EXHIBIT 10.47
EXHIBIT XVI
[FORM OF COMPANY SECURITY AGREEMENT]
COMPANY SECURITY AGREEMENT
This COMPANY SECURITY AGREEMENT (this "Agreement") is dated as of
August 25, 1995 and entered into by and between PLAYERS INTERNATIONAL, INC., a
Nevada corporation ("Grantor"), 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 Grantor,
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 Grantor.
B. It is a condition precedent to the initial extensions of
credit by Lenders under the Credit Agreement that Grantor 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, Grantor hereby agrees with Secured Party as follows:
SECTION 1. Grant of Security. Grantor hereby assigns to Secured
Party, and hereby grants to Secured Party a security interest in, all of
Grantor's right, title and interest in and to the following, in each case
whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located (the "Collateral"):
(a) 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 any of the Facilities (including, without limitation,
any building or structure that is now or that may hereafter be erected within or
on any of the Facilities), including, but not limited to, machinery, materials,
goods and equipment now or hereafter used in the construction or operation of
any of the 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 furniture, furnishings and equipment,
bathroom furniture and furnishings (including towels, bathmats, hamperettes,
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 any of the Facilities
(including but not limited to, gaming devices and associated equipment (as
defined in Nevada Revised Statutes Chapter 463, Louisiana Revised Statutes
4:504) and gaming equipment/supplies (as defined in Section 3000.100 of the
Rules of the Illinois Gaming Board), 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 any of the 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 any of the 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
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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 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, any of the
Facilities and all parts thereof and all accessions thereto (any and all such
equipment, replacements, substitutions, parts and accessions being the
"Equipment");
(b) 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
any of the Facilities (including, but not limited to, (i) all goods held by
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 Grantor's business, (iii) all goods in which
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 Grantor, and (v) all
packing materials, supplies and containers 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");
(c) all present and future accounts, accounts receivable,
rentals, revenues, receipts, payments, and income of any nature whatsoever
derived from or received with respect to rooms, banquet facilities, convention
facilities, retail premises, bars, restaurants, casinos, parking lots and
garages and any other facilities within or on any of the Facilities and services
and amenities provided in connection therewith, all agreements, contracts,
leases, contract rights, 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 any of the Facilities, rights under all
contracts relating to the construction, renovation or restoration of any of the
improvements now or hereafter located within or on any of the 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 any of
the Facilities
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and all forms of obligations owing to and rights of Grantor or in which 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");
(d) 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
Grantor to receive moneys due or to become due under or pursuant to the Assigned
Agreements, (ii) all rights of Grantor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned Agreements, (iii)
all claims of Grantor for damages arising out of any breach of or default under
the Assigned Agreements, and (iv) all rights of Grantor to terminate, 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;
(e) all present and future right, title and interest of Grantor
in and to all leases, subleases, licenses, concessions, franchises and other use
or occupancy agreements (except, however, agreements made by 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 any of the 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
any of the 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 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 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;
(f) all present and future deposit accounts of Grantor,
including, without limitation, those deposit accounts set forth on Schedule II
hereto, any demand, time, savings, passbook or like account maintained by
Grantor with any bank, savings and loan association, credit union or like
organization, and all money, cash and cash equivalents of Grantor, whether or
not deposited in any such deposit account and all such accounts maintained with
Secured Party;
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(g) all present and future general intangibles (including but
not limited to all governmental permits relating to construction or other
activities within or on any of the Facilities), the Options, all tax refunds of
every kind and nature to which 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
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: "World Championship of
Blackjack," "Players Club International," "Players Riverboat Casino" (and
design), "Players Club," "Players Club Preferred," "Players Riverboat Casino,"
"Players Riverboat Hotel Casino" (and design) "Players Island Resort," "Players
Island Resort Casino Hotel," "Players Island Resort Casino Spa" (and design 1),
"Players Island Resort Casino Spa" (and design 2), "Players Island Resort o
Casino o Spa" 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;
(h) 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 Grantor or its business related to any of the Facilities, all
