Exhibit 10.10
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of December 16, 1999, made by American
Gaming & Entertainment, Ltd., a Delaware corporation (the "Pledgor"), in favor
of Shamrock Holdings Group, Inc., Debtor in Possession (the "Secured Party").
WITNESSETH
WHEREAS, the Secured Party beneficially owns or controls at least 52.6%
of the voting power of the outstanding voting securities of the Pledgor and
all of the Series C Cumulative Preferred Stock, Series D Cumulative Preferred
Stock and Series E Preferred Stock of the Pledgor;
WHEREAS, as of December 31, 1998, the Pledgor owed the Secured Party not
less than $57,175,000 in respect of, among other things, various loans and
advances, accrued and declared dividends and obligations under certain lease
agreements, all of which are currently due and payable (the "Overdue
Obligations");
WHEREAS, the Pledgor and the Secured Party have entered into a letter
agreement dated November 23, 1999 ("Letter Agreement") which provides for the
delivery of this Security Agreement;
WHEREAS, the Pledgor has agreed to grant to the Secured Party the
security interests provided herein; and
WHEREAS, the Secured Party is a debtor and debtor in possession in a
bankruptcy case under chapter 11 of Title 11 of the United States Code, 11
U.S.C. ss 101-1330, Case No.98-63631, pending in the United States Bankruptcy
Court for the Northern District of New York (the "Bankruptcy Court").
NOW, THEREFORE, in consideration or the premises contained herein, the
Pledgor hereby agrees with the Secured Party as follows:
Section 1. Defined Terms.
(a) Definitions. Unless otherwise defined herein, the following
terms which are defined in the Uniform Commercial Code as in effect in the
State of New York on the date hereof are used herein as so defined: Chattel
Paper, Farm Products, General Intangibles, Instruments and Proceeds; and the
following terms shall have the following meanings:
"Agreement": this Security Agreement, as the same may be amended;
supplemented or otherwise modified from time to time.
"Code": the Uniform Commercial Code as from time to time in effect in the
State of New York.
"Collateral": as defined in Section 3.
"Collateral Account": any collateral account established by the Secured
Party as provided in subsection 8(a).
"Contracts": the Proxy Agreement and the Trust Agreement, including,
without limitation, (a) all rights of the Pledgor to receive moneys due and to
become due to it thereunder or in connection therewith, (b) all rights of the
Pledgor to damages arising out of or for breach or default in respect thereof
and (c) all rights of the Pledgor to exercise all remedies thereunder.
"Contractual Obligation": as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its property is bound.
"Event of Default": as defined in Section 7 of this Agreement.
"Forbearance Period": as defined in Section 2 of this Agreement.
"GAAP": generally accepted accounting principles applied on a consistent
basis.
"Governmental Authority": any nation or government, any state or other
political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government (including the National Association of Insurance Commissioners).
"Lien": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement and any capital lease
having substantially the same economic effect as any of the foregoing).
"Obligations": the collective reference to (a) all amounts due and owing
to the Secured Party by the Pledgor as of the date hereof in an amount that as
of December 31, 1998, was not less than $57, 175,000, (b) all amounts to
become due and owing to the Secured Party by the Pledgor under the agreements
listed on Schedule 1 hereto and (c) all obligations to the Secured Party of
the Pledgor which may arise under or in connection with this Agreement or any
of the agreements listed on Schedule I hereto.
"Person": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.
"Proxy Agreement": the Irrevocable Proxy and Consent Agreement, dated as
of August 23, 1996, by and between Xxxx X. Xxxxxxxxx, Xxxxxxx X. Xxxx, Xxxxx
X. Xxxxxxx, Xxxxxxx X. Xxxxxxx, Xx., Xxxx X. Xxxxxxx and the Pledgor, as the
same may be amended, supplemented or otherwise modified from time to time.
"Requirement of Law": as to any Person, the Certificate of Incorporation
and By-Laws or other organizational or governing documents of such Person, and
any law, treaty, rule or regulation or determination of an arbitrator or a
court or other Governmental Authority, in each case applicable to or binding
upon such Person or any of its property or to which such Person or any of its
property is subject.
