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SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of July 20, 1995 made by
LOUISIANA RIVERBOAT GAMING PARTNERSHIP, a Louisiana general partnership
(including its successors and assigns, "LRGP") and ST. ▇▇▇▇▇▇▇ GAMING COMPANY,
INC., a Louisiana corporation (including its successors and assigns, "SCGC",
and collectively with LRGP, the "Issuers"), jointly and severally and in
solido, in favor of FIRST NATIONAL BANK OF COMMERCE, as agent (in such
capacity, the "Agent") for the purchasers of the Notes defined below (together
with the holders at any time of any Note then outstanding, the "Noteholders")
parties to the Note Purchase Agreement, dated as of July 20, 1995 (as amended,
supplemented or otherwise modified from time to time, the "Note Purchase
Agreement"), among the Issuers, Nomura Holding America Inc., a Delaware
corporation (together with its successors and assigns, the "Purchaser") and the
Agent, as agent for the Purchaser.
W I T N E S S E T H :
WHEREAS, the Issuers desire to issue and sell to the
Purchaser, subject to the terms and conditions provided in the Note Purchase
Agreement, certain secured promissory notes, consisting of up to $38,400,000
aggregate principal amount of the Senior Secured Increasing Rate Notes Due 1996
(the "Notes"), all as more fully set forth in the Note Purchase Agreement; and
WHEREAS, the sale of such promissory notes is intended to
provide temporary bridge financing for the Issuers, to be refinanced and
replaced by the Issuers at the earliest practicable date out of the proceeds of
a public or private securities offering or a commercial loan transaction; and
WHEREAS, it is a condition precedent to the obligation of the
Purchaser to purchase such Notes of the Issuers under the Note Purchase
Agreement that the Issuers shall have executed and delivered this Agreement to
the Agent, for the ratable benefit of the Noteholders;
NOW, THEREFORE, in consideration of the premises and to induce
the Purchaser to enter into the Note Purchase Agreement and to purchase the
Notes, the Issuers hereby jointly and severally and in solido agree with the
Agent, for the ratable benefit of the Noteholders, as follows:
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Section 1. Defined Terms.
Section 1.1 Definitions. (a) Unless otherwise defined
herein, terms defined in the Note Purchase Agreement and used herein shall have
the meanings given to them in the Note Purchase Agreement, and the following
terms which are defined in the Uniform Commercial Code in effect in the State
of Louisiana on the date hereof are used herein as so defined: Accounts,
Chattel Paper, Documents, Equipment, Farm Products, General Intangibles and
Instruments.
(b) The following terms shall have the following meanings:
"Agreement" means this Security Agreement, as the same may be
amended, modified or otherwise supplemented from time to time.
"Bank Accounts": all accounts maintained by each respective
Issuer at any bank, savings and loan, credit union or other similar
institution, including, without limitation, any referred to in
Schedule 7 hereto.
"Cash Loads": monies maintained on either Issuer's riverboat
in slot machines, vaults, cages and other locations on such riverboat
for purposes of operating and reserve cash.
"Code" means the Uniform Commercial Code as from time to time
in effect in the State of Louisiana.
"Collateral" has the meaning specified in Section 2 of this
Agreement.
"Collateral Account" means any collateral account established
by the Agent as provided in Section 5.3 or Section 8.2.
"Contracts" means the contracts and agreements listed and
briefly described on Schedule 1 attached hereto, as the same may be
amended, modified or otherwise supplemented from time to time,
including, without limitation, (a) all rights of either Issuer to
receive moneys due and to become due to it thereunder or in connection
therewith, (b) all rights of either Issuer to damages arising out of
or for breach or default in respect thereof and (c) all rights of
either Issuer to exercise all remedies thereunder.
"Copyright Licenses": any written agreement, naming an Issuer
as licensor or licensee, granting any right under any Copyright,
including, without limitation, the agreements listed in Schedule 4
hereto.
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"Copyrights": (i) all United States copyrights in all Works,
whether published or unpublished, now existing or hereafter created or
acquired, including, without limitation, the copyrights in the Works
listed in Schedule 4 hereto, all registrations and recordings thereof,
and all applications in connection therewith, including, without
limitation, registrations, recordings and applications in the United
States Copyright Office, and (ii) all renewals thereof.
"Inventory" means all inventory (as defined in the Code) of
either Issuer and shall also include, without limitation, all tangible
personal Property leased by either Issuer to any other Person.
"Motor Vehicles" shall mean motor vehicles, tractors, trailers
and other like property, whether or not the title thereto is governed
by a certificate of title or ownership.
"Obligations" means, collectively, the unpaid principal of and
interest on the Notes and all other obligations and liabilities of the
Issuers to the Agent and the Purchaser and the Noteholders (including,
without limitation, interest accruing at the then applicable rate
provided in this Agreement after the maturity of the Notes and
interest accruing at the then applicable rate provided in the Note
Purchase Agreement after the filing of any petition in bankruptcy, or
the commencement of any insolvency, reorganization or like proceeding,
relating to either Issuer whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), whether direct
or indirect, absolute or contingent, due or to become due, or now
existing or hereafter incurred, which may arise under, out of, or in
connection with, this Agreement, the Note Purchase Agreement, the
Notes, the Related Documents or any other document made, delivered or
given in connection herewith or therewith, in each case whether on
account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Agent or to
the Purchaser that are required to be paid by the Issuers pursuant to
the terms of this Agreement, the Note Purchase Agreement, the Notes or
any Related Document).
"Patent Licenses": if any, all agreements, whether written or
oral, providing for the grant by or to either Issuer of any right to
manufacture, use or sell any invention covered by a Patent, including,
without limitation, any thereof referred to in Schedule 3 hereto.
"Patents": (a) if any, all letters patent of the United
States or any other country and all reissues and extensions thereof,
including, without limitation, any thereof referred to in Schedule 3
hereto, and (b) if any,
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all applications for letters patent of the United States or any other
country and all divisions, continuations and continuations-in-part
thereof, including, without limitation, any thereof referred to in
Schedule 3 hereto.
"Proceeds" means all "proceeds" as defined in the Code and
includes, without limitation and whether or not the following
constitute proceeds under the Code, (i) any and all proceeds of any
insurance, indemnity, warranty or guaranty payable to either Issuer
from time to time with respect to any of the Collateral, (ii) any and
all payments (in any form whatsoever) made or due and payable to
either Issuer from time to time in connection with any requisition,
confiscation, condemnation, seizure or forfeiture of all or any part
of the Collateral by any Governmental Body (or any Person acting under
color of Governmental Body), and (iii) any and all other amounts from
time to time paid or payable to either Issuer upon the sale, exchange,
collection or other disposition of, or under or in connection with,
any part of the Collateral.
"Trademark License" means any agreement, written or oral,
providing for the grant by or to either Issuer of any right to use any
Trademark, including, without limitation, any thereof referred to in
Schedule 5 hereto.
"Trademarks": (a) all trademarks, trade names, corporate
names, company names, business names, fictitious business names, trade
styles, service marks, logos and other source or business identifiers,
and the goodwill associated therewith, now existing or hereafter
adopted or acquired, all registrations and recordings thereof, and all
applications in connection therewith, whether in the United States
Patent and Trademark Office or in any similar office or agency of the
United States, any State thereof or any other country or any political
subdivision thereof, or otherwise, including, without limitation, any
thereof referred to in Schedule 5 hereto, and (b) all renewals
thereof.
"Work": any work which is subject to copyright protection
pursuant to Title 17 of the U.S. Code.
Section 1.2 Other Definitional Provisions. (a) The words
"hereof," "herein" and "hereunder" and words of similar import when used in
this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and section and paragraph references
are to this Agreement unless otherwise specified.
(b) The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such terms.
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Section 2. Grant of Security Interest. As collateral
security for the prompt and complete payment and performance when due (whether
at the stated maturity, by acceleration or otherwise) of the Obligations, each
Issuer hereby grants to the Agent, for the ratable benefit of the Noteholders,
a security interest in all of the following property now owned or at any time
hereafter acquired by such Issuer or in which such Issuer now has or at any
time in the future may acquire any right, title or interest (collectively, the
"Collateral"):
(a) all Accounts;
(b) all Chattel Paper;
(c) all Contracts (other than Contracts set forth on Part B
to Schedule 1);
(d) all Copyrights;
(e) all Copyright Licenses;
(f) all Documents, including without limitation, all
negotiable and non-negotiable bills of lading;
(g) all Equipment;
(h) all General Intangibles including, without limitation,
all financing statements in which such Issuer's interest appears as Secured
Party or Lessor and all rights to Accounts and General Intangibles for money
due or to become due under contracts as to which any prohibition on transfer,
pledge, assignment or hypothecation in such contract is ineffective;
(i) all Instruments;
(j) all Inventory;
(k) all Instruments, Chattel Paper and General Intangibles
relating to any Debt owed by any Subsidiary to such Issuer;
(l) all Patents;
(m) all Patent Licenses;
(n) all Trademarks;
(o) all Trademark Licenses;
(p) all Bank Accounts and all items from time to time on
deposit therein;
(q) all other tangible and intangible Property of such Issuer;
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(r) all books and records pertaining to the Collateral,
including, without limitation, all diskettes and other magnetic media,
correspondence, credit files, records, invoices and other papers, including
without limitation all tapes, cards, computer runs and other papers and
documents in the possession or under the control of such Issuer or any computer
bureau or service company from time to time acting for such Issuer; and
(s) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing.
