpose of perfecting the security
interest granted to each in such Collateral subject to the terms and conditions
of this Section 5.5. None of the Project Credit Parties shall have any
obligation whatsoever to the other Project Credit Parties to assure that the
Collateral is genuine or owned by the Borrower, or to preserve rights or
benefits of any Person. The duties or responsibilities of each Project Credit
Party under this Section 5.5 are and shall be limited solely to holding or
maintaining control of the Collateral as agent for itself and the others for
purposes of perfecting the Lien held by the Project Credit Parties. Persons
acting pursuant to this Section 5.5 are not and shall not be deemed to be
fiduciaries of any kind for any other Person.
5.6 WHEN PROCEEDS MUST BE PAID OVER. Any payment received by any Second
Lien Secured Party (including, without limitation, payments and prepayments made
for application against the Second Lien Secured Obligations and all other
payments and deposits made pursuant to any provision of any Permitted Additional
Junior Secured Debt Agreement or any Second Lien Security Document) prior to the
Discharge of all First Lien Secured Obligations when such payment is not
expressly permitted by the terms of this Agreement shall be held in trust for
the benefit of the First Lien Secured Parties and shall be turned over to the
Collateral Agent promptly upon the request of the Collateral Agent or any other
First Lien Secured Party.
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6. RIGHTS AND LIMITATIONS WITH RESPECT TO AMENDMENTS, WAIVERS AND OTHER
ACTIONS UNDER FACILITY AGREEMENTS.
6.1 RIGHTS AND LIMITATIONS APPLICABLE TO SECOND LIEN SECURED PARTIES.
Prior to the Discharge of the First Lien Secured Obligations, the Second Lien
Secured Parties will not enter into, authorize or direct, any amendment of or
supplement to any Second Lien Security Document relating to any Collateral that
would make such document inconsistent in any material respect with the
comparable provisions of the First Lien Security Document upon such Collateral.
For purposes of the foregoing, any provision granting rights or powers to any
Second Lien Secured Party that are not granted to the First Lien Secured Parties
will constitute a material inconsistency. For avoidance of doubt, each Project
Credit Party acknowledges and agrees (i) that certain inconsistencies referred
to in the Release and Indemnification Agreement, dated as of June 22, 2006, by
and among Lakes, Great Lakes, Banc of America Securities LLC, Banc of America
Leasing & Capital, LLC, Bank of America, N.A., Fifth Third Bank and U.S. Bank
National Association (the "RELEASE") exist between (A) the 2014 Notes Indenture
and other First Lien Security Documents, and (B) the Lakes Transaction Documents
and (ii) that the existence of such inconsistencies shall not be deemed a breach
of this Section 6.1.
6.2 RIGHTS AND LIMITATIONS APPLICABLE TO THE FIRST LIEN SECURED PARTIES.
6.2.1 The First Lien Secured Parties may at any time and from time to
time, without the consent of or notice to any Second Lien Secured Party, without
incurring any responsibility or liability to any Second Lien Secured Party and
without in any manner prejudicing, affecting or impairing the ranking or
priority of the Liens and the security interests in the Collateral created by
the First Lien Security Documents or the rights and obligations of the Project
Credit Parties hereunder, take (or instruct the Collateral Agent to take) any of
the following, subject to the provisions of Section 5.2:
(a) make loans and advances to the Borrower or issue, guaranty or obtain
letters of credit for account of the Borrower or otherwise extend
credit to the Borrower in any amount and on any terms, whether
pursuant to a commitment or as a discretionary advance and whether
or not any default or Event of Default or failure of condition is
then continuing;
(b) change the manner, place or terms of payment or extend the time of
payment of, or renew or alter, compromise, accelerate, extend or,
subject to Section 10.14, refinance any First Lien Secured
Obligations or any agreement, guaranty, Lien or obligation of the
Borrower or any other Person in any manner related thereto, or
otherwise amend, supplement or change in any manner any First Lien
Secured Obligations or Liens securing First Lien Secured Obligations
or any such agreement, guaranty, Lien or obligation;
(c) increase or reduce the amount of any First Lien Secured Obligation
or the interest, premium, fees or other amounts payable in respect
thereof;
24
(d) release or discharge any First Lien Secured Obligation or any
guaranty thereof or any agreement or obligation of the Borrower or
any other Person with respect thereto;
(e) take or fail to take any first priority Lien or any other collateral
security for any First Lien Secured Obligation or take or fail to
take any action which may be necessary or appropriate to ensure that
any Lien securing a First Lien Secured Obligation or any other Lien
upon any property is duly enforceable or perfected or entitled to
priority as against any other Lien or to ensure that any proceeds of
any property subject to any Lien are applied to the payment of any
First Lien Secured Obligation or any other obligation secured
thereby;
(f) release, discharge or permit the lapse of any or all Liens securing
a First Lien Secured Obligation or any other Liens upon any property
at any time;
(g) exercise or enforce, in any manner, order or sequence, or fail to
exercise or enforce, any right or remedy against the Borrower or any
collateral security or any other Person or property in respect of
any First Lien Secured Obligation or any Lien securing any First
Lien Secured Obligation or any right or power under the First Lien
Security Documents and hereunder and apply any payment or proceeds
of collateral in any order of application; or
(h) sell, exchange, release, foreclose upon or otherwise deal with any
property that may at any time be subject to any Lien securing any
First Lien Secured Obligation.
6.2.2 No (a) exercise, delay in exercising or failure to exercise any
right arising under the First Lien Security Documents or this Agreement, (b) act
or omission of any First Lien Secured Party in respect of the Borrower or any
other Person or any collateral security for any First Lien Secured Obligation or
any right arising under the First Lien Security Documents and hereunder, (c)
change, impairment, or suspension of any right or remedy of any First Lien
Secured Party, or (d) other act, failure to act, circumstance, occurrence or
event, including, without limitation, the acts listed in Section 6.2.1, which,
but for this provision, would or could act as a release or exoneration of the
agreements or obligations of any Second Lien Secured Party hereunder shall in
any way affect, decrease, diminish or impair any of such agreements or
obligations, including, without limitation, the Lien subordination provisions
and the standstill obligations set forth in Sections 4.1 and 5.1.
6.3 WAIVERS AND DEFERRALS OF PAYMENTS. Any Project Credit Party may,
without the consent of the other Project Credit Parties, defer any payments due
under its Class of Secured Obligations or waive any provisions thereof.
6.4 LIMITATION OF LIABILITY
6.4.1 Except as expressly set forth herein (and, with respect to any
rights or obligations among Secured Parties within the same Class, in their
respective Facility
25
Agreements), no Secured Party will have any duty, express or implied, fiduciary
or otherwise, to any other Secured Party.