receptacles and containers for such records, and all files and correspondence;
(i) 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 any
of the Facilities or the construction, renovation or restoration of any
improvements within or on any of the Facilities or the extraction of minerals,
sand, gravel or other valuable substances from the Facilities, together with all
amendments and modifications thereto;
(j) 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 Grantor from
any governmental authority having or claiming jurisdiction over any of the
Facilities or any other element of the Collateral or providing access thereto,
or the operation of any business within, on, at, or from any of the Facilities;
(k) 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
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other goods, wherever located, used or to be used in connection with or in the
conduct of Grantor's business or any of the Facilities;
(l) all present and future stocks, securities (except any voting
stock or securities if consent is required from the applicable Gaming
Authorities and not obtained), bonds, debentures, 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;
(m) 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;
(n) all other fixtures and storage and office facilities, and all
accessions thereto and products thereof and all water stock relating to any of
the Facilities;
(o) to the extent not covered by any of the preceding clauses,
any and all of Grantor's present and future machinery, equipment, furniture,
furnishings and fixtures, of every type and description, now or hereafter
located on any of the Ships or Barges or used in connection therewith, together
with all accessories, attachments, accessions, substitutions, replacements and
additions thereto;
(p) all other tangible and intangible personal property of
Grantor used in connection with or placed or located within or on any part of
any of the Facilities;
(q) all rights, remedies, powers and privileges of Grantor with
respect to any of the foregoing; and
(r) 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
Grantor described in clauses (f), (g) and (l) above, to the extent such a
security interest is prohibited by any Gaming Laws.
SECTION 2. Security for Obligations. This Agreement secures, and
the Collateral is collateral security for, the prompt payment or performance in
full when due,
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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 Grantor now or hereafter existing under or arising out of or in connection
with the Credit Agreement and the other Loan Documents 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
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 Grantor now or hereafter existing under
this Agreement (all such obligations of Grantor, together with the Underlying
Debt, being the "Secured Obligations").
SECTION 3. Grantor Remains Liable. Anything contained herein to
the contrary notwithstanding, (a) Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its 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 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 Grantor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.
SECTION 4. Representations and Warranties. 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, Grantor owns the Collateral 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.
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(c) Office Locations; Other Names. The chief place of business,
the chief executive office and the office where Grantor keeps its records
regarding the Accounts is, and has been for the four month period preceding the
date hereof, located at ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇.
Grantor has not in the past done, and does not now do, business under any other
name (including any trade-name or fictitious business name) except Players Club
International, Inc.
(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 Grantor of the security
interest granted hereby, (ii) the execution, delivery or performance of this
Agreement by Grantor, or (iii) the perfection of or the exercise by Secured
Party of its rights and remedies hereunder (except (v) authorization from
applicable Gaming Authorities for the use of certain voting stock and other
securities as collateral, which authorization has been obtained prior to the
date hereof, (w) authorization from any Gaming Authorities for the exercise by
Secured Party of certain of its rights and remedies hereunder, (x) the report
required to be filed by Grantor pursuant to Nevada Gaming Commission Regulation
8.130, (y) the filing of Uniform Commercial Code financing statements with the
Secretary of States of Illinois or Nevada or the Clerk of Court of any Louisiana
parish (or recorder of mortgages for Orleans Parish) and the Mortgages with the
Massac County, Illinois Recorder of Deeds, the ▇▇▇▇▇ County, Nevada Recorder or
the recorder of mortgages for Calcasieu Parish, Louisiana and (z) as has been
previously taken by or at the direction of 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 Secretary of States of Illinois and Nevada and with the
Clerk of Court of any Louisiana parish (or recorder of mortgages for Orleans
Parish) and the Mortgages with the Massac County, Illinois Recorder of Deeds,
the ▇▇▇▇▇ County, Nevada Recorder or the recorder of mortgages for Calcasieu
Parish, Louisiana, as the case may be, 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 Grantor with respect to
the Collateral is accurate and complete in all respects.
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SECTION 5. Further Assurances.
(a) Grantor agrees that from time to time, at the expense of
Grantor, 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, 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 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 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
Grantor's title to or Secured Party's security interest in all or any part of
the Collateral.
