EXHIBIT 10.49
EXHIBIT XVII-B
[FORM OF SUBSIDIARY SECURITY AGREEMENT (LOUISIANA)]
SUBSIDIARY SECURITY AGREEMENT (LOUISIANA)
This SUBSIDIARY SECURITY AGREEMENT (this "Agreement") is dated
as of August 25, 1995 and entered into by and between PLAYERS LAKE ▇▇▇▇▇▇▇,
INC., a Louisiana corporation ("PLC"), SHOWBOAT STAR PARTNERSHIP, a Louisiana
general partnership ("SSP"), PLAYERS RIVERBOAT, LLC, a Louisiana limited
liability company ("PRLLC", each of PRLLC, PLC and SSP being referred to herein
as a "Grantor" and collectively, "Grantors"), and FIRST INTERSTATE BANK OF
NEVADA, N.A. ("FIB"), as administrative agent for and representative of (in such
capacity herein called "Secured Party") the financial institutions ("Lenders")
party to the Credit Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Secured Party, Lenders, FIB and Bankers Trust Company, as
Managing Agents, and FIB and BT Securities Corporation, as Co-Arrangers, have
entered into a Credit Agreement dated as of even date herewith (said Credit
Agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time, being the "Credit Agreement", the terms defined therein and
not otherwise defined herein being used herein as therein defined) with Players
International, Inc., a Nevada corporation ("Company"), of which each Grantor is
a wholly-owned subsidiary, pursuant to which Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Company.
B. Grantors have delivered a Guaranty dated as of even date
herewith (said Guaranty, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Guaranty") in favor of Secured
Party for the benefit of Lenders, pursuant to which Grantors, along with other
Subsidiaries of Company, have guarantied the prompt payment and performance when
due of all obligations of Company under the Credit Agreement.
C. It is a condition precedent to the initial extensions of
credit by Lenders under the Credit Agreement that Grantors shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Loans and other extensions of credit and to issue the
Standby Letters of Credit under the Credit Agreement and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Grantors hereby agree with Secured Party as follows:
SECTION 1. Grant of Security. Each Grantor hereby assigns to
Secured Party, and hereby grants to Secured Party a security interest in, all of
such Grantor's right, title and interest in and to the following, in each case
whether now or hereafter existing or in which such Grantor now has or hereafter
acquires an interest and wherever the same may be located (the "Collateral"):
(a) All present and future interest in and to those certain
barges and vessels presently moored, anchored or otherwise located on or around
the Louisiana Facilities or otherwise used in connection with the Louisiana
Facilities, whether such barges or vessels in the present state of impoundment
are deemed real, personal or mixed property, which barges and vessels are
described as follows: (i) that certain vessel Star Casino having Official No.
D997578, built in 1993 in ▇▇▇▇▇▇▇▇▇▇, Louisiana, formerly having its home port
at _______, _________, its present home port being New Orleans, Louisiana, and
having its hailing port at _______, _______, and (ii) that certain vessel
Players Riverboat Casino II having Official No. D997773, built in 1993 in
Jennings, Louisiana, its present home port being New Orleans, Louisiana,
together with (iii) all equipment, earnings, proceeds arising from operation of
any business upon such barges and vessels, parts, attachments and all other
property, whether real, personal or mixed, now or hereafter located thereon,
derived therefrom or used in connection therewith, including, but not limited
to, all moorings, cells, cofferdam enclosures and related ancillary improvements
(collectively, the "Barges");
(b) all present and future chattels, furniture, furnishings,
goods, equipment, fixtures and all other tangible personal property, of whatever
kind and nature, now or hereafter used in connection with or placed or located
within or on any part of the Louisiana Facilities (including, without
limitation, any building or structure that is now or that may hereafter be
erected within or on the Louisiana Facilities), including, but not limited to,
machinery, materials, goods and equipment now or hereafter used in the
construction or operation of the Louisiana Facilities (including, without
limitation, air conditioning, heating, electrical, lighting, fire fighting and
fire prevention, food and beverage service, laundry, plumbing, refrigeration,
security, sound, signaling, telephone, television, window washing and other
equipment and fixtures, of whatever kind or nature, including generators,
transformers, switching gear, boilers, burners, furnaces, piping, sprinklers,
sinks, tubs, valves, compressors, motors, carts, dumb waiters, elevators and
other lifts, floor coverings, hardware, keys, locks, organs, pianos, planters,
railings, scales, shelving, signs, tools, machinery, molds, dies, drills,
presses, planers, saws, furniture, business fixtures, trade fixtures, electric,
gas and other motor vehicles, uniforms, vacuum cleaners, hotel or Ship
furniture, furnishings and equipment, bathroom furniture and furnishings
(including towels, bathmats, hamperettes,
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shower curtains and other bath linens), beds and bedding (including mattresses,
springs, pillows, bed pads, sheets, blankets, comforters, spreads and other bed
linens and furnishings), bric-a-brac, chairs, chests, vanities, secretaries,
bureaus, chiffonniers, love seats, benches, costumers, smoking stands, sand
jars, desks, dressers, hangings, paintings, pictures, frames, sculptures, lamps,
light bulbs, mirrors, night stands, ornaments, radios, stereo equipment, sofas,
statuary, tables, telephones, televisions, vases, window coverings, foodstuffs,
beverages (including beer, wine, liquor and other alcoholic beverages), and
other consumables (including soap, shampoo, cleaning supplies and paper goods),
cutlery, cooking, baking and other kitchen utensils and apparatus (including
crockery, fryers, grills, kettles, mixers, pots, pans, pails, racks, steamers
and toasters), china and other dishes, flatware, glassware, hollowware,
serving pieces, trays, table linens, washers, dryers, irons, ironing
boards and other ironing equipment, cables, outlets, plugs, wiring and related
apparatus and fixtures, card readers, cash registers, adding machines,
calculators, computers, keyboards, monitors, printers, printing equipment,
envelopes, stationery, posting machines, blank forms, typewriters, typewriter
stands, other office and accounting equipment and supplies, time stamps, time
recorders, bookkeeping machines, checking machines, payroll machines, computer
reservations systems, equipment used in the operation of casinos within or on
the Louisiana Facilities (including but not limited to, gaming devices and
associated equipment (as defined in La.R.S. 4:504), including but not limited
to, slot machines, cards, poker chips and gaming tables) and all other goods,
equipment, furnishings, apparatus and fixtures that are now or may hereafter be
located at or used within, at or in connection with the Louisiana Facilities)
and all other tangible personal property used or to be used at or in connection
with, or placed or to be placed in, rooms, halls, lounges, offices, lobbies,
lavatories, basements, cellars, vaults or other portions of the Louisiana
Facilities or of any other building or buildings hereafter constructed or
erected thereon, whether herein enumerated or not, and whether or not contained
in any such building, and which are used or to be used or useful in the
operation and maintenance thereof, or in any bar, casino, hotel, restaurant,
store, health spa, salon or other business conducted thereon, together with all
replacements and substitutions for any and all personal property in which such
Grantor has an interest, including without limitation such goods and equipment
as shall from time to time be located, placed, installed or used in or upon, or
procured for use, or to be used or useful in connection with the operation of
the whole, or any part of, the Louisiana Facilities and all parts thereof and