6.4.2 To the maximum extent permitted by law, each Second Lien Secured
Party waives any claim it may have against any First Lien Secured Party with
respect to or arising out of any action or failure to act or any error of
judgment or negligence (but not gross negligence, willful misconduct or any
breach of this Agreement) on the part of any First Lien Secured Party or their
respective directors, officers, employees or agents with respect to any exercise
of rights or remedies in respect of the Secured Obligations or under any
Security Documents or any transaction relating to the Collateral. Neither any
First Lien Secured Party nor any of their respective directors, officers,
employees or agents will be liable for failure to demand, collect or realize
upon any of the Collateral or for any delay in doing so, except to the extent
arising out of breach of this Agreement by or out of the gross negligence or
willful misconduct of such Secured Party or any of their respective directors,
officers, employees or agents, or will be under any obligation to sell or
otherwise dispose of any Collateral upon the request of the Borrower or upon the
request of any Second Lien Secured Party or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof.
6.4.3 Each Second Lien Secured Party (subject to its respective
Facility Agreement) shall be responsible for keeping itself informed of the
financial condition of the Borrower and its Affiliates and all other
circumstances bearing upon the risk of nonpayment of any Secured Obligations.
Except as set forth in Section 5.3, no First Lien Secured Party shall have any
duty to advise any other Project Credit Party of information regarding such
condition or circumstances or as to any other matter. Subject, with respect to
any rights and obligations among Secured Parties of the same Class, to the
provisions of their respective Facility Agreements, if any Secured Party, in its
sole discretion, undertakes at any time or from time to time to provide any such
information to any other Secured Party, it shall be under no obligation to
provide any similar information on any subsequent occasion, to provide any
additional information, or undertake any investigation, or to disclose any
information which, pursuant to accepted or reasonable commercial finance
practice, it wishes to maintain confidential.
7. INSOLVENCY OR LIQUIDATION PROCEEDINGS
7.1 RIGHT TO FILE INVOLUNTARY BANKRUPTCY. Notwithstanding any other
provision of this Agreement to the contrary, any Project Credit Party shall be
entitled, at any time and at its sole discretion, to initiate or join as a
petitioning creditor in an involuntary Insolvency or Liquidation Proceeding
against the Borrower; provided, however, that, until the prior Discharge of all
First Lien Secured Obligations, none of the Second Lien Secured Party shall,
without the prior written consent of the Collateral Agent, acting at the
direction of the Required First Lien Secured Parties, initiate or join as a
petitioning creditor in an involuntary Insolvency or Liquidation Proceeding
against the Borrower.
7.2 CERTAIN AGREEMENTS AND CONSENTS BY SECOND LIEN SECURED PARTIES.
7.2.1 At no time prior to the Discharge of all First Lien Secured
Obligations shall any Second Lien Secured Party:
26
(a) request judicial relief in an Insolvency or Liquidation Proceeding
or in any other court, that would hinder, delay, limit or prohibit
the exercise or enforcement of any right or remedy otherwise
available to the holders of First Lien Secured Obligations that
would limit, invalidate, avoid or set aside any Lien securing the
First Lien Secured Obligations or subordinate the Lien securing the
First Lien Secured Obligations to the Liens securing the Second Lien
Secured Obligations or grant the Liens securing the Second Lien
Secured Obligations equal ranking to the Liens securing the First
Lien Secured Obligations;
(b) oppose or otherwise contest any motion for relief from the automatic
stay or from any injunction against foreclosure or enforcement of
Liens securing the First Lien Secured Obligations made by any holder
of First Lien Secured Obligations in any Insolvency or Liquidation
Proceeding;
(c) oppose or otherwise contest any exercise by any holder of First Lien
Secured Obligations of the right to credit bid First Lien Secured
Obligations at any sale in foreclosure of Lien securing the First
Lien Secured Obligations; or
(d) oppose or otherwise contest any other request for judicial relief
made in any court by any holder of First Lien Secured Obligations
relating to the enforcement of any Lien securing the First Lien
Secured Obligations.
7.2.2 If, in any Insolvency or Liquidation Proceeding prior to the
Discharge of all First Lien Secured Obligations, the First Lien Secured Parties:
(a) consent to any order for use of cash collateral for payment of (i)
expenses reasonably necessary or appropriate for the conduct of the
Project or for the preservation of the Collateral, (ii) debt secured
by Liens upon the Shared Collateral that are senior to the Liens
securing the Second Lien Secured Obligations or (iii) administrative
expenses arising in connection with the Insolvency or Liquidation
Proceeding;
(b) consent to any order granting any priming Lien, replacement Lien,
cash payment or other relief on account of First Lien Secured
Obligations as adequate protection (or its equivalent) for the
interests of the First Lien Secured Parties in property subject to
the Liens securing the First Lien Secured Obligations in connection
with any order for use of cash collateral; or
(c) consent to any order relating to any sale of assets of the Borrower
and providing, to the extent the sale is to be free and clear of
Liens, that all such Liens shall attach to the proceeds of the sale
(except that the First Lien Secured Parties need not admit, consent
to or support any valuation of the Collateral alleged in support of
the allowance of any secured claim based upon the Liens securing the
Second Lien Secured Obligations),
27
then, the Second Lien Secured Parties will not oppose or otherwise contest the
entry of such order, except that any such order relating to a sale of assets may
be opposed or otherwise contested by them based on any ground that may be
asserted by a holder of unsecured claims (but not on any grounds arising from or
relating to any Lien securing the Second Lien Secured Obligations or any secured
claim or secured creditor rights based on any Lien securing the Second Lien
Secured Obligations, provided that such sale is conducted in a commercially
reasonable manner and otherwise in accordance with applicable law).
7.2.3 If, in any Liquidation or Insolvency Proceeding, debt
obligations of the reorganized debtor secured by Liens upon any property of the
reorganized debtor are distributed pursuant to a plan of reorganization or
similar dispositive restructuring plan, on more than one Class of Secured
Obligations, then, to the extent the debt obligations distributed on such
account are secured by Liens upon the same property, the provisions of this
Agreement will survive the distribution of such debt obligations pursuant to
such plan and will apply with like effect to the Liens securing such debt
obligations.
7.2.4 The Second Lien Secured Parties will not assert or enforce, at
any time prior to the Discharge of the First Lien Secured Obligations, any claim
under Section.506(c) of the United States Bankruptcy Code with respect to the
Liens securing the First Lien Secured Obligations for costs or expenses of
preserving or disposing of any Shared Collateral.