"RSR Trustee": NBD Bank, N.A., in its capacity as trustee under the Trust
Agreement, or any duly appointed successor to NBD Bank, N.A. in such capacity.
"Trust Agreement": The Trust Agreement dated as of August 23, 1996,
between the Pledgor and the RSR Trustee, as the same may be amended,
supplemented or otherwise modified from time to time.
(b) Other Definitional Provisions. The words "hereof;" "herein",
"hereto" 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, subsection and Schedule references
are to this Agreement unless otherwise specified. The meanings given to terms
defined herein shall be equally applicable to both the singular and plural
forms of such terms.
Section 2. Forbearance. The Secured Party shall forbear from the exercise
of any rights or remedies in respect of the Overdue Obligations during the
period (the "Forbearance Period") commencing on the date hereof and ending on
the earlier to occur of (a) the date of the occurrence of an Event of Default
under any of paragraphs (a) through (e) of Section 7 of this Agreement and (b)
the date on which the Pledgor is no longer diligently pursuing disposition of
its Membership Interest (as defined in the Trust Agreement) pursuant to the
terms of the Proxy Agreement, (c) Xxxxx 0, 0000, (x) by mutual consent of the
parties hereto, or (e) breach of the Letter Agreement.
Section 3. Grant of Security Interest. As collateral security for the
prompt and complete payment and performance of all Obligations, the Pledgor
hereby grants to the Secured Party a security interest in all of the Pledgor's
right, title or interest in, to and under the following property, whether now
owned or at any time hereafter acquired by the Pledgor (collectively, the
"Collateral"):
(a) all Proceeds and products and all collateral security and
guarantees given by any Person with respect to the Contracts;
(b) all General Intangibles arising out of or related to the
Contracts or the Membership Interest (as defined in the Trust Agreement);
(c) all books and records pertaining to the Collateral referred
to in clauses (a), (b) and (d) of this Section 3; and
(d) to the extent not otherwise included, all Proceeds and
products of any and all of the foregoing and all collateral security and
guarantees given by any Person with respect to any of the foregoing.
Section 4. Representations and Warranties: The Pledgor hereby represents
and warrants that:
(a) Power and Authority. The Pledgor has the corporate power and
authority to execute and deliver, to perform its obligations under, and to
grant the security interest in the Collateral pursuant to, this Agreement and
has taken all necessary corporate action to authorize its execution, delivery
and performance of, and grant of the security interest in the Collateral
pursuant to, this Agreement.
(b) Title: No Other Liens, Except for the security interest
granted to the Secured Party pursuant to this Agreement and rights granted
under the Contracts, the Pledgor's right, title and interest in, to and under
each item of the Collateral are free and clear of any and all Liens or claims
of others. No 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 such as may have been filed in favor of the Secured Party pursuant to
this Agreement.
(c) Enforceable Obligation; Perfected, First Priority Security
Interests. This Agreement constitutes a valid and binding obligation of the
Pledgor, enforceable in accordance with its terms, subject to the effects of
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), an implied covenant of good faith and fair dealing and the authority
of the Indiana Gaming Commission. The security interests granted pursuant to
this Agreement upon completion of the filings and other actions specified on
Schedule 2 will constitute a first priority perfected security interests in
the Collateral in favor of the Secured Party, as collateral security for the
Obligations.
(d) No Violation. The execution, delivery and performance of this
Agreement will not violate any provision of any Requirement of Law or material
Contractual Obligation of the Pledgor and will not result in the creation or
imposition of any Lien on any of the properties or revenues of the Pledgor
pursuant to any Requirement of Law or Contractual Obligation of the
Pledgor, except the security interests created hereby:
(e) No Consents Required. No consent or authorization of, filing
with, or other act by or in respect of, any arbitrator or Governmental
Authority and no consent of any other Person (including, without limitation,
any stockholder or creditor of the Pledgor or RSR, LLC or any other member
thereof), is required in connection with the execution, delivery, performance,
validity or enforceability of this Agreement.
(f) No Litigation. No litigation, investigation or proceeding of
or before any arbitrator or Governmental Authority is pending or, to the
knowledge of the Pledgor, threatened by or against the Pledgor or against any
of its properties or revenues with respect to this Agreement or any of the
transactions contemplated hereby, except as disclosed and alleged in a letter
from RSR, LLC to Pledgor dated September 9, 1999 and an action commenced by
Pledgor in connection therewith.
