EXHIBIT 4.5
PARTNERSHIP INTEREST PLEDGE AGREEMENT
MADE BY
HCS I, INC.
in favor of
STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE AND SECURED PARTY
August 10, 1999
PARTNERSHIP INTEREST PLEDGE AGREEMENT
THIS PARTNERSHIP INTEREST PLEDGE AGREEMENT (this "Agreement") is made as of
August 10, 1999 by HCS I, INC., Louisiana corporation, with principal offices at
Two Galleria Tower, Suite 2200, ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇ ▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
("Pledgor"), in favor of STATE STREET BANK AND TRUST COMPANY, Massachusetts
chartered trust company, with offices at ▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, as Trustee acting on behalf of the Holders of the
Notes under (and as defined in) the Indenture described below ("Secured Party").
RECITALS
A. Hollywood Casino Shreveport, a Louisiana general partnership ("Hollywood
Casino Shreveport"), Shreveport Capital Corporation, a Louisiana corporation
("Shreveport Capital", and together with Hollywood Casino Shreveport, the
"Issuers"), HWCC-Louisiana, Inc., a Louisiana corporation, HCS II, Inc., a
Louisiana corporation, and Pledgor, each as a Guarantor, and Secured Party, as
Trustee, have entered into an Indenture dated as of August 10, 1999 (as the same
may be amended, supplemented, restated or otherwise modified from time to time,
the "Indenture"), pursuant to which the Issuers will issue up to $150,000,000 of
their 13% First Mortgage Notes due 2006 with Contingent Interest (as the same
may be amended, supplemented, restated, exchanged, replaced or otherwise
modified from time to time, collectively, the "Notes").
B. Pledgor is the managing general partner of Hollywood Casino Shreveport
and holds a general partnership interest in Hollywood Casino Shreveport.
C. It is a condition to the issuance of the Notes that Pledgor execute and
deliver this Agreement, and Pledgor has agreed to enter into this Agreement.
D. Therefore, in order to comply with the terms and conditions of the
Indenture and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Terms Defined Above or in the Indenture. As used in this
Agreement, the terms defined herein shall have the meanings respectively
assigned to them. Other capitalized terms which are defined in the Indenture but
which are not defined herein shall have the same meanings as defined in the
Indenture.
Section 1.02 Certain Definitions. As used in this Agreement, the following
terms shall have the following meanings, unless the context otherwise requires:
"Code" shall mean the Uniform Commercial Code as presently in effect
in the State of New York. Unless otherwise indicated by the context
herein, all uncapitalized
terms which are defined in the Code shall have their respective meanings as
used in Articles 8 and 9 of the Code; provided that, if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interests in any Collateral is governed by
the Uniform Commercial Code as in effect in any jurisdiction other than the
State of New York, "Code" means the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to
such perfection or the effect of perfection or non-perfection.
"Collateral" shall mean the following types or items of property,
whether now owned or hereafter acquired:
(a) Pledgor's rights in any and all specific property of Hollywood
Casino Shreveport;
(b) Pledgor's interests in Hollywood Casino Shreveport, including all
general partnership interests, all of Pledgor's right, title and interest
in, to and under the Third Amended and Restated Joint Venture Agreement of
Hollywood Casino Shreveport dated as of July 21, 1999 (as heretofore
amended and as further amended, supplemented or otherwise modified from
time to time) (the "Partnership Agreement") and Pledgor's "JV Interests"
(as defined in the Partnership Agreement), and all options or other rights
to acquire such interests, now owned or hereafter acquired by Pledgor in
Hollywood Casino Shreveport, and including all of the rights of Pledgor in
and to the distributions, capital, profits and surplus of Hollywood Casino
Shreveport; and
(c) All other property hereinafter owned by, delivered to, or in the
possession or in the custody of, Pledgor, in substitution for or in
addition to the foregoing and all proceeds of the foregoing (excluding
distributions permitted under Section 4.02 hereof).
"Event of Default" shall mean any event specified in Section 6.01
hereof.
"Obligations" shall mean: (i) the payment when due of indebtedness
evidenced by the Notes in the aggregate principal sum not to exceed at any
time outstanding of $150,000,000, interest as set forth in the Indenture
and the Notes, and premiums, penalties, and late charges thereon; (ii) all
other indebtedness and other sums (including, without limitation, all
expenses, attorneys' fees, other fees, indemnifications, reimbursements,
damages, other monetary liabilities, and other charges) and obligations
that may or shall become due hereunder or under the Notes, the Guarantees,
the Indenture, or the other Collateral Documents, and (iii) any and all
renewals, modifications, amendments, extensions for any period, supplements
or restatements of any of the foregoing.
"Obligor" shall mean any Person, other than Pledgor, liable (whether
directly or indirectly, primarily or secondarily) for the payment or
performance of any of the Obligations whether as maker, co-maker, endorser,
guarantor, accommodation party, general partner or otherwise.
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ARTICLE II
SECURITY INTEREST
Section 2.01 Pledge. Pledgor hereby assigns, endorses, delivers, pledges,
and grants to Secured Party a continuing security interest in and Lien upon, the
Collateral to secure the prompt and complete payment and performance of the
Obligations and the performance by Pledgor of this Agreement. This security
interest is granted as security only and shall not subject Secured Party to, or
transfer or in any way affect or modify, any obligation or liability of the
Pledgor or any Obligor with respect to any of the Collateral, the Obligations or
any transaction in connection therewith.