7.2.5 If, for purposes of valuation of the secured claims of the First
Lien Secured Parties in any Insolvency or Liquidation Proceeding, the First Lien
Secured Parties determine, and the Collateral Agent or any other First Lien
Secured Party notifies any Project Credit Party on behalf of any Class of Second
Lien Secured Obligations, that the Collateral should be valued as of any
particular time in the period from the date of commencement of such Insolvency
or Liquidation Proceeding to the date of confirmation of any plan of
reorganization or other dispositive restructuring plan therein, then the Second
Lien Secured Parties shall not oppose or otherwise contest that the date as of
which such secured claims should be valued is the date chosen by the First Lien
Secured Parties. The Second Lien Secured Parties shall not have the right to
assert the lack of adequate protection of their Liens or the collateral securing
the Second Lien Secured Obligations as a basis for opposing a motion or other
relief sought in any Insolvency or Liquidation Proceeding and approved by the
First Lien Secured Parties.
7.2.6 If, in connection with the approval by creditors of any plan of
reorganization or other dispositive restructuring plan in any Insolvency or
Liquidation Proceeding, either:
(a) secured claims based upon the Second Lien Secured Obligations are
classified in the same class of secured claims as secured claims
based upon the First Lien Secured Obligations; or
(b) secured claims based upon the Second Lien Secured Obligations are
classified in a separate class from secured claims based upon the
First Lien Secured Obligations and are treated under such plan as an
impaired secured class, and such plan could not lawfully be
confirmed or approved by the court in such Insolvency or Liquidation
Proceeding unless the class
28
of secured claims based upon the Second Lien Secured Obligations
votes, as a class or as classes, to accept such plan;
then the holders of secured claims based upon the Second Lien Secured
Obligations shall not vote such secured claims to accept such plan if: (i) the
Collateral Agent or any other First Lien Secured Party notifies the holders of
such secured claims (in such manner and to such Person at such addresses as each
Project Credit Party on behalf of any Class of Second Lien Secured Obligations
may direct), at least 5 Business Days before ballots are due in the voting on
such plan, that fewer than the holders of two-thirds in amount of secured claims
based upon the 2014 Notes Secured Obligations or fewer than the holders of
two-thirds in amount of secured claims based upon Obligations under any
Permitted Additional Senior Secured Debt Agreement will vote, in each case as a
separate class (or as if they were a separate class), to accept such plan, (ii)
such notice is not withdrawn by the Collateral Agent or any other First Lien
Secured Party by written notice to such Project Credit Party (or, if required by
law, to the holders of such secured claims) and (iii) such plan is not accepted
by the holders of secured claims based upon the First Lien Secured Obligations
voting as a separate class (or as if they were a separate class).
The Project Credit Party on behalf of each Class of Second Lien Secured
Obligations shall provide the Collateral Agent with such information as may be
available to such Project Credit Party as to the names and notice addresses of
the holders of secured claims based upon such Class of Second Lien Secured
Obligations. The notice described in clause (i) of the preceding paragraph shall
be conclusively deemed sufficiently given if mailed by ordinary mail, postage
prepaid, to such names and addresses. No ballot voting a secured claim based
upon any of the Second Lien Secured Obligations shall be delivered in respect of
any such plan by any holder of secured claims based upon any of the Second Lien
Secured Obligations prior to the last date on which the notice described in
clause (i) may be given. Any ballot cast in violation of this Section 7.2.6 will
be invalid.
7.2.7 Until the Discharge of the First Lien Secured Obligations has
occurred, if the Borrower shall be subject to any Insolvency or Liquidation
Proceeding and the Collateral Agent shall, acting in accordance with the First
Lien Documents, agree to permit the use of "Cash Collateral" (as such term is
defined in Section 363(a) of the Bankruptcy Code), on which a Lien has been
granted to the Collateral Agent pursuant to the First Lien Documents or to
permit the Borrower to obtain financing, whether from any of the First Lien
Secured Parties or any other Person under Section 364 of the Bankruptcy Code or
any similar Bankruptcy Law ("DIP FINANCING"), then each Second Lien Secured
Party agrees that it will raise no objection to such Cash Collateral use or DIP
Financing so long as such Cash Collateral use or DIP Financing meet the
following requirements: (i) it is on commercially reasonable terms, (ii) each
Second Lien Secured Party retains the right to object to any ancillary
agreements or arrangements regarding the Cash Collateral use or the DIP
Financing that are materially prejudicial to their interests in the Shared
Collateral, and (iii) the terms of the DIP Financing (a) do not compel the
Borrower to seek confirmation of a specific plan of reorganization for which all
or substantially all of the material terms are set forth in the DIP Financing
documentation or a related document and (b) do not expressly require the
liquidation of the Shared Collateral prior to a default under the DIP Financing
documentation or Cash Collateral order. To the extent the Liens securing the
First Lien Secured Obligations are subordinated to or pari passu with such DIP
Financing which meets the requirements of clauses (i) through (iii) above, each
Second Lien Secured Party will
29
subordinate any Liens in the Shared Collateral to the Liens securing such DIP
Financing (and all Obligations relating thereto). Each Second Lien Secured Party
agrees that, so long as it is actually receiving adequate protection on a
current basis (and cash payments included therein are not being deferred), it
shall not directly or indirectly propose or support any DIP Financing which the
Collateral Agent on behalf of the First Lien Secured Parties has not approved.
For purposes of this Section 7.2.7 only, any adequate protection that is either
not requested or affirmatively waived by the Second Lien Secured Parties shall
be deemed to be received by the Second Lien Secured Parties. If the bankruptcy
court hearing any motion of the Second Lien Secured Parties for allowance of
adequate protection does not approve same, such disapproval shall constitute a
failure to receive same under this Section 7.2.7, unless cured by the Collateral
Agent on behalf of the First Lien Secured Parties, who shall have the right but
not the obligation to do so.