(g) Chief Executive Office. The Pledgor's chief executive office
is located at 00 Xxxxx Xxxx, Xxxx Xxxx, Xxx Xxxxxx 00000.
(h) Farm Products. None of the Collateral constitutes, or is the
Proceeds of; Farm Products.
Section 5. Covenants. The Pledgor covenants and agrees with the Secured
Party that from and after the date of this Agreement until the Obligations
shall have been paid in full:
(a) Inspection of Property; Books and Records; Discussions. The
Pledgor will keep proper books of records and account in which full, true and
correct entries in conformity with GAAP and all Requirements of Law shall be
made of all dealings and transactions in relation to the Collateral. The
Pledgor will permit representatives of the Secured Party to visit and inspect
any of the Pledgor's properties where any of the Collateral or any of the
Pledgor's books and records relating to the Collateral are located and to
inspect the Collateral and to examine and make abstracts from any of its books
and records during normal business hours upon five days' prior written notice
(or, if an Event of Default has occurred and is continuing, at any reasonable
time) and no more than once a month (or, if an Event of Default has occurred
and is continuing, as often as may be desired by the Secured Party) and to
discuss the condition and operation of the Collateral with officers and
employees of the Pledgor and with its independent certified public
accountants.
(b) Payment of Obligations. The Pledgor 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 its 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, reserves
in conformity with GAAP with respect thereto have
been provided on the books of the Pledgor and such proceedings do not involve
any material danger of the sale, forfeiture or loss of any of the Collateral
or any interest therein.
(c) Limitation on Dispositions and Liens; Further Documentation
(i) The Pledgor will not sell, transfer, lease or otherwise
dispose of any of the Collateral, or attempt, offer or contract to do so,
except with the prior written consent of the Secured Party or in accordance
with the terms of any Contract; provided that the Proceeds of any such
disposition shall constitute Collateral hereunder.
(ii) The Pledgor will (A) not create, incur or permit to
exist any Lien or claim on or to the Collateral or the Membership Interest (as
defined in the Trust Agreement), other than (I) the security interests created
hereby and (II) claims arising under the terms of any Contract, (B) maintain
the security interest created by this Agreement as a first, perfected secured
interest having the priority described in subsection 4(c) and (C) defend such
security interest against claims and demands of all Persons whomsoever.
(iii) At any time and from time to time, upon the written request
of the Secured Party, and at the sole expense of the Pledgor, the Pledgor will
promptly and duly execute and delivery such further instruments and documents
and take such further actions as the Secured Party may reasonably 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, 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.
(d) 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 or Chattel paper, such Instrument or Chattel Paper
shall be immediately delivered to the Secured Party, duly indorsed in a manner
satisfactory to the Secured Party, to be held as Collateral pursuant to this
Agreement.
(e) Changes in Locations. Name. etc. Unless it shall have given
the Secured Party at least 30 days' prior written notice, the Pledgor will
not:
(i) change the location of its chief executive office from
that specified in subsection 4(g); or
(ii) change its name, identity or corporate structure to
such an extent that any financing statement filed by the Secured Party in
connection with this Agreement would become seriously misleading.
(f) Further Identification of Collateral. The Pledgor will
furnish to the Secured Party from time to time statements and schedules
further identifying and describing the Collateral and such other reports in
connection with the Collateral as the Secured Party may
reasonably request, all in reasonable detail.
(g) Notices. The Pledgor will advise the Secured Party promptly,
in reasonable detail, of:
(i) any Lien (other than security interests created hereby)
on any of the Collateral; and
(ii) 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 creation, perfection or enforcement of the
security interests created hereby.
(h) Indemnification. The Pledgor agrees to pay, and to save the
Secured Party harmless from, any and all liabilities, costs and expenses
(including, without limitation, reasonable legal fees and expenses) with
respect to the enforcement, performance and administration of this Agreement
("indemnified liabilities"), provided that the Pledgor shall have no
obligation hereunder to the Secured Party with respect to indemnified
liabilities arising from (i) the gross negligence or willful misconduct of the
Secured Party or (ii) legal proceedings commenced against the Secured Party by
any security holder or creditor thereof arising out of and based upon rights
afforded any such security holder or creditor solely in its capacity as such.