Section 2.02 Ratable Benefit of Holders of the Notes. Pledgor and Secured
Party agree that the security interest and lien granted hereby are for the
benefit of the Trustee for the equal and ratable benefit of the Holders of the
Notes.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce Secured Party to accept this Agreement, Pledgor
represents and warrants to Secured Party (which representations and warranties
will survive the creation and payment of the Obligations) that:
Section 3.01 Ownership of Collateral; Location of Pledgor; Absence of
Encumbrances and Restrictions. Pledgor is the managing general partner of
Hollywood Casino Shreveport and owns the general partnership interest in
Hollywood Casino Shreveport described in the Partnership Agreement as in effect
on the date hereof. After giving effect to the use of proceeds of the Notes,
Pledgor is, and in the case of Collateral acquired after the date hereof, will
be, the legal and sole holder of record and the sole beneficial owner of the
Collateral, free and clear of all Liens except for Permitted Liens, and Pledgor
has full right, power and authority to pledge, assign and grant a security
interest in the Collateral to Secured Party. Pledgor's tax identification
number, chief executive office, principal place of business and the locations of
Pledgor's records concerning the Collateral are set forth on Exhibit A attached
hereto. The Partnership Agreement contains no restrictions preventing the
pledge, assignment and grant of a security interest in the Collateral to Secured
Party as contemplated herein. The exercise of remedies hereunder by the Secured
Party does not violate the Partnership Agreement, nor will such exercise give
additional rights to or allow exercise of rights by any other party to the
Partnership Agreement. No Collateral is evidenced by any certificate or
instrument. All of the partnership interests included in the Collateral have
been duly and validly issued in compliance with all applicable laws and
regulations. Pledgor has not performed any acts that might prevent Secured Party
from enforcing any of the terms of this Agreement or that would limit Secured
Party in any such enforcement.
Section 3.02 No Required Consent. Except for such authorizations, consents
and other actions as shall have been obtained and shall be in effect, no
authorization, consent,
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approval or other action by, and no notice to or registration, recordation or
filing with, any Governmental Authority or third party is required for (i) the
due execution, delivery and performance by Pledgor of this Agreement, (ii) the
grant by Pledgor of the security interest granted by this Agreement, (iii) the
perfection of such security interest (except for the filing of any appropriate
financing statements) or (iv) except as may be required by applicable gaming
laws or except as may be required in connection with the disposition of
Collateral by federal and state securities laws or antitrust laws and the ▇▇▇▇-
▇▇▇▇▇-▇▇▇▇▇▇ Antitrust Improvements Act of 1976, the exercise by Secured Party
of its rights and remedies under this Agreement. Pledgor has not performed nor
will perform any acts which might prevent Secured Party from enforcing any of
the terms and conditions of this Agreement or which would limit Secured Party in
any such enforcement.
Section 3.03 First Priority Security Interest. The pledge, assignment and
delivery of the Collateral pursuant to this Agreement creates and grants a valid
first lien and perfected first priority security interest in the Collateral,
subject to Permitted Liens, enforceable against Pledgor and all third parties
and securing payment of the Obligations, except that (a) the enforceability of
any rights to indemnity and contribution hereunder may be limited by federal or
state securities laws or principles of public policy, (b) the enforceability
hereof may be subject to applicable bankruptcy, insolvency, fraudulent
conveyance or transfer, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally, and (c) the enforceability hereof may
be subject to general principles of equity (regardless of whether enforcement is
sought in a proceeding at law or in equity).
ARTICLE IV
COVENANTS AND AGREEMENTS
Pledgor will at all times comply with the covenants and agreements
contained in this Article IV from the date hereof and for so long as any part of
the Obligations are outstanding.
Section 4.01 Sale, Disposition or Encumbrance of Collateral. Except as may
be permitted by the provisions hereof or of the Indenture, Pledgor will not in
any way encumber any of its rights in or to any of the Collateral (or permit or
suffer any of the Collateral to be encumbered) or sell, pledge, assign, lend or
otherwise dispose of or transfer any of the Collateral to or in favor of any
Person other than Secured Party. The Pledgor is not, and will not become, a
party to or be otherwise bound by any agreement, other than this Agreement or as
permitted by the Indenture, which restricts in any manner the rights of any
present or future holder of any of the Collateral. Except as may be permitted by
the Indenture, Pledgor shall not consent to or approve the issuance to any
person of any additional partnership interests of any type in Hollywood Casino
Shreveport, or any other interest in the assets of, or rights to distributions
from, Hollywood Casino Shreveport.