8. APPLICATION OF PROCEEDS OF SHARED COLLATERAL.
8.1 APPLICATION OF PROCEEDS GENERALLY. Other than (i) the Net Proceeds
from any Asset Sale and (ii) the Net Loss Proceeds from any Event of Loss, in
each case involving any or all of the Shared Collateral or the First Lien Shared
Collateral, both of which shall be applied in accordance with the 2014 Notes
Indenture or, in the case of any such Net Loss Proceeds prior to the termination
of the Disbursement Agreement, in accordance with the Disbursement Agreement,
all monies collected by the Collateral Agent or any other Secured Party upon any
sale or other disposition of any Shared Collateral or any First Lien Shared
Collateral pursuant to the enforcement of any of the First Lien Security
Documents with respect to Shared Collateral or First Lien Shared Collateral or
the exercise of any of the remedial provisions thereof, together with all other
monies received by the Collateral Agent or any other Secured Party hereunder or
under any Security Document with respect to Shared Collateral or First Lien
Shared Collateral as a result of any such enforcement or the exercise of any
such remedial provisions or as a result of any distribution of any Shared
Collateral or any First Lien Shared Collateral upon the bankruptcy, arrangement,
receivership, assignment for the benefit of creditors or any other action or
proceeding involving the readjustment of the obligations and Indebtedness of the
Borrower, or the application of any Shared Collateral or any First Lien Shared
Collateral to the payment thereof or any distribution of the Shared Collateral
or the First Lien Shared Collateral upon the liquidation or dissolution of the
Borrower, or the winding up of the assets or business of the Borrower, or any
distribution made on or in connection with any Facility Agreement or otherwise
payable under any Security Document with respect to Shared Collateral or the
First Lien Shared Collateral Shared Collateral shall be applied as follows:
With respect to Shared Collateral:
(a) first, to the payment of all amounts owing to the Collateral Agent
in the event of any proceeding for the collection or enforcement of
any Indebtedness or payment obligations of the Borrower, after an
Event of Default under the 2014 Notes Indenture shall have occurred
and be continuing, the reasonable expenses of re-taking, holding,
preparing for sale or lease, selling or otherwise disposing of or
realizing on the Shared Collateral, or of any exercise by the
Collateral Agent of its rights
30
hereunder or under the First Lien Security Documents with respect to
Shared Collateral, together with reasonable attorneys' fees and
court costs;
(b) second, to the extent proceeds remain after the application pursuant
to the preceding clause (a), an amount equal to the outstanding
Primary Obligations shall be paid to the First Lien Secured Parties
as provided in Section 8.2, with each Class of First Lien Secured
Parties collectively receiving an amount equal to their respective
aggregate outstanding Primary Obligations or, if the proceeds are
insufficient to pay in full in cash all such Primary Obligations,
their respective Pro Rata Share of the amount remaining to be
distributed;
(c) third, to the extent proceeds remain after the application pursuant
to the preceding clauses (a) and (b), an amount equal to the
outstanding Secondary Obligations shall be paid to the First Lien
Secured Parties as provided in Section 8.2, with each Class of First
Lien Secured Parties collectively receiving an amount equal to their
respective aggregate outstanding Secondary Obligations or, if the
proceeds are insufficient to pay in full in cash all such Secondary
Obligations, their respective Pro Rata Share of the amount remaining
to be distributed;
(d) fourth, to the extent proceeds remain after the application pursuant
to the preceding clauses (a) through (c), inclusive, an amount equal
to the outstanding Primary Obligations shall be paid to the Second
Lien Secured Parties as provided in Section 8.2, with each Class of
Second Lien Secured Parties collectively receiving an amount equal
to their respective aggregate outstanding Primary Obligations or, if
the proceeds are insufficient to pay in full all such Primary
Obligations, their respective Pro Rata Share of the amount remaining
to be distributed;
(e) fifth, to the extent proceeds remain after the application pursuant
to the preceding clauses (a) through (d), inclusive, an amount equal
to the outstanding Secondary Obligations shall be paid to the Second
Lien Secured Parties as provided in Section 8.2, with each Class of
Second Lien Secured Parties collectively receiving an amount equal
to their respective aggregate outstanding Secondary Obligations or,
if the proceeds are insufficient to pay in full in cash all such
Secondary Obligations, their respective Pro Rata Share of the amount
remaining to be distributed;
(f) sixth, to the extent proceeds remain after the application pursuant
to the preceding clauses (a) through (e), inclusive, and following
the termination of this Agreement pursuant to the terms hereof, to
the Borrower under its respective Security Documents, or to whomever
may be lawfully entitled to receive such surplus;
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With respect to First Lien Shared Collateral:
(a) first, to the payment of all amounts owing to the Collateral Agent
in the event of any proceeding for the collection or enforcement of
any Indebtedness or payment obligations of the Borrower, after an
Event of Default shall have occurred and be continuing, the
reasonable expenses of re-taking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the First
Lien Shared Collateral, or of any exercise by the Collateral Agent
of its rights hereunder or under the First Lien Security Documents
with respect to First Lien Shared Collateral, together with
reasonable attorneys' fees and court costs;
(b) second, to the extent proceeds remain after the application pursuant
to the preceding clause (a), an amount equal to the outstanding
Primary Obligations shall be paid to the First Lien Secured Parties
as provided in Section 8.2, with each Class of First Lien Secured
Parties collectively receiving an amount equal to their respective
aggregate outstanding Primary Obligations or, if the proceeds are
insufficient to pay in full in cash all such Primary Obligations,
their respective Pro Rata Share of the amount remaining to be
distributed;
(c) third, to the extent proceeds remain after the application pursuant
to the preceding clauses (a) and (b), an amount equal to the
outstanding Secondary Obligations shall be paid to the First Lien
Secured Parties as provided in Section 8.2, with each Class of First
Lien Secured Parties collectively receiving an amount equal to their
respective aggregate outstanding Secondary Obligations or, if the
proceeds are insufficient to pay in full in cash all such Secondary
Obligations, their respective Pro Rata Share of the amount remaining
to be distributed;
(d) fourth, to the extent proceeds remain after the application pursuant
to the preceding clauses (a) through (c), inclusive, and following
the termination of this Agreement pursuant to the terms hereof, to
the Borrower under its respective Security Documents, or to whomever
may be lawfully entitled to receive such surplus.
8.2 CERTAIN TERMS. For purposes of this Agreement (a) "PRO RATA SHARE"
means, when calculating each Class of Secured Parties' respective portions of
any distribution or amount, the amount (expressed as a percentage) equal to a
fraction the numerator of which is the then aggregate unpaid amount of the
Primary Obligations or Secondary Obligations, as the case may be, owed to such
Class of Secured Parties and the denominator of which is the then outstanding
amount of all Primary Obligations or Secondary Obligations, as the case may be,
(b) "PRIMARY OBLIGATIONS" means all Obligations under such Class of Secured
Obligations, in each case excluding indemnities, fees (including, without
limitation, attorneys' fees) and similar obligations and liabilities (except,
with respect to Great Lakes or any successor, assign or transferee of any
portion of the Lakes Obligations, "Primary Obligations" shall include, without
limitation, the management fee and other Management Agreement Obligations) and
(c)
32
"SECONDARY OBLIGATIONS" means all other obligations owed to such Class of
Secured Parties other than Primary Obligations; provided, however, that the
principal amount will be calculated without duplication of the underlying
obligation for any guarantees.