Notwithstanding the foregoing, Collateral shall not include
for any purpose hereunder any contract (other than the Contracts) which by its
terms prohibits the pledge, transfer, assignment, or hypothecation by the
Company of such contract or any rights of the Company thereunder unless a
consent shall have been obtained, but in any event shall include all rights to
Accounts and General Intangibles for money due or to become due under such
contracts as to which any prohibition on transfer, pledge, assignment or
hypothecation in such contract is ineffective.
Section 3. Representations and Warranties. Each Issuer
hereby represents and warrants that:
Section 3.1 Title; No Other Liens. Except for the security
interest granted to the Agent for the ratable benefit of the Noteholders
pursuant to this Agreement and the other Liens permitted to exist on the
Collateral pursuant to the Note Purchase Agreement, each Issuer, to the extent
applicable, owns each item of the Collateral, free and clear of any and all
Liens. No security agreement, financing statement or other public notice with
respect to all or any part of the Collateral is on file or of record in any
public office, except (a) such as have been filed in favor of the Agent, for
the ratable benefit of the Noteholders, pursuant to this Agreement, (b) as are
permitted pursuant to the Note Purchase Agreement or (c) for which termination
statements are delivered on or prior to the Closing Date.
Section 3.2 Perfected First Priority Liens. The security
interests granted pursuant to this Agreement (a) upon completion of the filings
and other actions specified on Schedule 2 attached hereto will constitute
perfected security interests in the Collateral, other than Motor Vehicles, in
favor of the Agent, for the ratable benefit of the Noteholders, (b) are prior
to all other Liens on the Collateral, other than Motor Vehicles, except for
Liens permitted to exist and to be prior to the security interests granted
hereby pursuant to the Note Purchase Agreement and (c) are enforceable as such
against (i) all creditors of and purchasers from the Issuers, as applicable
(except purchasers of Inventory in the ordinary course of business) and (ii)
any Person having any present or future
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interest in the real property where any of the Equipment is located.
Section 3.3 Inventory and Equipment. The Inventory and the
Equipment are kept at the locations listed on Schedule 6 hereto.
Section 3.4 Chief Executive Office; Chief Place of Business.
(a) LRGP's chief executive office and chief place of business is located at
▇▇▇ ▇▇▇▇ ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
(b) SCGC's chief executive office and chief place of business
is located at ▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
Section 3.5 Farm Products. None of the Collateral
constitutes, or is the Proceeds of, Farm Products.
Section 3.6 Bank Accounts. Schedule 7 hereto contains a true
and complete list of all Bank Accounts, maintained on the date hereof by each
Issuer, as applicable, setting forth the name and address of each bank, savings
institution or other depositary institution at which each such account is
maintained and stating the title and account number of such account.
Section 3.7 Incorporation of Representations and Warranties.
On the Closing Date and after giving effect to the transactions contemplated by
the Note Purchase Agreement, the representations and warranties contained in
the Note Purchase Agreement, as such warranties relate to the Issuers, are
complete, correct and true, and are incorporated herein by reference.
Section 3.8 Federal Identification Numbers. LRGP's Federal
tax identification number is ▇▇-▇▇▇▇▇▇▇, and LRGP shall not change such number,
except upon at least 30 days' prior written notice to the Agent and upon the
taking or causing to be taken at LRGP's expense of such actions as may be
reasonably requested by the Agent. SCGC's Federal tax identification number is
▇▇-▇▇▇▇▇▇▇, and SCGC shall not change such number, except upon at least 30
days' prior written notice to the Agent and upon the taking or causing to be
taken at SCGC's expense of such actions as may be reasonably requested by the
Agent.
Section 4. Covenants. Each Issuer covenants and agrees with
the Agent and the Noteholders that, from and after the date of this Agreement
until this Agreement is terminated and the security interests created hereby
are released:
Section 4.1 Delivery of Instruments and Chattel Paper. If
any amount payable under or in connection with any of the Collateral shall be
or become evidenced by any Instrument (other than instruments which constitute
part of Chattel Paper), such
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Instrument shall be immediately delivered to the Agent, duly endorsed in a
manner satisfactory to the Agent, to be held as Collateral pursuant to this
Agreement. LRGP is concurrently with the execution and delivery of this
Agreement delivering the Inter-Issuer Note to the Agent, duly indorsed in a
manner satisfactory to the Agent.
Section 4.2 Marking of Records. Each Issuer will ▇▇▇▇ its
books and records pertaining to the Collateral to evidence this Agreement and
the security interests created hereby. Each Issuer will (i) stamp all Chattel
Paper with a legend, on the first page and each signature page thereof, which
provides that said Chattel Paper is subject to a security interest granted to
the Agent for the ratable benefit of the Noteholders and (ii) deliver to the
Agent the original of each agreement or instrument constituting Chattel Paper.
Section 4.3 Maintenance of Insurance. (a) Each of the
Issuers will, and will cause each of their respective Subsidiaries to, carry
and maintain in full force and effect at all times with financially sound and
reputable insurance companies or associations (or, as to workers' compensation
or similar insurance, in an insurance fund or by self-insurance authorized by
the jurisdiction in which its operations are carried on): (i) insurance
against loss or damage to the tangible real and personal Property of such
Issuer and its Subsidiaries by fire, theft, explosion, spoilage and all other
hazards and risks ordinarily insured against by other owners or users of such
Property in similar businesses, (ii) all workers' compensation or similar
insurance as may be required under the laws of any jurisdiction, (iii) public
liability insurance against claims for personal injury, death or property
damage suffered upon, in or about any premises occupied by them or occurring as
a result of the ownership, maintenance or operation by them of any automobile,
truck or other vehicle or as a result of the use of products manufactured,
constructed or sold by it, or services rendered by it, (iv) business
interruption insurance as required pursuant to Section 9.4(a)(iv) of the Note
Purchase Agreement, and (v) insurance against such other risks as are usually
insured against by corporations of established reputation engaged in the same
or similar businesses and similarly situated. Insurance specified in clause
(i) shall be maintained in an amount at least equal to the full insurable value
of the Property covered thereby. Insurance specified in clauses (iii), (iv)
and (v) shall be maintained in such amounts (and with co-insurance, deductibles
and self-insured retention, if any) as such insurance is usually carried by
corporations of established reputation engaged in the same or similar
businesses and similarly situated, and shall name the Purchaser as loss payee
and additional insured, as its interests may appear.
(b) Each of the Issuers hereby directs, and shall cause
each of its Subsidiaries to direct, all insurers under such policies of fire,
casualty and property damage insurance to pay
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all proceeds of such insurance policies (x) if such Property constitutes
Collateral subject to any of the Intercreditor Agreements, as set forth in such
Intercreditor Agreement, and (y) if otherwise, directly to the Purchaser. If
the amount of any claim for loss or damage thereunder is less than $100,000,
the Purchaser shall release the proceeds of such insurance policies received by
it to such Issuer or the applicable Subsidiary. If the amount of such claim is
greater than $100,000, such Issuer may elect either (x) to apply the proceeds
thereof to the prepayment of the obligations under the Notes in the manner and
with the effect set forth in the first and second sentences of Section 3.4(a)
of the Note Purchase Agreement, or (y) to have the proceeds thereof released by
the Purchaser when and as necessary to pay for the repair, replacement or
reconstruction of the assets subject to such casualty, provided that such
Issuer shall not elect to apply such proceeds as specified in the foregoing
clause (y) unless the following conditions are satisfied:
(i) at the time of any requested release of funds, no
Default or Event of Default shall have occurred and be continuing; and
(ii) each release of funds shall be conditioned upon
receipt by the Purchaser of architect's certificates, completion
certificates, waivers of mechanic's liens and such other documentation
as the Purchaser may reasonably request.
(c) The Issuers shall at least once during each fiscal
year deliver to the Purchaser a report of a reputable insurance broker with
respect to all insurance maintained by the Issuers and their Subsidiaries,
together with a certificate of insurance evidencing the effectiveness of the
policies of insurance required to be maintained by the provisions of paragraphs
(a) and (c) of this Section.
(d) As long as the Notes are outstanding, all insurance
required to be maintained pursuant to this Section 4.3 shall be subject to the
following requirements:
(i) All statements or information which have or will be
furnished to insurers or their representatives by any Issuer or their
respective Subsidiaries in connection with applications for or
renewals of insurance policies listed in Schedule 4.19 to the Note
Purchase Agreement shall be complete, truthful, accurate and correct
in all material respects.