Section 4.02 Distributions. So long as no Event of Default shall have
occurred and be continuing, Pledgor shall be entitled to receive and retain free
and clear of the Lien of this Agreement any and all distributions, interest and
principal payments, cash, instruments and other property and proceeds made upon
or with respect to the Collateral, which shall not constitute
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Collateral and may be used by Pledgor subject to the terms and conditions of the
Indenture; provided, however, that in the event Pledgor now is or hereafter
becomes entitled to distributions paid or payable in securities of Hollywood
Casino Shreveport, including all securities convertible into any Collateral, and
warrants, options or other rights to purchase stock or equity interests, in
Hollywood Casino Shreveport, receivable or otherwise distributed in respect of,
or in exchange for (including, without limitation, any certificate or share
purchased or exchanged in connection with a tender offer or merger agreement)
any Collateral, shall be, and shall be forthwith delivered to Secured Party to
hold as, Collateral and shall, if received by Pledgor, be received in trust for
the benefit of Secured Party, be segregated from the other Property or funds of
Pledgor, and be forthwith delivered to Secured Party as Collateral in the same
form as so received (with any necessary endorsement). Pledgor shall execute and
deliver all documents, and if required, certificates, necessary to perfect
Secured Party's Lien on such Collateral. Upon the occurrence and during the
continuance of an Event of Default, all rights of Pledgor to receive all
distributions, interest and principal payments, cash, instruments and other
property and proceeds shall cease, and such distributions, interests and
principal payments, cash, instruments and other property and proceeds shall
constitute Collateral and shall be paid or otherwise delivered to the Secured
Party.
Section 4.03 Records and Information. Pledgor shall keep accurate and
complete records of the Collateral (including proceeds, payments, distributions,
income and profits). Upon reasonable notice and without undue interference with
the Pledgor's business, Secured Party may at any time have access to, examine,
audit, make extracts from and inspect without hindrance or delay Pledgor's
records, files and the Collateral.
Section 4.04 Further Assurances. Upon the request of Secured Party, Pledgor
shall (at Pledgor's expense) execute and deliver all such assignments, financing
statements or other documents and give further assurances and do all other acts
and things as Secured Party may reasonably request to perfect Secured Party's
interest in the Collateral or which is necessary to protect, enforce or
otherwise effect Secured Party's rights and remedies hereunder.
Section 4.05 Certificates or Instruments; Change in Location of Pledgor.
Pledgor shall not cause or permit its general partnership interest in the
Collateral to be evidenced by any certificate or instrument. Pledgor will not
change the location of Pledgor's chief executive office, principal place of
business or the locations of Pledgor's records concerning the Collateral unless
Pledgor shall have given Secured Party at least thirty (30) days prior written
notice thereof and shall have delivered to Secured Party such new financing
statements or other documentation as may be reasonably necessary or required by
Secured Party to ensure the continued perfection and priority of its security
interest in the Collateral.
Section 4.06 Rights to Sell.
(a) If Secured Party shall determine to exercise its rights to sell all or
any of the Collateral pursuant to its rights hereunder, Pledgor agrees that,
upon request of the Secured Party, Pledgor will, at its own expense, use its
commercially reasonable best efforts to do or cause to be done all such other
acts and things as may be necessary to make such sale of the
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Collateral or any part thereof valid and binding and in compliance with
applicable law and the Partnership Agreement.
(b) Pledgor further acknowledges the impossibility of ascertaining the
amount of damages which would be suffered by Secured Party and the Holders of
the Notes by reason of the failure by Pledgor to perform any of the covenants
contained in this Section 4.06 and consequently agrees that if Pledgor shall
fail to perform any of such covenants, it shall be subject to a suit for
specific performance of such covenants.
Section 4.07 Voting and Other Consensual Rights. Except to the extent
otherwise provided in Section 6.06(d) hereof, Pledgor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Collateral or any part thereof for any purpose not inconsistent with the terms
of this Agreement or the Indenture or any other Collateral Document.
ARTICLE V
RIGHT, DUTIES, AND POWERS OF SECURED PARTY
Secured Party shall have the following rights, duties and powers:
Section 5.01 Discharge Encumbrances. After the occurrence and during the
continuance of an Event of Default, Secured Party may, at its option, discharge
any taxes, Liens, security interests or other encumbrances at any time levied or
placed on the Collateral. Pledgor agrees to reimburse Secured Party as provided
in the Indenture.
Section 5.02 Cumulative and Other Rights. The rights, powers and remedies
of Secured Party hereunder are in addition to all rights, powers and remedies
given by law or in equity. The exercise by Secured Party of any one or more of
the rights, powers and remedies herein shall not be construed as a waiver of any
other rights, powers and remedies, including, without limitation, any other
rights of set-off (provided that set-off rights may not be exercised prior to
the acceleration of the Notes).
Section 5.03 Disclaimer of Certain Duties.
(a) The powers conferred upon Secured Party by this Agreement are to
protect its interest in the Collateral and shall not impose any duty upon
Secured Party to exercise any such powers. Pledgor hereby agrees that Secured
Party shall not be liable for, nor shall the indebtedness evidenced by the
Obligations be diminished by, Secured Party's delay or failure to collect upon,
foreclose, sell, take possession of or otherwise obtain value for the
Collateral.
(b) Except as may be required by the provisions of the Indenture, and to
the fullest extent permitted by applicable law, Secured Party shall be under no
duty whatsoever to make or give any presentment, notice of dishonor, protest,
demand for performance, notice of non-performance, notice of intent to
accelerate, notice of acceleration, or other notice or demand in connection with
any Collateral or the Obligations, or to take any steps necessary to preserve
any rights against any Obligor or other Person. Pledgor waives any right of
marshaling in respect
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of any and all Collateral, and waives any right to require Secured Party to
proceed against any Obligor or other Person, exhaust any Collateral or enforce
any other remedy which Secured Party now has or may hereafter have against any
Obligor or other Person.