8.3 SHARING OF NON-PRO RATA PAYMENTS. Each First Lien Secured Party agrees
that in the event any First Lien Secured Party shall obtain payment that is not
a Pro Rata Payment of any amounts due to it on or in respect of any First Lien
Secured Obligations and such payment arises from the items or circumstances
listed in items (a), (b) or (c) below, then such First Lien Secured Party shall
promptly remit to the Collateral Agent for distribution to other First Lien
Secured Parties the portion of such payment necessary to ensure that each First
Lien Secured Party shall have received a Pro Rata Payment; provided that, if at
such time redistribution of such payment in such manner is inadvisable in the
reasonable judgment of the Collateral Agent, then at the request of such First
Lien Secured Party, the Project Credit Parties representing such First Lien
Secured Parties shall promptly consult with each other to determine whether
there is a preferable manner to make equitable adjustments (including the
purchase by such First Lien Secured Parties) to permit all First Lien Secured
Parties to share such payment (net of expenses incurred by the recipient First
Lien Secured Party in obtaining or preserving such payment) pro rata (in
accordance with the definition of Pro Rata Payment). If any such redistributed
or shared payment is rescinded or must otherwise be restored by the First Lien
Secured Party who originally obtained such payment, then each First Lien Secured
Party which shares the benefit of such payment shall return to such First Lien
Secured Party its portion of the payment so rescinded or required to be
restored. The payments that are subject to the foregoing provisions are those
that: (a) arise from any exercise of a right of setoff, banker's Lien or
counterclaim, or from any security or from any realization (whether through
attachment, foreclosure or otherwise) of assets of the Borrower, (b) are made
after an Event of Default has occurred and is continuing, or (c) are made in
connection with the events or circumstances described in Section 3.08 of the
2014 Notes Indenture, but in the case of this clause (c), only to the extent
that a prepayment of principal outstanding under any Class of First Lien Secured
Obligations is required in connection with the same events or circumstances.
8.4 OVERPAYMENTS. When payments to Secured Parties are based upon their
respective Pro Rata Shares, the amounts received by such Secured Parties
hereunder shall be applied (for purposes of making determinations under this
Section 8 only) (a) first, to their Primary Obligations and (b) second, to their
Secondary Obligations. If any payment to any Secured Party of its Pro Rata Share
of any distribution would result in overpayment to such Secured Party, then (x)
such Secured Party shall promptly notify the other Secured Parties within the
same Class as such Secured Party of such overpayment and (y) the amount of such
overpayment shall instead be distributed in respect of the unpaid Primary
Obligations or Secondary Obligations, as the case may be, of the other Secured
Parties of such Class. Each Secured Party of such Class whose Primary
Obligations or Secondary Obligations, as the case may be, have not been paid in
full shall receive an amount equal to such overpayment amount multiplied by a
fraction the numerator of which is the unpaid Primary Obligations or Secondary
Obligations, as the case may be, of such Secured Party and the denominator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of all Secured Parties entitled to such distributions.
33
8.5 PAYMENT TO CLASS REPRESENTATIVES. All payments required to be made
under this Section 8 shall be made, with respect to each Class of Secured
Parties, to the Project Credit Party acting on behalf of such Class. Each such
Project Credit Party shall apply such funds in accordance with its respective
Facility Agreement.
9. REPRESENTATIONS AND WARRANTIES. Each party hereto represents and warrants
to each other party as follows:
9.1 ORGANIZATION. It is duly organized and is validly existing under the
laws of the jurisdiction under which it was organized with full power to
execute, deliver, and perform this Agreement and consummate the transactions
contemplated hereby.
9.2 AUTHORIZATION. All actions necessary to authorize the execution,
delivery and performance of this Agreement on behalf of such party have been
duly taken, and all such actions continue in full force and effect as of the
date hereof.
9.3 BINDING AGREEMENT. It has duly executed and delivered this Agreement
and this Agreement constitutes the legal, valid, and binding agreement of such
party enforceable in accordance with its terms and subject to (a) Bankruptcy
Laws, and (b) principles of equity, which may apply regardless of whether a
proceeding is brought in law or in equity.
9.4 NO CONSENT REQUIRED. To the best of its knowledge, no consent of any
other party (other than any consent that would otherwise be required to avoid
conflicts referred to in the Release) and no consent, license, approval, or
authorization of, or exemption by, or registration or declaration or filing
with, any governmental authority, bureau or agency is required in connection
with the execution, delivery, or performance by such party of this Agreement or
consummation by such party of the transactions contemplated by this Agreement.
9.5 NO CONFLICT. None of the execution, delivery, and performance of this
Agreement nor the consummation of the transactions contemplated by this
Agreement will (a) violate or conflict with any provision of the organizational
or governing documents, if any, of such party; (b) to the best of its knowledge,
violate, conflict with, or result in the breach or termination of, or otherwise
give any other contracting party the right to terminate, or constitute (or with
notice or lapse of time, or both, would constitute) a default under the terms of
any contract, mortgage, lease, bond, indenture, agreement, or other instrument
to which such party is a party or to which any of its properties are subject,
other than certain conflicts with the Lakes Transaction Documents referred to in
the Release, it being acknowledged that the performance of this Agreement and
the consummation of the transactions contemplated by this Agreement may
conflict; (c) to the best of its knowledge, result in the creation of any Lien,
charge, encumbrance, mortgage, lease, claim, security interest, or other right
or interest upon the properties or assets of such party pursuant to the terms of
any such contract, mortgage, lease, bond, indenture, agreement, franchise, or
other instrument; (d) violate any judgment, order, injunction, decree, or award
of any court, arbitrator, administrative agency, or governmental or regulatory
body of which it has knowledge against, or binding upon such party or upon any
of the securities, properties, assets, or business of such party; or (e) to the
best of its knowledge, constitute a violation by such party of any statute, law,
or regulation that is applicable to such party.
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10. MISCELLANEOUS PROVISIONS.
10.1 NOTICES; ADDRESSES. Any communications between the Project Credit
Parties hereto or notices herein to be given may be given to the following
addressees:
If to the 2014 Notes Indenture Trustee: U.S. Bank National Association
Corporate Trust Services
EP-MN-WS3C
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx
If to Great Lakes: Great Lakes Gaming of Michigan, LLC
Lakes Entertainment, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxx, President
with a copy to:
Lakes Entertainment, Inc.
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxxx 00000
Facsimile: [__]
Attention: [Xxxxx Xxxxxxx]
with a copy to:
[Xxxxxxxx Xxxxxxx & Xxxxx, PLC]
First Xxxxxxxx Xxxx Xxxxxxxx, Xxxxx
X0000
000 Xxxxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxx 00000
Facsimile: [__]
Attention: Xxxxx Xxxxxxx
with a copy to:
Xxxx, Plant, Xxxxx, Xxxxx & Xxxxxxx,
P.A.