(ii) All such insurance policies shall be maintained and
renewed with insurance carriers having either a rating of at least "A"
from A.M. Best Company or a rating equivalent thereto as determined by
▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ of Texas, Inc.
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(iii) Any insurer not listed on Schedule 4.19 to the Note
Purchase Agreement or any insurer which does not have one of the
foregoing ratings shall not be utilized without the prior written
consent of the Majority Noteholders.
(iv) The Issuers shall not, and shall cause their
respective Subsidiaries not to, change the terms of such insurance
policies in such a way as to reduce the scope or the limits of
coverage set forth in Schedule 4.19 to the Note Purchase Agreement on
(i) the riverboats owned by the Issuers (including equipment, fixtures
and other property thereon), (ii) the terminal facilities (including
equipment, fixtures and other property therein) or (iii) its
respective general liability insurance without the prior written
consent of the Majority Noteholders.
(v) The Issuers shall, and shall cause their respective
Subsidiaries to, give written notice to the Purchaser upon receipt of
any written notice or other communication from an insurer seeking to
reduce the scope or the limits of coverage under a policy listed in
Schedule 4.19 to the Note Purchase Agreement or to cancel, nonrenew or
otherwise terminate or amend coverage.
(vi) The Issuers shall, and shall cause their respective
Subsidiaries to, give written notice to the Purchaser of any loss or
claim submitted with respect to any such policy which is expected to
exceed $100,000.
(e) All such insurance shall (i) provide that no
cancellation, material reduction in amount or material change in coverage
thereof shall be effective until at least 30 days after receipt by the
Purchaser of written notice thereof, (ii) name the Purchaser as additional
insured party and loss payee, as its interests may appear, and (iii) be
reasonably satisfactory in all other respects to the Majority Noteholders.
Section 4.4 Payment of Obligations. Each Issuer, as
applicable, will pay and discharge or otherwise satisfy at or before maturity
or before they become delinquent, as the case may be, all taxes, assessments
and governmental charges or levies imposed upon the Collateral or in respect of
income or profits therefrom, as well as all claims of any kind (including,
without limitation, claims for labor, materials and supplies) against or with
respect to the Collateral, except that no such charge need be paid if the
amount or validity thereof is currently being contested in good faith by
appropriate proceedings, adequate reserves in conformity with GAAP with respect
thereto have been provided on the books of such Issuer and such proceedings do
not involve any material danger of the sale, forfeiture or loss of any of the
Collateral or any interest therein.
Section 4.5 Maintenance of Perfected Security Interest;
Further Documentation. (a) Each Issuer shall maintain
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the security interest created by this Agreement in the Collateral, other than
Motor Vehicles, as a first priority, perfected security interest subject only
to Liens permitted to exist and to be prior to the security interests granted
hereby pursuant to the Note Purchase Agreement and shall defend such security
interest against claims and demands of all Persons whomsoever.
(b) At any time and from time to time, with or without the
written request of the Agent, and at the sole expense of each Issuer, each
Issuer will promptly and duly execute and deliver such further instruments and
documents and take such further action as the Agent may request for the purpose
of obtaining or preserving the full benefits of this Agreement and of the
rights and powers herein granted, including, without limitation, (i) the filing
of any financing or continuation statements under the Uniform Commercial Code
in effect in any jurisdiction with respect to the security interests created
hereby, (ii) placing the interest of the Agent as lienholder on the certificate
of title of any Motor Vehicle (subject to Section 4.5(c)), hereof, and (iii)
the execution and delivery of any warehouse receipts, bills of lading and other
documents of title with respect to such Issuer's Inventory and Equipment,
together with copies of all invoices with respect to such Inventory and
Equipment.
(c) Each Issuer shall cause the Agent to be listed as the
lienholder on each certificate of title or ownership covering any of its Motor
Vehicles, at any time when the aggregate fair market value of all Motor
Vehicles owned by such Issuer equals or exceeds $100,000.
Section 4.6 Changes in Locations, Name, etc. Each Issuer
will not:
(a) permit any of its Inventory or Equipment to be kept at a
location other than those listed on Schedule 6 hereto; or
(b) change the location of its chief executive office and
chief place of business from that specified in Section 3.4; or
(c) change its name, identity or corporate structure to such
an extent that any financing statement filed by the Agent in connection with
this Agreement would become seriously misleading; or
(d) in the case of SCGC, change its Federal taxpayer
identification number from that specified in Section 3.4.
Section 4.7 Further Identification of Collateral. Each
Issuer will furnish to the Agent from time to time statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the
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Collateral as the Agent may reasonably request, all in reasonable detail.
Section 4.8 Notices. The Issuers will advise the Agent
promptly, in reasonable detail, at its address set forth in the Note Purchase
Agreement of:
(i) any Lien (other than security interests created
hereby or Liens permitted under the Note Purchase Agreement) on, or
claim asserted against, any of the Collateral; and
(ii) of the occurrence of any other event which could
reasonably be expected to have a material adverse effect on the
aggregate value of the Collateral or on the security interests created
hereby.
Section 4.9 Indemnification. Each Issuer agrees to pay, and
to save the Agent and Noteholders harmless from, any and all liabilities, costs
and expenses (including, without limitation, legal fees and expenses) (i) with
respect to, or resulting from any failure or delay in paying, any and all
excise, sales, stamp or other taxes which may be payable or determined to be
payable with respect to any of the Collateral, (ii) with respect to, or
resulting from, any failure or delay in complying with any federal, state,
local or foreign statute, ordinance or law, or rule, regulation or Order of any
Governmental Body, applicable to any of the Collateral, and (iii) in connection
with any of the transactions contemplated by this Agreement. In any suit,
proceeding or action brought by the Agent or any Noteholder under any Account
or Contract for any sum owing thereunder, or to enforce any provisions of any
Account or Contract, each Issuer, as applicable, will save, indemnify and keep
the Agent and such Noteholder harmless from and against all expense, loss or
damage suffered by reason of any defense, setoff, counterclaim, recoupment or
reduction or liability whatsoever of the account debtor or obligor thereunder,
arising out of a material breach by such Issuer of any obligation thereunder.
Section 4.10 Changes in Bank Accounts. Without the prior
written approval of the Majority Noteholders, which approval shall not be
unreasonably withheld, neither of the Issuers shall maintain any Bank Accounts
other than those listed on Schedule 7 hereto. Each Issuer shall (a) obtain and
maintain a first, perfected security interest in favor of the Agent, for the
ratable benefit of the Noteholders, in any such Bank Account approved by the
Majority Noteholders as provided in this Section 4.10 and (b) defend such
security interest against claims and demands of all Persons whomsoever.
Section 4.11 Monies in Bank Accounts. Except for Cash Loads,
each Issuer will not permit any cash, checks, money orders or other cash
equivalents to be held by or on behalf of such Issuer other than in a Bank
Account, the Transaction Account or
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such Issuer's vaults or in a secure location on each respective Vessel in
connection with the Riverboat Gaming Operations.
Section 4.12 Maintenance of Equipment. Each Issuer will
maintain each material item of Equipment in good operating condition, ordinary
wear and tear excepted, and will provide all maintenance, service and repairs
necessary for such purpose.
Section 4.13 Maintenance of Records. Each Issuer will keep
and maintain at its own cost and expense satisfactory and complete records of
the Collateral, including, without limitation, a record of all payments
received and all credits granted with respect to the Accounts. Each Issuer
will ▇▇▇▇ its books and records pertaining to the Collateral to evidence this
Agreement and the security interests granted hereby. For the Agent's and the
Noteholders' further security, the Agent, for the ratable benefit of the
Lenders, shall have a security interest in all of each Issuer's books and
records pertaining to the Collateral, and each Issuer shall turn over any such
books and records to the Agent or to its representatives for review upon
reasonable advance notice during normal business hours at the location where
such books and records are kept and at the request of the Agent.
Section 4.14 Right of Inspection. Upon reasonable advance
notice to each Issuer and at reasonable intervals, or at any time and from time
to time after the occurrence and during the continuance of an Event of Default,
the Agent and the Noteholders shall have full and free access during normal
business hours to all the books, correspondence and records of each Issuer, and
the Agent and the Noteholders and their respective representatives may examine
the same, take extracts therefrom and make photocopies thereof, and each Issuer
agrees to render to the Agent and the Lenders, at such Issuer's cost and
expense, such clerical and other assistance as may be reasonably requested with
regard thereto. The Agent and the Noteholders and their respective
representatives shall also have the right upon reasonable advance notice to
each Issuer to enter during normal business hours into and upon any premises
where any of the Inventory or Equipment is located for the purpose of
inspecting the same, observing its use or otherwise protecting its interests
therein.
Section 4.15 Compliance with Laws, etc. Each Issuer will
comply in all material respects with all federal, state, local or foreign
statute, ordinance or law, or rule, regulation or Order of any Governmental
Body applicable to the Collateral or any part thereof or to the operation of
such Issuer's business, except to the extent that the failure to so comply
would not be reasonably likely to materially adversely affect the Agent's or
the Noteholders' rights hereunder, the priority of their Liens on the
Collateral or the value of the Collateral.
