EXHIBIT 4.5
PLEDGE AGREEMENT
DATED AS OF DECEMBER 6, 2001
BETWEEN
MAJESTIC INVESTOR, LLC,
AS PLEDGOR
AND
THE BANK OF NEW YORK,
AS SECURED PARTY
TABLE OF CONTENTS
PAGE
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1. DEFINITIONS 1
1.1 GENERAL DEFINITIONS....................................................................1
1.2 DEFINITIONS; INTERPRETATION............................................................3
2. GRANT OF SECURITY 3
2.1 GRANT OF SECURITY......................................................................3
2.2 INTERCREDITOR AGREEMENT................................................................3
3. SECURITY FOR OBLIGATIONS. 3
3.1 SECURITY FOR OBLIGATIONS...............................................................3
3.2 OBLIGATIONS REMAIN.....................................................................4
4. REPRESENTATIONS AND WARRANTIES AND COVENANTS. 4
4.1 GENERALLY..............................................................................4
4.2 PLEDGED LLC INTERESTS..................................................................6
5. FURTHER ASSURANCES. 10
6. ATTORNEY-IN-FACT. 10
6.1 POWER OF ATTORNEY.....................................................................10
6.2 NO DUTY ON THE PART OF SECURED PARTY..................................................11
7. REMEDIES. 11
7.1 GENERALLY.............................................................................11
7.2 APPLICATION OF PROCEEDS...............................................................13
7.3 PLEDGED LLC INTERESTS.................................................................13
7.4 CASH PROCEEDS.........................................................................13
7.5 REGULATORY MATTERS....................................................................14
8. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES. 14
9. STANDARD OF CARE; SECURED PARTY MAY PERFORM. 14
10. INDEMNITY AND EXPENSES. 15
11. MISCELLANEOUS. 15
11.1 NOTICES...............................................................................15
11.2 EXPENSES..............................................................................16
11.3 AMENDMENTS AND WAIVERS................................................................16
11.4 SUCCESSORS AND ASSIGNS................................................................16
11.5 INDEPENDENCE OF COVENANTS.............................................................17
11.6 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS................................17
11.7 NO WAIVER; REMEDIES CUMULATIVE........................................................17
11.8 MARSHALING; PAYMENTS SET ASIDE........................................................17
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11.9 SEVERABILITY..........................................................................17
11.10 HEADINGS..............................................................................17
11.11 APPLICABLE LAW........................................................................17
11.12 CONSENT TO JURISDICTION...............................................................17
11.13 WAIVER OF JURY TRIAL..................................................................18
11.14 COUNTERPARTS..........................................................................18
11.15 GAMING LAWS...........................................................................18
11.16 EFFECTIVENESS.........................................................................19
11.17 ENTIRE AGREEMENT......................................................................19
11.18 INDENTURE CONTROLS....................................................................19
11.19 TRUST INDENTURE ACT CONTROLS..........................................................19
SCHEDULE 4.1 - (A) FULL LEGAL NAME/JURISDICTION OF
ORGANIZATION/CHIEF EXECUTIVE OFFICE
(B) OTHER NAMES
(C) FINANCING STATEMENTS
SCHEDULE 4.2 - INVESTMENT RELATED PROPERTY
EXHIBIT A - FORM OF PLEDGE SUPPLEMENT
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This PLEDGE AGREEMENT, dated as of December 6, 2001 (this
"AGREEMENT"), between MAJESTIC INVESTOR, LLC, a Delaware limited liability
company ("PLEDGOR"), and THE BANK OF NEW YORK (together with any successor
Trustee pursuant to the terms of the Indenture, "SECURED PARTY"), acting in the
capacity of collateral agent for the benefit of the holders of the Notes issued
under the Indenture referred to below.
R E C I T A L S:
WHEREAS, reference is made to that certain Indenture, dated as of the
date hereof (as it may be amended, restated, supplemented or otherwise modified
from time to time, the "INDENTURE"), by and among Majestic Investor Holdings,
LLC, a Delaware limited liability company and wholly-owned Subsidiary of Pledgor
("COMPANY"), Majestic Investor Capital Corp., a Delaware corporation (together
with Company, "ISSUERS" and each an "ISSUER"), the Subsidiary Guarantors party
thereto and Secured Party.
WHEREAS, Pledgor, as a member of Company, will directly and indirectly
receive substantial benefits by reason of the financial accommodations made by
Secured Party and the Holders under the Indenture.
WHEREAS, in consideration of the extension of credit as set forth in
the Indenture, Pledgor has agreed to secure all obligations under the Indenture.
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Pledgor and Secured Party agree as
follows:
1. DEFINITIONS
1.1 GENERAL DEFINITIONS. In this Agreement, the following terms shall
have the following meanings:
"AGREEMENT" shall have the meaning set forth in the preamble.
"CASH PROCEEDS" shall mean all proceeds of any Collateral received by
Pledgor consisting of cash, checks and cash equivalents.
"COLLATERAL" shall have the meaning set forth in Section 2.1.
"COLLATERAL RECORDS" shall mean books, records, ledger cards, files,
correspondence and similar items that at any time evidence or contain
information relating to any of the Collateral or are otherwise necessary or
helpful in the collection thereof or realization thereupon.
"COMPANY" shall have the meaning set forth in the recitals hereto.
"CREDIT FACILITY SECURED PARTY" shall mean the agent or any other
Person acting on behalf and for the benefit of the lender(s) under the Credit
Facility.
"GOVERNMENTAL AUTHORITY" shall mean any federal, state, municipal or
other governmental department, commission, board, bureau, agency or
instrumentality, or any court, in each case whether of the United States or
foreign, including any Gaming Authority.