The agreements in this subsection shall survive repayment of the Obligations.
Section 6. Provisions Relating to Contracts.
(a) Pledgor Remains Liable under Contracts. Anything herein to
the contrary notwithstanding, the Pledgor 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 such Contract. The Secured Party shall not have
any obligation or liability under any Contract by reason of or arising out of
this Agreement or its receipt of any payment relating to such Contract
pursuant hereto, nor shall the Secured Party be obligated in any manner to
perform any of the obligations of the Pledgor under or pursuant to any
Contract, 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 Contract, 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.
(b) Representations and Warranties.
(i) No consent of any party (other than the Pledgor) to any
Contract is required, or purports to be required, in connection with the
execution, delivery and performance of this Agreement.
(ii) Each Contract is in full force and effect and
constitutes a valid and
enforceable obligation of the Pledgor and, to the best of the Pledgor's
knowledge, the other parties thereto, subject to the effects of 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.
(iii) No consent or authorization of, filing with or other
act by or in respect of any Governmental Authority 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 and do not subject
the scope of any such Contract to any material adverse limitation, either
specific or general in nature.
(iv) Neither the Pledgor nor (to the best of the Pledgor's
knowledge) any of the other parties to the Contracts is in default in the
performance or observance of any of the material terms thereof.
(v) The Pledgor has fully performed all its obligations
under each Contract for which performance has been required as of the date
hereof
(vi) To the best of Pledgor's knowledge, the right, title
and interest of the Pledgor in, to and under the Contracts are not subject to
any defenses, offsets, counterclaims or claims that, in the aggregate, could
reasonably be expected to have a material adverse effect on the aggregate
value of the Collateral or on the creation, perfection or enforcement of the
security interests created hereby, except as alleged in a letter from RSR, LLC
to Pledgor dated September 9, 1999.
(vii) The Pledgor has delivered to the Secured Party a
complete and correct copy of each Contract, including all amendments,
supplements and other modifications thereto as of the date hereof.
(viii) No amount payable to the Pledgor under or in connection
with any Contract is evidenced by any Instrument or Chattel Paper which has
not been delivered to the Secured Party.
(ix) None of the parties to any Contract is a Governmental
Authority.
(c) Covenants.
(i) The Pledgor will perform and comply in all material
respects with all its obligations under the Contracts.
(ii) The Pledgor will not amend, modify, terminate or waive
any provision of any Contract in any manner without the prior written consent
of the Secured Party.
(iii) The Pledgor will exercise promptly and diligently each
and every material right which it may have under each Contract (other than any
right of termination) unless, in the Pledgor's reasonable business judgment,
and after notice to and consultation with the Secured Party, the Pledgor
determines that the non-exercise of such right would not have a material
adverse effect on the aggregate value of the Collateral or on the creation,
perfection or enforcement of the security interests created hereby, provided
that, except for any transfer of the Membership Interest pursuant to Section 4
of the Proxy Agreement, the Pledgor will not direct any action by the RSR
Trustee under the Trust Agreement, including, without limitation, the
disposition of the Membership Interest (as defined in the Trust Agreement)
under Article 5a of the Trust Agreement, without the prior written consent of
the Secured Party.
(iv) The Pledgor will deliver to the Secured Party a copy of
each demand, notice or document received by it relating in any way to any
Contract.
