Pledge and Assignment Agreement between Windsor Woodmont Black Hawk Resort Corp. and SunTrust Bank as Trustee

Summary

This agreement, dated March 14, 2000, is between Windsor Woodmont Black Hawk Resort Corp. (the pledgor) and SunTrust Bank, acting as trustee for noteholders. The agreement secures the payment and performance of obligations related to the issuance of up to $135 million in mortgage notes by pledging certain securities and accounts as collateral. The agreement outlines how the pledged assets will be managed and maintained, and is a condition for the purchase of the notes. Key parties include the pledgor, trustee, Hyatt Gaming Management, and other financial agents.

EX-10.10 11 0011.txt PLEDGE AND ASSIGNMENT AGREEMENT Exhibit 10.10 PLEDGE AND ASSIGNMENT AGREEMENT THIS PLEDGE AND ASSIGNMENT AGREEMENT, dated as of March 14, 2000 (as the same may be amended, restated, supplemented or otherwise modified from time to time, the "Agreement"), is made by WINDSOR WOODMONT BLACK HAWK RESORT CORP., a Colorado corporation, as pledgor ("Pledgor"), in favor of SUNTRUST BANK, a Georgia banking corporation ("SunTrust"), as trustee (SunTrust, in such capacity, together with its successors and assigns, the "Trustee") for the benefit of the Holders (as hereinafter defined). RECITALS WHEREAS, the Pledgor and the Trustee are, contemporaneously with the execution and delivery of this Agreement, entering into that certain Indenture of even date herewith (as the same may be amended, restated, supplemented or otherwise modified from time to time, the "Indenture"), pursuant to which Pledgor (a) is issuing its 13% Series A First Mortgage Notes due 2005 (such notes, together with any notes issued in replacement thereof or in exchange therefor, the "Series A Notes"), and (b) will issue its 13% Series B First Mortgage Notes due 2005 (such notes, together with any notes issued in replacement thereof or in exchange therefor, the "Series B Notes" and, together with the Series A Notes, the "Initial Notes"), in the original aggregate principal amount of $100,000,000, and pursuant to which the Pledgor may issue up to an additional $35,000,000 aggregate principal amount of notes in the same series as the Initial Notes (such notes, together with any notes issued in replacement thereof or in exchange therefor, the "Additional Notes" and, together with the Initial Notes, the "Senior Notes"). WHEREAS, the Pledgor and Hyatt Gaming Management, Inc., a Nevada corporation ("Hyatt Gaming"), are, contemporaneously with the execution and delivery of this Agreement, entering into that certain Subordinated Loan Agreement of even date herewith (as the same may be amended, restated, supplemented or otherwise modified from time to time, the "Subordinated Loan Agreement"), pursuant to which Hyatt Gaming is loaning Pledgor the original aggregate principal amount of $7,500,000, evidenced by that certain Subordinated Promissory Note dated as of March 14, 2000 (such note, together with any notes issued in replacement thereof or in exchange therefor, the "Second Mortgage Notes"; together with the Senior Notes, collectively, the "Notes"). WHEREAS, the Pledgor, the Trustee, Hyatt Gaming, Norwest Bank Minnesota, N.A., a national association ("Norwest"), as disbursement agent for the Trustee (in such capacity, the "Disbursement Agent"), First American Heritage Title Company, as the construction escrow agent, and RE TECH+, Inc., as independent construction consultant, are, contemporaneously with the execution and delivery of this Agreement, entering into that certain Cash Collateral and Disbursement Agreement of even date herewith (as the same may be amended, restated, supplemented or otherwise modified from time to time, the "Disbursement Agreement") pursuant to which the net proceeds of the Senior Notes (the "Senior Notes Proceeds") and the Second Mortgage Notes (the "Hyatt Gaming Proceeds" which, together with the Senior Notes Proceeds shall be referred to herein as the "Note Proceeds") will be administered and maintained, including the investment of certain portions of such proceeds in Government Securities and Investment Grade Securities in accordance with the Indenture and the Disbursement Agreement and such other investments as provided in the Clearing Account Letter Agreement. WHEREAS, Pledgor is the legal and beneficial owner of the securities listed in Schedule I hereto and will be the legal and beneficial owner of all securities purchased by or on behalf of Pledgor from time to time with the Note Proceeds and/or other amounts deposited or accruing in the Pledged Collateral Accounts, as defined below (all of the foregoing securities, collectively, the "Securities"). WHEREAS, it is a condition precedent to the purchase of the Initial Notes that Pledgor shall have executed and delivered this Agreement to the Trustee for itself and the ratable benefit of the holders from time to time of the Senior Notes (the "Holders) to secure the payment and performance of the Obligations (as hereinafter defined). NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, and in order to induce the Holders to purchase the Initial Notes, the Pledgor agrees as follows: Section 1. Definitions. Terms used but not otherwise defined herein that are defined in the Uniform Commercial Code (as defined herein) shall have the meanings given in the Uniform Commercial Code. Capitalized terms used but not otherwise defined herein shall have the meanings given in the Indenture. In addition the following terms shall have the following meanings when used herein. "Account Agreement" means that certain Account Agreement dated as of even date herewith by and among Pledgor, the Trustee and the Securities Intermediary (as amended, restated, supplemented or otherwise modified from time to time). "Advance Disbursement Account" shall have the meaning assigned to such term under subsection 