(b) 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 Grantor. Grantor agrees that
a carbon, photographic or other reproduction of this Agreement or of a financing
statement signed by Grantor shall be sufficient as a financing statement and may
be filed as a financing statement in any and all jurisdictions.
(c) 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.
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(d) 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 Gaming Authority or
Governmental Authority or seek to obtain consent from any Gaming Authority to
foreclose on the Collateral (including all gaming permits) and operate any of
the Facilities or otherwise seek to enforce its rights hereunder, 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 Gaming Authority or any Governmental Authority shall require
any amendments to the Collateral Documents or require Grantor to execute such
other documents as a condition to or as a part of such approval process, Grantor
shall consent to such amendments and/or execute such documents promptly.
SECTION 6. Certain Covenants of Grantor. 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 Grantor's name,
identity or corporate structure within 15 days of such change;
(c) give Secured Party 30 days' prior written notice of any
change in Grantor's chief place of business, chief executive office or residence
or the office where Grantor keeps its records regarding the Accounts and all
originals of all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable 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 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 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. 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
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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 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. 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
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, 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, 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 States of Illinois, Louisiana or Nevada, as the
case may be;
(g) upon the occurrence of an Event of Default, if any Inventory
is in possession or control of any of 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 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
XVI-11
Grantor or (ii) to customers of Grantor), deliver such Negotiable Document of
Title to Secured Party.
SECTION 8. Insurance.
(a) Grantor shall, at its own expense, maintain insurance with
respect to the Equipment and Inventory in accordance with the terms of the
Credit Agreement, this Section 8 and the Mortgages. 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 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 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.
Grantor shall, if 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, 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
exclusive of the requirements under Section 6.4 of the Credit Agreement relating
to insurance.
(b) Reimbursement under any liability insurance maintained by
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, Grantor 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 Grantor pursuant to this Section 8 shall be paid to 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 Grantor or any of its Subsidiaries 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.
XVI-12
(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) 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. 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 Grantor agrees to render to Secured Party, at 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,
Grantor shall deliver to Secured Party complete and correct copies of each
Related Contract.
(b) 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 payments received, credits granted and merchandise
returned, and (ii) all documentation relating thereto.
(c) Except as otherwise provided in this subsection (c), Grantor
shall continue to collect, at its own expense, all amounts due or to become due
to 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, Grantor may take (and, at Secured Party's
direction, shall take) such action as 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 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 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 Grantor, to
enforce collection of any such Accounts and to adjust, settle or compromise the
amount or payment
XVI-13
thereof, in the same manner and to the same extent as Grantor might have done.
After receipt by 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 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 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) 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) 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
(ii) furnish to Secured Party, promptly upon receipt
thereof, copies of all notices of default received by 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 Grantor is entitled to make
under the Assigned Agreements.
(b) Grantor shall not, 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
Grantor thereunder or to confer any additional rights on the
XVI-14
counterparties to such Assigned Agreements that could reasonably be
expected to be materially adverse to 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 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.
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, service marks, copyrights, customers lists,
patents or technical processes owned or used by Grantor that relate to the
Collateral and any other collateral granted by 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 Grantor.
SECTION 13. Transfers and Other Liens. Grantor shall not:
(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 IV 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.
XVI-15
SECTION 14. Secured Party Appointed Attorney-in-Fact. Grantor
hereby irrevocably appoints Secured Party as Grantor's attorney-in-fact, with
full authority in the place and stead of Grantor and in the name of 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
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 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;
(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 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 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 Grantor might do.
SECTION 15. Secured Party May Perform. If Grantor fails to
perform any agreement contained herein, Secured Party may itself perform, or
cause performance of, such
XVI-16
agreement, and the expenses of Secured Party incurred in connection therewith
shall be payable by 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 any of the Mortgages and applicable
law, then the terms of such 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 such Mortgage shall have 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 (Louisiana Revised Statutes,
Title 10, Chapter 9)) (the "Code") (whether or not the Code applies to
the affected Collateral), and also may (a) require Grantor to, and
Grantor hereby agrees that it will at its 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 Grantor's premises or place
custodians in exclusive control thereof, remain on such premises and
use the same and any of 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
XVI-17
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 Grantor, and
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. Grantor agrees that, to the extent
notice of sale shall be required by law, at least ten days' notice to
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 place to which it was
so adjourned. 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,
Grantor shall be 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, the 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.