all accessions thereto (any and all such equipment, replacements, substitutions,
parts and accessions being the "Equipment");
(c) all present and future inventory and merchandise in all of
its forms used in connection with or placed or located within or on any part of
the Louisiana Facilities (including, but not limited to, (i) all goods held by
such Grantor for sale or lease or to be furnished under contracts of service or
so leased or furnished, (ii) all raw materials, work in process, finished goods,
and materials used or consumed in the manufacture, packing, shipping,
advertising, selling, leasing, furnishing or production of such inventory or
otherwise used or consumed in such Grantor's business, (iii) all goods in which
such Grantor has an interest in mass or a joint or other interest or right of
any kind, (iv) all goods that are returned to or repossessed by such Grantor,
and (v) all packing materials, supplies and containers
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relating to or used in connection with any of the foregoing, and all accessions
thereto and products thereof (all such inventory, accessions and products being
the "Inventory") and all negotiable documents of title (including without
limitation warehouse receipts, dock receipts and bills of lading) issued by any
person covering any of the foregoing (any such negotiable document of title
being a "Negotiable Document of Title");
(d) all present and future accounts, accounts receivable,
rentals, revenues, receipts, payments, and income of any nature whatsoever
derived from or received with respect to hotel rooms, rooms on any Ship, banquet
facilities, convention facilities, retail premises, bars, restaurants, casinos,
parking lots and garages, and any other facilities within or on the Louisiana
Facilities and services and amenities provided in connection therewith, all
agreements, contracts, leases, contract rights (including, without limitation,
that Development and Exchange Agreement dated as of November 16, 1993, among
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, Mortgager, the City of Lake Charles, Louisiana, and
the State of Louisiana), rights to payment, instruments, documents, chattel
paper, security agreements, guaranties, undertakings, surety bonds, insurance
policies, condemnation deposits and awards, notes and drafts, securities,
certificates of deposit and the right to receive all payments thereon or in
respect thereof (whether principal, interest, fees or otherwise), contract
rights (other than rights under contracts or governmental permits that may not
be transferred by law), including, without limitation, rights to all deposits
from tenants and other users of the Louisiana Facilities, rights under all
contracts relating to the construction, renovation or restoration of any of the
improvements now or hereafter located within or on the Louisiana Facilities or
the financing thereof and all rights under payment or performance bonds,
warranties, and guaranties, and all rights to payment from any credit/charge
card organization or entity such as or similar to, and including, without
limitation, the organizations or entities that sponsor and administer,
respectively, the American Express Card, the ▇▇▇▇▇ ▇▇▇▇▇▇▇ Card, the Diners Club
Card, the Discover Card, the MasterCard and the Visa Card, books of account, and
principal, interest and payments due on account of goods sold, services
rendered, loans made or credit extended, within, on or in connection with the
Louisiana Facilities and all forms of obligations owing to and rights of such
Grantor or in which such Grantor may have any interest, however created or
arising (any and all such accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other obligations being the "Accounts", and
any and all such security agreements, leases and other contracts being the
"Related Contracts");
(e) the agreements listed in Schedule I annexed hereto, as each
such agreement may be amended, supplemented or otherwise modified from time to
time (said agreements, as so amended, supplemented or otherwise modified, being
referred to herein individually as an "Assigned Agreement" and collectively as
the "Assigned Agreements"), including without limitation (i) all rights of such
Grantor to receive moneys due or to become due under or pursuant to the Assigned
Agreements, (ii) all rights of such Grantor to receive proceeds of any
insurance, indemnity, warranty or guaranty with respect to the Assigned
Agreements, (iii) all claims of such Grantor for damages arising out of any
breach of or default under the Assigned Agreements, and (iv) all rights of such
Grantor to terminate,
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amend, supplement, modify or exercise rights or options under the Assigned
Agreements, to perform thereunder and to compel performance and otherwise
exercise all remedies thereunder;
(f) all present and future right, title and interest of such
Grantor in and to all leases, subleases, licenses, concessions, franchises and
other use or occupancy agreements (excepting, however, agreements made by such
Grantor in the ordinary course of business for short-term use by members of the
public of any guest rooms and public rooms, including banquet and meeting
facilities, located within or on the Louisiana Facilities, and any amendments,
modifications, extensions or renewals thereof (collectively, "Leases"), whether
or not specifically herein described, that now or may hereafter pertain to or
affect the Louisiana Facilities or any portion thereof and all amendments to the
same, including, but not limited to, the following: (i) all payments due and to
become due under such Leases, whether as rent, damages, insurance payments,
condemnation awards, or otherwise; (ii) all claims, rights, powers, privileges
and remedies under such Leases; and (iii) all rights of such Grantor under such
Leases to exercise any election or option (including, without limitation, any
right of Grantor under any ground lease to purchase the fee interest of the
lessor thereunder (the "Options")), or to give or receive any notice, consent,
waiver or approval, or to accept any surrender of the premises or any part
thereof, together with full power and authority in the name of such Grantor, or
otherwise, to demand and receive, enforce and collect any receipt for any or all
of the foregoing, to endorse or execute any checks or any instruments or orders,
to file any claims, and to take any other action that Secured Party may deem
necessary or advisable in connection therewith;
(g) all present and future deposit accounts of such Grantor,
including, without limitation, those deposit accounts set forth on Schedule II
hereto, any demand, time, savings, passbook or like account maintained by such
Grantor with any bank, savings and loan association, credit union or like
organization, and all money, cash and cash equivalents of such Grantor, whether
or not deposited in any such deposit account and all such accounts maintained
with Secured Party;
(h) all present and future general intangibles (including but
not limited to all governmental permits relating to construction or other
activities within or on the Louisiana Facilities), the Options, all tax refunds
of every kind and nature to which such Grantor now or hereafter may become
entitled, however arising, all other refunds, and all deposits, goodwill, choses
in action, rights to payment or performance, gambling debts or gaming debts owed
to such Grantor by Grantor's patrons (whether or not evidenced by a note),
judgments taken on any rights or claims included in the Collateral, trade
secrets, computer programs, software, customer lists, business names,
trademarks, trade names and service marks (including, but not limited to: "Star
Casino," "Players Riverboat Casino II," "Players Riverboat Hotel" and any
derivation thereof, including any and all state and federal applications and
registrations thereof), patents, patent applications, licenses, copyrights,
registration and franchise rights, technology, processes, proprietary
information, insurance proceeds and all goodwill associated with any of the
foregoing;
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(i) all present and future books and records, including,