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"INDEMNITEE" shall mean Secured Party, and its and its Affiliates'
officers, partners, directors, trustees, employees, agents.
"INDENTURE" shall have the meaning set forth in the recitals hereto.
"INDENTURE DOCUMENTS" shall mean the Indenture, the Notes, the Security
Documents and the Registration Rights Agreement, and such other agreements,
instruments and certificates executed and delivered (or issued) by Issuers or
Subsidiary Guarantors pursuant to the Indenture or any of the foregoing, as any
or all of the same may be amended, restated, supplemented or otherwise modified
from time to time.
"ISSUERS" shall have the meaning set forth in the recitals hereto.
"PLEDGED LLC INTERESTS" shall mean all interests in Company, including,
without limitation, all limited liability company interests listed on Schedule
4.2 under the heading "Pledged LLC Interests" (as such schedule may be amended
or supplemented from time to time) and the certificates, if any, representing
such limited liability company interests and any interest of Pledgor on the
books and records of such limited liability company or on the books and records
of any securities intermediary pertaining to such interest and all dividends,
distributions, cash, warrants, rights, options, instruments, securities and
other property or proceeds from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of such limited
liability company interests.
"PLEDGE SUPPLEMENT" shall mean any supplement to this agreement in
substantially the form of Exhibit A.
"PLEDGOR" shall have the meaning set forth in the preamble.
"PROCEEDS" shall mean: (i) all "proceeds" as defined in Article 9 of
the UCC, (ii) payments or distributions made with respect to any Pledged LLC
Interests and (iii) whatever is receivable or received when Collateral or
proceeds are sold, exchanged, collected or otherwise disposed of, whether such
disposition is voluntary or involuntary.
"RECORD" shall have the meaning specified in Article 9 of the UCC.
"SECURED OBLIGATIONS" shall have the meaning specified in Section 3.1.
"SECURED PARTY" shall have the meaning set forth in the preamble.
"SECURITIES" shall mean any stock, shares, partnership interests,
voting trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"UCC" shall mean the Uniform Commercial Code as in effect from time to
time in the State of New York or, when the context implies, the Uniform
Commercial Code as in effect from time to time in any other applicable
jurisdiction.
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1.2 DEFINITIONS; INTERPRETATION. All capitalized terms used herein
(including the preamble and recitals hereto) and not otherwise defined herein
shall have the meanings ascribed thereto in the Indenture or, if not defined
therein, in the UCC. References to "Sections," "Exhibits" and "Schedules" shall
be to Sections, Exhibits and Schedules, as the case may be, of this Agreement
unless otherwise specifically provided. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
Any of the terms defined herein may, unless the context otherwise requires, be
used in the singular or the plural, depending on the reference. The use herein
of the word "include" or "including", when following any general statement, term
or matter, shall not be construed to limit such statement, term or matter to the
specific items or matters set forth immediately following such word or to
similar items or matters, whether or not nonlimiting language (such as "without
limitation" or "but not limited to" or words of similar import) is used with
reference thereto, but rather shall be deemed to refer to all other items or
matters that fall within the broadest possible scope of such general statement,
term or matter. If any conflict or inconsistency exists between this Agreement
and the Indenture, the Indenture shall govern. All references herein to
provisions of the UCC shall include all successor provisions under any
subsequent version or amendment to any Article of the UCC.
2. GRANT OF SECURITY
2.1 GRANT OF SECURITY. Pledgor hereby grants to Secured Party a
security interest and continuing lien on all of Pledgor's right, title and
interest in, to and under all property of Pledgor including, but not limited to
the following, in each case whether now owned or existing or hereafter acquired
or arising and wherever located (collectively, Pledgor's "COLLATERAL"):
(i) Pledged LLC Interests;
(ii) to the extent not otherwise included above, all
Collateral Records relating to any of the foregoing;
and
(iii) to the extent not otherwise included above, all
Proceeds of or in respect of any of the foregoing.
2.2 INTERCREDITOR AGREEMENT. Notwithstanding anything herein to the
contrary, the relative rights and remedies of Secured Party hereunder and the
Credit Facility Secured Party shall be subject to and governed by the terms of
the Intercreditor Agreement at any time the Intercreditor Agreement is in
effect. In the event of any inconsistency between the terms hereof and the
Intercreditor Agreement, the Intercreditor Agreement shall control at any time
the Intercreditor Agreement is in effect.
3. SECURITY FOR OBLIGATIONS.
3.1 SECURITY FOR OBLIGATIONS. This Agreement secures, and the
Collateral is collateral security for, the prompt and complete payment or
performance in full when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including the
payment of amounts that would become due but for the operation of the automatic
stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C. ss.362(a) (and any
successor provision thereof)), of all Obligations of each Issuer under the
Indenture Documents (the "SECURED OBLIGATIONS").
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3.2 OBLIGATIONS REMAIN.
(a) Anything contained herein to the contrary notwithstanding:
(i) Pledgor shall remain liable under any limited
liability company agreement relating to any Pledged
LLC Interest and/or any other contracts and
agreements included in the Collateral, to the extent
set forth therein, to perform all of its duties and
obligations thereunder to the same extent as if this
Agreement had not been executed;
(ii) the exercise by Secured Party of any of its rights
hereunder shall not release Pledgor from any of its
duties or obligations under the contracts and
agreements included in the Collateral; and
(iii) Secured Party shall not have any obligation or
liability under any limited liability company
agreement relating to any Pledged LLC Interests or
any other contracts and agreements included in the
Collateral by reason of this Agreement, nor shall
Secured Party be obligated to perform any of the
obligations or duties of Pledgor thereunder or to
take any action to collect or enforce any claim for
payment assigned hereunder.