(c) The security interests are granted as security only and shall not
subject Secured Party to, or transfer or in any way affect or modify, any
obligation or liability of the Pledgor with respect to any of the Collateral or
any transaction in connection therewith. The Pledgor shall remain liable under
the Partnership Agreement to the extent set forth therein to perform its duties
and obligations thereunder to the same extent as if this Agreement had not been
executed. The exercise by Secured Party of any of its rights hereunder shall not
release the Pledgor from any of its duties or obligations under the Partnership
Agreement and Secured Party shall not have any obligation or liability under the
Partnership Agreement by reason of this Agreement or otherwise, nor shall
Secured Party be obligated to perform any of the obligations or duties of the
Pledgor thereunder, to make any payment, to make any inquiry as to the nature or
sufficiency of any payment received by the Pledgor or Secured Party or the
sufficiency of any performance by any party under the Partnership Agreement or
to take any action to collect or enforce any claim for payment assigned
hereunder. Secured Party shall not by reason of this Agreement or the exercise
of any remedies hereunder become responsible or liable in any manner or to any
extent for the obligations and liabilities of Hollywood Casino Shreveport,
whether now existing or hereafter incurred, except as a result of obligations
and liabilities of Hollywood Casino Shreveport first arising after Secured
Party's admission as a general partner in Hollywood Casino Shreveport. The
Pledgor specifically understands and agrees that Secured Party shall have no
responsibility for (i) collecting or protecting any income, earnings, or
proceeds with regard to the Collateral, (ii) preserving any of the Pledgor's
rights against parties to the Collateral or against third persons, (iii)
ascertaining any maturities, calls, conversion rights, exchanges, offers,
tenders or similar matters relating to the Collateral, or (iv) informing the
Pledgor about any of these matters, whether or not Secured Party actually has or
is deemed to have knowledge thereof. Beyond the exercise of reasonable care in
the custody thereof, Secured Party shall have no duty as to any Collateral in
its possession or control or in the possession or control of any agent or bailee
or any income thereon. The Pledgor hereby agrees to indemnify and hold harmless
Secured Party and its directors, officers, employees and agents against any and
all claims, actions, liabilities, costs and expenses of any kind or nature
whatsoever (including reasonable fees and disbursements of counsel) that may be
imposed on, incurred by, or asserted against any of them, in any way relating to
or arising out of this Agreement or any action taken or omitted by them
hereunder (including such obligations and liabilities of Hollywood Casino
Shreveport), except to the extent that they directly resulted from the gross
negligence or willful misconduct of such persons.
Section 5.04 Modification of Obligations; Other Security. Except as
specifically provided for in the Indenture, Pledgor waives (i) any and all
notice of acceptance, creation, modification, rearrangement, renewal or
extension for any period of any instrument executed by any Obligor in connection
with the Obligations, and (ii) to the fullest extent permitted by applicable
law, any defense of any Obligor by reason of disability, lack of authorization,
cessation of the liability of any Obligor or for any other reason. Pledgor
authorizes Secured Party, without notice or demand and without any reservation
of rights against Pledgor and
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without affecting Pledgor's liability hereunder or on the Obligations, from time
to time after the occurrence and during the continuance of an Event of Default,
to (x) apply the Collateral in the manner permitted by this Agreement, and (y)
after the occurrence and during the continuance of an Event of Default, renew,
extend for any period, accelerate, amend or modify, supplement, enforce,
compromise, settle, waive or release the obligations of any Obligor or any
instrument or agreement of such other Person with respect to any or all of the
Obligations or Collateral.
Section 5.05 Custody and Preservation of the Collateral. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which comparable secured parties accord
comparable collateral, it being understood and agreed, however, that Secured
Party shall not have responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not Secured Party has or is deemed to
have knowledge of such matters, or (ii) taking any necessary steps to preserve
rights against Persons or entities with respect to any Collateral.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Events. It shall constitute an Event of Default under this
Agreement if an "Event of Default" occurs and is continuing under the Indenture.