without limitation, books of account and ledgers of every kind and nature,
ledger cards, computer programs, tapes, disks and other information storage
devices, all related data processing software, and all electronically recorded
data relating to such Grantor or its business related to the Louisiana
Facilities, all receptacles and containers for such records, and all files and
correspondence;
(j) all present and future maps, plans, specifications,
surveys, studies, reports, data and drawings (including, without limitation,
architectural, structural, mechanical and engineering plans and specifications,
studies, data and drawings) prepared for or relating to the development of the
Louisiana Facilities or the construction, renovation or restoration of any
improvements within or on the Louisiana Facilities or the extraction of
minerals, sand, gravel or other valuable substances from the Louisiana
Facilities, together with all amendments and modifications thereto;
(k) all present and future licenses, permits, variances,
special permits, franchises, certificates, rulings, certifications, validations,
exemptions, filings, registrations, authorizations, consents, approvals,
waivers, orders, rights and agreements (including options, option rights and
contract rights), other than those (including non-transferrable gaming permits)
that may not be transferred by law, now or hereafter obtained by such Grantor
from any governmental authority having or claiming jurisdiction over the
Louisiana Facilities or any other element of the Collateral or providing access
thereto, or the operation of any business within, on, at, or from the Louisiana
Facilities;
(l) all present and future goods, including, without
limitation, all consumer goods, inventory, equipment, and other supplies, of
whatever kind or nature, and any and all other goods, wherever located, used or
to be used in connection with or in the conduct of such Grantor's business or
the Louisiana Facilities;
(m) all present and future stocks, bonds, debentures,
securities, subscription rights, options, warrants, puts, calls, certificates,
partnership interests, joint venture interests, investments, brokerage accounts
and all rights, preferences, privileges, dividends, distributions, redemption
payments and liquidation payments received or receivable with respect thereto;
(n) all present and future accessions, appurtenances,
components, repairs, repair parts, spare parts, replacements, substitutions,
additions, issue and improvements to or of or with respect to any of the
foregoing;
(o) all other fixtures and storage and office facilities, and
all accessions thereto and products thereof and all water stock relating to the
Louisiana Facilities;
(p) to the extent not covered by any of the preceding clauses,
any and all of such Grantor's present and future machinery, equipment,
furniture, furnishings and fixtures, of every type and description, now or
hereafter located on any of the Louisiana Ships or any
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Barge or used in connection therewith, together with all accessories,
attachments, accessions, substitutions, replacements and additions thereto;
(q) all other tangible and intangible personal property of
such Grantor used in connection with or placed or located within or on any part
of the Louisiana Facilities;
(r) all rights, remedies, powers and privileges of such
Grantor with respect to any of the foregoing; and
(s) any and all proceeds, products, rents, income and profits
of any of the foregoing, including, without limitation, all money, accounts,
general intangibles, deposit accounts, documents, instruments, chattel paper,
goods, insurance proceeds (whether or not Secured Party is the loss payee), and
any other tangible or intangible property received upon the sale or disposition
of any of the foregoing (it being agreed, for purposes hereof, that the term
"proceeds" includes whatever is receivable or received when any of the
Collateral is sold, collected, exchanged or otherwise disposed of, whether such
disposition is voluntary or involuntary).
Notwithstanding anything to the contrary contained herein,
Secured Party acknowledges that it has no security interest in any cash of any
Grantor described in clauses (f), (g) and (l) above, to the extent such a
security interest is prohibited by the Louisiana Gaming Control Act.
SECTION 2. Security for Obligations. This Agreement secures,
and the Collateral is collateral security for, the prompt payment or performance
in full when due, whether at stated maturity, by required prepayment,
declaration, acceleration, demand or otherwise (including the payment of amounts
that would become due but for the operation of the automatic stay under Section
362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all obligations and
liabilities of every nature of Grantors now or hereafter existing under or
arising out of or in connection with the Guaranty and all extensions or renewals
thereof, whether for principal, interest (including without limitation interest
that, but for the filing of a petition in bankruptcy with respect to any
Grantor, would accrue on such obligations), reimbursement of amounts drawn under
Letters of Credit, fees, expenses, indemnities or otherwise, whether voluntary
or involuntary, direct or indirect, absolute or contingent, liquidated or
unliquidated, whether or not jointly owed with others, and whether or not from
time to time decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid, to the
extent all or any part of such payment is avoided or recovered directly or
indirectly from Secured Party or any Lender as a preference, fraudulent transfer
or otherwise (all such obligations and liabilities being the "Underlying Debt"),
and all obligations of every nature of any Grantor now or hereafter existing
under this Agreement (all such obligations of Grantors, together with the
Underlying Debt, being the "Secured Obligations").
XVII-B-7
SECTION 3. Grantors Remain Liable. Anything contained herein to
the contrary notwithstanding, (a) Grantors shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of their duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by Secured
Party of any of its rights hereunder shall not release any Grantor from any of
its duties or obligations under the contracts and agreements included in the
Collateral, and (c) Secured Party shall not have any obligation or liability
under any contracts and agreements included in the Collateral by reason of this
Agreement or otherwise, nor shall Secured Party be obligated to perform any of
the obligations or duties of Grantors thereunder or to take any action to
collect or enforce any claim for payment assigned hereunder.
SECTION 4. Representations and Warranties. Each Grantor
represents and warrants as follows:
(a) Ownership of Collateral. Except for the security interest
created by this Agreement and any Liens permitted pursuant to subsection 7.2A of
the Credit Agreement, such Grantor owns the Collateral owned by it free and
clear of any Lien. Except such as may have been filed in favor of Secured Party
relating to this Agreement, no effective financing statement or other instrument
similar in effect covering all or any part of the Collateral is on file in any
filing or recording office.
(b) Location of Equipment and Inventory. All of the Equipment
and Inventory is, as of the date hereof, located at the places specified in
Schedule III annexed hereto.
(c) Office Locations; Other Names. The chief place of business,
the chief executive office and the office where such Grantor keeps its records
regarding the Accounts is, and has been for the four month period preceding the
date hereof, located at the place listed on Schedule IV annexed hereto. No
Grantor has in the past done, and does not now do, business under any other name
(including any trade-name or fictitious business name) except "Star Casino,"
"Players Casino II" and "Players Island."
(d) Delivery of Certain Collateral. All chattel paper and all
notes and other instruments (excluding checks) comprising any and all items of
Collateral have been delivered to Secured Party duly endorsed and accompanied by
duly executed instruments of transfer or assignment in blank.