(b) Neither Secured Party nor any purchaser at a foreclosure sale under
this Agreement shall be obligated to assume any obligation or liability under
any limited liability company agreement relating to any Pledged LLC Interests or
any other contracts and agreements included in the Collateral.
4. REPRESENTATIONS AND WARRANTIES AND COVENANTS.
4.1 GENERALLY.
(a) Representations and Warranties. Pledgor hereby represents and
warrants that:
(i) it owns the Collateral purported to be owned by it or
otherwise has the rights it purports to have in each
item of Collateral and, as to all Collateral whether
now existing or hereafter acquired, will continue to
own or have such rights in each item of the
Collateral, in each case free and clear of any and
all Liens, rights or claims of all other Persons
other than Permitted Liens, including, without
limitation, liens arising as a result of Pledgor
becoming bound (as a result of merger or otherwise)
as debtor under a security agreement entered into by
another Person;
(ii) it has indicated on Schedule 4.1(A) (as such schedule
may be amended or supplemented from time to time):
(x) the type of organization of Pledgor, (y) the
jurisdiction of organization of Pledgor and (z) the
jurisdiction where the chief executive office
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or its sole place of business is, and for the
one-year period preceding the date hereof has been,
located;
(iii) the full legal name of Pledgor is as set forth on
Schedule 4.1(A) and it has not done in the last five
(5) years, and does not do, business under any other
name (including any trade-name or fictitious business
name) except for those names set forth on Schedule
4.1(B) (as such schedule may be amended or
supplemented from time to time);
(iv) Pledgor has not within the last five (5) years become
bound (whether as a result of merger or otherwise) as
debtor under a security agreement entered into by
another Person, which has not heretofore been
terminated;
(v) upon the filing of all UCC financing statements
naming Pledgor as "debtor" and Secured Party as
"Secured Party" and describing the Collateral in the
filing offices set forth opposite Pledgor's name on
Schedule 4.1(C) hereof (as such schedule may be
amended or supplemented from time to time), the
security interests granted to Secured Party hereunder
constitute valid and perfected Liens (subject in the
case of priority only to Permitted Liens);
(vi) all actions and consents, including all filings,
notices, registrations and recordings necessary or
desirable for the exercise by Secured Party of the
voting or other rights provided for in this Agreement
or the exercise of remedies in respect of the
Collateral have been made or obtained except to the
extent any consents or approvals are required under
applicable Gaming Laws or the Intercreditor
Agreement;
(vii) other than the financing statements filed in favor of
Secured Party, no effective UCC financing statement,
fixture filing or other instrument similar in effect
under any applicable law covering all or any part of
the Collateral is on file in any filing or recording
office except for (x) financing statements for which
proper termination statements have been delivered to
Secured Party for filing and (y) financing statements
filed in connection with Permitted Liens;
(viii) no authorization, approval or other action by, and no
notice to or filing with, any Governmental Authority
is required for either (i) the pledge or grant by
Pledgor of the Liens purported to be created in favor
of Secured Party hereunder or (ii) the exercise by
Secured Party of any rights or remedies in respect of
any Collateral (whether specifically granted or
created hereunder or created or provided for by
applicable law), except (A) for the filings
contemplated by clause (v) above, (B) as may be
required, in connection with the disposition of any
Pledged LLC Interests, by laws generally affecting
the offering and sale of Securities
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and (C) to the extent any consents or approvals are
required under applicable Gaming Laws or the
Intercreditor Agreement; and
(ix) all information supplied by Pledgor with respect to
any of the Collateral (in each case taken as a whole
with respect to any particular Collateral) is
accurate and complete in all material respects.
(b) Covenants and Agreements. Pledgor hereby covenants and agrees that:
(i) except for the security interest created by this
Agreement, it shall not create or suffer to exist any
Lien upon or with respect to any of the Collateral
except Permitted Liens, and Pledgor shall defend the
Collateral against all Persons at any time claiming
any interest therein;
(ii) it shall not change Pledgor's name, identity,
corporate structure, sole place of business, chief
executive office or jurisdiction of organization or
establish any trade names unless it shall have taken
all actions necessary or advisable to maintain the
continuous validity and perfection of Secured Party's
security interest in the Collateral intended to be
granted and agreed to hereby;
(iii) it shall pay promptly when due all property and other
taxes, assessments and governmental charges or levies
imposed upon, and all claims (including claims for
labor, materials and supplies) against, the
Collateral, except to the extent the validity thereof
is being contested in good faith; provided, Pledgor
shall in any event pay such taxes, assessments,
charges, levies or claims not later than five (5)
days prior to the date of any proposed sale under any
judgment, writ or warrant of attachment entered or
filed against Pledgor or any of the Collateral as a
result of the failure to make such payment; and
(iv) upon Pledgor or any officer of Pledgor obtaining
knowledge thereof, it shall promptly notify Secured
Party in writing of any event that may materially and
adversely affect the ability of Pledgor or Secured
Party to dispose of the Collateral or any portion
thereof, or the rights and remedies of Secured Party
in relation thereto, including, without limitation,
the levy of any legal process against the Collateral
or any portion thereof.
4.2 PLEDGED LLC INTERESTS.
(a) Representations and Warranties. Pledgor hereby represents and
warrants that:
(i) Schedule 4.2 (as such schedule may be amended or
supplemented from time to time) sets forth, under the
headings
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"Pledged LLC Interests", all of the Pledged LLC
Interests owned by Pledgor, and such Pledged LLC
Interests constitute one hundred percent (100%) of
membership interests of Company;
(ii) it is the record and beneficial owner of the Pledged
LLC Interests free of all Liens, rights or claims of
other Persons other than Permitted Liens;
(iii) without limiting the generality of Section
4.1(a)(vi), no consent of any Person or any other
member of a limited liability company is necessary or
desirable in connection with the creation or
perfection of the security interest of Secured Party
in any Pledged LLC Interests or (other than approvals
required under applicable Gaming Laws) the exercise
by Secured Party of the voting or other rights
provided for in this Agreement or the exercise of
remedies in respect thereof; and
(iv) as of the Issue Date, none of the Pledged LLC
Interests are or represent interests in issuers that
are: (a) registered as investment companies or (b)
are dealt in or traded on securities exchanges or
markets.