XVI-18
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 Grantor expressly agrees to the immediate seizure of the
Collateral in the event of suit herein. Further, 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 Gaming Laws 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 Gaming Laws.
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 Grantor, 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
XVI-19
THIRD: To the payment to or upon the order of Grantor, 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. 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 all applicable
Gaming Laws.
(b) Without limiting the generality of the foregoing, all
required prior approvals under applicable Gaming Laws will be obtained in
connection with Secured Party's exercise of any of the rights set forth in
Section 15 or 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) Grantor agrees to assist Secured Party in obtaining all
approvals of the 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, 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 appropriate Gaming Authorities the transferor's portion of any
application or applications for consent to the transfer of control thereof
necessary or appropriate under applicable Gaming Laws 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) Grantor agrees 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) Grantor 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 Grantor to perform or observe any of the provisions hereof.
XVI-20
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 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 Grantor. Upon any
such termination Secured Party will, at Grantor's expense, execute and deliver
to Grantor such documents as Grantor shall reasonably request to evidence such
termination.
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
XVI-21
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 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 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
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, as to either
party, such other address as shall be designated by such party in a written
notice delivered to the other party 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
XVI-22
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 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 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. 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 requested, to Grantor at
its addresses as provided in Section 24, such service being hereby acknowledged
by Grantor to be sufficient for personal jurisdiction in any action against
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 Grantor in the courts of any other jurisdiction.
SECTION 30. Waiver of Jury Trial. 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. Grantor and Secured Party
each acknowledge that this waiver is a material inducement for Grantor and
Secured Party to enter into a business relationship, that 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.
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.
XVI-23
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]
XVI-24
IN WITNESS WHEREOF, Grantor 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 INTERNATIONAL, INC.,
as Grantor
By: ____________________________________
Title: _________________________________
Notice Address:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: President and Chief Financial
Officer
With copies to:
Players International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
Players International, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
S-1
FIRST INTERSTATE BANK OF NEVADA, N.A.,
as Secured Party
By: ____________________________________
Title: _________________________________
Notice Address:
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇
S-2
SCHEDULE I
TO SECURITY AGREEMENT
Assigned Agreements
A. ILLINOIS PROJECT AGREEMENTS:
1. Purchase Agreement dated as of June 23, 1992 by and among Players
International, Inc. ("PII"), Southern Illinois Riverboat/Casino Cruises,
Inc. ("SIRCC") and The ▇▇▇▇▇▇▇ Group, Inc. ("TGG").
2. 1992 Series A Exchangeable Debenture of SIRCC issued to TGG on June 23,
1992 in the aggregate principal amount of $2,250,000.
3. 1992 Series A Warrant of PII to purchase 1,948,000 shares of common
stock issued to TGG on June 23, 1992.
4. Registration Rights Agreements dated June 23, 1992 between PII and TGG.
5. Joint Venture Agreement dated May 6, 1993 between SIRCC and Amerihost
Development, Inc.
6. Lease Agreement by and between Riverfront Realty Corporation ("RRC")
and Burlington Northern Railroad Company dated as of August 1, 1992.
7. Lease Agreement by and among Burlington Northern Railroad Company and
SIRCC dated May 27, 1992 and assigned to RRC by Assignment of Lease
dated September 16, 1992.
8. Purchase Agreement dated June 23, 1992 by and among SIRCC, PII and
certain Purchasers.
9. 1992 Series B Exchangeable Debenture of SIRCC.
10. 1992 Series B Warrant to Purchase Common Stock of PII.
11. Lease dated December 10, 1990 by and between PCI and the City of
Metropolis, Amendment to Lease dated May 26, 1992, Amendment and
Assignment of Lease dated August 25, 1995.
12. Agreement of Limited Partnership of Metropolis, IL 1292 Limited
Partnership.