(e) Governmental Authorizations. No authorization, approval or
other action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the grant by such Grantor of the
security interest granted hereby, (ii) the execution, delivery or performance of
this Agreement by such Grantor, or (iii) the perfection of or the exercise by
Secured Party of its rights and remedies hereunder (except (x) authorization
from the Louisiana Gaming Authorities for the exercise by Secured Party of
certain of its rights and remedies hereunder, (y) the filing of a Uniform
Commercial Code
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financing statement with the Clerk of Court of any Louisiana parish (or recorder
of mortgages for Orleans Parish) and the Louisiana Mortgage with the recorder of
mortgages for Calcasieu Parish, Louisiana and (z) as has been previously taken
by or at the direction of such Grantor).
(f) Perfection. This Agreement creates a valid and enforceable
security interest in the Collateral, securing the payment of the Secured
Obligations. Upon the filing of a UCC-1 financing statement describing the
Collateral with the Clerk of Court of any Louisiana parish (or with the recorder
of mortgages for Orleans Parish) and the Louisiana Mortgage with the recorder of
mortgages for Calcasieu Parish, Louisiana, Secured Party shall also have a
perfected and first priority security interest in the Collateral, subject only
to Permitted Encumbrances, securing the payment of the Secured Obligations.
(g) Other Information. All information heretofore, herein or
hereafter supplied to Secured Party by or on behalf of such Grantor with
respect to the Collateral is accurate and complete in all respects.
SECTION 5. Further Assurances.
(a) Each Grantor agrees that from time to time, at the expense
of such Grantor, such Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that Secured Party may reasonably request, in order to perfect and
protect any security interest granted or purported to be granted hereby or to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral and to preserve, protect and maintain the
Collateral and the value thereof. Without limiting the generality of the
foregoing, each Grantor will: (i) at the reasonable request of Secured Party
▇▇▇▇ conspicuously each item of chattel paper included in the Accounts, each
Related Contract and, at the reasonable request of Secured Party, each of its
records pertaining to the Collateral, with a legend, in form and substance
satisfactory to Secured Party, indicating that such Collateral is subject to the
security interest granted hereby, (ii) if any Account shall be evidenced by a
promissory note or other instrument (excluding checks) or chattel paper, deliver
and pledge to Secured Party hereunder such note or instrument or the original
counterpart of such chattel paper, duly endorsed and accompanied by duly
executed instruments of transfer or assignment, all in form and substance
satisfactory to Secured Party, (iii) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Secured Party may reasonably
request, in order to perfect and preserve the security interests granted or
purported to be granted hereby, (iv) promptly after the acquisition by such
Grantor of any item of Equipment which is covered by a certificate of title
under a statute of any jurisdiction under the law of which indication of a
security interest on such certificate is required as a condition of perfection
thereof, execute and file with the registrar of motor vehicles or other
appropriate authority in such jurisdiction an application or other document
requesting the notation or other indication of the security interest created
hereunder on such certificate of title, (v) at any reasonable time, upon
reasonable request by Secured Party, exhibit the Collateral to and allow
inspection of the
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Collateral by Secured Party, or persons designated by Secured Party, and (vi) at
the reasonable request of Secured Party, appear in and defend any action or
proceeding that may affect such Grantor's title to or Secured Party's security
interest in all or any part of the Collateral.
(b) Each Grantor hereby authorizes Secured Party to file one or
more financing or continuation statements, and amendments thereto, relative to
all or any part of the Collateral without the signature of such Grantor. Each
Grantor agrees that a carbon, photographic or other reproduction of this
Agreement or of a financing statement signed by such Grantor shall be sufficient
as a financing statement and may be filed as a financing statement in any and
all jurisdictions.
(c) Each Grantor will furnish to Secured Party from time to
time statements and schedules further identifying and describing the Collateral
and such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
(d) Each Grantor agrees, after an Event of Default or Potential
Event of Default, in the event that Secured Party shall apply for or appoint an
agent to apply for a gaming or liquor license with any Louisiana Gaming
Authority or any Governmental Authority or seek to obtain consent from any
Louisiana Gaming Authority to foreclose on the Collateral (including all gaming
permits) and operate the Louisiana Facilities or otherwise seek to enforce its
rights hereunder, such Grantor shall provide such cooperation as is necessary in
order for Secured Party to obtain the full benefits of this Agreement. Without
limiting the generality of the foregoing, if any Louisiana Gaming Authority or
any Governmental Authority shall require any amendments to the Collateral
Documents or require such Grantor to execute such other documents as a condition
to or as a part of such approval process, such Grantor shall consent to such
amendments and/or execute such documents promptly.
SECTION 6. Certain Covenants of Grantors. Each Grantor shall:
(a) not use or permit any Collateral to be used unlawfully or
in violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
(b) notify Secured Party of any change in such Grantor's name,
identity, corporate or partnership structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of any
change in such Grantor's chief place of business, chief executive office or
residence or the office where such Grantor keeps its records regarding the
Accounts and all originals of all chattel paper that evidence Accounts;
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(d) if Secured Party gives value to enable such Grantor to
acquire rights in or the use of any Collateral, use such value for such
purposes; and
(e) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the Collateral,
except to the extent the validity thereof is being contested in good faith and
for which adequate reserves have been established; provided that such Grantor
shall in any event pay such taxes, assessments, charges, levies or claims not
later than five days prior to the date of any proposed sale under any judgement,
writ or warrant of attachment entered or filed against such Grantor or any of
the Collateral as a result of the failure to make such payment.
SECTION 7. Special Covenants With Respect to Equipment and
Inventory. Each Grantor shall:
(a) keep the Equipment and Inventory at the places therefor
specified on Schedule III annexed hereto or, upon 30 days' prior written notice
to Secured Party, at such other places in jurisdictions where all action that
may be necessary or desirable, or that Secured Party may reasonably request, in
order to perfect and protect any security interest granted or purported to be
granted hereby, or to enable Secured Party to exercise and enforce its rights
and remedies hereunder, with respect to such Equipment and Inventory shall have
been taken;
(b) cause the Equipment to be maintained and preserved in the
same condition, repair and working order as when new, ordinary wear and tear
excepted, and in accordance with such Grantor's past practices, and shall
forthwith, or, in the case of any loss or damage to any of the Equipment when
subsection (c) or (d) of Section 8 is not applicable, as quickly as practicable
after the occurrence thereof, make or cause to be made all repairs, replacements
and other improvements in connection therewith that are necessary or desirable
to such end. Each Grantor shall promptly furnish to Secured Party a statement
respecting any material loss or damage to any of the Equipment (the requirements
under this subsection 7(b) being supplemental to and not exclusive of the
requirements of Company under Section 6.4 of the Credit Agreement relating to
maintenance of property);
(c) provide prompt written notice to Secured Party of any
breach or default by any party to any Assigned Agreement;
(d) notify Secured Party of the establishment of any deposit
accounts after the date hereof and take such steps as may be reasonably
requested by Secured Party to perfect Secured Party's lien therein;
(e) perform all acts that are necessary or desirable to cause
all licenses, permits, variances, special permits, franchises, certificates,
rulings, certifications, validations, exemptions, filings, registrations,
authorizations, consents, approvals, waivers, orders, rights,
XVII-B-11
and agreements in which a security interest has been conveyed to Secured Party
pursuant to subsection 1(j) to remain in full force and effect;
(f) keep correct and accurate records of the Inventory,
itemizing and describing the kind, type and quantity of Inventory, such
Grantor's cost therefor and (where applicable) the current list prices for the
Inventory substantially consistent with the practice of other gaming
institutions in connection with their gaming operations in the State of
Louisiana;
(g) upon the occurrence of an Event of Default, if any
Inventory is in possession or control of any of such Grantor's agents or
processors, instruct such agent or processor to hold all such Inventory for the
account of Secured Party and subject to the instructions of Secured Party; and
(h) promptly upon the issuance and delivery to such Grantor of
any Negotiable Document of Title (other than any one or more Negotiable
Documents of Title covering Inventory which, in the ordinary course of business,
is in transit either (i) from a supplier to Grantor or (ii) to customers of
Grantor), deliver such Negotiable Document of Title to Secured Party.