(b) Covenants and Agreements. Pledgor hereby covenants and agrees that:
(i) it shall not vote to enable or take any other action
to: (a) amend or terminate any limited liability
company agreement or other organizational documents
in any way that materially changes the rights of
Pledgor with respect to any Pledged LLC Interests or
adversely affects the validity, perfection or
priority of Secured Party's security interest, (b)
other than as permitted under the Indenture, permit
Company to dispose of all or a material portion of
its assets, or (c) waive any default under or breach
of any terms of organizational document relating to
Company;
(ii) in the event it acquires rights in any Pledged LLC
Interests after the date hereof, it shall deliver to
Secured Party a completed Pledge Supplement,
substantially in the form of Exhibit A attached
hereto, together with all Supplements to Schedules
thereto, reflecting such new Pledged LLC Interests
and all other Pledged LLC Interests. Notwithstanding
the foregoing, it is understood and agreed that the
security interest of Secured Party shall attach to
all Pledged LLC Interests immediately upon Pledgor's
acquisition of rights therein and shall not be
affected by the failure of Pledgor to deliver a
supplement to Schedule 4.2 as required hereby;
(iii) except as provided in the next sentence, in the event
Pledgor receives any dividends, interest or
distributions on any Pledged LLC Interests, or any
securities or other property upon the merger,
consolidation, liquidation or dissolution of any
issuer of any Pledged LLC Interests, then (a) such
dividends, interest or
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distributions and securities or other property shall
be included in the definition of Collateral without
further action and (b) Pledgor shall immediately take
all steps, if any, necessary or advisable to ensure
the validity and perfection, priority and, if
applicable, control of Secured Party over such
Pledged LLC Interests (including, without limitation,
delivery thereof to Secured Party or Credit Facility
Secured Party pursuant to the terms of the
Intercreditor Agreement to the extent then in effect)
and pending any such action Pledgor shall be deemed
to hold such dividends, interest, distributions,
securities or other property in trust for the benefit
of Secured Party and shall be segregated from all
other property of Pledgor. Notwithstanding the
foregoing, so long as no Event of Default shall have
occurred and be continuing, Secured Party authorizes
Pledgor to retain all ordinary cash dividends and
distributions paid in the normal course of business
and all scheduled payments of interest;
(iv) it shall comply with all of its obligations under any
limited liability company agreement relating to
Pledged LLC Interests and shall enforce all of its
rights with respect to any Pledged LLC Interests; and
(v) it shall not permit Company to merge or consolidate
unless (i) Company creates a security interest that
is perfected by a filed financing statement (that is
not effective solely under section 9-508 of the UCC)
in collateral in which such new debtor has or
acquires rights, (ii) all the outstanding capital
stock or other equity interests of the surviving or
resulting corporation, limited liability company,
partnership or other entity is, upon such merger or
consolidation, pledged hereunder and no cash,
securities or other property is distributed in
respect of the outstanding equity interests of any
other constituent company and (iii) permitted by the
terms of the Indenture.
(c) Delivery and Control. Pledgor agrees that with respect to any
Pledged LLC Interests in which it currently has rights it shall comply with the
provisions of this Section 4.2(c) on or before the Closing Date and with respect
to any Pledged LLC Interests hereafter acquired by Pledgor it shall comply with
the provisions of this Section 4.2(c) immediately upon acquiring rights therein,
in each case in form and substance satisfactory to Secured Party. With respect
to any Pledged LLC Interests that is now or hereafter represented by a
certificate or that is an "instrument" it shall cause such certificate or
instrument to be delivered to Secured Party or Credit Facility Secured Party (in
accordance with the terms of the Intercreditor Agreement to the extent then in
effect), indorsed in blank by an "effective indorsement" (as defined in Section
8-107 of the UCC), regardless of whether such certificate constitutes a
"certificated security" for purposes of the UCC. In the event that at any time
after the date of this Agreement any Pledged LLC Interest is (i) dealt in or
traded on a securities exchange or in a securities market, (ii) by its terms
expressly provides that it is a security governed by Article 8 of the UCC, (iii)
is an investment company security or (iv) is held in a securities account,
Pledgor will immediately notify Secured Party in writing of such event, and will
immediately execute such documents, and do such other acts or things deemed
appropriate by Secured Party to deliver to Secured Party (subject to the terms
of the Intercreditor Agreement to the extent then in effect) control (within
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the meaning of Article 8 of the UCC) of the Pledged LLC Interest. Pledgor
represents and warrants that none of the events described in clauses (i), (ii),
(iii) or (iv) above has occurred and is existing as of the date of this
Agreement. Pledgor will not contest in any manner the perfection or priority of
Secured Party's lien on any Pledged LLC Interest. Upon the occurrence of an
Event of Default, subject to the terms of the Intercreditor Agreement to the
extent then in effect, any applicable Gaming Laws and other applicable laws
(including, without limitation, Liquor Laws) and Section 7 hereof, Secured Party
shall have the right to have all or any portion of the Pledged LLC Interests
registered in its name or the name of a nominee or agent on the books of the
Company, to the extent necessary to enforce its rights to receive distributions
with respect thereto or vote such Pledged LLC Interests; provided that no such
registration shall constitute a transfer of ownership and Pledgor shall not be
deemed to have waived its rights under Section 9-610 of the UCC to have the
Pledged LLC Interests sold in a public sale. In addition, Secured Party (subject
to and in accordance with the terms of the Intercreditor Agreement to the extent
then in effect) shall have the right at any time, without notice to Pledgor, to
exchange any certificates or instruments representing any Pledged LLC Interests
for certificates or instruments of smaller or larger denominations.