2(c). "Advance Disbursement Account Agreement" means that certain Advance Disbursement Account Agreement dated as of even date herewith by and among Pledgor, the Trustee, Hyatt Gaming and Norwest. "Book-Entry Securities" means securities issued by the United States of America or any agency or instrumentality thereof maintained through registration on the books of a Federal Reserve Bank pursuant to applicable Federal book-entry regulations. "Clearing Account" shall have the meaning assigned to such term under subsection 2(c). -2- "Clearing Account Letter Agreement" means that certain letter agreement of even date herewith among the Company, the Trustee and Hyatt Gaming, and acknowledged by the Disbursement Agent. "Completion Reserve Account" shall have the meaning assigned to such term under subsection 2(c). "Construction Disbursement Account" shall have the meaning assigned to such term under subsection 2(c). "Governmental Authority" means any federal, state, local or foreign court, agency, authority, board, bureau, commission, department, office or instrumentality of any nature whatsoever or any governmental or quasi-governmental unit, whether now or hereafter in existence, or any officer or official thereof. "Hyatt Gaming Accounts" means, collectively, the Hyatt Gaming Completion Reserve Account and the Hyatt Gaming Construction Disbursement Account. "Hyatt Gaming Completion Reserve Account" shall have the meaning assigned to such term under subsection 2(c). "Hyatt Gaming Construction Disbursement Account" shall have the meaning assigned to such term under subsection 2(c). "Interim Interest Reserve Account" shall have the meaning assigned to such term under subsection 2(c). "Interim Interest Reserve Account Agreement" means that certain Interest Reserve Account Agreement dated as of even date herewith by and among Pledgor, the Trustee and the Securities Intermediary. "Interest Reserve Account" shall have the meaning assigned to such term under subsection 2(c). "Interest Reserve Account Agreement" means that certain Interest Reserve Account Agreement dated as of even date herewith by and among Pledgor, the Trustee and the Interest Securities Intermediary. "Interest Securities Intermediary" means SunTrust, together with its successor and assigns, in its capacity as a "securities intermediary" within the meaning of 31 C.F.R. Section 357.2 and Section 8-102 of the Uniform Commercial Code. "Liquor Laws" means the liquor laws of any jurisdiction or jurisdictions to which the Pledgor or any of its Subsidiaries is, or may at any time after the date of the Indenture, be subject. -3- "Liquor License" means any license, permit, franchise or other authorization from any Liquor Licensing Authority necessary or required on the date of the Indenture or at any time thereafter to own, lease, operate or otherwise conduct the lodging, retail, restaurant or other entertainment facilities of the Pledgor, including all licenses granted under the Liquor Laws. "Liquor Licensing Authority" means any agency, authority, board, bureau, commission, department, office or instrumentality of any nature whatsoever of the United States federal or a foreign government, any state, province or any city or other political subdivision or otherwise, and whether now or hereafter in existence, or any officer or official thereof, including the Colorado Liquor Enforcement Division and the city of Black Hawk Liquor Licensing Authority and any other applicable liquor licensing regulatory authority with authority to regulate any liquor licensed operation (or proposed liquor licensed operation) owned by the Pledgor or any of its Subsidiaries and managed or operated by Hyatt Gaming or any of its Subsidiaries. "Obligations" means all obligations of the Pledgor to the Holders and the Trustee howsoever created, arising or evidenced, whether direct or indirect, absolute or contingent, now or hereafter existing, or due or to become due, which arise out of or in connection with the Indenture, the Senior Notes, this Agreement or any other Transaction Document. "Obligor" means any and all Persons obligated to pay money or to perform some other act under or in respect of the Pledged Collateral. "Person" means any individual, corporation, limited liability company, partnership, joint venture, estate, association, joint stock company, trust, unincorporated organization, or government or any agency or political subdivision thereof and any fiduciary acting in such capacity on behalf of any of the foregoing. "Securities Intermediary" means Norwest, together with its successor and assigns, in its capacity as a "securities intermediary" within the meaning of 31 C.F.R. Section 357.2 and Section 8-102 of the Uniform Commercial Code. "Transaction Documents" means the Indenture, the Senior Notes, this Agreement, the other Collateral Documents and all other documents, instruments, financing statements and other agreements executed in connection herewith and therewith from time to time, as each of the same may be amended, restated, supplemented or modified from time to time. "Uniform Commercial Code" means the Uniform Commercial Code as in effect in the State of New York on the date of this Agreement; provided, however, that if by reason of mandatory provisions of law, the perfection or effect of perfection or non-perfection of the security interest granted hereunder in any Pledged Collateral is governed by the Uniform Commercial Code as in effect in a jurisdiction other than New York, Uniform Commercial Code shall mean the Uniform Commercial Code as in effect in such other jurisdiction for purposes of the provisions hereof relating to such perfection or effect of perfection or non-perfection. -4- "Unmatured Surviving Obligation" means, as of any date, an Obligation which is contingent and unliquidated and not due and owing on such date and which, pursuant to provisions of any