SECTION 8. Insurance.
(a) Each Grantor shall, at its own expense, maintain insurance
with respect to the Equipment and Inventory in accordance with the terms imposed
on Company by the Credit Agreement, this Section 8 and the Louisiana Mortgage.
Such insurance shall include, without limitation, property damage insurance and
liability insurance. Each policy for property damage insurance shall provide for
all losses (except for losses of less than $2,500,000 per occurrence) to be paid
directly to Secured Party as provided in clauses (c) and (d) below. Each policy
shall in addition name such Grantor and Secured Party as insured parties
thereunder (without any representation or warranty by or obligation upon Secured
Party) as their interests may appear and have attached thereto a loss payable
clause acceptable to Secured Party that shall (i) contain an agreement by the
insurer that any loss thereunder shall be payable to Secured Party
notwithstanding any action, inaction or breach of representation or warranty by
such Grantor, (ii) provide that there shall be no recourse against Secured Party
for payment of premiums or other amounts with respect thereto, and (iii) provide
that at least 30 days' prior written notice of cancellation, material amendment,
reduction in scope or limits of coverage or of lapse shall be given to Secured
Party by the insurer. Each Grantor shall, if so reasonably requested by Secured
Party, deliver to Secured Party original or duplicate policies of such insurance
and, as often as Secured Party may reasonably request, a report of a reputable
insurance broker with respect to such insurance. Further, each Grantor shall, at
the reasonable request of Secured Party, duly execute and deliver instruments of
assignment of such insurance policies to comply with the requirements of
subsection 5(a) and cause the respective insurers to acknowledge notice of such
assignment. The requirements under this subsection 8(a) shall be supplemental to
and not
XVII-B-12
exclusive of the requirements imposed on Company under Section 6.4 of the Credit
Agreement relating to insurance.
(b) Reimbursement under any liability insurance maintained by
each Grantor pursuant to this Section 8 may be paid directly to the Person who
shall have incurred liability covered by such insurance. In case of any loss
involving damage to Equipment or Inventory when subsection (c) or (d) of this
Section 8 is not applicable, the Grantor owning such Collateral shall make or
cause to be made the necessary repairs to or replacements of such Equipment or
Inventory, and any proceeds of insurance maintained by such Grantor pursuant to
this Section 8 shall be paid to such Grantor as reimbursement for the costs of
such repairs or replacements.
(c) Upon the occurrence of any Event of Loss involving
Equipment or Inventory and pursuant to which any Grantor receives Net Cash
Proceeds equal to or in excess of $2,500,000, all insurance payments in respect
of such Equipment or Inventory shall be paid to and applied by Secured Party as
specified in subsection 2.4A(ii)(b) of the Credit Agreement.
(d) Notwithstanding the provisions of Section 8(c), upon the
occurrence and during the continuation of any Event of Default, all insurance
payments in respect of any Equipment or Inventory shall be paid to and applied
by Secured Party as specified in Section 18.
SECTION 9. Special Covenants with respect to Accounts and
Related Contracts.
(a) Each Grantor shall keep its chief place of business and
chief executive office and the office where it keeps its records concerning the
Accounts and Related Contracts at the location therefor specified in Section 4
or, upon 30 days' prior written notice to Secured Party, at such other location
in a jurisdiction where all action that may be necessary or desirable, or that
Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby, or to enable
Secured Party to exercise and enforce its rights and remedies hereunder, with
respect to such Accounts and Related Contracts shall have been taken. Each
Grantor will hold and preserve such records and will permit representatives of
Secured Party at any time during normal business hours to inspect and make
abstracts from such records, and each Grantor agrees to render to Secured Party,
at such Grantor's cost and expense, such clerical and other assistance as may be
reasonably requested with regard thereto. Promptly upon the request of Secured
Party, each Grantor shall deliver to Secured Party complete and correct copies
of each Related Contract.
(b) Each Grantor shall, for not less than 5 years from the date
on which such Account arose, maintain (i) complete records of each Account,
including records of all
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payments received, credits granted and merchandise returned, and (ii) all
documentation relating thereto.
(c) Except as otherwise provided in this subsection (c), each
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to such Grantor under the Accounts (but, other than with respect to
security deposits, in no event more than one month in advance) and Related
Contracts. In connection with such collections, each Grantor may take (and, at
Secured Party's direction, shall take) such action as such Grantor or Secured
Party may deem necessary or advisable to enforce collection of amounts due or to
become due under the Accounts; provided, however, that Secured Party shall have
the right at any time, upon the occurrence and during the continuation of an
Event of Default or a Potential Event of Default and upon written notice to such
Grantor of its intention to do so, to notify the account debtors or obligors
under any Accounts of the assignment of such Accounts to Secured Party and to
direct such account debtors or obligors to make payment of all amounts due or to
become due to such Grantor thereunder directly to Secured Party, to notify each
Person maintaining a lockbox or similar arrangement to which account debtors or
obligors under any Accounts have been directed to make payment to remit all
amounts representing collections on checks and other payment items from time to
time sent to or deposited in such lockbox or other arrangement directly to
Secured Party and, upon such notification and at the expense of such Grantor, to
enforce collection of any such Accounts and to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done. After receipt by such Grantor of the notice from
Secured Party referred to in the proviso to the preceding sentence, (i) all
amounts and proceeds (including checks and other instruments) received by such
Grantor in respect of the Accounts and the Related Contracts shall be received
in trust for the benefit of Secured Party hereunder, shall be segregated from
other funds of such Grantor and shall be forthwith paid over or delivered to
Secured Party in the same form as so received (with any necessary endorsement)
to be held as cash Collateral and applied as provided by Section 18, and (ii)
such Grantor shall not adjust, settle or compromise the amount or payment of any
Account, or release wholly or partly any account debtor or obligor thereof, or
allow any credit or discount thereon.