(d) Voting and Distributions.
(i) So long as no Event of Default shall have occurred
and be continuing, subject to applicable Gaming Laws:
(A) Pledgor shall be entitled to exercise or
refrain from exercising any and all voting
and other consensual rights pertaining to
the Pledged LLC Interests or any part
thereof for any purpose not inconsistent
with the terms of this Agreement or the
Indenture; and
(B) Secured Party shall promptly execute and
deliver (or cause to be executed and
delivered) to Pledgor all proxies, and other
instruments as Pledgor may from time to time
reasonably request for the purpose of
enabling Pledgor to exercise the voting and
other consensual rights when and to the
extent which it is entitled to exercise
pursuant to clause (A) above; and
(ii) Subject to applicable Gaming Laws, upon the
occurrence and during the continuation of an Event of
Default, subject to Section 7.5(a) and the terms of
the Intercreditor Agreement, to the extent then in
effect:
(A) all rights of Pledgor to exercise or refrain
from exercising the voting and other
consensual rights which it would otherwise
be entitled to exercise pursuant hereto
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; and
(B) in order to permit Secured Party to exercise
the voting and other consensual rights which
it may be entitled to
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exercise pursuant hereto and to receive all
dividends and other distributions which it
may be entitled to receive hereunder: (1)
Pledgor shall promptly execute and deliver
(or cause to be executed and delivered) to
Secured Party all proxies, dividend payment
orders and other instruments as Secured
Party may from time to time reasonably
request and (2) Pledgor acknowledges that
Secured Party may utilize the power of
attorney set forth in Section 6.
5. FURTHER ASSURANCES.
Pledgor agrees that from time to time, at the expense of Pledgor, it
shall promptly execute and deliver all further instruments and documents, and
take all further action, that may be reasonably necessary or desirable in order
to create and/or maintain the validity, perfection or priority of and protect
any security interest granted or purported to be granted hereby or to enable
Secured Party to exercise and enforce its rights and remedies hereunder with
respect to any Collateral. Without limiting the generality of the foregoing,
Pledgor shall:
(i) execute and file such financing or continuation
statements, or amendments thereto, and execute and
deliver such other agreements, instruments,
endorsements, powers of attorney or notices, as may
be necessary or desirable, in order to perfect and
preserve the security interests granted or purported
to be granted hereby; and
(ii) appear in and defend any action or proceeding that
may affect Pledgor's title to or Secured Party's
security interest in all or any part of the
Collateral.
(b) Pledgor, upon its written direction and with forms provided by it
to Secured Party, hereby authorizes Secured Party to file a Record or Records,
including, without limitation, financing or continuation statements, and
amendments thereto, in all jurisdictions and with all filing offices as are
reasonably necessary or advisable to perfect the security interest granted to
Secured Party herein. Such financing statements may describe the Collateral in
the same manner as described herein or may contain an indication or description
of collateral that describes such property in any other manner as is necessary,
advisable or prudent to ensure the perfection of the security interest in the
Collateral granted to Secured Party herein. Pledgor shall furnish to Secured
Party from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral all in reasonable detail.
6. ATTORNEY-IN-FACT.
6.1 POWER OF ATTORNEY. Pledgor hereby irrevocably appoints Secured
Party (such appointment being coupled with an interest) as Pledgor's
attorney-in-fact, with full authority in the place and stead of Pledgor and in
the name of Pledgor, Secured Party or the Credit Facility Secured Party, from
time to time in its discretion to take any action and to execute any instrument
that it may deem reasonably necessary or advisable to accomplish the purposes of
this Agreement, subject to the terms of the Intercreditor Agreement (to the
extent then in effect), including, without limitation, the following:
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(a) upon the occurrence and during the continuance of any Event of
Default, to ask for, demand, collect, xxx for, recover, compound, receive and
give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) upon the occurrence and during the continuance of any Event of
Default, to receive, endorse and collect any drafts or other instruments,
documents and chattel paper in connection with clause (a) above, subject in all
respects to the rights of any lender under the Credit Facility to receive,
endorse and collect the same;
(c) upon the occurrence and during the continuance of any Event of
Default, to file any claims or take any action or institute any proceedings
necessary or desirable for the collection of any of the Collateral or otherwise
to enforce the rights of Secured Party with respect to any of the Collateral;
(d) to prepare and file any UCC financing statements against Pledgor as
debtor;
(e) to take or cause to be taken all actions necessary to perform or
comply or cause performance or compliance with the terms of this Agreement,
including, without limitation, access to pay or discharge taxes or Liens (other
than Permitted Liens) levied or placed upon or threatened against the
Collateral, the legality or validity thereof and the amounts necessary to
discharge the same, any such payments made by Secured Party to become
obligations of Pledgor to Secured Party, due and payable immediately without
demand; and
(f) upon the occurrence and during the continuance of any Event of
Default, generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as though
Secured Party were the absolute owner thereof for all purposes, and to do, at
Secured Party's option and Pledgor's expense, at any time or from time to time,
all acts and things necessary to protect, preserve or realize upon the
Collateral and Secured Party's security interest therein in order to effect the
intent of this Agreement, all as fully and effectively as Pledgor might do.
6.2 NO DUTY ON THE PART OF SECURED PARTY. The powers conferred on
Secured Party hereunder are solely to protect the interests of Secured Party in
the Collateral and shall not impose any duty upon Secured Party to exercise any
such powers. 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 officers, directors, employees or agents shall be responsible to
Pledgor for any act or failure to act hereunder, except for their own gross
negligence or willful misconduct.