Section 6.02 Remedies. Upon the occurrence and during the continuance of
any Event of Default, Secured Party may take any or all of the following actions
without notice (except where expressly required below or in the Indenture) or
demand to Pledgor:
(a) Sell, in one or more sales and in one or more parcels, or otherwise
dispose of any or all of the Collateral in any commercially reasonable manner as
Secured Party may elect, in a public or private transaction, at any location as
deemed reasonable by Secured Party for cash at such price as Secured Party may
deem fair; and (unless prohibited by the Code, as adopted in any applicable
jurisdiction) Secured Party may be the purchaser of any or all Collateral so
sold and may apply upon the purchase price therefor any Obligations secured
hereby. Any such sale or transfer by Secured Party either to itself or to any
other Person shall be absolutely free from any claim of right by Pledgor,
including any equity or right of redemption, stay or appraisal which Pledgor has
or may have under any rule of law, regulation or statute now existing or
hereafter adopted. Upon any such sale or transfer, Secured Party shall have the
right to deliver, assign and transfer to the purchaser or transferee thereof the
Collateral so sold or transferred. If Secured Party deems it advisable to do so,
it may restrict the bidders or purchasers of any such sale or transfer to
Persons or entities who will represent and agree that they are purchasing the
Collateral for their own account and not with the view to the distribution or
resale of any of the Collateral. Secured Party may, at its discretion, provide
for a public sale, and any such public sale shall be held at such time or times
within ordinary business hours and at such place or places as Secured Party may
fix in the notice of such sale. Secured Party shall not be obligated to make any
sale pursuant to any such notice. Secured Party may, without notice or
publication, adjourn any public or private sale by announcement at any time and
place fixed for such sale, and such
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sale may be made at any time or place to which the same may be so adjourned. In
the event any sale or transfer hereunder is not completed or is defective in the
opinion of Secured Party, such sale or transfer shall not exhaust the rights of
Secured Party hereunder, and Secured Party shall have the right to cause one or
more subsequent sales or transfers to be made hereunder. If only part of the
Collateral is sold or transferred such that the Obligations remain outstanding
(in whole or in part), Secured Party's rights and remedies hereunder shall not
be exhausted, waived or modified, and Secured Party is specifically empowered to
make one or more successive sales or transfers until all the Collateral shall be
sold or transferred and all the Obligations are paid. In the event that Secured
Party elects not to sell the Collateral, Secured Party retains its rights to
dispose of or utilize the Collateral or any part or parts thereof in any manner
authorized or permitted by law or in equity, and to apply the proceeds of the
same towards payment of the Obligations. Each and every method of disposition of
the Collateral described in this Section 6.02 shall constitute disposition in a
commercially reasonable manner.
(b) Apply proceeds of the disposition of the Collateral to the Obligations
as provided by the Indenture. Such application may include, without limitation,
the reasonable attorneys' fees and legal expenses incurred by Secured Party.
(c) Appoint any Person as agent to perform any act or acts necessary or
incident to any sale or transfer by Secured Party of the Collateral.
(d) Execute, assign and endorse negotiable and other instruments for the
payment of money, documents of title or other evidences of payment, shipment or
storage for any form of Collateral on behalf of and in the name of Pledgor.
(e) Secured Party, instead of exercising the power of sale herein conferred
upon it, may proceed by a suit or suits at law or in equity to foreclose the
security interests and sell the Collateral, or any portion thereof, under a
judgment or decree of a court or course of competent jurisdiction. For the
purposes of Louisiana executory process procedures, the Pledgor does hereby
acknowledge the Obligations and does hereby confess judgment in favor of Secured
Party for the full amount of the Obligations. The Pledgor does by these
presents, consent, agree and stipulate that during the continuance of an Event
of Default it shall be lawful for Secured Party, and the Pledgor does hereby
authorize Secured Party, to cause all and singular the Collateral to be seized
and sold under executory or ordinary process, at Secured Party's sole option,
without appraisement, appraisement being hereby expressly waived, in one lot as
an entirety or in separate portions or parcels as Secured Party may determine,
to the highest bidder, and otherwise exercise the rights, powers and remedies
afforded herein and under applicable Louisiana law. Any and all declarations of
fact made by authentic act before a Notary Public 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 Pledgor hereby waives in favor of Secured Party: (i) 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; (ii) the demand and
three days delay accorded by Louisiana Code of Civil Procedure Articles 2639 and
2721; (iii) the notice of seizure required by Louisiana Code of Civil Procedure
Articles 2293 and 2721; (iv) the three days delay provided by Louisiana Code of
Civil Procedure
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Articles 2331 and 2722; and (v) the benefit of the other provisions of Louisiana
Code of Civil Procedure Articles 2331, 2722 and 2723, not specifically mentioned
above.
(f) Exercise all other rights and remedies permitted by law or in equity.
Section 6.03 Attorney-in-Fact. Pledgor hereby irrevocably appoints Secured
Party as Pledgor's attorney-in-fact, with full authority in the place and stead
of Pledgor and in the name of Pledgor or otherwise, from time to time in Secured
Party's reasonable discretion upon the occurrence and during the continuance of
an Event of Default, but at Pledgor's cost and expense, to take any action and
to execute any assignment, certificate, financing statement, stock power,
notification, document or instrument which Secured Party may reasonably deem
necessary or advisable to accomplish the purposes of this Agreement, including,
without limitation, to receive, endorse and collect all instruments made payable
to Pledgor representing any dividend, interest payment or other distribution in
respect of the Collateral or any part thereof and to give full discharge for the
same.
Section 6.04 Liability for Deficiency. If any sale or other disposition of
Collateral by Secured Party or any other action of Secured Party hereunder
results in reduction of the Obligations, such action will not release Pledgor
from its liability to Secured Party for any unpaid Obligations, including
reasonable costs, charges and expenses incurred in the liquidation of Collateral
and the same shall be immediately due and payable to Secured Party at Secured
Party's address set forth in the opening paragraph hereof.
Section 6.05 Reasonable Notice. If any applicable provision of any law
requires Secured Party to give reasonable notice of any sale or disposition or
other action, Pledgor hereby agrees that ten (10) days' prior written notice
shall constitute reasonable notice thereof. Such notice, in the case of public
sale, shall state the time and place fixed for such sale and, in the case of
private sale, the time after which such sale is to be made.