Transaction Document, survives termination of such Transaction Document and the indefeasible payment in full of the Senior Notes. Section 2. Pledge. As collateral security for the due and punctual payment and performance in full when due (whether at stated maturity, upon redemption or required repurchase, by acceleration or otherwise) of the Senior Notes and all other Obligations, Pledgor hereby pledges, assigns, transfers and grants to the Trustee for itself and on behalf of the Holders, a continuing first priority lien on all of the right, title and interest of Pledgor in, to and under the following property, whether now or hereafter existing, owned or acquired (collectively, the "Pledged Collateral"): (a) the Securities and the certificates, if any, evidencing the Securities and any interest of Pledgor in the entries on the books of any securities intermediary pertaining to the Securities; (b) all Proceeds (as defined under the Uniform Commercial Code or to the extent not defined therein, under other relevant law) of the Securities, and in any event including, without limitation, any and all (i) proceeds of any insurance (except payment made to a Person which is not a party to this Agreement), indemnity, warranty or guarantee payable to Pledgor from time to time with respect to any of the Securities, (ii) payments (in any form whatsoever) made or due and payable to Pledgor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Securities by any Governmental Authority (or any person acting on behalf of a Governmental Authority), and (iii) other amounts from time to time paid or payable under or in connection with any of the Securities; and (c) any and all (i) funds and assets, including without limitation the Note Proceeds, now or hereafter deposited in Account Nos.: 13645-100 (the "Clearing Account") ---------------- 13645-102 (the "Construction Disbursement Account"), --------------------------------- 13645-104 (the "Hyatt Gaming Construction Disbursement Account"), ---------------------------------------------- 13645-101 (the "Interim Interest Reserve Account"), -------------------------------- 13645-103 (the "Completion Reserve Account"), -------------------------- 13645-105 (the "Hyatt Gaming Completion Reserve Account"), and --------------------------------------- 0404017634 (the "Advance Disbursement Account") ---------------------------- at the Disbursement Agent, and Account No. 6797500 (the "Interest Reserve Account") at the Trustee, (each, a "Pledged Collateral Account" and, collectively, the "Pledged Collateral Accounts"), including interest that accrues either before or after the commencement of any bankruptcy or insolvency proceeding by or against Pledgor, (ii) present and future accounts, general intangibles, chattel paper, contract rights, deposit accounts, instruments, investment property, financial assets and documents now or hereafter relating or arising with respect to the Pledged Collateral -5- Accounts and/or the use thereof and all securities entitlements with respect thereto, and (iii) cash and noncash proceeds and products of the items described in subparagraphs (i) and (ii) above; provided, however, that the Lien granted herein to the Hyatt Gaming Accounts and any Hyatt Gaming Proceeds or other amounts held in any such Hyatt Gaming Accounts shall be subordinated to the Lien of Hyatt Gaming in such accounts to the extent, but only to the extent, set forth in the Intercreditor Agreement; provided, further, that the lien granted herein to the Advance Disbursement Account shall be subject to the provisions of the Intercreditor Agreement. Section 3. No Release. Nothing set forth in this Agreement shall relieve Pledgor from the performance of any term, covenant, condition or agreement on Pledgor's part to be performed or observed under or in respect of any of the Pledged Collateral or from any liability to any Person under or in respect of any of the Pledged Collateral or shall impose any obligation on the Trustee to perform or observe any such term, covenant, condition or agreement on Pledgor's part to be so performed or observed or shall impose any liability on the Trustee for any act or omission on the part of Pledgor relating thereto or for any breach of any representation or warranty on the part of Pledgor contained in this Agreement, under or in respect of the Pledged Collateral or made in connection herewith or therewith. The provisions set forth in this Section 3 shall survive the termination of this Agreement and the discharge of Pledgor's obligations under this Agreement or any other agreement constituting Pledged Collateral. Section 4. Further Assurances. Pledgor agrees that, at any time and from time to time, it will make, execute, endorse, acknowledge and file and refile, or permit the Trustee to file and refile, such lists, descriptions and designations of the Pledged Collateral, copies of documents of title, vouchers, invoices, schedules, confirmatory assignments, supplements, additional security agreements, conveyances, financing statements, amendments thereto, continuation statements, transfer endorsements, powers of attorney and other documents (including without limitation this Agreement), in form reasonably satisfactory to the Trustee in such offices as the Trustee may deem necessary or appropriate, wherever required or permitted by law in order to perfect, protect and preserve the rights and interests granted to the Trustee hereunder. Pledgor hereby (i) authorizes the Trustee and appoints the Trustee as its attorney-in-fact to file such financing statements, continuation statements, amendments thereto and other documents, without the signature of Pledgor to the fullest extent permitted by applicable law, and (ii) Pledgor agrees to do such further acts and things, and to execute and deliver to the Trustee such additional assignments, agreements, powers and instruments, in