7. REMEDIES.
7.1 GENERALLY.
(a) If any Event of Default shall have occurred and be continuing, and
subject to applicable Gaming Laws, Secured Party may exercise in respect of the
Collateral, in addition to all other rights and remedies provided for herein or
otherwise available to it at law or in equity, all the rights and remedies of
Secured Party on default under the UCC (whether or not the UCC applies to the
affected Collateral) to collect, enforce or satisfy any Secured Obligations then
owing, whether by acceleration or otherwise, and also may pursue any of the
following
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separately, successively or simultaneously: without notice except as specified
below or under the UCC, sell, assign or otherwise dispose of the Collateral or
any part thereof in one or more parcels at public or private sale, at any of
Secured Party's offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and upon such other
terms as Secured Party may deem commercially reasonable.
(b) Secured Party may be a purchaser of any or all of the Collateral at
any public or private (to the extent permitted by applicable law, including any
applicable Gaming Law) sale in accordance with the UCC and Secured Party, as
Secured Party for and representative of the Holders, shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such sale made in accordance
with the UCC, to use and apply any of the Secured Obligations as a credit on
account of the purchase price for any Collateral payable by Secured Party at
such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of Pledgor, and Pledgor
hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Pledgor agrees that, to the extent notice of sale shall be required by law, at
least ten (10) days notice to Pledgor of the time and place of any public sale
or the time after which any private sale is to be made shall constitute
reasonable notification. Secured Party shall not be obligated to make any sale
of Collateral regardless of notice of sale having been given. Secured Party may
adjourn any public or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further notice, be made at
the time and place to which it was so adjourned. Pledgor agrees that it would
not be commercially unreasonable for Secured Party to dispose of the Collateral
or any portion thereof by using Internet sites that provide for the auction of
assets of the types included in the Collateral or that have the reasonable
capability of doing so, or that match buyers and sellers of assets. Pledgor
hereby waives any claims against Secured Party arising by reason of the fact
that the price at which any Collateral may have been sold at such a private sale
was less than the price which might have been obtained at a public sale, even if
Secured Party accepts the first offer received and does not offer such
Collateral to more than one offeree. Pledgor further agrees that a breach of any
of the covenants contained in this Section will cause irreparable injury to
Secured Party, that Secured Party has no adequate remedy at law in respect of
such breach and, as a consequence, that each and every covenant contained in
this Section shall be specifically enforceable against Pledgor, and Pledgor
hereby waives and agrees not to assert any defenses against an action for
specific performance of such covenants except for a defense that no default has
occurred giving rise to the Secured Obligations becoming due and payable prior
to their stated maturities. Nothing in this Section shall in any way alter the
rights of Secured Party hereunder.
(c) Secured Party may sell the Collateral without giving any warranties
as to the Collateral. Secured Party may specifically disclaim or modify any
warranties of title or the like. This procedure will not be considered to
adversely effect the commercial reasonableness of any sale of the Collateral.
(d) If Secured Party sells any of the Collateral on credit, the Secured
Obligations will be credited only with payments actually made by the purchaser
and received by Secured Party and applied to the indebtedness of the purchaser.
In the event the purchaser fails to pay for the Collateral, Secured Party may
resell the Collateral, subject to applicable Gaming Laws.
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(e) All amounts and proceeds (including checks and other instruments)
received by Pledgor in respect of amounts due to Pledgor in respect of the
Collateral or any portion thereof following the occurrence and during the
continuance of an Event of Default shall be received in trust for the benefit of
Secured Party hereunder, shall be segregated from other funds of Pledgor and
shall be forthwith paid over or delivered (subject to the Intercreditor
Agreement to the extent then in effect) to Secured Party in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 7.4 following the occurrence and during the
continuance of an Event of Default.
7.2 APPLICATION OF PROCEEDS. Except as expressly provided elsewhere in
this Agreement, all proceeds received by Secured Party in respect of any sale,
any collection from, or other realization upon all or any part of the Collateral
shall be applied in full or in part by Secured Party against, the Secured
Obligations in the following order of priority: first, to the payment of all
costs and expenses of such sale, collection or other realization, including
reasonable compensation to Secured Party and its agents and counsel, and all
other expenses, liabilities and advances made or incurred by Secured Party in
connection therewith, and all amounts for which Secured Party is entitled to
indemnification hereunder and all advances made by Secured Party hereunder for
the account of the applicable Pledgor, and to the payment of all costs and
expenses paid or incurred by Secured Party in connection with the exercise of
any right or remedy hereunder or under the Indenture, all in accordance with the
terms hereof or thereof; second, to the extent of any excess of such proceeds,
to the payment of all other Secured Obligations for the ratable benefit of the
Holders; and third, to the extent of any excess of such proceeds, to the payment
to or upon the order of Pledgor or to whosoever may be lawfully entitled to
receive the same as a court of competent jurisdiction may direct.
7.3 PLEDGED LLC INTERESTS. Pledgor recognizes that, by reason of
certain prohibitions contained in the Securities Act and applicable state
securities laws, Secured Party may be compelled, with respect to any sale of all
or any part of the Pledged LLC Interests conducted without prior registration or
qualification of such Pledged LLC Interests under the Securities Act and/or such
state securities laws, to limit purchasers to those who will agree, among other
things, to acquire the Pledged LLC Interests for their own account, for
investment and not with a view to the distribution or resale thereof, and to
comply with applicable Gaming Laws. Pledgor acknowledges that any such sale may
be at prices and on terms less favorable than those obtainable through a sale
without such restrictions (including a public offering made pursuant to a
registration statement under the Securities Act) and Pledgor agrees that any
such sale shall not be deemed to have not been made in a commercially reasonable
manner by reason of such circumstances and that Secured Party shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Pledged LLC Interests for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would, or should, agree to so register it. If Secured Party determines to
exercise its right to sell any or all of the Pledged LLC Interests, upon written
request, Pledgor shall and shall cause Company from time to time to furnish to
Secured Party all such information as necessary to determine the number and
nature of interests, shares or other instruments included in the Pledged LLC
Interests which may be sold by Secured Party in exempt transactions under the
Securities Act and the rules and regulations of the Securities and Exchange
Commission thereunder, as the same are from time to time in effect.