Section 6.06 Collateral. Upon the occurrence and during the continuance of
an Event of Default:
(a) All rights of Pledgor to receive the property which it would otherwise
be authorized to receive and retain pursuant to Section 4.02 hereof shall cease,
and all such rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to receive and hold as Collateral such property,
but Secured Party shall have no duty to receive and hold such property and shall
not be responsible for any failure to do so or delay in so doing.
(b) All property which is received by Pledgor contrary to the provisions of
this Section 6.06 shall be received in trust for the benefit of Secured Party,
shall be segregated from other funds of Pledgor and shall be forthwith paid over
to Secured Party as Collateral in the same form as so received (with any
necessary endorsement).
(c) Secured Party may exercise any and all rights of conversion, exchange,
or any other rights, privileges or options pertaining to any of the Collateral
as if it were the absolute owner thereof, including without limitation, the
right to exchange at its discretion, any and all of
10
the Collateral upon the merger, consolidation, reorganization, recapitalization
or other readjustment of Hollywood Casino Shreveport or upon the exercise by
Hollywood Casino Shreveport or Secured Party of any right, privilege or option
pertaining to any of the Collateral, and in connection therewith, to deposit and
deliver any and all of the Collateral with any committee, depository, transfer
agent, registrar or other designated agency upon such terms and conditions as it
may determine, all without liability except to account for property actually
received by it, but Secured Party shall have no duty to exercise any of the
aforesaid rights, privileges or options and shall not be responsible for any
failure to do so or delay in so doing.
(d) All rights of Pledgor to exercise the voting and other consensual
rights which Pledgor would otherwise be entitled to exercise pursuant to Section
4.07 hereof with respect to the Collateral shall cease, and all such rights
shall thereupon become vested in Secured Party who shall thereupon have the sole
right to exercise such voting and other consensual rights, but Secured Party
shall have no duty to exercise any such voting or other consensual rights and
shall not be responsible for any failure to do so or delay in so doing.
Notwithstanding the foregoing, Secured Party's ability to exercise voting rights
is subject to Secured Party foreclosing on or acquiring the Collateral hereunder
and being admitted as a partner of Hollywood Casino Shreveport in accordance
with the Partnership Agreement, and therefore, during the continuance of an
Event of Default, if Secured Party shall not be entitled under the Partnership
Agreement to exercise voting or other consensual rights regarding the
Collateral, then until Secured Party shall be so entitled in accordance with the
Partnership Agreement to exercise such voting or other consensual rights, the
Pledgor shall be permitted to exercise such voting or other consensual rights,
but only at the sole direction of Secured Party.
Section 6.07 Non-judicial Enforcement. Secured Party may enforce its rights
hereunder without prior judicial process or judicial hearing, and to the extent
permitted by law, Pledgor expressly waives any and all legal rights which might
otherwise require Secured Party to enforce its rights by judicial process.
Section 6.08 Private Sale of Collateral. Pledgor recognizes that Secured
Party may deem it impracticable to effect a public sale of all or any part of
the Collateral and that Secured Party may, therefore, determine to make one or
more private sales of any such Collateral to a restricted group of purchasers
who will be obligated to agree, among other things, to acquire such Collateral
for their own account, for investment and not with a view to the distribution or
resale thereof. Pledgor acknowledges that any such private sale may be at prices
and on terms less favorable to the seller than the prices and other terms which
might have been obtained at a public sale and, notwithstanding the foregoing,
agrees that such private sale shall be deemed to have been made in a
commercially reasonably manner and that Secured Party shall have no obligation
to delay sale of any such securities for the period of time necessary to permit
Pledgor to register such Collateral for public sale under the Securities Act of
1933, as amended (the "Securities Act"). Pledgor further acknowledges and agrees
that any offer to sell such Collateral which has been (i) publicly advertised on
a bona fide basis in a newspaper or other publication of general circulation in
the financial community of New York, New York (to the extent that such an offer
may be so advertised without prior registration under the Securities Act), or
(ii) made privately in the manner described above to not less than fifteen (15)
bona fide offerees shall be deemed to involve a "public sale" for the purposes
of Section 9-504(c) of the Code (or any
11
successor or similar, applicable statutory provision) as then in effect in the
State of New York, notwithstanding that such sale may not constitute a "public
offering" under the Securities Act and that Secured Party may, in such event,
bid for the purchase of such Collateral.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Notices. Any notice required or permitted to be given under or
in connection with this Agreement shall be given in accordance with the notice
provisions of the Indenture.
Section 7.02 Amendments and Waivers. Secured Party's acceptance of partial
or delinquent payments or any forbearance, failure or delay by Secured Party in
exercising any right, power or remedy hereunder shall not be deemed a waiver of
any obligation of Pledgor or any Obligor, or of any right, power or remedy of
Secured Party, and no partial exercise of any right, power or remedy shall
preclude any other or further exercise thereof. Secured Party may remedy any
Event of Default hereunder or in connection with the Obligations without waiving
the Event of Default so remedied. Pledgor hereby agrees that if Secured Party
and the Holders of the Notes agree to a waiver of any provision hereunder, as
provided by the Indenture, or an exchange of or release of the Collateral, or
the addition or release of any Obligor or other Person, any such action shall
not constitute a waiver of any of Secured Party's other rights or of Pledgor's
obligations hereunder. This Agreement may be amended only by an instrument in
writing in the manner set forth in the Indenture and may be supplemented only by
documents delivered or to be delivered in accordance with the express terms
hereof.