each case, as the Trustee may reasonably require to carry into effect the purposes of this Agreement, to preserve or protect the lien on the Pledged Collateral created by this Agreement or to assure and confirm unto the Trustee its rights, powers and remedies hereunder. The foregoing grant of authority is a power of attorney coupled with an interest and such appointment shall be irrevocable for the term of this Agreement. All of the foregoing shall be at the sole cost and expense of Pledgor. Section 5. Representations, Warranties and Covenants. Pledgor represents, warrants and covenants as follows: -6- (a) Delivery; Perfection. To the extent that any of the Pledged Collateral constitutes certificated securities, Pledgor has delivered to the Trustee all certificates representing such Pledged Collateral relating to the Securities identified on Schedule I hereto (and will immediately deliver to the Trustee all certificates representing such Pledged Collateral acquired after the date hereof), accompanied in each case by undated bond powers duly executed in blank, and has caused to be filed with the Secretary of State of the State of Texas, the principal place of business of Pledgor, Uniform Commercial Code financing statements evidencing the lien or pledge created by this Agreement, and, together with the book entries described in Section 5(f) below and the execution and delivery of this Agreement, the Advance Disbursement Account Agreement, the Interim Interest Reserve Account Agreement, the Interest Reserve Account Agreement, the Clearing Account Letter Agreement and the Account Agreement, such delivery, filing, pledge, transfer and control of the Pledged Collateral pursuant to this Agreement creates a valid and perfected first priority security interest in the Pledged Collateral (except (i) to the extent subordinated to Hyatt Gaming with respect to, but only with respect to, the Hyatt Gaming Accounts and any Hyatt Gaming Proceeds or other amounts held in any such Hyatt Gaming Accounts, and (ii) as set forth in the Intercreditor Agreement) and pursuant to the Uniform Commercial Code securing the payment and performance in full of the Obligations. (b) No Liens. Pledgor is as of the date hereof, and, as to Pledged Collateral acquired by it from time to time after the date hereof, Pledgor will be, the owner of all of the Pledged Collateral free and clear of any lien (other than the Lien granted to the Trustee under this Agreement or any other Transaction Document, the Liens granted to Hyatt Gaming in the Hyatt Gaming Accounts, any Hyatt Gaming Proceeds or other amounts held in any such Hyatt Gaming Accounts and Permitted Liens specified in subclauses (iv), (vi), (viii) and (xv) of the Indenture), and Pledgor shall defend the Pledged Collateral against all claims and demands of all Persons at any time claiming any interest therein adverse to the Trustee. (c) Other Financing Statements. There is no financing statement (or similar statement or instrument of registration under the law of any jurisdiction) covering or purporting to cover any interest of any kind in the Pledged Collateral and, so long as any Obligations are outstanding, Pledgor shall not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) or statements relating to the Pledged Collateral, except financing statements filed or to be filed in respect of and covering the Lien granted by Pledgor pursuant to this Agreement or any other Transaction Document and the Lien granted to Hyatt Gaming in the Hyatt Gaming Accounts and any Hyatt Gaming Proceeds or other amounts held in any such Hyatt Gaming Accounts. (d) Chief Executive Office; Records. The chief executive office of Pledgor is located at 2231 Valdina Street, Dallas, TX 75207, and has been located there for at least four (4) months preceding the date hereof. In addition, Pledgor's name has not been changed in the four (4) months preceding the date hereof. Pledgor shall not establish a new location for such office nor shall it change its name unless (i) -7- it shall have given the Trustee not less than thirty (30) days' prior written notice of its intention so to do, clearly describing such new location or locations or name and providing such other information in connection therewith as the Trustee may request, and (ii) with respect to such new location or name, Pledgor shall have taken all action satisfactory to the Trustee to maintain the perfection, priority and validity of the lien of the Trustee in the Pledged Collateral intended to be granted by this Agreement. (e) Authorization; Enforceability; Consents and No Breach. The execution and delivery of this Agreement and the performance by Pledgor of its obligations hereunder are within Pledgor's corporate powers, have been duly authorized by all necessary corporate action, have received all necessary governmental approvals (if any shall be required), and do not and will not contravene or conflict with any provision of law or of the charter or by-laws of Pledgor or of any agreement, instrument or order binding upon Pledgor. (f) Book-Entry Securities. With respect to the Book-Entry Securities identified in Schedule I hereto and the Book-Entry Securities acquired by or on behalf of Pledgor from time to time with the Note Proceeds and/or other amounts deposited or accruing in (1) the Construction Disbursement Account and the Completion Reserve Account (the "Investment Grade Accounts"), (2) the Clearing Account and the Interim Interest Reserve Account (collectively, the "Trustee Accounts") and (3) the Interest Reserve Account, (x) Pledgor (with respect to Investment Grade Accounts) shall promptly request the Disbursement Agent as Securities Intermediary, (y) the Trustee (with respect to the Trustee Accounts) shall promptly request the Securities Intermediary, and (z) the Trustee (with respect to the Interest Reserve Account) shall promptly request the Interest