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Section 4.16 Compliance with Terms of Contracts, etc. Each
Issuer will perform and comply in all material respects with all its
obligations under the Contracts and all its other contractual obligations
relating to the Collateral.
Section 4.17 Limitations on Dispositions of Collateral.
Without the prior written consent of the Agent, neither Issuer will sell,
assign, transfer, exchange or otherwise dispose of, or grant any option with
respect to, the Collateral, or attempt, offer or contract to do so, except to
the extent permitted under Section 10.4 of the Note Purchase Agreement.
Section 5. Provisions Relating to Accounts.
Section 5.1 Issuers to Remain Liable under Accounts.
Anything herein to the contrary notwithstanding, each Issuer shall remain
liable under each of its respective Accounts to observe and perform all the
conditions and obligations to be observed and performed by it thereunder, all
in accordance with the terms of any agreement giving rise to each such Account.
Neither the Agent nor any Noteholder shall have any obligation or liability
under any Account (or any agreement giving rise thereto) by reason of or
arising out of this Agreement or the receipt by the Agent or any Noteholder of
any payment relating to such Account pursuant hereto, nor shall Agent or any
Noteholder be obligated in any manner to perform any of the obligations of such
Issuer under or pursuant to any Account (or any agreement giving rise thereto),
to make any payment, to make any inquiry as to the nature or the sufficiency of
any payment received by it or as to the sufficiency of any performance by any
party under any Account (or any agreement giving rise thereto), to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
Section 5.2 Analysis of Accounts. The Agent shall have the
right to make test verifications of the Accounts at reasonable intervals and
pursuant to reasonable methods designed to minimize any negative impact on the
respective Issuer's relationship with its customers, and each respective Issuer
shall furnish all such assistance and information as the Agent may require in
connection with such test verifications. At any time, and from time to time,
upon the request of the Agent and at the expense of the Issuers, at reasonable
intervals each Issuer shall cause independent public accountants or others
satisfactory to the Agent to furnish to the Agent reports showing
reconciliations, aging and test verifications of, and trial balances for, its
respective Accounts.
Section 5.3 Collections on Accounts. (a) The Agent hereby
authorizes the Issuers to collect the Accounts, subject to the Agent's
direction and control, and the Agent may curtail or terminate said authority at
any time after the occurrence and
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during the continuance of an Event of Default. If required by the Agent at any
time after the occurrence and during the continuance of an Event of Default,
any payments of Accounts, when collected by the Issuers, (i) shall be forthwith
(and, in any event, within two Business Days) deposited by such Issuer in the
exact form received, duly endorsed by such Issuer to the Agent if required, in
a Collateral Account maintained in a depositary institution selected by the
Agent and under its sole dominion and control, subject to withdrawal by the
Agent for the account of the Noteholders as provided in Section 9.2, and (ii)
until so turned over, shall be held by such Issuer in trust for the Agent and
the Noteholders, segregated from other funds of such Issuer.
(b) Each such deposit of Proceeds of Accounts into the
Collateral Account referenced in the preceding paragraph shall be accompanied
by a report identifying in reasonable detail the nature and source of the
payments included in the deposit.
(c) At the Agent's request, each Issuer shall deliver to the
Agent all original and other documents evidencing, and relating to, the
agreements and transactions which gave rise to its Accounts, including, without
limitation, all original orders, invoices and shipping receipts.
Section 5.4 Representations and Warranties. (a) No amount
payable to each Issuer under or in connection with any of its Accounts is
evidenced by any Instrument or Chattel Paper which has not been delivered to
the Agent.
(b) The place where each Issuer keeps its records concerning
its Accounts is such Issuer's chief executive office and chief place of
business identified in Section 3.4 hereof.
(c) None of the obligors on any Accounts is a Governmental
Body.
Section 5.5 Covenants. (a) The amount represented by each
Issuer to the Noteholders from time to time as owing by each account debtor or
by all account debtors in respect of its Accounts will at such time be the
correct amount actually owing by such account debtor or debtors thereunder.
(b) Neither Issuer will amend, modify, terminate or waive any
agreement giving rise to an Account in any manner which could reasonably be
expected to have a Material Adverse Effect.
(c) Neither Issuer will fail to exercise promptly and
diligently any right which it may have under each agreement giving rise to any
of its Accounts (other than any right of termination) if the failure to
exercise such right would have a Material Adverse Effect on such Issuer and its
Subsidiaries, taken as a whole.
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(d) Other than in the ordinary course of business as
generally conducted by each Issuer over a period of time, neither Issuer will
grant any extension of the time of payment of any of its Accounts compromise,
compound or settle the same for less than the full amount thereof, release,
wholly or partially, any Person liable for the payment thereof, or allow any
credit or discount whatsoever thereon.
(e) Neither Issuer will remove its books and records from the
location specified in Section 5.4(b).
(f) In any suit, proceeding or action brought by the Agent or
any Noteholder under any Account for any sum owing thereunder, or to enforce
any provisions of any Contract, each respective Issuer will save, indemnify and
keep the Agent and such Noteholder harmless from and against all expense, loss
or damage suffered by reason of any defense, setoff, counterclaim, recoupment
or reduction or liability whatsoever of the account debtor thereunder, arising
out of a breach by such Issuer of any obligation thereunder or arising out of
any other agreement, indebtedness or liability at any time owing to or in favor
of such account debtor or its successors from such Issuer.
Section 6. Provisions Relating to Contracts.
Section 6.1 Issuers to Remain Liable under Contracts.
Anything herein to the contrary notwithstanding, each Issuer shall remain
liable under each of the Contracts to observe and perform all the conditions
and obligations to be observed and performed by it thereunder, all in
accordance with and pursuant to the terms and provisions of each Contract.
Neither the Agent nor any Noteholder shall have any obligation or liability
under any Contract by reason of or arising out of this Agreement or the receipt
by the Agent or any such Noteholder of any payment relating to such Contract
pursuant hereto, nor shall the Agent or any Noteholder be obligated in any
manner to perform any of the obligations of each Issuer under or pursuant to
any of its Contracts, to make any payment, to make any inquiry as to the nature
or the sufficiency of any payment received by it or as to the sufficiency of
any performance by any party under any of its Contracts, to present or file any
claim, to take any action to enforce any performance or to collect the payment
of any amounts which may have been assigned to it or to which it may be
entitled at any time or times.
Section 6.2 Communication With Contracting Parties. During
the continuance of an Event of Default, the Agent in its own name or in the
name of others may communicate with parties to the Contracts to verify with
them to the Agent's satisfaction the existence, amount and terms of any
Contracts.
Section 6.3 Representations and Warranties. (a) No consent
of any party (other than each respective Issuer, and other than consents which
have been obtained and remain in full
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force and effect, and which have been delivered to the Agent) to any Contract
is required, or purports to be required, in connection with the execution,
delivery and performance of this Agreement.
(b) Each Contract is in full force and effect and constitutes
a valid and legally enforceable obligation of the parties thereto, except as
affected by bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
(c) No consent or authorization of, filing with or other act
by or in respect of any Governmental Body is required in connection with the
execution, delivery, performance, validity or enforceability of any of the
Contracts by any party thereto other than those which have been duly obtained,
made or performed, are in full force and effect.
(d) Neither Issuer nor (to the best of the Company's
knowledge) any other party to any of its respective Contracts is in default or
is likely to become in default in the performance or observance of any of the
material terms thereof.
(e) Each Issuer has fully performed all its material
obligations under each of its respective Contracts.
(f) The right, title and interest of each Issuer in, to and
under each of its respective Contracts are not subject to any defense, offset,
counterclaim or claim which would be likely to materially adversely affect the
value of such Contracts as Collateral, nor have any of the foregoing been
asserted or alleged against such Issuer as to any of its Contracts.
(g) No amount payable to each respective Issuer under or in
connection with any of its Contracts is evidenced by any Instrument which,
except with respect to Instruments constituting part of Chattel Paper or as
otherwise agreed to by the Agent in writing, has not been delivered to the
Agent or by any Chattel Paper which has not been marked in accordance with
Section 4.2 hereof.
(h) None of the parties to any Contract is a Governmental
Body.
Section 6.4 Covenants. (a) Each Issuer will perform and
comply in all respects with all its material obligations under each of its
respective Contracts and all its other obligations relating to the Collateral.
(b) Neither Issuer will amend, modify, terminate or waive any
provision of any of its respective Contracts in any
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manner which would violate the Note Purchase Agreement or which could
reasonably be expected to have a Material Adverse Effect or which would
otherwise result in a Default or Event of Default under subsection 10.17 of the
Note Purchase Agreement.
(c) Neither Issuer will fail to exercise promptly and
diligently any right which it may have under each of its respective Contracts
(other than any right of termination) if the failure to exercise such right
would have a Material Adverse Effect on such Issuer and its Subsidiaries, taken
as a whole.