500 IDS Center
00 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxxxx
35
If to the Collateral Agent: U.S. Bank National Association
Corporate Trust Services
EP-MN-WS3C
00 Xxxxxxxxxx Xxxxxx
Xx. Xxxx, Xxxxxxxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxxxxxx
All notices or other communications required or permitted to be given hereunder
shall be in writing and shall be considered as properly given (a) if delivered
in person, (b) if sent by reputable overnight delivery service, (c) in the event
overnight delivery services are not readily available, if mailed by first class
mail, postage prepaid, registered or certified with return receipt requested or
(d) if sent by prepaid telex, or by telecopy with correct answer back received.
Notice so given shall be effective upon receipt by the addressee, except that
any communication or notice so transmitted by telecopy or other direct written
electronic means shall be deemed to have been validly and effectively given on
the day (if a Business Day and, if not, on the next following Business Day) on
which it is validly transmitted if transmitted before 4 p.m., recipient's time,
and if transmitted after that time, on the next following Business Day;
provided, however, that if any notice is tendered to an addressee and the
delivery thereof is refused by such addressee, such notice shall be effective
upon such tender. Any party shall have the right to change its address for
notice hereunder to any other location by giving of no less than twenty (20)
days' notice to the other parties in the manner set forth hereinabove.
10.2 FURTHER ASSURANCES. Each party hereto (a) shall deliver to each other
party, to the Disbursement Agent and to any Securities Intermediary such
instruments, agreements, certificates and documents as any such Person may
reasonably request to confirm the validity and priority of the Liens on and
security interests in the Collateral granted pursuant to the Security Documents
as affected hereby, (b) shall fully cooperate with each other, with the
Disbursement Agent and with any Securities Intermediary, and (c) shall perform
all additional acts reasonably requested by any such Person to effect the
purposes of this Agreement. Without limiting the generality of the foregoing,
Great Lakes shall fully cooperate with the Borrower and any other Person in
connection with the incurrence by the Borrower of Indebtedness under any
proposed Permitted Additional Junior Secured Debt Agreement, provided that Great
Lakes and any other holders of the Lakes Secured Obligations, in their sole
discretion, have given their prior written consent to the incurrence of such
Indebtedness.
10.3 WAIVER. Any waiver, permit, consent or approval of any kind or
character on the part of any of the parties hereto, the Disbursement Agent or
any Securities Intermediary of any Event of Default or other breach or default
under this Agreement, any Security Document or any other Facility Agreement, or
any waiver on the part of any of the parties hereto, the Disbursement Agent or
any Securities Intermediary, of any provision or condition of this Agreement or
any other operative document, must be in writing and shall be effective only to
the extent in such writing specifically set forth.
10.4 ENTIRE AGREEMENT. As among the parties hereto, this Agreement and any
agreement, document or instrument attached hereto or referred to herein
integrate all the terms
36
and conditions mentioned herein or incidental hereto and supersede all oral
negotiations and prior writings in respect to the subject matter hereof, all of
which negotiations and writings are deemed void and of no force and effect. As
among the parties hereto, in the event of any conflict between the terms of this
Agreement and the terms of the Disbursement Agreement, the terms of this
Agreement shall control.
10.5 GOVERNING LAW. This Agreement shall be governed by the laws of State
of New York of the United States of America and shall for all purposes be
governed by and construed in accordance with the laws of such state without
regard to the conflict of law rules thereof other than Sections 5-1401 and
5-1402 of the New York General Obligations Law.
10.6 SEVERABILITY. In case any one or more of the provisions contained in
this Agreement should be invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby, and the parties hereto shall enter into
good faith negotiations to replace the invalid, illegal or unenforceable
provision.
10.7 HEADINGS. Section headings have been inserted in this Agreement as a
matter of convenience for reference only and it is agreed that such headings are
not a part of this Agreement and shall not be used in the interpretation of any
provision of this Agreement.
10.8 LIMITATIONS ON LIABILITY. In addition to requirements under Section
6.4, no claim shall be made by any party hereto or any of its Affiliates against
any other party hereto, the Disbursement Agent, any Securities Intermediary or
any of their respective Affiliates, directors, employees, attorneys or agents
for any special, indirect, consequential or punitive damages (whether or not the
claim therefor is based on contract, tort or duty imposed by law), in connection
with, arising out of or in any way related to the transactions contemplated by
this Agreement or any act or omission or event occurring in connection
therewith; and each party hereto hereby waives, releases and agrees not to xxx
upon any such claim for any such special, indirect, consequential or punitive
damages, whether or not accrued and whether or not known or suspected to exist
in its favor.
10.9 CONSENT OF JURISDICTION, WAIVER OF IMMUNITY. Any legal action or
proceeding arising out of this Agreement may be brought in or removed to the
courts of the State of New York, in and for the County of New York, or of the
United States of America for the Southern District of New York. By execution and
delivery of this Agreement, each Project Credit Party, accepts, for its and in
respect of its property, generally and unconditionally, the jurisdiction of the
aforesaid courts for legal proceedings arising out of or in connection with this
Agreement and irrevocably consents to the appointment of CT Corporation, a
woltersKluwer Company, located at 000 Xxxxxx Xxxxxx, 00xx Xxxxx; Xxx Xxxx, XX
00000; telephone: 000-000-0000; facsimile: 212-590-9190, as its agent to receive
service of process in New York, New York. Nothing herein shall affect the right
to serve process in any other manner including judicial or non-judicial
foreclosure of real property interests which are part of the Collateral. Each
party hereto hereby waives any right to stay or dismiss any action or proceeding
under or in connection with any or all of the Project, this Agreement or any
other operative document brought before the foregoing courts on the basis of
forum non-conveniens.
37
10.10 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns; provided, however, this Agreement shall terminate upon
the Discharge of all but one of the Classes of Secured Obligations (and each
Secured Party whose Secured Obligations have been Discharged shall cease to be a
party hereto with respect to such Secured Obligations upon such Discharge). Upon
the Discharge of all but one of the Classes of Secured Obligations, the
Collateral Agent or the Project Credit Party whose Secured Obligations are last
to be Discharged, as applicable, agrees to deliver any and all Shared Collateral
of which it has possession (subject to the terms of the applicable Security
Documents), either directly or through an agent, custodian or other
representative as requested by the Project Credit Party whose Secured
Obligations have not been discharged, and to notify each Securities
Intermediary, each counterparty to a consent and such other Persons as such
Project Credit Party may reasonably request that such obligations have been
terminated and discharged in full.
10.11 COUNTERPARTS. This Agreement may be executed in one or more
duplicate counterparts and when signed by all of the parties hereto listed below
shall constitute a single binding agreement.
10.12 NO THIRD PARTY BENEFICIARIES. Except for the 2014 Noteholders, any
other First Lien Secured Parties, any Second Lien Secured Parties, the
Disbursement Agent and each Securities Intermediary, the parties hereto do not
intend the benefits of this Agreement to inure to the benefit of nor shall it be
enforceable by any third party (including, without limitation, the Borrower or
any of its Affiliates) nor shall this Agreement be construed to make or render
any party hereto liable to any third party (including, without limitation, the
Borrower or any of its Affiliates) for the performance or failure to perform any
obligations hereunder.