SECTION 10. Special Provisions With Respect to the Assigned
Agreements.
(a) Each Grantor shall at its expense:
(i) perform and observe all terms and provisions of
the Assigned Agreements to be performed or observed by it, maintain the
Assigned Agreements in full force and effect, enforce the Assigned
Agreements in accordance with their terms, and take all such action to
such end as may be from time to time reasonably requested by Secured
Party; and
XVII-B-14
(ii) furnish to Secured Party, promptly upon receipt
thereof, copies of all notices of default received by such Grantor
under or pursuant to the Assigned Agreements, and from time to time (A)
furnish to Secured Party such information and reports regarding the
Assigned Agreements as Secured Party may reasonably request and (B)
upon reasonable request of Secured Party make to the appropriate
counterparty to an Assigned Agreement such demands and requests for
information and reports or for action as such Grantor is entitled to
make under the Assigned Agreements.
(b) No Grantor shall, without the prior written consent of
Requisite Lenders, which consent shall not be unreasonably withheld:
(i) cancel or terminate any of the Assigned Agreements
or consent to or accept any cancellation or termination thereof if such
cancellation or termination, together with all other such cancellations
or terminations, would result in a Material Adverse Effect;
(ii) amend or otherwise modify the Assigned Agreements
or give any consent, waiver or approval thereunder if the effect of
such amendment or modification, together with all other amendments,
modifications, consents, waivers or approvals made or consents, waivers
or approvals given, is to increase materially the obligations of such
Grantor thereunder or to confer any additional rights on the
counterparties to such Assigned Agreements that could reasonably be
expected to be materially adverse to such Grantor or Lenders;
(iii) waive any default under or breach of the
Assigned Agreements;
(iv) consent to or permit or accept any prepayment of
amounts to become due under or in connection with the Assigned
Agreements, except as expressly provided therein; or
(v) take any other action in connection with the
Assigned Agreements that would impair the value of the interest or
rights of such Grantor thereunder or that would impair the interest or
rights of Secured Party.
SECTION 11. Deposit Accounts. Upon the occurrence and during the
continuation of an Event of Default, Secured Party and each Lender may exercise
dominion and control over, and refuse to permit further withdrawals (whether of
money, securities, instruments or other property) from any deposit accounts
maintained with Secured Party or such Lender constituting part of the
Collateral.
SECTION 12. License of Patents, Trademarks, Copyrights, etc. Each
Grantor hereby assigns, transfers and conveys to Secured Party, effective upon
the occurrence of any Event of Default, the nonexclusive right and license to
use all trademarks, tradenames,
XVII-B-15
service marks, copyrights, customers lists, patents or technical
processes owned or used by such Grantor that relate to the Collateral and any
other collateral granted by such Grantor as security for the Secured
Obligations, together with any goodwill associated therewith, all to the extent
necessary to enable Secured Party to use, possess and realize on the Collateral
and to enable any successor or assign to enjoy the benefits of the Collateral.
This right and license shall inure to the benefit of all successors, assigns and
transferees of Secured Party and its successors, assigns and transferees,
whether by voluntary conveyance, operation of law, assignment, transfer,
foreclosure, deed in lieu of foreclosure or otherwise. Such right and license is
granted free of charge, without requirement that any monetary payment whatsoever
be made to such Grantor.
SECTION 13. Transfers and Other Liens. No Grantor shall:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as permitted by the Credit Agreement;
or
(b) except for the security interest created by this Agreement
and the interests disclosed in Schedule V hereto which are permitted by the
Credit Agreement, create or suffer to exist any Lien upon or with respect to any
of the Collateral to secure the indebtedness or other obligations of any Person.
SECTION 14. Secured Party Appointed Attorney-in-Fact. Each
Grantor hereby irrevocably appoints Secured Party as such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor, Secured Party or otherwise, from time to time in
Secured Party's discretion to take any action and to execute any instrument that
Secured Party may deem necessary or advisable to accomplish the purposes of this
Agreement, including without limitation:
(a) to obtain and adjust insurance required to be maintained by
such Grantor or paid to Secured Party pursuant to Section 8;
(b) to ask for, demand, collect, ▇▇▇ for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a) and (b)
above;
(d) to file any claims or take any action or institute any
proceedings (including, without limitation, any proceeding before any Louisiana
Gaming Authority) that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;
XVII-B-16
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Secured Party in its
sole discretion, any such payments made by Secured Party to become obligations
of such Grantor to Secured Party, due and payable immediately without demand;
(f) to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with Accounts and other
documents relating to the Collateral; and
(g) upon the occurrence and during the continuation of an Event
of Default, generally to sell, transfer, pledge, make any agreement with respect
to or otherwise deal with any of the Collateral as fully and completely as
though Secured Party were the absolute owner thereof for all purposes, and to
do, at Secured Party's option and such Grantor's expense, at any time or from
time to time, all acts and things that Secured Party deems necessary to protect,
preserve or realize upon the Collateral and Secured Party's security interest
therein in order to effect the intent of this Agreement, all as fully and
effectively as such Grantor might do.
SECTION 15. Secured Party May Perform. If any Grantor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such agreement, and the expenses of Secured Party incurred
in connection therewith shall be payable by such Grantor under Section 20.
SECTION 16. Standard of Care. The powers conferred on Secured
Party hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the exercise
of reasonable care in the custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral or as to the taking of any necessary steps to
preserve rights against prior parties or any other rights pertaining to any
Collateral. Secured Party shall be deemed to have exercised reasonable care in
the custody and preservation of Collateral in its possession if such Collateral
is accorded treatment substantially equal to that which Secured Party accords
its own property.
SECTION 17. Remedies.
(a) Notwithstanding any other provision hereof, if Secured
Party elects, upon any Event of Default, to sell real property and any
of the Collateral together under the Louisiana Mortgage and applicable
law, then the terms of the Louisiana Mortgage shall, with respect to
such sale and Collateral, control and supersede any terms in this
Agreement with respect to such sale and Collateral; provided that
Secured Party's election to exercise remedies under the Louisiana
Mortgage shall have
XVII-B-17
no effect on the terms contained in this Agreement with respect to any
Collateral as to which Secured Party has not so elected.