(d) In any suit, proceeding or action brought by the Agent or
any Noteholder under any Contract for any sum owing thereunder, or to enforce
any provisions of any Contract, the Issuers will save, indemnify and keep the
Agent or any such Noteholder harmless from and against all expense, loss or
damage suffered by reason of any defense, setoff, counterclaim, recoupment or
reduction or liability whatsoever of the obligor thereunder, arising out of a
breach by any Issuer of any obligation thereunder or arising out of any other
agreement, indebtedness or liability at any time owing to or in favor of such
obligor or its successors from such Issuer.
Section 7. Provisions Relating to Patents, Trademarks and
Copyrights.
Section 7.1 Representations and Warranties. (a) Schedule 3
hereto includes all Patents and Patent Licenses, if any, owned by each Issuer
as of the date hereof.
(b) Schedule 5 hereto includes all Trademarks and Trademark
Licenses owned by each Issuer as of the date hereof.
(c) Schedule 4 hereto includes all registered U.S. Copyrights
owned by each Issuer as of the date hereof and all other Copyrights and
Copyright Licenses in Works owned by each Issuer as of the date hereof.
(d) To the best of each Issuer's knowledge, each of its
Patents, Trademarks and Copyrights is valid, subsisting, unexpired, enforceable
and has not been abandoned.
(e) Except as set forth in either Schedule 3, Schedule 5 or
Schedule 4, none of such Patents, Trademarks and Copyrights is the subject of
any licensing or franchise agreement.
(f) No holding, decision or judgment has been rendered by any
Governmental Body which would limit, cancel or question the validity of any
Patent, Trademark or Copyright.
(g) No action or proceeding is pending (i) seeking to limit,
cancel or question the validity of any Patent or
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Trademark, or (ii) which, if adversely determined, would have a material
adverse effect on the value of any Patent or Trademark.
Section 7.2 Covenants with respect to Patents and Trademarks.
(a) Each Issuer (either itself or through licensees) will, except with respect
to any Trademark that such Issuer shall reasonably determine is of negligible
economic value to it, (i) continue to use each Trademark on the same goods and
services it is currently used on in order to maintain such Trademark in full
force free from any claim of abandonment for non-use, (ii) maintain as in the
past the quality of products and services offered under such Trademark, (iii)
employ such Trademark with the appropriate notice of registration, (iv) not
adopt or use any ▇▇▇▇ which is confusingly similar or a colorable imitation of
such Trademark unless the Agent, for the ratable benefit of the Noteholders,
shall obtain a perfected security interest in such ▇▇▇▇ pursuant to this
Agreement, and (v) not (and not permit any licensee or sublicensee thereof to)
do any act or knowingly omit to do any act whereby any Trademark may become
invalidated.
(b) Neither Issuer will (either itself or through licensees),
except with respect to any Patent that each such Issuer shall reasonably
determine is of negligible economic value to it, do any act, or omit to do any
act, whereby any Patent may become abandoned or dedicated.
(c) Either Issuer will notify the Agent immediately if it
knows, or has reason to know, that any application or registration relating to
any Patent or Trademark may become abandoned or dedicated, or of any adverse
determination or development (including, without limitation, the institution
of, or any such determination or development in, any proceeding in the United
States Patent and Trademark Office or any court or tribunal in any country)
regarding either Issuer's ownership of any Patent or Trademark or its right to
register the same or to keep and maintain the same.
(d) Whenever either Issuer, either by itself or through any
agent, employee, licensee or designee, shall file an application for the
registration of any Patent or Trademark with the United States Patent and
Trademark Office or any similar office or agency in any other country or any
political subdivision thereof, such Issuer shall report such filing to the
Agent within five Business Days after the last day of the fiscal quarter in
which such filing occurs (or, if the Agent requests, more often). Such Issuer
shall further execute and deliver any and all agreements, instruments,
documents, and papers as may be necessary to evidence the Agent's and the
Noteholders' security interest in any Patent or Trademark and the goodwill and
general intangibles, if any, of such Issuer relating thereto or represented
thereby, and such Issuer hereby constitutes the Agent its attorney-in-fact to
execute and file all such writings for the purpose of so evidencing the Agent's
security interest (and
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the Agent agrees to notify such Issuer that any such filing has been made,
provided that any failure to so notify shall not invalidate any such actions by
the Agent), all lawful acts of such attorney being hereby ratified and
confirmed; such power being coupled with an interest is irrevocable until the
Obligations are paid in full.
(e) Each Issuer will take all reasonable and necessary steps,
including, without limitation, in any proceeding before the United States
Patent and Trademark Office, or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue each
application (and to obtain the relevant registration) and to maintain each
registration of the Patents and Trademarks, including, without limitation,
filing of applications for renewal, affidavits of use and affidavits of
incontestability.
(f) In the event that any Patent or Trademark of an Issuer
included in the Collateral is infringed, misappropriated or diluted by a third
party, such Issuer shall promptly notify the Agent after it learns thereof and
shall, unless such Issuer shall reasonably determine that such Patent or
Trademark is of negligible economic value to such Issuer which determination
such Issuer shall promptly report to the Agent, promptly ▇▇▇ for infringement,
misappropriation or dilution, to seek injunctive relief where appropriate and
to recover any and all damages for such infringement, misappropriation or
dilution, or take such other actions as such Issuer shall reasonably deem
appropriate under the circumstances to protect such Patent or Trademark.
7.3 Covenants with respect to Copyrights. (a) Each
Issuer (either itself or through licensees) will (i) employ the appropriate
notice of copyright for each published Work subject to copyright protection to
the extent necessary to protect the Copyright relating to such Work and (ii)
not (and not permit any licensee or sublicensee thereof to) do any act or
knowingly omit to do any act whereby any Copyright may become invalidated.
(b) Each Issuer will notify the Agent of any determination by
a court or tribunal in the country where a copyright is registered or copyright
application is pending that such Issuer does not own all right, title and
interest to the registered copyright or copyright application, or of any other
determination of such court or tribunal relating to any registered copyright or
copyright application which would be reasonably likely to have a Material
Adverse Effect.
(c) On the last Business Day of each calendar year of each
Issuer following the Closing Date (or, if the Agent so requests, more often),
each such Issuer shall provide to the Agent a document confirming the Agent's
and the Noteholders' security interest in the Copyright with respect to each
Work for which such Issuer has registered its Copyright during such calendar
year, duly executed and in proper form for filing in the
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United States Copyright Office or other applicable United States Governmental
Body. Each such Issuer shall further execute and deliver any and all
additional agreements, instruments, documents, and papers as may be necessary
to evidence the Agent's security interest (for the benefit of the Noteholders)
in such Copyright, and such Issuer hereby constitutes the Agent its
attorney-in-fact to file all such writings for the purpose of so evidencing the
Agent's security interest (and the Agent agrees to notify such Issuer that any
such filing has been made, provided that any failure to so notify such Issuer
shall in no event invalidate any such actions by the Agent), all lawful acts of
such attorney being hereby ratified and confirmed; such power being coupled
with an interest is irrevocable until the Obligations are paid in full.
(d) Each Issuer will take all reasonable and necessary steps
(i) to maintain and pursue each application filed (and to obtain the relevant
registration) and (ii) to maintain to the extent permitted by law each
registration of each Copyright owned by such Issuer, including, without
limitation, in each case where appropriate, filing of applications for renewal.
(e) Each Issuer will promptly notify the Agent of any
material infringement of any Copyright owned by it of which it becomes aware
and will take such actions as it shall reasonably deem appropriate under the
circumstances to protect such Copyright.
Section 8. RESERVED.
Section 9. Remedies.
Section 9.1 Notice to Account Debtors and Contract Parties.
Upon the request of the Agent at any time after the occurrence and during the
continuance of an Event of Default, each Issuer shall notify its respective
account debtors or its respective Accounts and parties to its respective
Contracts that such Accounts and such Contracts have been assigned to the Agent
for the ratable benefit of the Noteholders and that payments in respect thereof
shall be made directly to the Agent.
Section 9.2 Proceeds to be Turned Over to Agent. In addition
to the rights of the Agent specified in Section 5.3 with respect to payments of
Accounts, if an Event of Default shall occur and be continuing, all Proceeds
received by the Issuers consisting of cash, checks and other near-cash items
shall be held by such Issuers in trust for the Agent and the Noteholders,
segregated from other funds of each respective Issuer, and shall, forthwith
upon receipt by each respective Issuer, be turned over to the Agent and the
Noteholders in the exact form received by each respective Issuer (duly indorsed
by each respective Issuer to the Agent and the Noteholders, if required) and
held by each respective Issuer in a Collateral Account maintained in a
depositary institution selected by the Agent and under its sole
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dominion and control. All Proceeds while held by the Agent in a Collateral
Account (or by each respective Issuer in trust for the Agent and the
Noteholders) shall continue to be held as collateral security for all the
Obligations and shall not constitute payment thereof until applied as provided
in Section 9.3.