Section 7.03 Redelivery of Collateral. If any sale or transfer of
Collateral by Secured Party results in full satisfaction of the Obligations, and
after such sale or transfer and discharge there remains a surplus of proceeds,
Secured Party will deliver to Pledgor or such other Person as may be required by
a Governmental Authority such excess proceeds in a commercially reasonable time;
provided, however, that neither Secured Party nor any Holders of the Notes shall
have any liability for any interest, cost or expense in connection with any
reasonable delay in delivering such proceeds to Pledgor.
Section 7.04 Gaming Laws and Regulations. To the extent required under
applicable law, the consummation of the transactions contemplated hereby and the
exercise of remedies hereunder may be subject to the Louisiana Riverboat
Economic Development and Gaming Control Act, La. R.S. 27:41, et seq., and the
Louisiana Gaming Control Law, La. R.S. 27:1, and the regulations promulgated
pursuant to each such law, all as amended from time to time. The Gaming License
held by Hollywood Casino Shreveport is not part of the Collateral of this
Agreement and, under the above described legislation and rules promulgated
thereunder, the Trustee may be precluded from or otherwise limited in taking
possession of or in selling the Collateral of this Agreement under the defaults
and remedies provisions of this Agreement. Due to various legal restrictions,
including, without limitation, licensing of operators of gaming facilities and
prior approval of the sale or disposition of assets of a licensed gaming
operation,
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the sale of Collateral may be denied by Gaming Authorities or delayed pending
Gaming Authority approval.
Section 7.05 Governing Law; Jurisdiction. This Agreement and the security
interest granted hereby shall be construed in accordance with and governed by
the laws of the State of New York (except to the extent that the laws of any
other jurisdiction govern the perfection and priority of the security interests
granted hereby).
Section 7.06 Continuing Security Agreement.
(a) Except as may be expressly applicable pursuant to Section 9-505 of the
Code, no action taken or omission to act by Secured Party hereunder, including,
without limitation, any exercise of voting or consensual rights pursuant to
Section 6.06(d) hereof or any other action taken or inaction pursuant to Section
6.02 hereof, shall be deemed to constitute a retention of the Collateral in
satisfaction of the Obligations or otherwise to be in full satisfaction of the
Obligations, and the Obligations shall remain in full force and effect until
Secured Party shall have applied payments (including, without limitation,
collections from Collateral) towards the Obligations in the full amount then
outstanding or until such subsequent time as is hereinafter provided in Section
7.06(b) hereof.
(b) To the extent that any payments on the Obligations or proceeds of the
Collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other Person under any bankruptcy law, common law or
equitable cause, then to such extent the Obligations so satisfied shall be
revived and continue as if such payment or proceeds had not been received by
Secured Party, and Secured Party's security interests, rights, powers and
remedies hereunder shall continue in full force and effect. In such event, this
Agreement shall be automatically reinstated if it shall theretofore have been
terminated pursuant to Section 7.07 or Section 7.08 hereof.
Section 7.07 Termination. The grant of a security interest hereunder and
all of Secured Party's rights, powers and remedies in connection therewith
shall, unless otherwise provided in the Indenture or in this Agreement, remain
in full force and effect until the payment in full of (a) the Notes under the
terms of the Indenture and (b) all Obligations then due and owing under the
Indenture, the Notes and the Collateral Documents; provided, however, that after
receipt from the Pledgor by the Secured Party of a request for a release of any
Collateral permitted under the Indenture upon the sale, transfer, assignment,
exchange or other disposition of the Collateral not prohibited by the Indenture
(and upon receipt by the Secured Party of all proceeds of such sale, transfer,
assignment, exchange or other disposition to the extent required to be remitted
to the Secured Party under the Indenture), such Collateral shall be released
from the Lien and security interest created hereunder in accordance with the
provisions of the Indenture and no longer constitute Collateral. Notwithstanding
the foregoing, the provisions of Section 7.06(b) hereof shall survive the
termination of this Agreement.
Section 7.08 Release. Subject to the provisions of Section 7.06(b) hereof,
this Agreement shall terminate upon payment in full of (a) the Notes under the
terms of the Indenture and (b) all Obligations then due and owing under the
Indenture, the Notes and the Collateral
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Documents. At such time, the Secured Party shall, at the request of the Pledgor,
reassign and redeliver to the Pledgor all of the Collateral hereunder that has
not been sold, disposed of, retained or applied by the Secured Party in
accordance with the terms of the Indenture or the Collateral Documents. Such
reassignment and redelivery shall be without warranty by or recourse to the
Secured Party, except as to the absence of any prior assignments by the Secured
Party of its interest in the Collateral, and shall be at the expense of the
Pledgor. Notwithstanding the foregoing, the provisions of Section 7.06(b) hereof
shall survive the termination of this Agreement.