(b) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Collateral, in
addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured
party on default under the Uniform Commercial Code as in effect in any
relevant jurisdiction (or, in the case of Louisiana, the Louisiana
Commercial Laws - Secured Transactions (La.R.S., Title 10, Chapter 9))
(the "Code") (whether or not the Code applies to the affected
Collateral), and also may (a) require any Grantor to, and Grantors
hereby agree that they will at their expense and upon request of
Secured Party forthwith, assemble all or part of the Collateral as
directed by Secured Party and make it available to Secured Party at a
place to be designated by Secured Party that is reasonably convenient
to both parties, (b) enter onto the property where any Collateral is
located and take possession thereof with or without judicial process,
(c) prior to the disposition of the Collateral, store, process, repair
or recondition the Collateral or otherwise prepare the Collateral for
disposition in any manner to the extent Secured Party deems
appropriate, (d) take possession of any Grantor's premises or place
custodians in exclusive control thereof, remain on such premises and
use the same and any of such Grantor's equipment for the purpose of
completing any work in process, taking any actions described in the
preceding clause (c) and collecting any Secured Obligation, and (e)
without notice except as specified below, sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any
of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and
upon such other terms as Secured Party may deem commercially
reasonable. Secured Party or any Lender may be the purchaser of any or
all of the Collateral at any such sale and Secured Party, as
administrative agent for and representative of Lenders (but not any
Lender or Lenders in its or their respective individual capacities
unless Requisite Lenders shall otherwise agree in writing), shall be
entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Collateral sold at
any such public sale, to use and apply any of the Secured Obligations
as a credit on account of the purchase price for any Collateral payable
by Secured Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the
part of Grantors, and each Grantor hereby waives (to the extent
permitted by applicable law) all rights of redemption, stay and/or
appraisal which it now has or may at any time in the future have under
any rule of law or statute now existing or hereafter enacted. Each
Grantor agrees that, to the extent notice of sale shall be required by
law, at least ten days' notice to such Grantor of the time and place of
any public sale or the time after which any private sale is to be made
shall constitute reasonable notification. Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale
having been given. Secured Party may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor,
and such sale may, without further notice, be made at the time and
XVII-B-18
place to which it was so adjourned. Each Grantor hereby waives any
claims against Secured Party arising by reason of the fact that the
price at which any Collateral may have been sold at such a private sale
was less than the price which might have been obtained at a public
sale, even if Secured Party accepts the first offer received and does
not offer such Collateral to more than one offeree. If the proceeds of
any sale or other disposition of the Collateral are insufficient to pay
all the Secured Obligations, Grantors shall be jointly and severally
liable for the deficiency and the fees of any attorneys employed by
Secured Party to collect such deficiency.
Further, as to all Collateral now or hereafter located in the
State of Louisiana, or as to which the laws of the State of Louisiana
may now be or hereafter become applicable, each Grantor hereby
acknowledges the Secured Obligations, whether now or existing or to
arise hereafter, and confesses judgment thereon if the Secured
Obligations are not paid at maturity, and does by these presents
consent, agree and stipulate that if any portion of the Secured
obligations is not promptly and fully paid when due, or if there should
occur an Event of Default, the Secured Obligations shall, at the option
of the Secured Party become immediately due and payable and it shall be
lawful for the Secured Party, without making a demand and without
notice or putting in default, the same being hereby expressly waived,
to cause all and singular the Collateral to be seized and sold by
executory process, without appraisement (appraisement being hereby
expressly waived), either in its entirety or in lots or parcels, as the
Secured Party may determine, to the highest bidder for cash, or on such
terms as plaintiff in such proceedings may direct.
Each Grantor hereby expressly waives: (a) the benefit of
appraisement, as provided in Articles 2332, 2336, 2723 and 2724,
Louisiana Code of Civil Procedure, and all other laws conferring the
same; (b) the demand and three (3) days delays accorded by Articles
2639 and 2721, Louisiana Code of Civil Procedure; (c) the notice of
seizure required by Articles 2293 and 2721, Louisiana Code of Civil
Procedure; (d) the three (3) days delay provided by Articles 2331 and
2722, Louisiana Code of Civil Procedure; and (e) the benefit of the
other provisions of Articles 2331, 2722 and 2723, Louisiana Code of
Civil Procedure, and the benefit of any other Articles or laws relating
to rights of appraisement, notice, or delay not specifically mentioned
above; and each Grantor expressly agrees to the immediate seizure of
the Collateral in the event of suit herein. Further, each Grantor
acknowledges that Secured Party shall have all rights to appointment of
a keeper in connection with any action to foreclose the lien hereof,
all in accordance with Louisiana Revised Statutes 9:5136 et seq. The
compensation of the keeper is hereby fixed at 1% of the amount due or
sued for or claimed or sought to be protected or enforced, and shall
constitute a portion of the Secured Obligations secured by the lien
hereof.
Notwithstanding anything to the contrary contained herein, if,
upon an Event of Default hereunder or under the Credit Agreement and
foreclosure upon any gaming permits pledged and assigned herein,
Secured Party is not qualified under the
XVII-B-19
Louisiana Gaming Control Act to hold such gaming permits, then Secured
Party shall designate an appropriately qualified third party to which
an assignment of such gaming permits can be made in compliance with the
Louisiana Gaming Control Act.
SECTION 18. Application of Proceeds. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of Secured Party, be held by Secured Party
as Collateral for, and/or then, or at any other time thereafter, applied in full
or in part by Secured Party against, the Secured Obligations in the following
order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in
connection therewith, and all amounts for which Secured Party is
entitled to indemnification hereunder and all advances made by Secured
Party hereunder for the account of Grantors, and to the payment of all
costs and expenses paid or incurred by Secured Party in connection with
the exercise of any right or remedy hereunder, all in accordance with
Section 20;
SECOND: To the payment of all other Secured Obligations (for
the ratable benefit of the holders thereof) in such order as Secured
Party shall elect; and
THIRD: To the payment to or upon the order of the Grantor who
owned the Collateral in issue, or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction
may direct, of any surplus then remaining from such proceeds.
SECTION 19. Regulatory Matters. Each Grantor and Secured Party
acknowledge and agree that:
(a) The terms and provisions of this Agreement and the rights and
obligations created hereunder shall be subject to compliance with the Louisiana
Gaming Control Act.
(b) Without limiting the generality of the foregoing, all
required prior approvals under the Louisiana Gaming Control Act will be obtained
in connection with Secured Party's exercise of any of the remedies set forth in
Section 17 upon the occurrence of an Event of Default including, without
limitation, any separate prior approvals required in connection with the sale,
transfer or other disposition of the Collateral; and
(c) Each Grantor agrees to assist Secured Party in obtaining all
approvals of the Louisiana Gaming Authorities or any other Governmental
Authority that are required by law for or in connection with any action or
transaction contemplated by this Agreement and,
XVII-B-20
at Secured Party's reasonable request upon the occurrence and during
the continuation of an Event of Default, to prepare, sign and file with
the Louisiana Gaming Authorities the transferor's portion of any application or
applications for consent to the transfer of control thereof necessary or
appropriate under the Louisiana Gaming Control Act for approval of any sale or
transfer of the Collateral pursuant to the exercise of Secured Party's remedies
under Section 17.
SECTION 20. Indemnity and Expenses.