Section 9.3 Application of Proceeds. At such intervals
agreed upon by the Agent and the Issuers or if an Event of Default shall have
occurred and be continuing, at any time at the Agent's election, the Agent may
apply all or any part of Proceeds held in any Collateral Account in payment of
the Obligations in such order as the Agent may elect, and any part of such
funds which the Agent elects not so to apply and deems not required as
collateral security for the Obligations shall be paid over from time to time by
the Agent to the respective Issuer or to whomsoever may be lawfully entitled to
receive the same. Any balance of such Proceeds remaining after (a) the
Noteholders shall have no commitment or obligation to purchase Notes under the
Note Purchase Agreement and (b) the Obligations shall have been paid in full,
shall be paid over to each respective Issuer or to whomsoever may be lawfully
entitled to receive the same.
Section 9.4 Code Remedies. If an Event of Default shall
occur and be continuing, the Agent, on behalf of the Noteholders, may exercise,
in addition to all other rights and remedies granted to it in this Agreement
and in any other instrument or agreement securing, evidencing or relating to
the Obligations, all rights and remedies of a secured party under the Code and
such additional rights and remedies to which a secured party is entitled under
the laws in effect in any jurisdiction where any rights and remedies hereunder
may be asserted to exercise all voting, consensual and other powers of
ownership pertaining to the Collateral as if the Agent were the sole and
absolute owner thereof (and each Issuer agrees to take all such action as may
be necessary or appropriate to give effect to such right). Without limiting
the generality of the foregoing, the Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below) to or upon the Issuers or any
other Person (all and each of which demands, defenses, advertisements and
notices are hereby waived), may in such circumstances forthwith collect,
receive, appropriate and realize upon the Collateral, or any part thereof,
and/or may forthwith sell, lease, assign, give option or options to purchase,
or otherwise dispose of and deliver the Collateral or any part thereof (or
contract to do any of the foregoing), in one or more parcels at public or
private sale or sales, in the over-the-counter market, at any exchange,
broker's board or office of the Agent or any Noteholder or elsewhere upon such
terms and conditions as it may deem advisable and at such prices as it may deem
best, for cash or on credit or for future delivery without assumption of any
credit risk. The Agent may, without notice or publication, adjourn any public
or private sale or
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cause the same to be adjourned from time to time by announcement at the time
and place fixed for the sale, and such sale may be made at any time or place to
which the sale may be so adjourned. The Agent or any Noteholder shall have the
right upon any such public sale or sales, and, to the extent permitted by law,
upon any such private sale or sales, to purchase the whole or any part of the
Collateral so sold, free of any right or equity of redemption in the respective
Issuers, which right or equity is hereby waived or released. Each respective
Issuer further agrees, at the Agent's request, to assemble the Collateral and
make it available to the Agent at places which the Agent shall reasonably
select, whether at such respective Issuer's premises or elsewhere. The Agent
shall apply the net Proceeds of any such collection, recovery, receipt,
appropriation, realization or sale, after deducting all reasonable costs and
expenses of every kind incurred therein or incidental to the care or
safekeeping of any of the Collateral or in any way relating to the Collateral
or the rights of the Agent and the Noteholders hereunder, including, without
limitation, reasonable attorneys' fees and disbursements, to the payment in
whole or in part of the Obligations, in such order as the Agent may elect, and
only after such application and after the payment by the Agent of any other
amount required by any provision of law, including, without limitation, Section
9-504(1)(c) of the Code, need the Agent account for the surplus, if any, to
each respective Issuer. To the extent permitted by applicable law, each Issuer
waives all claims, damages and demands it may acquire against the Agent arising
out of the exercise by them of any rights hereunder. If any notice of a
proposed sale or other disposition of Collateral shall be required by law, such
notice shall be deemed reasonable and proper if given at least 10 days before
such sale or other disposition.
Section 9.5 Deficiency. Each Issuer shall remain liable for
any deficiency if the Proceeds of any sale or other disposition of the
Collateral are insufficient to pay the Obligations and the fees and
disbursements of any attorneys employed by the Agent or any Noteholder to
collect such deficiency.
Section 9.6 Special Louisiana Provisions. The following
provisions shall apply if the remedies indicated are governed by the laws of
Louisiana. The Agent shall have the right to cause the Collateral to be seized
and sold under Louisiana executory or ordinary process, at the Agent's sole
option, without appraisement, appraisement being hereby expressly waived, as an
entirety or in portions as the Agent may determine, to the highest bidder for
cash, and otherwise exercise the rights, powers and remedies afforded herein
and under applicable Louisiana law. For purposes of Louisiana executory
process, the Issuers acknowledge the Obligations and do hereby confess judgment
in favor of the Agent and the Noteholders for the full amount of the
Obligations not paid when due. Any and all declarations of fact made by
authentic act before a notary public
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in the presence of two witnesses by a person declaring that such facts lie
within his knowledge shall constitute authentic evidence of such facts for the
purpose of executory process. The Issuers hereby waive: (a) the benefit of
appraisement as provided in Louisiana Code of Civil Procedure Articles 2332,
2336, 2723 and 2724, and all other laws conferring the same; (b) the demand and
three days' delay accorded by Louisiana Code of Civil Procedure Articles 2639
and 2721; (c) the notice of seizure required by Louisiana Code of Civil
Procedure Articles 2293 and 2721; (d) the three days' delay provided by
Louisiana Code of Civil Procedure Articles 2331 and 2722; and (e) the benefit
of the other provisions of Louisiana Code of Civil Procedure Articles 2331,
2722 and 2723, not specifically mentioned above. In the event the Collateral
or any part thereof is seized as an incident to an action for the recognition
or enforcement of this Agreement by executory process, ordinary process,
sequestration, writ of fieri facias, or otherwise, the Issuers and the Agent
agree that the court issuing any such order shall, if petitioned for by the
Agent, direct the applicable sheriff to appoint as a keeper of the Collateral,
the Agent or any agent designated by the Agent or any person named by the Agent
at the time such seizure is effected. This designation of a keeper will be
pursuant to Louisiana Revised Statutes 9:5136-9:5140.2 and the Agent or its
agent shall be entitled to all the rights and benefits of a keeper afforded
thereunder as the same may be amended. The Agent shall not be under any
obligation to petition such court for the appointment of a keeper.
Section 10. Agent's Appointment as Attorney-in-Fact; Agent's
Performance of Issuer's Obligations.
Section 10.1 Powers. Each Issuer hereby irrevocably
constitutes and appoints each of the holders of the Notes and any officer or
agent thereof, with full power of substitution, as its true and lawful
attorney-in-fact with full irrevocable power and authority in the place and
stead of such Issuer and in the name of such Issuer or in its own name, from
time to time in the Agent's discretion, for the purpose of carrying out the
terms of this Agreement, to take any and all appropriate action and to execute
any and all documents and instruments which may be necessary or desirable to
accomplish the purposes of this Agreement, and, without limiting the generality
of the foregoing, each Issuer hereby gives the Agent the power and right, on
behalf of such Issuer, without notice to or assent by such Issuer, to do the
following:
(a) in the case of any Account, at any time when the
authority of such Issuer to collect the Accounts has been curtailed or
terminated pursuant to Section 5.3(a), or in the case of any other Collateral,
at any time when any Event of Default shall have occurred and is continuing, in
the name of such Issuer or its own name, or otherwise, to take possession of
and endorse and collect any checks, drafts, notes, acceptances or other
instruments for the payment of moneys due under any
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Account, Instrument, General Intangible or Contract or with respect to any
other Collateral and to file any claim or to take any other action or
proceeding in any court of law or equity or otherwise deemed appropriate by the
Agent for the purpose of collecting any and all such moneys due under any
Account, Instrument, General Intangible, or Contract or with respect to any
other Collateral whenever payable;
(b) in the case of any Patents, Trademarks or Copyrights, to
execute and deliver any and all agreements, instruments, documents and papers
as the Agent may request to evidence the Agent's and the Noteholders' security
interest in any Patent, Trademark or Copyright and the goodwill and general
intangibles of each Issuer relating thereto or represented thereby;
(c) to pay or discharge taxes and Liens levied or placed on
or threatened against the Collateral, to effect any repairs or any insurance
called for by the terms of this Agreement and to pay all or any part of the
premiums therefor and the costs thereof;
(d) to execute, in connection with the sale provided for in
Section 9.4 hereof, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral; and
(e) (i) to direct any party liable for any payment under any
of the Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Agent or as the Agent shall direct; (ii) to ask or
demand for, collect, receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (iii) to sign and indorse any invoices, freight
or express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications, notices and other documents in
connection with any of the Collateral; (iv) to commence and prosecute any
suits, actions or proceedings at law or in equity in any court of competent
jurisdiction to collect the Collateral or any thereof and to enforce any other
right in respect of any Collateral; (v) to defend any suit, action or
proceeding brought against either Issuer with respect to any Collateral; (vi)
to settle, compromise or adjust any such suit, action or proceeding and, in
connection therewith, to give such discharges or releases as the Agent may deem
appropriate; and (vii) generally, to sell, transfer, pledge and make any
agreement with respect to or otherwise deal with any of the Collateral as fully
and completely as though the Agent were the absolute owner thereof for all
purposes, and to do, at the Agent's option and such Issuer's expense, at any
time, or from time to time, all acts and things which the Agent deems necessary
to protect, preserve or realize upon the Collateral and the Agent's and the
Noteholders' security interests therein and
26
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to effect the intent of this Agreement, all as fully and effectively as such
Issuer might do.