Section 7. Default. Each of the following shall be an event of default
("Event of Default") under this Agreement:
(a) any representation or warranty made or deemed made by the
Pledgor contained herein or that is contained in any certificate, document or
financial or other statement furnished by it at any time under or in
connection with this Agreement shall prove to have been inaccurate in any
material respect on or as of the date made or deemed made; or
(b) the Pledgor shall default in the observance or performance
of any agreement contained in subsection 5(e) or Section 6; or
(c) the Pledgor shall default in the observance or performance of
any other agreement contained in this Agreement (other than as provided in
paragraphs (a) and (b) of this Section) or under the Letter Agreement, and
such default shall continue unremedied for a period of 10 days after notice to
the Pledgor from the Secured Party; or
(d) any levy, attachment or execution on, or seizure of; any of
the Collateral; or
(e)(A) the Pledgor shall commence any case, proceeding or other
action (I) under any existing or future law of any jurisdiction, domestic or
foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (II) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or the Pledgor
shall make a general assignment for the benefit of its creditors; or (B) there
shall be commenced against the Pledgor any case, proceeding or other action of
a nature referred to in clause (A) above that (I) results in the entry of an
order for relief or any such adjudication or appointment or (II) remains
undismissed, undischarged or unbonded for a period of 60 days; or (C) there
shall be commenced against the Pledgor any case, proceeding or other action
seeking issuance of a warrant of attachment, execution, distraint or similar
process against all or any substantial part of its assets that results in the
entry of an order for any such relief that shall not have been vacated,
discharged, or stayed or bonded pending appeal within 60 days from the entry
thereof; or (D) the Pledgor shall take any action in furtherance of, or
indicating its consent to, approval of, or acquiescence in, any of the acts
set forth in clause (A), (B) or (C) above; or
(f) the termination of the Forbearance Period in accordance with
Section 2.
Section 8. Remedies.
(a) Proceeds to be Turned Over to Secured Party. Before or after
an Event of Default, all Proceeds received by the Pledgor consisting of cash,
checks and other cash equivalents shall be held by the Pledgor in trust for
the Secured Party, segregated from other funds of the Pledgor, and shall,
forthwith upon receipt by the Pledgor, be turned over to the Secured Party in
the exact form received by the Pledgor (duly indorsed by the Pledgor to the
Secured Party, if required) and held by the Secured Party in a Collateral
Account maintained under the sole dominion and control of the Secured Party,
provided that any proceeds received by the Pledgor that should have been
deposited in the account maintained by the RSR Trustee shall be paid over to
the RSR Trustee for deposit into such account to be held in accordance with
the terms of the Trust Agreement. All Proceeds while held by the Secured Party
in a Collateral Account (or by the Pledgor in trust for the Secured Party)
shall continue to be held as collateral security for all the Obligations and
shall not constitute payment thereof until applied as provided in. subsection
8(b).
(b) Application of Proceeds. At such intervals as may be agreed
upon by the Pledgor and the Secured Party, or, if an Event of Default shall
have occurred and be continuing, at any time at the Secured Party's election,
the Secured Party may apply all or any part of Proceeds held in any Collateral
Account in payment of the Obligations in such order as the Secured Party may
elect, and any part of such funds which the Secured Party 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 Secured Party to the Pledgor or to
whomsoever may be lawfully entitled to receive the same. Any balance of such
Proceeds remaining after the Obligations shall have been paid in full, shall
be paid over to the Pledgor or to whomsoever may be lawfully entitled to
receive the same.
(c) Code Remedies. If an Event of Default shall occur and be
continuing, the Secured Party 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. To the extent permitted by applicable law, the Pledgor waives all
claims, damages and demands it may acquire against the Secured Party arising
out of the exercise by it 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. Secured Party's Appointment as Attorney in Fact; Secured
Party's Performance of Pledgor's Obligations.
(a) Powers. The Pledgor hereby irrevocably constitutes and
appoints the Secured Party 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 the Pledgor and in the name of
the Pledgor or in its own name, from time to time in the Secured Party'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, the
Pledgor hereby gives the Secured Party the power and right on behalf of the
Pledgor, without notice to or assent by the Pledgor; to do any or all of the
following:
(i) in the name of the Pledgor or its own name, or otherwise,
take possession of and indorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Contract or with respect to any other Collateral and file any claim or take
any other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Secured Party for the purpose of collecting any and
all such moneys due under any Contract or with respect to any other Collateral
whenever payable;
(ii) pay or discharge taxes and Liens levied or placed on of
threatened against the Collateral;
(iii) execute any indorsements, assignments or other instruments
of conveyance or transfer with respect to the Collateral; and
(iv) (A) 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 Secured Parry or as the Secured Party shall direct;
(B) 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; (C) sign and indorse any
assignments, notices and other documents in connection with any of the
Collateral; (D) 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 Proceeds thereof and to enforce any other right in respect
of any Collateral or Pledgor's rights under the Contracts; (E) defend any
suit, action or proceeding brought against the Pledgor with respect to any
Collateral; (F) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, to give such discharges or releases
as the Secured Party may deem appropriate; and (G) generally, 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 Secured Party were the
absolute owner thereof for all purposes, and do, at the Secured Party's option
and the Pledgor's expense, at any time, or from time to time, all acts and
things which the Secured Party deems necessary to protect, preserve or realize
upon the Collateral and the Secured Party's security interests therein and to
effect the intent of this Agreement, all as fully and effectively as the
Pledgor might do.