10.13 CO-COLLATERAL AGENTS; SEPARATE COLLATERAL AGENTS. (a) If at any time
or times it shall be necessary or prudent in order to conform to any law of any
jurisdiction in which any of the Shared Collateral or the First Lien Shared
Collateral shall be located, or the Collateral Agent shall be advised by
counsel, satisfactory to it and to the 2014 Notes Indenture Trustee, that it is
necessary or prudent in the interest of the Collateral Agent or the First Lien
Secured Parties to conform to such law, the Collateral Agent shall execute and
deliver all instruments and agreements necessary or proper to constitute another
bank or trust company, or one or more individuals approved by the Collateral
Agent and the 2014 Notes Indenture Trustee, either to act as co-collateral agent
or co-collateral agents jointly with the Collateral Agent originally named
herein or any successor or successors, or to act as a separate or sub-collateral
agent or agents of the Collateral Agent and the First Lien Secured Parties in
respect of the Shared Collateral and/or First Lien Shared Collateral. Any
co-collateral agent or separate or sub-collateral agent appointed to act with
respect to the Project shall meet the requirements for a successor Collateral
Agent set forth in Section 3.9.
(b) Every separate or sub-collateral agent (and all references herein to a
"separate collateral agent" shall be deemed to refer also to a "sub-collateral
agent" or a "collateral sub-agent") and every co-collateral agent, other than
any collateral agent which may be appointed as successor to any Collateral
Agent, shall, to the extent permitted by applicable
38
law, be appointed and act and be such, subject to the following provisions and
conditions, namely:
(i) all rights, remedies, powers, duties and obligations conferred
upon, reserved to or imposed upon the Collateral Agent in respect of the
custody, control and management of monies, papers or securities shall be
exercised solely by the Collateral Agent hereunder;
(ii) all rights, remedies, powers, duties and obligation conferred
upon, reserved or imposed upon the Collateral Agent hereunder shall be
conferred, reserved or imposed and exercised or performed by the Collateral
Agent and such separate collateral agent or separate collateral agents or
co-collateral agent or co-collateral agents, jointly or severally, as shall
be provided in the instrument appointing such separate collateral agent or
separate collateral agents or co-collateral agent or co-collateral agents,
except to the extent that, under any law of any jurisdiction in which any
particular act or acts are to be performed, the Collateral Agent shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, remedies, powers, duties and obligations shall be exercised and
performed by such separate collateral agent or separate collateral agents or
co-collateral agent or co-collateral agents;
(iii) no power given hereby to, or which it is provided hereby may be
exercised by, any such separate collateral agent or separate collateral
agents or co-collateral agent or co-collateral agents shall be exercised
hereunder by such separate collateral agent or separate collateral agents or
co-collateral agent or co-collateral agents except (subject to applicable
law) jointly with, or with the consent or at the direction in writing of, the
Collateral Agent;
(iv) all provisions of this Agreement relating to the Collateral Agent
or to releases of Collateral shall apply to any such separate collateral
agent or separate collateral agents or co-collateral agent or co-collateral
agents;
(v) no collateral agent constituted under this Section 10.13 shall be
personally liable by reason of any act or omission of any other separate or
co-collateral agent or the Collateral Agent hereunder; and
(vi) subject to clause (c) below, the Collateral Agent at any time by
an instrument in writing, executed by it, may (x) accept the resignation of
any such separate collateral agent or co-collateral agent, (y) remove any
such separate collateral agent or co-collateral agent, and in that case, by
an instrument in writing executed by the Collateral Agent, and (z) appoint a
successor to such separate collateral agent or co-collateral agent.
(c) Notwithstanding any other provision of this Section 10.13, the
Collateral Agent shall not appoint any separate collateral agent or
co-collateral agent at the objection of any Project Credit Party.
39
10.14 AMENDMENTS.
10.14.1 Upon any refinancing of any Class of Secured Obligations, or
the incurring of other Indebtedness of the Borrower (subject to the rights of
the existing Project Credit Parties under this Agreement or their respective
financing agreements with respect to any such refinancing or other
Indebtedness), the applicable lender shall be bound by the terms of this
Agreement (and, with respect to any refinancing of the 2014 Notes, the financing
agreements relating thereto shall incorporate the provisions of the 2014 Notes
Indenture referenced in Sections 2.1 and 2.3 with respect to permitted payments
of the Lakes Obligations) and such lender, or an agent or trustee on its behalf,
and the parties hereto shall execute and deliver an amendment to this Agreement
to make such Person a party hereunder. Any such new party shall also execute any
other joinder agreements, amendments or counterparts to any existing credit or
security documents to which each of the existing party is a party, as required
by such documents or as reasonably requested by the Collateral Agent.
10.14.2 Except as otherwise set forth in this Section 10.14.2, no
amendment, modification or waiver of any of the provisions of this Agreement
shall be deemed to be made unless the same shall be in a writing signed by each
party hereto and, if such amendment, modification or waiver affects the rights
or obligations of the Collateral Agent, a writing signed by the Collateral
Agent.
10.15 ADDITIONAL SECURED PARTIES. Upon the entering into of any Permitted
Additional Senior Secured Debt Agreement or Permitted Additional Junior Secured
Debt Agreement (subject to the rights of the existing Secured Parties under this
Agreement or their respective Facility Agreements with respect to any such
refinancing, replacement or restructuring of a Class of Secured Obligations or
the entering into of such Permitted Additional Senior Secured Debt Agreement or
Permitted Additional Junior Secured Debt Agreement), a representative of the
applicable lender shall execute a joinder to this Agreement in substantially the
form attached as Exhibit A hereto (each, a "JOINDER AGREEMENT"). Upon the
execution and delivery of such a Joinder Agreement by the representative on
behalf of such new lenders (and the execution by such representative of any
other joinder agreements, amendments or counterparts to any existing credit or
security documents to which each of the existing party is a party, as required
by such documents or as reasonably requested by the Collateral Agent), (a) such
new lenders shall become, as the case may be, a "First Lien Secured Party" or a
"Second Lien Secured Party" hereunder and (b) such representative shall become a
"Project Credit Party" hereunder, with the same force and effect as if it were
originally a party to this Agreement in such capacity. The execution and
delivery of such a Joinder Agreement shall not require the consent of any other
party hereunder so long as such addition does not otherwise give rise to an
express violation of the terms of this Agreement or any Facility Agreement, and
the rights and obligations of each party hereunder shall remain in full force
and effect notwithstanding the addition of any new Project Credit Party as a
party to this Agreement.