Section 10.2 Performance by Agent of the Issuers'
Obligations. If either Issuer fails to perform or comply with any of its
agreements contained herein, the Agent at its option, but without any
obligation so to do, may perform or comply, or otherwise cause performance or
compliance, with such agreement.
Section 10.3 Issuers' Reimbursement Obligation. The expenses
of the Agent incurred in connection with actions undertaken as provided in this
Section 10, together with interest thereon at 12% from the date of payment by
the Agent to the date reimbursed by either Issuer, shall be payable by the
Issuers to the Agent on demand.
Section 10.4 Ratification; Power Coupled With An Interest.
Each Issuer hereby ratifies all that said attorneys shall lawfully do or cause
to be done by virtue hereof. All powers, authorizations and agencies contained
in this Agreement are coupled with an interest and are irrevocable until the
Obligations are paid, this Agreement is terminated and the security interests
created hereby are released.
Section 11. Duty of Agent. The Agent's sole duty with
respect to the custody, safekeeping and physical preservation of the Collateral
in its possession, under Section 9-207 of the Code or otherwise, shall be to
deal with it in the same manner as the Agent deals with similar property for
its own account. Neither the Agent, any Noteholder nor any of their respective
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon any of the Collateral or for any delay in doing so or
shall be under any obligation to sell or otherwise dispose of any Collateral
upon the request of each respective Issuer or any other Person or to take any
other action whatsoever with regard to the Collateral or any part thereof. The
powers conferred on the Agent hereunder are solely to protect the Agent's
interests in the Collateral and shall not impose any duty upon the Agent to
exercise any such powers. The Agent and the Noteholders shall be accountable
only for amounts that they actually receive as a result of the exercise of such
powers, and neither they nor any of their officers, directors, employees or
agents shall be responsible to the Issuers for any act or failure to act
hereunder, except for their own gross negligence or willful misconduct.
Section 12. Execution of Financing Statements/ Certificates
of Title. (a) Pursuant to Section 9-402 of the Code, each Issuer authorizes
the Agent to file financing statements with respect to the Collateral without
the signature of each respective Issuer in such form and in such filing offices
as the Agent reasonably determines appropriate to perfect the security
interests of the Agent and the Noteholders under this Agreement. A carbon,
photographic or other reproduction of this
27
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Agreement shall be sufficient as a financing statement for filing in any
jurisdiction.
(b) Each Issuer, as applicable, shall execute and deliver to
the Agent assignments of any and all Uniform Commercial Code financing
statements filed in connection with any of the Lease Agreements by any lessor
thereunder. Such executed assignments shall be delivered to the Agent on date
hereof for each Lease Agreement existing on the date hereof and promptly after
the execution of each Lease Agreement executed after the date hereof.
Section 13. Notices. All notices, requests and demands to or
upon the Agent or the Issuers shall be in writing and shall be conclusively
deemed to have been received and shall be effective (a) on the day on which if
delivered personally or transmitted by telex or telegram or telecopier, or (b)
one Business Day after the date on which the same is delivered to a nationally
recognized overnight courier service, and shall be addressed to such party at
its address set forth in the Note Purchase Agreement, or at such other address
and/or telecopy number and/or to the attention of such other Person as either
of such Persons shall have advised the other by notice in the manner herein
specified.
Section 14. Severability. Any provision of this Agreement
which is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof, and any
such prohibition or unenforceability in any jurisdiction shall not invalidate
or render unenforceable such provision in any other jurisdiction.
Section 15. Miscellaneous.
Section 15.1 Amendments in Writing. None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except by a written instrument executed by the Issuers and the Agent,
provided that any provision of this Agreement may be waived by the Agent and
the Majority Noteholders in a letter or agreement executed by the Agent or by
telex or facsimile transmission from the Agent.
Section 15.2 Termination. Upon payment and performance by
the Issuers of all of the Obligations and upon termination of all obligations
by the Purchaser to purchase the Notes, this Agreement shall terminate and the
Purchaser shall forthwith cause to be assigned, transferred and delivered,
against receipt but without any recourse, warranty or representation
whatsoever, any remaining Collateral and money received in respect thereof, to
or on the order of each respective Issuer. The Agent shall also execute and
deliver to each respective Issuer upon such termination such Uniform
28
28
Commercial Code termination statements, certificates for terminating the Liens
on the Motor Vehicles (if any) and such other documentation as shall be
reasonably requested by each respective Issuer to effect the termination and
release of the Liens against the Collateral.
Section 15.3 No Waiver by Course of Conduct. Neither the
Agent nor any Noteholder shall by any act (except by a written instrument
pursuant to Section 15.1 hereof, delay, indulgence, omission or otherwise be
deemed to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default or in any breach of any of the terms and
conditions hereof. No failure to exercise, nor any delay in exercising, on the
part of the Agent or any Noteholder, any right, power or privilege hereunder
shall operate as a waiver thereof. No single or partial exercise of any right,
power or privilege hereunder shall preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. A waiver by
the Agent or any Noteholder of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the Agent
or such Noteholder would otherwise have on any future occasion.
Section 15.4 Remedies Cumulative. The rights and remedies
herein provided are cumulative, may be exercised singly or concurrently and are
not exclusive of any other rights or remedies provided by law.
Section 15.5 Integration. This Agreement represents the
entire agreement of the Issuer with respect to the subject matter hereof and
there are no promises or representations by the Agent or any Noteholder
relative to the subject matter hereof not reflected herein.
Section 15.6 Section Headings. The section and subsection
headings used in this Agreement are for convenience of reference only and are
not to affect the construction hereof or be taken into consideration in the
interpretation hereof.
Section 15.7 Successors and Assigns. This Agreement shall be
binding upon the successors and assigns of the Issuer provided that neither
Issuer shall assign or transfer its rights hereunder without the consent of the
Agent and the Noteholders and shall inure to the benefit of the Agent and the
Noteholders and their respective successors and assigns. In the event that the
Issuer sells or assigns all or any part of its interest in the Notes in
accordance with Section 14.4 of the Note Purchase Agreement, each such Assignee
shall be deemed to be a party to this Agreement and shall be entitled to its
ratable share of the Collateral.
Section 15.8 Authority of Agent. Each Issuer acknowledges
that the rights and responsibilities of the Agent under this Agreement with
respect to any action taken by the
29
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Agent or the exercise or non-exercise by the Agent of any option, voting right,
request, judgment or other right or remedy provided for herein or resulting or
arising out of this Agreement shall, as between the Agent and the Noteholders,
be governed by the Note Purchase Agreement and by such other agreements with
respect thereto as may exist from time to time among them, but, as between the
Agent and such Issuer, the Agent shall be conclusively presumed to be acting as
agent for the Noteholders with full and valid authority so to act or refrain
from acting, and such Issuer shall be under no obligation, or entitlement, to
make any inquiry respecting such authority.
Section 15.9 GOVERNING LAW. THIS AGREEMENT SHALL BE
GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE
STATE OF LOUISIANA (WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW).
Section 15.10 CONSENT TO JURISDICTION. EACH ISSUER HEREBY
CONSENTS AND AGREES TO THE JURISDICTION OF ANY STATE OR FEDERAL COURT SITTING
IN THE COUNTY OF NEW YORK, STATE OF NEW YORK, AND WAIVES ANY OBJECTION BASED ON
VENUE OR FORUM NON CONVENIENS WITH RESPECT TO ANY ACTION INSTITUTED THEREIN,
AND AGREES THAT ANY DISPUTE CONCERNING THE RELATIONSHIP BETWEEN THE AGENT AND
THE NOTEHOLDERS ON THE ONE HAND, AND THE ISSUER, ON THE OTHER HAND, OR THE
CONDUCT OF ANY PARTY IN CONNECTION WITH THIS AGREEMENT OR OTHERWISE SHALL BE
HEARD ONLY IN THE COURTS DESCRIBED ABOVE.