7.4 CASH PROCEEDS. Cash Proceeds shall be held by Pledgor in trust for
Secured Party, segregated from other funds of Pledgor, and shall, forthwith upon
receipt by Pledgor, unless otherwise provided pursuant to Section 4.2, be turned
over to Secured Party in the exact
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form received by Pledgor (duly indorsed by Pledgor to Secured Party, if
required). Any Cash Proceeds received by Secured Party (whether from Pledgor or
otherwise): (i) if no Event of Default shall have occurred and be continuing,
shall be held by Secured Party for the ratable benefit of the Holders, as
collateral security for the Secured Obligations (whether matured or unmatured)
and (ii) if an Event of Default shall have occurred and be continuing, may, in
the sole discretion of Secured Party, (A) be held by Secured Party for the
ratable benefit of the Holders, as collateral security for the Secured
Obligations (whether matured or unmatured) and/or (B) then or at any time
thereafter may be applied by Secured Party against the Secured Obligations then
due and owing.
7.5 REGULATORY MATTERS. Secured Party acknowledges and agrees that:
(a) In the event that, upon the occurrence and during the continuance
of an Event of Default, Secured Party exercises any of the voting and consensual
rights afforded under this Agreement, or one or more of the remedies set forth
in Section 7 of this Agreement, including but not limited to foreclosure,
transfer or other enforcement of security interests in the Pledged LLC
Interests, pursuant to applicable Gaming Laws, such exercise of remedies shall
require the separate and prior approval of the applicable Gaming Authorities
and/or licensing of Secured Party (unless such licensing requirement is waived
by such Gaming Authorities upon application of Secured Party) pursuant to
applicable Gaming Laws.
(b) The approval of the applicable Gaming Authorities of this Agreement
shall not act or be construed as the approval, either express or implied, for
Secured Party to take any actions or steps provided for in this Agreement for
which prior approval of such Gaming Authority is required, without first
obtaining such prior and separate approval of the Gaming Authorities to the
extent then required by applicable law.
8. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES.
This Agreement shall create a continuing security interest in the
Collateral and shall remain in full force and effect until the payment in full
of all Secured Obligations, be binding upon Pledgor, its successors and assigns
(except to the extent otherwise provided in the Indenture), and inure, together
with the rights and remedies of Secured Party hereunder, to the benefit of
Secured Party and its successors, transferees and assigns. Without limiting the
generality of the foregoing, but subject to the terms of the Indenture, any
Holder may assign or otherwise transfer any Note held by it to any other Person,
and such other Person shall thereupon become vested with all the benefits in
respect thereof granted to Holders herein or otherwise. Upon the payment in full
of all Secured Obligations, the security interest granted hereby shall terminate
hereunder and of record and all rights to the Collateral granted hereunder shall
revert to Pledgor. Upon any such termination Secured Party shall, at Pledgor's
expense and upon documents provided by it, execute and deliver to Pledgor such
documents as Pledgor shall reasonably request to evidence such termination.
9. STANDARD OF CARE; SECURED PARTY MAY PERFORM.
The powers conferred on Secured Party hereunder are solely to protect
its interest in the Collateral and shall not impose any duty upon it to exercise
any such powers. Except for the exercise of reasonable care in the custody of
any Collateral in its possession and the accounting for moneys actually received
by it hereunder, Secured Party shall have no duty as to any Collateral or as to
the taking of any necessary steps to preserve rights against prior parties or
any other rights pertaining to any Collateral. Secured Party shall be deemed to
have exercised
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reasonable care in the custody and preservation of Collateral in its possession
if such Collateral is accorded treatment substantially equal to that which
Secured Party accords its own property. Neither Secured Party nor any of its
directors, officers, employees or agents shall be liable for failure to demand,
collect or realize upon all or any part 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 Pledgor or otherwise. If Pledgor fails to perform
any agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the expenses of Secured Party incurred in
connection therewith shall be payable by Pledgor under Section 11.2 hereof.
10. INDEMNITY AND EXPENSES.
(a) Pledgor agrees:
(i) to defend (subject to Indemnitees' selection of
counsel), indemnify, pay and hold harmless each
Indemnitee, from and against any and all claims,
losses, damages, expenses (including reasonable legal
fees and expenses) and liabilities in any way
relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby
(including without limitation enforcement of this
Agreement), except to the extent such claims, losses
or liabilities result from such Indemnitee's own
gross negligence or willful misconduct as finally and
unappeallably determined by a court of competent
jurisdiction; and
(ii) to pay to Secured Party promptly following written
demand the amount of any and all costs and expenses,
including the reasonable fees and expenses of its
counsel and of any experts and agents in accordance
with the terms and conditions of the Indenture.
(b) The obligations of Pledgor in this Section 10 shall survive the
termination of this Agreement and the discharge of Pledgor's other obligations
under this Agreement.