XVI-I-1
B. PRINCIPAL OFFICE AGREEMENTS:
13. Act of Lease dated July 29, 1993 by and between Players Lake ▇▇▇▇▇▇▇,
Inc. ("PLCI") and the Housing Authority of the City of Lake ▇▇▇▇▇▇▇.
14. Lease Agreement dated _________________ by and between Players Nevada, Inc.
("PNI") and _________________ [Office Space 1].
15. Lease Agreement dated ____________________ by and between PNI and
_________________ [Office Space 2].
C. LOUISIANA PROJECT AGREEMENTS:
16. Lease by ▇.▇. Bel Heirs, et al. to PLCI dated April 29, 1993.
17. Lease Agreement by ▇▇▇▇ ▇▇▇▇ Trust, et al. to PLCI dated October 26, 1993.
18. Lease between The ▇▇▇▇▇▇ Corporation ("▇▇▇▇▇▇") and PLCI dated May 19, 1993
(with PII Joinder).
19. Escrow Agreement dated May 20, 1993 by and among PLCI, ▇▇▇▇▇▇ and First
National Bank of Lake ▇▇▇▇▇▇▇.
20. Non-Disturbance and Attornment Agreement by and among Lakeside National
Bank of Lake ▇▇▇▇▇▇▇, PLCI, PII, ▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
dated May 20, 1993.
21. Agreement dated February 12, 1993 by and between Jebaco, Inc. and PII.
22. Development and Exchange Agreement dated November 16, 1993 by and among
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, PLCI, the City of Lake ▇▇▇▇▇▇▇ and the State of
Louisiana, together with executed Construction Lease dated November 17,
1993 by and between the City of Lake Charles, Louisiana, as Lessor, and
Players Lake ▇▇▇▇▇▇▇, Inc., as Lessee.
23. Agreement dated December 1, 1994 by and between PLCI and ▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇.
24. Video Lottery Terminal Agreement dated December 1, 1994 by and between PLCI
and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇.
25. Preliminary Purchase Agreement dated as of January 25, 1995 by and among
PLCI and ▇▇▇▇▇▇.
XVI-I-2
26. Development Agreement dated as of January 27, 1995 by and among PII and the
City of Lake ▇▇▇▇▇▇▇.
27. Construction Contract between ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ Construction Co., Inc. and
PLCI.
D. INDIANA PROJECT AGREEMENTS:
28. Agreement dated April 20, 1993 by and between B.B. Riverboats, Inc. and PII
as amended by First Amendment to Agreement dated January 10, 1995 and
letter agreement dated March 6, 1995.
29. Option Agreement dated July 30, 1993 between ▇▇▇▇ ▇▇▇▇ and PII as amended
by First Amendment to Option Agreement dated April 29, 1994.
30. Assignment of Rents dated May 4, 1994 between ▇▇▇▇ ▇▇▇▇ and PII.
31. Option Agreement dated July 15, 1993 between Evansville Federal Savings
Bank and PII as amended by First Amendment to Option Agreement dated
April 14, 1994.
32. Option To Enter Into Lease dated May 5, 1995 between Inland Marina, Inc.
and Players Indiana, Inc.
E. MISSOURI PROJECT AGREEMENTS:
33. Letter of Intent dated March 3, 1995 by and among PII, The Promus Companies
Incorporated and ▇▇▇▇▇▇'▇ Club.
F. NEVADA PROJECT AGREEMENTS:
34. Option Transfer Agreement dated June 16, 1994 by and among GGI., Gem
Mesquite, Ltd. and PNI.
35. Development Consulting Agreement dated June 16, 1994 by and between GGI and
PNI.
36. 1994 Series G Warrant of PII to purchase 100,000 shares of common stock
issued to GGI on June 16, 1994.
37. Joint Declaration of Covenants and Restrictions dated June 2, 1995 by and
among ▇▇▇▇▇ ▇. ▇▇▇▇▇ and ▇▇▇▇ ▇. ▇▇▇▇▇ (the "Hafens"), PNI, and Players
Mesquite Land, Inc.