Securities Intermediary, to: (i) cause such Book-Entry Securities to be credited to the Securities Intermediary's or Interest Securities Intermediary's, as applicable, trust/custody account maintained at the Federal Reserve Bank at which such Securities Intermediary or Interest Securities Intermediary, as applicable, maintains a Participant's Securities Account (as such term is defined in 31 C.F.R. ss 357.2) (and to be identified on the records of such Federal Reserve Bank as being held for the sole and exclusive account of such Securities Intermediary or Interest Securities Intermediary, as applicable), (ii) credit by book-entry on its books and records such Book-Entry Securities as being held for the account of the Trustee and for the benefit of the Trustee (subject to the lien of Hyatt Gaming in the Hyatt Gaming Accounts and any Hyatt Gaming Proceeds thereof or other amounts held in such Hyatt Gaming Accounts, as applicable); provided, however, with respect to the Interim Interest Reserve Account, the Securities Intermediary shall, upon direction from the Trustee, free deliver the Book-Entry Securities with respect to such account to the Interest Securities Intermediary which shall, credit by book-entry on its books and records such Book Entry Securities as provided in this clause (ii), and -8- (iii) send a confirmation to the Trustee that such Securities Intermediary or Interest Securities Intermediary, as applicable, is holding such Book-Entry Securities for the account of the Trustee and for the benefit of the Trustee (subject to the lien of Hyatt Gaming in the Hyatt Gaming Accounts and any Hyatt Gaming Proceeds thereof or other amounts held in such Hyatt Gaming Accounts, as applicable and in each case (i) with respect to the Investment Grade Accounts, the Securities Intermediary shall act upon the instructions of the Disbursement Agent, (ii) with respect to the Trustee Accounts, the Securities Intermediary shall act upon the instructions of the Trustee and (iii) with respect to the Interest Reserve Account, the Interest Securities Intermediary shall act upon the instructions of the Trustee. With respect to the Pledged Collateral, Pledgor and the Trustee hereby acknowledge and agree that Norwest is the Securities Intermediary at which securities accounts for the Pledged Collateral is maintained, and Norwest hereby agrees to maintain each of the Pledged Collateral Accounts (excluding the Interest Reserve Account) as a "securities account" within the meaning of Article 8 of the Uniform Commercial Code. Norwest hereby acknowledges that, and the Pledgor hereby agrees, subject to the lien of Hyatt Gaming in the Hyatt Gaming Accounts and any Hyatt Gaming Proceeds thereof or other amounts held in such Hyatt Gaming Accounts, as applicable, (i) it has with respect to all Pledged Collateral Accounts except the Interest Reserve Account, by book- entry credited the Book-Entry Securities to the Trustee and the Trustee is the entitlement holder with respect to the security entitlements therein, (ii) it shall, as Securities Intermediary, comply with all written entitlement orders originated by the Trustee (including such orders with respect to the Interim Interest Reserve Account, directing the Securities Intermediary to free deliver the such Book- Entry Securities to the Interest Securities Intermediary) without the need for further consent by Pledgor or further direction from the Disbursement Agent acting on the direction of any Party and (iii) the Trustee shall have control over the Book-Entry Securities and the security entitlements and securities accounts relating thereto. With respect to the Pledged Collateral, Pledgor and the Trustee hereby acknowledge and agree that SunTrust is the Interest Securities Intermediary at which a securities account for the Pledged Collateral is maintained, and SunTrust hereby agrees to maintain the Interest Reserve Account as a "securities account" within the meaning of Article 8 of the Uniform Commercial Code. SunTrust hereby acknowledges that, and the Pledgor hereby agrees, (i) it has by book-entry credited the Book-Entry Securities to the Trustee and the Trustee is the entitlement holder with respect to the security entitlements therein, (ii) it shall, as Interest Securities Intermediary, comply with all written entitlement orders originated by the Trustee without the need for further consent by Pledgor, and (iii) the Trustee shall have control over the Book-Entry Securities and the security entitlements and securities accounts relating thereto. Norwest and SunTrust each hereby agree that each item of property (whether investment property, financial asset, security, instrument or cash) credited to the respective Pledged Collateral Accounts which each established and maintains, shall be treated as a "financial asset" within the meaning of Section 8-102(a)(9) of the Uniform Commercial Code. -9- (g) Pledged Collateral. All information set forth herein (including the exhibits hereto) relating to the Pledged Collateral is accurate and complete in all material respects. Section 6. Provisions Concerning the Pledged Collateral. (a) Protection of the Pledged Collateral. Pledgor shall not take any action that impairs the rights of the Trustee in the Pledged Collateral. (b) Payments. So long as no Event of Default shall have occurred and be continuing, all distributions, cash, interest, return of capital or other payments made in respect of the Pledged Collateral shall be deposited in the applicable Pledged Collateral Account and utilized in accordance with the provisions of the Indenture and the Disbursement Agreement (which utilization shall include, without limitation, the payment of any installment due under the Senior Notes). Upon the occurrence and during the continuation of an Event of Default, the Trustee shall be entitled to exercise its rights and remedies as set forth in