Section 7.09 Counterparts, Effectiveness. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an original, but
all of which taken together shall constitute one and the same instrument. This
Agreement becomes effective upon the execution hereof by Pledgor and delivery of
the same to Secured Party, and it is not necessary for Secured Party to execute
any acceptance hereof or otherwise signify or express its acceptance hereof.
Section 7.10 Interpretation of Agreement. To the extent a term or provision
of this Agreement conflicts with the Indenture, the Indenture shall control with
respect to the subject matter of such term or provision.
Section 7.11 Rights of Holders. No Holder of Notes shall have any
independent rights hereunder other than those rights granted to individual
Holders of Notes pursuant to the Indenture; provided that, nothing in this
Section 7.11 shall limit any rights granted to the Secured Party under the
Notes, the Indenture or the Collateral Documents.
Section 7.12 No Personal Liability of Directors, Officer, Employees, and
Stockholders. Other than as set forth in the Indenture or the documents executed
and delivered pursuant thereto, no past, present or future director, officer,
employee, incorporator or stockholder of the Pledgor, as such or any successor
Person, as such, shall have any liability for any obligations of the Pledgor
under this Agreement or for any claim based on, in respect of, or by reason of,
such Obligations or their creation.
Section 7.13 Trustee. State Street Bank and Trust Company is acting
hereunder solely in its capacity as Trustee under the Indenture, and all of the
rights of Trustee set forth in the Indenture shall apply to Trustee's actions
hereunder. To the extent this Agreement contemplates payments by the Secured
Party, the Trustee shall have no liability therefor, such liability continuing
to be the liability of Pledgor or realized through the value of any collateral
for the obligations under the Indenture.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, Pledgor has caused this Partnership Interest
Pledge Agreement to be executed as of the date first above written.
Pledgor: HCS I, INC., a Louisiana corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive VP & CFO
[SIGNATURE PAGE TO PARTNERSHIP PLEDGE AGREEMENT (HCS I, INC.)]
S-1
EXHIBIT A
PERFECTION
(a) Legal Name of Pledgor:
HCS I, Inc.
(b) Other Names:
None
(c) (i) Chief Executive Office and Principal Place of Business of Pledgor:
Chief Executive Office: Dallas County, Texas
Principal Place of Business: Dallas County, Texas
(ii) Other Premises at which Collateral is Stored or Located:
Caddo Parish, Louisiana
Bossier Parish, Louisiana
(iii) Locations of Records Concerning Collateral:
Dallas County, Texas
(d) Tax Identification Number:
▇▇-▇▇▇▇▇▇▇
A-1
ACKNOWLEDGMENT OF HOLLYWOOD CASINO SHREVEPORT
The undersigned hereby:
(a) acknowledges receipt of a copy of the foregoing Partnership
Interest Pledge Agreement (the "Agreement") and that such receipt
constitutes notice to it of the Pledgor's authorization and direction to it
to comply with the terms and provisions hereof and of the Agreement and of
the Partnership Agreement (as defined in the Agreement), and accepts,
consents to, confirms and agrees to be bound by such terms and provisions;
(b) acknowledges that, pursuant to the Agreement, and as permitted by
the Partnership Agreement, the Pledgor has pledged and assigned to Secured
Party, and granted to Secured Party a continuing first-priority security
interest in, all right, title and interest of the Pledgor, whether now
existing or hereafter arising or acquired, in, to and under the Collateral,
and hereby consents to such assignment;
(c) agrees, upon notice from Secured Party, to make direct payment to
Secured Party of any amounts due or to become due to the Pledgor in respect
of the Collateral, and to do every act and thing necessary or appropriate
to carry out the terms and provisions hereof and of the Agreement and of
the Partnership Agreement, and agrees to make no payments or distributions
contrary to such terms and provisions; and
(d) waives notice of acceptance of the Agreement by Secured Party.
DELIVERED on August 10, 1999.
HOLLYWOOD CASINO SHREVEPORT, a Louisiana general
partnership
By: HCS I, Inc., a Louisiana corporation, its
managing general partner
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer
ACKNOWLEDGMENT OF GENERAL PARTNER
The undersigned, in its capacity as a General Partner of
Hollywood Casino Shreveport, hereby:
(a) acknowledges receipt of a copy of the foregoing Partnership
Interest Pledge Agreement (the "Agreement");
(b) consents to the pledge and assignment by the Pledgor to Secured
Party, and the grant by the Pledgor to Secured Party of a continuing first-
priority security interest in, all right, title and interest of the
Pledgor, whether now existing or hereafter arising or acquired, in, to and
under the Collateral, and the exercise by Secured Party of its rights and
remedies pursuant to the Agreement (including any sale or transfer of the
Collateral in accordance with the Agreement), and agrees to do every act
and thing necessary or appropriate to carry out the terms and provisions
hereof and of the Agreement, including without limitation, upon request of
Secured Party or any transferee of the Collateral, confirming and ratifying
the admission of such transferee as a partner in Hollywood Casino
Shreveport, and electing any transferee of the Collateral as the Managing
General Partner, under Hollywood Casino Shreveport's partnership agreement.
DELIVERED on August 10, 1999.
HCS II, INC., a Louisiana corporation
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Executive Vice President and
Chief Financial Officer