XVI-I-3
38. Agreement Concerning Development of Golf Course and Residential Housing
dated February 3, 1995 by and between Players Mesquite Golf Club, Inc.
("PMGC") and River View Limited Liability Company ("RVLLC"), as amended by
Agreement of June 2, 1995.
39. Lease Agreement between PMGC and RVLLC.
40. Loan Agreement dated June 2, 1995 between PMGC and RVLLC.
41. Promissory Note dated June 2, 1995 in the amount of $650,000.00 by RVLLC in
favor of PMGC.
42. Deed of Trust and Assignment of Rents dated June 2, 1995 naming RVLLC as
Trustor, Fidelity National Title Agency of Nevada, Inc. as Trustee, and
PMGC as Beneficiary.
G. KENTUCKY PROJECT AGREEMENTS:
43. Agreement dated _________________, 1995 by and between Players Bluegrass
Downs, Inc. and United Tote Company.
H. GENERAL PII AGREEMENTS:
44. Various Employment Agreements.
45. Stock Option Plans and Summaries .
46. Commitment Letter for bank facility by and among PII, Bankers Trust Company
and First Interstate Bank of Nevada.
47. Aircraft Lease Agreement dated March 28, 1994 by and between Aviex Jet,
Inc. and PII.
48. Security Agreement given by Aviex Jet, Inc. ("Aviex") to PII dated March
28, 1994 to secure debt in principal amount of $1,250,000.00 as amended by
Amendment to Security Agreement dated April __, 1995.
49. Promissory Note made by Aviex in favor of PII in principal amount of
$1,250,000.00 as amended and replaced by Replacement of Promissory Note
dated April __, 1995.
50. Aircraft Lease Agreement dated April __, 1995 by and between Aviex and PII.
XVI-I-4
51. Security Agreement given by Aviex to PII dated April __, 1995 to secure
debt in principal amount of $1,450,000.00.
52. Promissory Note made by Aviex in favor of PII in principal amount of
$1,450,000.00.
53. Indenture dated April 10, 1995 issued by PII, with certain named
guarantors and First Fidelity Bank as Trustee.
XVI-I-5
SCHEDULE II
TO SECURITY AGREEMENT
Players International, Inc.
Carneigie Hill Investment 8001-0032616150
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇.
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Chemical Bank Disbursement ▇▇▇▇-▇▇▇▇▇▇-▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
▇(▇▇▇) ▇▇▇-▇▇▇▇
Dreyfus Basic U.S. Investment 124-3339619904
Government
Money Market Fund
Bank of New York
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
First Interstate Bank Checking 1840101329
P.O. Box 98588 Corporate Payrll 1840110866
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇▇ Concentration 1840110858
(▇▇▇) ▇▇▇-▇▇▇▇ BGD Disbursement ▇▇▇▇▇▇▇▇▇▇
Mesquite Disbursement 4309613794
Lake ▇▇▇▇▇▇▇ Disbursement 4309613786
Metropolis Disbursement 4309613778
Corporate Disbursement 4309613752
Insurance Claims 4309613760
First National Bank of Lake Escrow Account 0002-91471
▇▇▇▇▇▇▇ Concentration Account 0002-94101
▇.▇. ▇▇▇ ▇▇▇▇ Insurance Claims 0002-98085
▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ Corporate Payroll 0002-94330
(▇▇▇) ▇▇▇-▇▇▇▇
Marquis Investment Investment 093-585092
▇.▇. ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
XVI-II-1
SCHEDULE III
TO SECURITY AGREEMENT
Locations of Equipment:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
Locations of Inventory:
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
(▇▇▇) ▇▇▇-▇▇▇▇
XVI-III-1
SCHEDULE IV
TO SECURITY AGREEMENT
Existing Permitted Liens
Nevada
Secretary of State
Financing Statement #95-02872
Dated: 3/2/95
Secured Party: Business Credit Leasing
Nevada
Secretary of State
Financing Statement #95-04600
Dated: 4/3/95
Secured Party: Skipco
Assignee: Business Credit Leasing
XVI-IV-1