Section 8 hereof. Section 7. Transfers and Other Liens. Pledgor shall not (i) sell, convey, assign or otherwise dispose of, or grant any option, right or warrant with respect to, any of the Pledged Collateral except as permitted under the Indenture, the Disbursement Agreement and this Agreement, or (ii) create or permit to exist any Lien upon or with respect to any Pledged Collateral, except for the lien of this Agreement and the other Transaction Documents and Permitted Liens described in Section 5(b) hereof. Section 8. Remedies Upon Default; Obtaining the Pledged Collateral Upon Event of Default. (a) If an Event of Default shall have occurred and be continuing, subject to compliance with the Gaming Laws and the Liquor Laws, then and in every such case, the Trustee may: (i) instruct the obligor or obligors on any agreement, instrument or other obligation constituting Pledged Collateral to make any payment required by the terms of such instrument or agreement directly to or as directed by the Trustee; provided, however, that in the event that any such payments are made directly to Pledgor prior to receipt by any such obligor of such instruction or notwithstanding such instruction, Pledgor shall hold such amounts as agent and trustee for the Trustee, segregate all amounts received pursuant thereto in a separate account and pay such amounts promptly to or as directed by the Trustee; and (ii) proceed to exercise all rights, privileges and remedies of Pledgor under the Pledged Collateral, and may exercise such rights and remedies either in the name of the Trustee or in the name of Pledgor for the use and benefit of the Trustee to the fullest extent permitted by applicable law. -10- (b) Upon the occurrence and during the continuance of an Event of Default, the Trustee may from time to time exercise in respect of the Pledged Collateral, in addition to the other rights and remedies provided herein or otherwise available to it, all the rights and remedies of a secured party under the Uniform Commercial Code. The proceeds of the exercise by the Trustee of any remedy hereunder shall be paid to and applied as follows: First: to payment of all of the reasonable costs and expenses of the Trustee, including (i) the expenses of such sale, (ii) the out-of-pocket costs and expenses of the Trustee and the fees and out-of-pocket costs and expenses of counsel employed by the Trustee, (iii) the payment of all advances made by the Trustee for the account of Pledgor hereunder, and (iv) the payment of all costs and expenses incurred by the Trustee in connection with the administration and enforcement of this Agreement, to the extent that such advances, costs and expenses shall not have been reimbursed to the Trustee; Second: to the payment in full of the Obligations in a manner consistent with Section 6.10 of the Indenture as the Trustee in its discretion shall decide and any Obligation as defined in the Subordinated Loan Agreement to the extent required by Section 3.7 of the Intercreditor Agreement with respect to the Advance Disbursement Account; Third: the balance, if any, of such proceeds shall be paid to the Pledgor, its successors and assigns, or to whomever may be lawfully entitled to receive the same. (c) Upon the occurrence and during the continuance of an Event of Default, subject to compliance with the Gaming Laws and the Liquor Laws, the Trustee may, upon ten (10) business days' prior written notice to Pledgor of the time and place, with respect to the Pledged Collateral or any part thereof that shall then be or shall thereafter come into the possession, custody or control of the Trustee or any of its agents, sell, lease, assign or otherwise dispose of all or any part of the Pledged Collateral, at such place or places as the Trustee deems best, and for cash or for credit or for future delivery, at public or private sale, without demand of performance or notice of intention to effect any such disposition or of the time or place thereof (except such notice as is required above or by applicable statute and cannot be waived), and the Trustee or anyone else may be the purchaser, lessee, assignee or recipient of any or all of the Pledged Collateral so disposed of at any public sale (or, to the extent permitted by law, at any private sale) and thereafter hold the same absolutely, free from any claim or right of whatsoever kind, including any right or equity of redemption (statutory or otherwise), of Pledgor, any such demand, notice (other than the notice specified above) and right or equity being hereby expressly waived and released. The Trustee may, without notice or publication, adjourn any public or private sale or cause the same to be adjourned from time to time by announcement at the time and place fixed for the sale, and such sale may be made at any time or place to which the sale may be so adjourned. Notwithstanding the first sentence of this Section 8(c) to the contrary, with respect to that portion of the Pledged Collateral consisting of Book-Entry Securities, the parties acknowledge and -11- agree that such Pledged Collateral is sold on a recognized market and, accordingly, the Trustee need not furnish Pledgor with notice of its intention to sell such Pledged Collateral. The proceeds of each collection, sale or other disposition under this Section 8(c) shall be applied in accordance with Section 8(b) hereof. (d) Private Sale. The Trustee shall incur no liability as a result of the sale of the Pledged Collateral, or any part thereof, at any private sale pursuant to Section 8(c) hereof conducted in a commercially reasonably manner. Pledgor hereby waives any claims against the Trustee arising by reason of the fact that the price at which the Pledged Collateral may have been sold at such private sale was less than the price that might have been obtained at a public sale or was less than the aggregate amount owed by Pledgor