Anything in this subsection to the contrary notwithstanding, the Secured
Xxxxx agrees that it will not, without Pledgor's consent which shall not be
unreasonably withheld,
exercise any rights under the power of attorney provided for in this
subsection unless an Event of Default shall have occurred and be continuing.
(b) Performance by Secured Party of Pledgor's Obligations.
Subject to the giving of notice required under subsection 7(c), if the Pledgor
fails to perform or comply with any of its agreements contained herein, the
Secured Party, at its option, but without any obligation so to do, may perform
or comply, or otherwise cause performance or compliance, with such agreement.
(c) Pledgor's Reimbursement Obligation. The expenses of the
Secured Party incurred in connection with actions undertaken as provided in
this Section, together with interest thereon at a rate per annum equal to the
rate of interest publicly announced by The Chase Manhattan Bank as its "Prime
Rate" in effect at such time at its principal office in New York, New York,
from the date of payment by the Secured Party to the date reimbursed by the
Pledgor, shall be payable by the Pledgor to the Secured Party on demand.
(d) Ratification; Power Counted With An Interest. The Pledgor
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 this
Agreement is terminated and the security interests created hereby are
released.
Section 10. Duty of Secured Party. The Secured Party'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 Secured Party deals with
similar property for its own account. Neither the Secured Party nor any of its
officers, directors, 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 the Pledgor 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 Secured Party hereunder are solely to protect the Secured
Party's interests in the Collateral and shall not impose any duty upon the
Secured Party to exercise any such powers. The Secured Party shall be
accountable only for amounts that it actually receives as a result of the
exercise of such powers, and neither it nor any of its officer, directors,
employees or agents shall be responsible to the Pledgor for any act or failure
to act hereunder, except for their own gross negligence or willful misconduct.
Section 11. Execution of Financing Statements. Pursuant to Section 9-402
of the Code, the Pledgor authorizes the Secured Party to file financing
statements with respect to the Collateral without the signature of the Pledgor
in such form and in such filing offices as the Secured Party reasonably
determines appropriate to perfect the security interests of the Secured Party
under this Agreement. A carbon, photographic or other reproduction of this
Agreement shall be sufficient as a financing statement for filing in any
jurisdiction.
Section 12. Effectiveness. (a) The agreements and obligations of the
parties under this Agreement (other than the agreement of the Secured Party
contained in Section 2 above) shall be effective upon the due execution and
delivery of this Agreement by the Secured Party and the Pledgor and (b) the
agreement of the Secured Party contained in Section 2 above shall become
effective upon approval of this Agreement by the Bankruptcy Court.
Section 13. Notices. All notices, requests and demands to or upon the
Secured Xxxxx or the Pledgor to be effective shall be in writing (including by
facsimile transmission) and shall be deemed to have been duly given or made
(a) in the case of delivery by hand, when delivered, (b) in the case of
delivery by mail, three days after being deposited in the mails, postage prep
aid, or (c) in the case of delivery by facsimile transmission, when sent and
receipt has been confirmed, in each case addressed as follows or to such other
address as may be hereafter notified by the respective parties hereto:
(i) if to the Secured Party, at its address or transmission
number for notices set forth under its signature below; and
(ii) if to the Pledgor, at its address or transmission
number for notices set forth under its signature below.
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. Integration. This Agreement represents the agreement of the
parties hereto with respect to the subject matter hereof and there are no
promises or representations by any party hereto relative to the subject matter
hereof not reflected herein.