10.16 LEGENDS. Each Project Credit Party (to the extent that approval is
not required by the Chairman of the National Indian Gaming Commission) agrees
that each Security Document shall include the following language:
40
"Notwithstanding anything herein to the contrary, the lien and security
interest granted to the First Lien Secured Party, the Second Lien Secured
Party, as applicable pursuant to this Agreement and the exercise of any
right or remedy by the First Lien Secured Party, the Second Lien Secured
Party, as applicable hereunder are subject to the provisions of the
Intercreditor and Subordination Agreement, dated as of June 22, 2006 (as
amended, restated, supplemented or otherwise modified from time to time,
the "INTERCREDITOR AND SUBORDINATION AGREEMENT"), among U.S. Bank National
Association, as Collateral Agent, U.S. Bank National Association, as the
2014 Notes Indenture Trustee and Great Lakes Gaming of Michigan, LLC and
certain other persons which may be or become parties thereto or become
bound thereto from time to time. In the event of any conflict between the
terms of the Intercreditor and Subordination Agreement and this Agreement,
the terms of the Intercreditor and Subordination Agreement shall govern
and control (all capitalized terms having the meanings ascribed thereto in
the Intercreditor and Subordination Agreement)."
For the avoidance of doubt, none of the Lakes Transaction Documents shall be
required to bear such legend, unless such documents are assigned to a third
party.
10.17 TRUST INDENTURE ACT. The parties do not intend that the provisions
of this Agreement violate the requirements of the Trust Indenture Act of 1939,
as amended.
10.18 REINSTATEMENT. If the payment of any amount applied to any First
Lien Secured Obligations is later avoided, or rescinded (including by settlement
of any claim for avoidance or rescission) or otherwise set aside, then:
(a) to the fullest extent lawful, all claims for the payment of such
amount as First Lien Secured Obligations and, to the extent securing
such claims, all such Liens under the First Lien Security Documents
will be reinstated and entitled to the benefits hereof, and
(b) if a Discharge of First Lien Secured Obligations became effective
prior to such reinstatement, all obligations of the Second Lien
Secured Parties that were terminated as a result of such Discharge
of First Lien Secured Obligations shall be concurrently reinstated
to the extent such claims and Liens under the First Lien Security
Documents are reinstated, beginning on such date but prospectively
only (and not retroactively), as though no First Lien Secured
Obligations or Liens under the First Lien Security Documents had
been outstanding at any time prior to such date and will remain
effective until the claims for such amount are paid in full in cash.
10.19 ATTORNEYS' FEES. Unless paid by the Borrower, the prevailing party
in any dispute or controversy hereunder shall be entitled to an award of its
reasonable attorneys' fees.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers or agents thereunto duly authorized as of
the day and year first above written.
2014 Notes Indenture Trustee:
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
Great Lakes:
GREAT LAKES GAMING OF MICHIGAN, LLC
By: /s/ Xxxxxxx X. Xxxx
----------------------------------------
Name: Xxxxxxx X. Xxxx
Title: President and Chief Financial Officer
2
Collateral Agent:
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Xxxxxxx X. Xxxxxxxxxx
--------------------------------------
Name: Xxxxxxx X. Xxxxxxxxxx
Title: Vice President
3
Acknowledged by:
Borrower:
POKAGON GAMING AUTHORITY
By: /s/ Xxxx Xxxxxx
-------------------------------
Name: Xxxx Xxxxxx
Title: President/CEO
4
EXHIBIT A
FORM OF JOINDER AGREEMENT
This JOINDER AGREEMENT, dated as of [___________], 200[_] (this "JOINDER
AGREEMENT"), is made by [___________], a [___________] [identify the agent under
the Permitted Additional Senior Debt Agreement or Permitted Additional Junior
Debt Agreement] (the "NEW AGENT"), in favor of the 2014 Notes Indenture Trustee,
Great Lakes, any additional party thereto, from time to time, and the Collateral
Agent. Capitalized terms used but not defined herein shall have the meaning
ascribed to them in that certain Intercreditor and Subordination Agreement,
dated as of June 22, 2006 (as amended, amended and restated, supplemented and
otherwise modified from time to time, the "INTERCREDITOR AND SUBORDINATION
AGREEMENT"), by and among the 2014 Notes Indenture Trustee, Great Lakes and the
Collateral Agent.
RECITALS:
WHEREAS, pursuant to the [identify the Permitted Additional Senior Debt
Agreement or Permitted Additional Junior Debt Agreement] (the "ADDITIONAL DEBT
AGREEMENT") among [___________], the New Agent and the lenders party thereto
(the "NEW LENDERS"), the New Lenders have agreed to provide the Borrower (the
"BORROWER") credit facility in a principal amount of up to $[___________]
pursuant to the terms of the [Permitted Additional Senior Debt
Agreement/Permitted Additional Junior Debt Agreement]; and
WHEREAS, as a condition to permitting the Borrowers to enter into the
Additional Debt Agreement, the New Agent on behalf of the New Lenders is
required to enter into this Joinder Agreement.
NOW, THEREFORE, in consideration of the premises, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the New Agent on behalf of the New Lenders hereby agrees as
follows:
1. INTERCREDITOR AND SUBORDINATION AGREEMENT. The New Agent on its behalf
and on behalf of the New Lenders agrees that (a) the New Agent shall be bound by
all of the terms and conditions of the Intercreditor Agreement as a "Project
Credit Party" thereunder, and (b) the New Lenders shall be bound by all of the
terms and conditions of the Intercreditor Agreement as "[FIRST][SECOND] Lien
Secured Parties" thereunder.
2. ADDITIONAL DEBT AGREEMENT. The New Agent on behalf of the New Lenders
hereby agrees that the Additional Debt Agreement constitutes a "[Permitted
Additional Senior Debt Agreement/Permitted Additional Junior Debt Agreement]"
under the Intercreditor Agreement.
3. AUTHORITY. The New Agent represents that it has been authorized by the
New Lenders to enter into this Joinder Agreement with respect to the matters set
forth herein on their behalf.
4. APPOINTMENT. The New Agent hereby designates [_______] as its
collateral agent to act as specified in the Intercreditor and Subordination
Agreement and in the Shared Security Documents.
5. GOVERNING LAW. This Agreement shall be governed by the laws of State of
New York of the United States of America and shall for all purposes be governed
by and construed in accordance with the laws of such state without regard to the
conflict of law rules thereof other than Sections 5-1401 and 5-1402 of the New
York General Obligations Law.
[SIGNATURE PAGE FOLLOWS]
6
IN WITNESS WHEREOF, the undersigned have caused this Joinder Agreement to
be duly executed and delivered as of the date first above written.
[NEW AGENT]
By: _______________________________
Name: _______________________________
Title:_______________________________