under the Transaction Documents, even if the Trustee accepts, the first offer received and does not offer the Pledged Collateral to more than one offeree. Notwithstanding anything to the contrary in this Section 8(d), with respect to that portion of the Pledged Collateral consisting of Book- Entry Securities, the parties acknowledge and agree that such Pledged Collateral is sold on a recognized market and, accordingly, such Pledged Collateral is excluded from this Section 8(d). Section 9. The Trustee May Perform; the Trustee Appointed Attorney-In-Fact. If Pledgor fails to do any act or thing that it has covenanted to do hereunder or if any warranty on the part of Pledgor contained herein shall be breached, the Trustee may (but shall not be obligated to), upon notice to Pledgor specifying the action to be taken, do the same or cause it to be done or remedy any such breach, and may expend funds for such purpose. Any and all amounts so expended by the Trustee (including, but not limited to, reasonable legal expenses and disbursements) shall be paid by Pledgor promptly upon demand therefor, with interest at the fixed rate of interest of 15% per annum during the period from the date on which such payment is made to and including the date of repayment. Pledgor hereby authorizes the Trustee and appoints the Trustee its attorney-in-fact, with full authority in the place and stead of Pledgor and in the name of Pledgor, or otherwise, from time to time in the Trustee's reasonable discretion to take any action and to execute any instrument which is consistent and in accordance with the terms of this Agreement and the Transaction Documents and which the Trustee may deem reasonably necessary or advisable to accomplish the purposes of this Agreement. The foregoing grant of authority is a power of attorney coupled with an interest and such appointment shall be irrevocable for the term of this Agreement. Pledgor hereby ratifies all actions that such attorney shall lawfully take or cause to be taken in accordance with this Section 9. Section 10. Notices. All notices, requests, demands and other communication shall be given in the manner set forth in Section 11.02 of the Indenture and shall be given or delivered at the following respective addresses and facsimile and telephone numbers and to the attention of the following individuals or departments: (i) if to Pledgor, at its address specified pursuant to the Indenture; (ii) if to the Trustee, at its address specified pursuant to the Indenture; (iii) if to the Securities Intermediary or the Interest Securities Intermediary, at their respective addresses specified on the signature page hereto; and (iv) as to any such party, at such other address, facsimile or telephone number, or to the attention of such other individual or department, as the party to which such information pertains may hereafter specify for the purpose in a notice to the other specifically captioned "Notice of Change of Address." A copy of any notice provided pursuant to this -12- Agreement shall be provided to Hyatt Gaming at its address as set forth in the Management Agreement. Section 11. Governing Law; Terms; Severability. THIS AGREEMENT SHALL BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICT OF LAWS THEREOF, EXCEPT TO THE EXTENT THAT THE PERFECTION AND ENFORCEMENT OF THE SECURITY INTERESTS HEREUNDER IN RESPECT OF ANY PARTICULAR PLEDGED COLLATERAL ARE GOVERNED BY THE LAWS OF ANOTHER JURISDICTION, AND EACH OF THE PARTIES HERETO, TOGETHER WITH THE SECURITIES INTERMEDIARY AND THE INTEREST SECURITIES INTERMEDIARY, EXPRESSLY AGREES THAT FOR PURPOSES OF SECTION 8-110 OF THE UNIFORM COMMERCIAL CODE, THE SECURITIES INTERMEDIARY'S AND INTEREST SECURITIES INTERMEDIARY'S JURISDICTION IS NEW YORK. THE PARTIES HERETO IRREVOCABLY SUBMIT TO THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING IN THE CITY OF NEW YORK OVER ANY SUIT, ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT. If any term or provision of this Agreement is held to be or rendered invalid or unenforceable at any time in any jurisdiction, such term or provision shall not affect the validity or enforceability of any other terms or provisions at any other time or in any other jurisdiction. Section 12. Facsimile; Counterparts. Each party hereto may deliver an executed signature page to this Agreement by facsimile transmission to each other party, which facsimile copy shall be deemed to be an original executed signature page; provided, however, that such party shall deliver an original signature page to each other party promptly thereafter. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original and all of which counterparts together shall constitute one agreement with the same effect as if the parties hereto had signed the same signature page. Section 13. Headings. The Section headings used in this Agreement are for convenience of reference only and shall not affect the construction of this Agreement. Section 14. Entire Agreement; Amendments. This Agreement, together with those other agreements referenced herein, constitutes the entire understanding and agreement of the Pledgor and the Trustee, and shall supersede any other agreements and understandings (written or oral) between the Pledgor and the Trustee on or prior to the date of this Agreement with respect to the transaction contemplated in this Agreement. No amendment or modification to any terms of this Agreement, or cancellation of this Agreement, shall be valid unless in writing and executed and delivered by both the Pledgor and the Trustee. Section 15. Limitation on Duty of the Trustee in Respect of Pledged Collateral. Beyond the exercise of reasonable care in the custody thereof, the Trustee shall have no duty as to any Pledged Collateral in its possession or control or in the possession or control of any agent or bailee or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto. The