Section 16. Amendments in Writing; No Waiver; Cumulative Remedies.
(a) 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 Pledgor and the Secured Party, provided
that any provision of this Agreement imposing obligations on the Pledgor may
be waived by the Secured Xxxxx in a written instrument executed by the Secured
Party.
(b) No Waiver by Course of Conduct. The Secured Party shall not be
deemed to have waived any right or remedy hereunder or to have acquiesced in
any Event of Default by any act (except by a written instrument pursuant to
subsection 16(a)), delay, indulgence, omission or otherwise. No failure to
exercise, nor any delay in exercising, on the part of the Secured Party, 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 Secured Party of any right or
remedy hereunder on any one occasion shall not be construed as a bar to any
right or remedy which the Secured Party would otherwise have on any future
occasion.
(c) 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 17. 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 18. Successors and Assigns. This Agreement shall be binding upon
the successors and assigns of the Pledgor and shall inure to the benefit of
the Secured Party and its successors and assigns.
Section 19. Governing Law. This Agreement shall be governed by, and
construed and interpreted in accordance with, the law of the State of New
York.
Section 20. Secured Party's Representations and Warranties. The Secured
Party hereby represents and warrants to the Pledgor that:
a. Power and Authoritv. The Secured Party has the corporate
power and authority to execute and deliver, and to perform its obligations
under, this Agreement and has taken all necessary corporate action to
authorize its execution, delivery and performance of this Agreement.
b. Enforceable Obligation. This Agreement constitutes a valid
and binding obligation of the Secured Party, enforceable in accordance with
its terms, subject to the effects of bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and other
Schedule 1
__________
AGREEMENTS GIVING RISE TO OBLIGATIONS
1. First Preferred Ship Mortgage, dated May 6, 1994 granted by American
Gaming Corporation to the American Gaming & Entertainment Ltd. (the "Pledgor")
2. First Amendment to First Preferred Ship Mortgage dated July 28, 1994
from American Gaming Corporation to the Pledgor
3. Second Amendment to First Preferred Ship Mortgage dated December 15,
1994 granted by American Gaming and Resorts of Mississippi, Inc. ("AGRM") to
the Pledgor, together with Assignment of First Preferred Ship Mortgage dated
December 15, 1994 from the Pledgor to Shamrock Holdings Group, Inc.
4. Assumption and Third Amendment of First Preferred Ship Mortgage dated
as of January 31, 1995 made by the Pledgor and executed by AGRM in favor of
Shamrock Holdings Group, Inc.
5. Agreement to Restructure and Cancel Debt dated as of April 12, 1995 by
and between Xxxxxxx Management and Development Company and the Pledgor.
6. Assignment of Charter Agreement and Collateral Assignment Agreement
dated as of April 13, 1995 by and between the Pledgor and Shamrock Holdings
Group, Inc.
7. Security Agreement dated April 12, 1995 by and between Xxxxxxx
Management and Development Company and the Pledgor.
8. Amendment to Agreement to Restructure and Cancel Debt and Assignment of
Charter Agreement and Collateral Assignment executed on July 10, 1995 by and
between the Pledgor, Xxxxxxx Management and Development Company and Xxxxxxx
Holdings, Inc.
9. Agreement dated as of August 15, 1995 by and between Xxxxxxx Holdings,
Inc. and Emerald Gaming, Inc.
10. Exclusive Management Agreement dated as of August 15, 1995 by and
between Xxxxxxx Holdings, Inc. and Emerald Gaming, Inc.
11. Letter Agreement dated September 26, 1996 between Shamrock Holdings
Group, Inc. and the Pledgor.
12. Letter agreement dated September 20, 1994 by and between Xxxxxxx
Holdings, Inc. and Pledgor.
13. Letter agreement dated November 5, 1997 by and between Shamrock
Holdings Group, Inc. and the Pledgor.
14. Letter agreement dated November 23, 1999 by and between Shamrock
Holdings Group, Inc. and the Pledgor.
Schedule 2
__________
FILINGS AND OTHER ACTIONS
REQUIRED TO PERFECT SECURITY INTERESTS
Uniform Commercial Code Filings
New Jersey Secretary of State
10K Xxxxx final full.doc