(a) Grantors agree to indemnify Secured Party and each Lender
from and against any and all claims, losses and liabilities in any way relating
to, growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result
solely from Secured Party's or such Lender's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
(b) Grantors shall pay to Secured Party upon demand the amount of
any and all costs and expenses, including the reasonable fees and expenses of
its counsel and of any experts and agents, that Secured Party may incur in
connection with (i) the custody, preservation, use or operation of, or the sale
of, collection from, or other realization upon, any of the Collateral, (ii) the
exercise or enforcement of any of the rights of Secured Party hereunder, or
(iii) the failure by any Grantor to perform or observe any of the provisions
hereof.
SECTION 21. Continuing Security Interest; Transfer of Loans or
Letters of Credit. This Agreement shall create a continuing security interest in
the Collateral and shall (a) remain in full force and effect until the
indefeasible payment in full of the Secured Obligations, the cancellation or
termination of the Commitments and the termination, cancellation or expiration
of all outstanding Letters of Credit, (b) be binding upon each Grantor, its
successors and assigns, and (c) inure, together with the rights and remedies of
Secured Party hereunder, to the benefit of Secured Party and its successors,
transferees and assigns. Without limiting the generality of the foregoing clause
(c), but subject to the provisions of subsection 10.1 of the Credit Agreement,
any Lender may assign or otherwise transfer any Loans held by it or
Administrative Agent may assign any Letters of Credit issued by it to any other
Person, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to Lenders herein or otherwise. Upon the
indefeasible payment in full of all Secured Obligations, the cancellation or
termination of the Commitments and the termination, cancellation or expiration
of all outstanding Letters of Credit, the security interest granted hereby shall
terminate and all rights to the Collateral shall revert to Grantors. Upon any
such termination Secured Party will, at Grantors' expense, execute and deliver
to each Grantor such documents as such Grantor shall reasonably request to
evidence such termination.
XVII-B-21
SECTION 22. Secured Party as Administrative Agent.
(a) Secured Party has been appointed to act as Secured Party
hereunder by Lenders. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement.
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute removal as Secured Party under this Agreement;
and appointment of a successor Administrative Agent pursuant to subsection 9.5
of the Credit Agreement shall also constitute appointment of a successor Secured
Party under this Agreement. Upon the acceptance of any appointment as
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative Agent shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Secured Party under this Agreement, and the retiring
or removed Secured Party under this Agreement shall promptly (i) transfer to
such successor Secured Party all sums, securities and other items of Collateral
held hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of the successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Administrative Agent's resignation or removal hereunder as Secured
Party, the provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement while it was
Secured Party hereunder.
SECTION 23. Amendments; Etc. No amendment, modification,
termination or waiver of any provision of this Agreement, and no consent to any
departure by any Grantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by Secured Party and, in the case of any
such amendment or modification, by such Grantor. Any such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which it was given.
SECTION 24. Notices. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex, or five Business Days
after depositing it in the United States mail with postage prepaid and properly
XVII-B-22
addressed. For the purposes hereof, the address of each party hereto
shall be as set forth under such party's name on the signature pages
hereof or such other address as shall be designated by such party in a written
notice delivered to the other parties hereto.
SECTION 25. Failure or Indulgence Not Waiver; Remedies
Cumulative. No failure or delay on the part of Secured Party in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 26. Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 27. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 28. Governing Law; Terms. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEVADA, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEVADA. Unless otherwise defined herein or in the Credit
Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code in the
State of Nevada are used herein as therein defined.
SECTION 29. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEVADA, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT EACH GRANTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Each Grantor hereby agrees that service of all process in any such proceeding in
any such court may be made by registered or certified mail, return receipt
XVII-B-23
requested, to such Grantor at its addresses as provided in Section 24,
such service being hereby acknowledged by such Grantor to be sufficient
for personal jurisdiction in any action against such Grantor in any
such court and to be otherwise effective and binding service in every respect.
Nothing herein shall affect the right to serve process in any other manner
permitted by law or shall limit the right of Secured Party to bring proceedings
against any Grantor in the courts of any other jurisdiction.
SECTION 30. Waiver of Jury Trial. EACH GRANTOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Each Grantor and Secured
Party each acknowledge that this waiver is a material inducement for such
Grantor and Secured Party to enter into a business relationship, that such
Grantor and Secured Party have already relied on this waiver in entering into
this Agreement and that each will continue to rely on this waiver in their
related future dealings. Each Grantor and Secured Party further warrant and
represent that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY
SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT.
In the event of litigation, this Agreement may be filed as a written consent to
a trial by the court.
SECTION 31. Counterparts. This Agreement may be executed in one
or more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
XVII-B-24
IN WITNESS WHEREOF, Grantors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
PLAYERS LAKE ▇▇▇▇▇▇▇, INC.,
as a Grantor
By ______________________________
Title ____________________________
Notice Address:
c/o Players International, Inc.
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▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President and Chief Financial
Officer
With copies to:
c/o Players International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
c/o Players International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
S-1
IN WITNESS WHEREOF, Grantors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
SHOWBOAT STAR PARTNERSHIP,
as a Grantor
By PLAYERS RIVERBOAT, LLC
General Partner
By ____________________________
Title _________________________
By PLAYERS RIVERBOAT MANAGEMENT, INC.
General Partner
By ____________________________
Title _________________________
Notice Address:
c/o Players International, Inc.
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▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President and Chief Financial
Officer
With copies to:
c/o Players International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
c/o Players International, Inc.
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▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
S-2
FIRST INTERSTATE BANK OF NEVADA, N.A.,
as Secured Party
By: __________________________
Title: ________________________
Notice Address:
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▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
S-3
PLAYERS RIVERBOAT, LLC,
as a Grantor
By ______________________________
Title ____________________________
Notice Address:
c/o Players International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President and Chief Financial
Officer
With copies to:
c/o Players International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
c/o Players International, Inc.
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▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
S-4
SCHEDULE I
TO SECURITY AGREEMENT
Assigned Agreements
Players Lake ▇▇▇▇▇▇▇, Inc.
Showboat Star Partnership
Players Riverboat, LLC
S-5
SCHEDULE II
TO SECURITY AGREEMENT
Deposit Accounts
Players Lake ▇▇▇▇▇▇▇, Inc.
Showboat Star Partnership
Players Riverboat, LLC
XVII-B-II-1
SCHEDULE III
TO SECURITY AGREEMENT
Locations of Equipment:
PLC
SSP
PRLLC
Locations of Inventory:
PLC
SSP
PRLLC
XVII-B-III-1
SCHEDULE IV
TO SECURITY AGREEMENT
Chief Executive Offices
Players Lake ▇▇▇▇▇▇▇, Inc.
Showboat Star Partnership
Players Riverboat, LLC
XVII-B-IV-1
SCHEDULE V
TO SECURITY AGREEMENT
Existing Permitted Liens
Players Lake ▇▇▇▇▇▇▇, Inc.
Showboat Star Partnership
Players Riverboat, LLC
XVII-B-V-1