Trustee shall be deemed to have exercised reasonable care in the custody and preservation of the Pledged Collateral in its possession if such Pledged Collateral is accorded treatment substantially equal -13- to that which the Trustee accords its own property, and shall not be liable or responsible for any loss or damage to any of the Pledged Collateral, or for any diminution in the value thereof, by reason of the act or omission of any agent or bailee selected by the Trustee in good faith. Section 16. No Waiver. No delay on the part of the Trustee in the exercise of any right or remedy shall operate as a waiver thereof, and no single or partial exercise by the Trustee of any right or remedy shall preclude other or further exercise thereof or the exercise of any other right or remedy. Section 17. Binding Agreement; Assignment. This Agreement shall be binding upon Pledgor and the Trustee and their respective successors and assigns, and shall inure to the benefit of Pledgor, the Holders and the Trustee and the respective successors and assigns of the Holders and the Trustee. Section 18. Indemnification. Pledgor agrees to indemnify the Trustee and hold the Trustee harmless from and against any and all liabilities, losses, damages, costs and expenses of any kind or nature whatsoever, including without limitation the reasonable fees and disbursements of counsel, which may be incurred by the Trustee in connection with its actions hereunder or in connection with any investigative, administrative or judicial proceeding (whether or not the Trustee shall be designated a party thereto) relating to or arising out of this Agreement or the Pledged Collateral (including without limitation any such proceeding by Pledgor against the Trustee or the Trustee against Pledgor); provided that the Trustee shall not have the right to be indemnified hereunder for its own gross negligence or willful misconduct as determined by a court of competent jurisdiction. Section 19. Waiver of Right to Jury Trial. EACH OF THE PARTIES HERETO HEREBY WAIVES TRIAL BY JURY IN ANY JUDICIAL PROCEEDINGS INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH THIS AGREEMENT OR THE RELATIONSHIP ESTABLISHED HEREUNDER. Section 20. Limitations of Gaming Laws and Liquor Laws. The Trustee acknowledges that: (i) its grant of a security interest in, and its rights and remedies with respect to the Pledged Collateral are subject to the limitations and restrictions of the Gaming Laws and/or the Liquor Laws, which may, among other things, require the Trustee to obtain the prior approval of the Gaming Authority or Liquor License Authority, as applicable, enforcing such laws before taking any action hereunder and to be licensed by such authorities before exercising certain rights and remedies hereunder and (ii) the Gaming Laws and Liquor Laws currently prohibit any pledge, hypothecation or transfer of any Gaming License or Liquor License or any interests therein or attachment of any security interest in such licenses. Section 21. Conflicts with Indenture. In the event of any conflict between the provisions of this Agreement and those of the Indenture, including, -14- without limitation, any conflicts or inconsistencies in any definitions herein or therein, the applicable provisions or definitions or the Indenture shall govern. Section 22. Termination. Upon the indefeasible payment in full of all Obligations (other than Unmatured Surviving Obligations) of the Pledgor under the Indenture, the Senior Notes, this Agreement or any other Transaction Document, or upon Legal Defeasance or Covenant Defeasance, the Trustee shall, at the request of the Pledgor, deliver a certificate to the Pledgor stating that such Obligations have been paid in full, the security interest granted herein shall terminate and all rights to the Pledged Collateral shall revert to the Pledgor. Upon any such termination the Trustee shall, at the Pledgor's expense, execute and deliver to the Pledgor such Uniform Commercial Code termination statements and such other documents as the Pledgor shall reasonably request to effect or evidence the termination and release of such security interest in the Pledged Collateral. [remainder of page intentionally left blank; signature page follows] -15- IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be executed and delivered by its duly authorized officer as of the date first above written. PLEDGOR: WINDSOR WOODMONT BLACK HAWK RESORT CORP., a Colorado corporation By: /s/ David P. Robinowitz ------------------------------- Name: David P. Robinowitz Title: President TRUSTEE: SUNTRUST BANK, a Georgia banking corporation By: /s/ Deborah Moreyra ------------------------------------- Name: Deborah Moreyra Title: First Vice President Norwest Bank Minnesota, N.A., a national association, acting in its capacity as Securities Intermediary, hereby (i) agrees to act as Securities Intermediary and (ii) acknowledges its agreement to be bound by the provisions of subsections 5(f) and 11 set forth in this Agreement. NORWEST BANK MINNESOTA, N.A., a national association By: /s/ Kristy M. Perez --------------------------------- Name: Kristy M. Perez Title: Vice President Midwest Plaza West Tower 801 Nicollet Mall, Suite 700 Minneapolis, MN ###-###-#### Attention: Kristy M. Perez Facsimile: (702) 765-3531 SunTrust Bank, a Georgia banking corporation, acting in its capacity as Interest Securities Intermediary, hereby (i) agrees to act as Securities Intermediary and (ii) acknowledges its agreement to be bound by the provisions of subsections 5(f) and 11 set forth in this Agreement. SUNTRUST BANK, a Georgia banking corporation By: /s/ Deborah Moreyra --------------------------------- Name: Deborah Moreyra Title: First Vice President 225 East Robinson Street, Suite 250 Orlando, FL 32801 Attention: Deborah L. Moreyra Facsimile: (407) 237-5299 Schedule I ---------- LIST OF SECURITIES