Section 15.11 SERVICE OF PROCESS. EACH ISSUER HEREBY WAIVES
PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL SUCH
SERVICE OF PROCESS MAY BE MADE BY HAND DELIVERY TO SUCH ISSUER AT THE ADDRESS
OF SUCH ISSUER SET FORTH IN THE NOTE PURCHASE AGREEMENT, OR, AT THE OPTION OF
THE AGENT OR THE NOTEHOLDERS, BY SERVICE UPON CT CORPORATION, WHICH EACH ISSUER
IRREVOCABLY APPOINTS AS ITS AGENT FOR THE PURPOSE OF ACCEPTING SERVICE OF
PROCESS WITHIN THE STATE OF NEW YORK. IN ADDITION, THE AGENT AND THE
NOTEHOLDERS AGREE TO PROMPTLY FORWARD BY REGISTERED MAIL ANY PROCESS SO SERVED
UPON CT CORPORATION (AS THE ISSUERS' AGENT) TO THE ISSUERS AT THE ADDRESSES OF
THE ISSUERS SET FORTH IN THE NOTE PURCHASE AGREEMENT. THE ISSUERS HEREBY
CONSENT TO SERVICE OF PROCESS AS AFORESAID.
NOTHING IN THIS AGREEMENT SHALL AFFECT THE RIGHT OF THE AGENT
OR ANY NOTEHOLDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW
OR AFFECT THE RIGHT OF THE AGENT OR ANY NOTEHOLDER TO BRING ANY ACTION OR
PROCEEDING AGAINST EITHER ISSUER OR THEIR RESPECTIVE PROPERTIES IN THE COURTS
OF ANY OTHER JURISDICTION.
Section 15.12 WAIVER OF TRIAL BY JURY. EACH ISSUER HEREBY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION (i) ARISING UNDER THIS AGREEMENT OR ANY OTHER INSTRUMENT, DOCUMENT OR
AGREEMENT EXECUTED OR DELIVERED IN CONNECTION HEREWITH OR (ii) IN ANY WAY
CONNECTED WITH OR RELATED
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OR INCIDENTAL TO THE DEALINGS OF EACH SUCH ISSUER IN RESPECT TO THIS AGREEMENT
OR ANY OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER
NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT OR TORT OR
OTHERWISE. EACH ISSUER HEREBY AGREES AND CONSENTS THAT ANY SUCH CLAIM, DEMAND,
ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT A JURY AND
THAT ANY PARTY MAY FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS AGREEMENT
WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF SUCH ISSUER TO THE WAIVER
OF ITS RIGHT TO TRIAL BY JURY.
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IN WITNESS WHEREOF, each of the undersigned has caused this
Agreement to be duly executed and delivered as of the date first above written.
LOUISIANA RIVERBOAT GAMING
PARTNERSHIP
By:
-----------------------------
Title:
ST. ▇▇▇▇▇▇▇ GAMING COMPANY, INC.
By:
-----------------------------
Title:
FIRST NATIONAL BANK OF COMMERCE,
as Agent
By:
---------------------------
Title:
NOMURA HOLDING AMERICA INC.,
as Purchaser
By:
---------------------------
Title:
▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇ )
: ss.:
COUNTY OF )
On the day of , 1995, before me
personally came , to me personally known and known to me to be the
person described in and who executed the foregoing instrument as of
LOUISIANA RIVERBOAT GAMING PARTNERSHIP, a Lousiana general partnership (the
"Partnership"), who, being by me duly sworn, did depose and say that he resides
at ; that said instrument was signed on behalf of said
Partnership by order of its general partners; that he signed his name thereto
by like order; and that he acknowledged said instrument to be the free act and
deed of said Partnership.
------------------------
[NOTARIAL SEAL]
33
2
ST. ▇▇▇▇▇▇▇ GAMING COMPANY, INC.
STATE OF FLORIDA )
: ss.:
COUNTY OF )
On the day of , 1995, before me
personally came , to me personally known and known to me to be the
person described in and who executed the foregoing instrument as of
ST. ▇▇▇▇▇▇▇ GAMING COMPANY, INC., a Lousiana corporation, who, being by me
duly sworn, did depose and say that he resides at
; that he knows the seal of said corporation; that the
seal affixed to said instrument is such corporate seal; that said instrument
was signed and sealed on behalf of said corporation by order of its Board of
Directors; that he signed his name thereto by like order; and that he
acknowledged said instrument to be the free act and deed of said corporation.
-----------------------
[NOTARIAL SEAL]
34
3
NOMURA HOLDING AMERICA, INC.
STATE OF NEW YORK )
: ss.:
COUNTY OF NEW YORK )
On the day of , 1995, before me
personally came , to me personally known and known to me to be the
person described in and who executed the foregoing instrument as of
NOMURA HOLDING AMERICA, INC., who, being by me duly sworn, did depose and say
that he resides at ; that he knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that said instrument was signed and sealed on behalf of said corporation by
order of its Board of Directors; that he signed his name thereto by like order;
and that he acknowledged said instrument to be the free act and deed of said
corporation.
------------------------
[NOTARIAL SEAL]
35
4
FIRST NATIONAL BANK OF COMMERCE
STATE OF LOUISIANA )
: ss.:
COUNTY OF )
On the day of , 1995, before me
personally came , to me personally known and known to me to be the
person described in and who executed the foregoing instrument as of
FIRST NATIONAL BANK OF COMMERCE, the national banking association named
therein,, who, being by me duly sworn, did depose and say that he resides at
; that he knows the seal of said national banking association; that the
seal affixed to said instrument is its corporate seal; that said instrument was
signed and sealed on behalf of said corporation by order of its Board of
Directors; that he signed his name thereto by like order; and that he
acknowledged said instrument to be the free act and deed of said national
banking association.
------------------------
[NOTARIAL SEAL]
36
Schedule 1
CONTRACTS
Part A
The Development Agreement dated June 1, 1995 by and between Calcasieu Parish
Police Jury and SCGC.
The Agreement dated as of April 14, 1994 by and between Louisiana Riverboat
Gaming Partnership and the City of Bossier (distribution of gaming revenues in
lieu of a boarding fee).
The Lease Agreement dated May 20, 1994, by and between St. ▇▇▇▇▇▇▇ Gaming
Company, Inc. and IGT-North America, and all subsequent amendments and
modifications thereto.
Letter Agreement dated February 23, 1995 by and between Louisiana Downs, Inc.
and Isle of Capri ($500,000 sponsorship to the Isle of Capri Casino Super Derby
and the Capri Horseracing Enhancement Fund).
The Management Contract dated as of January 4, 1993 by and between Louisiana
Riverboat Gaming Partnership and Riverboat Services, Inc.
The Management Contract dated as of March 2, 1995 by and between St. ▇▇▇▇▇▇▇
Gaming Company, Inc. and Riverboat Services, Inc.
Part B
The Purchase and Installment Purchase Agreement dated February 22, 1994 by and
between Sensormatic Electronics Corporation and St. ▇▇▇▇▇▇▇ Gaming Company,
Inc.
Purchase and Installment Purchase Agreement, dated February 22, 1994, by and
between Sensormatic Electronics Corporation and St. ▇▇▇▇▇▇▇ Gaming Company,
Inc.
Purchase Agreement and License Agreement, dated April 14, 1994, by and between
Lodging Systems and St. ▇▇▇▇▇▇▇ Gaming Company, Inc.
Software Services Agreement, dated April 14, 1994, by and between Lodging
Systems and St. ▇▇▇▇▇▇▇ Gaming Company, Inc.
Customer Agreement-License, dated April 14, 1994, by and between IBM and St.
▇▇▇▇▇▇▇ Gaming Company, Inc.
Sales Agreement, dated October 19, 1994, between Mikohn Gaming Corporation and
St. ▇▇▇▇▇▇▇ Gaming Company, Inc.
S-1
37
Schedule 2
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
Clerk of Court and Ex-Officio Recorder
For the Parishes of Calcasieu [SCGC] and
Bossier [LRGP]
Other Actions
None.
S-2
38
Schedule 3
PATENTS AND PATENT LICENSES
None.
S-3
39
Schedule 4
COPYRIGHTS AND COPYRIGHT LICENSES
None.
S-4
40
Schedule 5
TRADEMARKS AND TRADEMARK LICENSES
None.
S-5
41
Schedule 6
INVENTORY AND EQUIPMENT
Location
Isle of Capri - Bossier Riverboat Casino,
Bossier City, Bossier Parish, Louisiana
Isle of Capri - Calcasieu Riverboat Casino,
Calcasieu Parish, Louisiana
S-6
42
Schedule 7
BANK ACCOUNTS
==============================================================================================
Account
Name and Address of Bank Title of Account Number
----------------------------------------------------------------------------------------------
Calcasieu Marine National Bank Operating Account ▇▇-▇▇▇▇▇▇-▇▇
----------------------------------------------------------------------------------------------
Hibernia National Bank Payroll Controlled 54-20-2224-8
Disbursement Account
----------------------------------------------------------------------------------------------
Hibernia National Bank Tax Account 76-20-6302-6
----------------------------------------------------------------------------------------------
Hibernia National Bank Medical Funding Account 54-20-6302-6
----------------------------------------------------------------------------------------------
Hibernia National Bank Jackpot Account 54-20-2250-7
----------------------------------------------------------------------------------------------
Hibernia National Bank Main Depository Account 76-20-6262-3
----------------------------------------------------------------------------------------------
Hibernia National Bank Accounts Payable Controlled 54-20-2171-3
Disbursement Account
==============================================================================================
S-7