11. MISCELLANEOUS.
11.1 NOTICES. Unless otherwise specifically provided herein, any notice
or other communication herein required or permitted to be given to Pledgor or
Secured Party, shall be sent to (a) in the case of Secured Party, to its address
as set forth in the Indenture and (b) in the case of Pledgor, to:
Majestic Investor, LLC
Xxx Xxxxxxxxxx Xxxxxx Xxxxx
Xxxx, Xxxxxxx 00000
Attention: Xxxxxxx X. Xxxxx
Facsimile No.: (000) 000-0000
Each notice hereunder shall be in writing and may be personally served or sent
by telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service and signed for
against receipt thereof, upon receipt of telefacsimile or
15
three Business Days after depositing it in the United States mail with postage
prepaid and properly addressed; provided, no notice to Secured Party shall be
effective until received by Secured Party.
11.2 EXPENSES. Pledgor agrees to pay promptly all the costs and
expenses of preparation of the Collateral Agreements and any consents,
amendments, waivers or other modifications thereto; all the costs of furnishing
all opinions by counsel for Pledgor; the reasonable fees, expenses and
disbursements of counsel to Secured Party (in each case including allocated
costs of internal counsel) in connection with the negotiation, preparation,
execution and administration of the Collateral Agreements and any consents,
amendments, waivers or other modifications thereto and any other documents or
matters requested by Pledgor; all the actual costs and reasonable expenses of
creating and perfecting Liens in favor of Secured Party, for the benefit of
Holders pursuant hereto, including filing and recording fees, expenses and
taxes, stamp or documentary taxes, search fees, title insurance premiums and
reasonable fees, expenses and disbursements of counsel to Secured Party and of
counsel providing any opinions in respect of the Collateral or the Liens created
pursuant to the Collateral Agreements; all the actual costs and reasonable fees,
expenses and disbursements of any auditors, accountants, consultants or
appraisers; all the actual costs and reasonable expenses (including the
reasonable fees, expenses and disbursements of any appraisers, consultants,
advisors and agents employed or retained by Secured Party and its counsel) in
connection with the custody or preservation of any of the Collateral; and after
the occurrence of a Default or an Event of Default, all costs and expenses,
including reasonable attorneys' fees (including allocated costs of internal
counsel) and costs of settlement, incurred by Secured Party in enforcing any
Secured Obligations of or in collecting any payments due from Pledgor hereunder
by reason of such Default or Event of Default (including in connection with the
sale of, collection from, or other realization upon any of the Collateral) or in
connection with any refinancing or restructuring of the credit arrangements
provided hereunder in the nature of a "work-out" or pursuant to any insolvency
or bankruptcy cases or proceedings.
11.3 AMENDMENTS AND WAIVERS.
(a) Secured Party's Consent. Subject to Section 11.3(b) and 11.3(c), no
amendment, modification, termination or waiver of any provision of this
Agreement, or consent to any departure by Pledgor therefrom, shall in any event
be effective without the written concurrence of Secured Party.
(b) Other Consents. No amendment, modification, termination or waiver
of any provision of this Agreement, or consent to any departure by Pledgor
therefrom, shall amend, modify, terminate or waive any provision herein as the
same applies to Secured Party without the consent of Secured Party except as
provided in accordance with the Indenture.
(c) Waiver. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on Pledgor in any case shall entitle Pledgor to any other or
further notice or demand in similar or other circumstances.
11.4 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
parties hereto and their respective successors and assigns including all persons
who become bound as debtor to this Agreement. Pledgor shall not assign any
right, duty or obligation hereunder.
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11.5 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of a Default or an Event of Default if such action is taken
or condition exists.
11.6 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS. All
representations, warranties and agreements made herein shall survive the
execution and delivery hereof. Notwithstanding anything herein or implied by law
to the contrary, the agreements of Pledgor set forth in Sections 10 and 11.2
shall survive the payment of the Obligations under the Indenture and the
termination hereof.
11.7 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the part of
Secured Party in the exercise of any power, right or privilege hereunder or
under any other Indenture Document shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other power, right or privilege. All
rights, powers and remedies existing under this Agreement and the other
Indenture Documents are cumulative, and not exclusive of, any rights or remedies
otherwise available. Any forbearance or failure to exercise, and any delay in
exercising, any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor shall it
preclude the further exercise of any such right, power or remedy.
11.8 MARSHALING; PAYMENTS SET ASIDE. Secured Party shall not be under
any obligation to marshal any assets in favor of Pledgor or any other Person or
against or in payment of any or all of the Secured Obligations.
11.9 SEVERABILITY. In case any provision in or obligation hereunder
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.
11.10 HEADINGS. Section headings herein are included herein for
convenience of reference only and shall not constitute a part hereof for any
other purpose or be given any substantive effect.
11.11 APPLICABLE LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (INCLUDING WITHOUT
LIMITATION SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
11.12 CONSENT TO JURISDICTION. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST
PLEDGOR ARISING OUT OF OR RELATING HERETO, OR ANY OF THE SECURED OBLIGATIONS,
MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN XXX
XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND DELIVERING THIS AGREEMENT,
PLEDGOR, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY ACCEPTS
GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH
COURTS; WAIVES ANY
17
DEFENSE OF FORUM NON CONVENIENS; AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH
PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO PLEDGOR AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH SECTION
11.1; AGREES THAT SERVICE AS PROVIDED ABOVE IS SUFFICIENT TO CONFER PERSONAL
JURISDICTION OVER PLEDGOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND
OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; AND AGREES
SECURED PARTY RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO BRING PROCEEDINGS AGAINST PLEDGOR IN THE COURTS OF ANY OTHER
JURISDICTION.
11.13 WAIVER OF JURY TRIAL. EACH OF THE PARTIES HERETO HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING HEREUNDER. THE SCOPE OF THIS WAIVER IS INTENDED TO BE
ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING CONTRACT CLAIMS,
TORT CLAIMS, BREACH OF DUTY CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY
CLAIMS. EACH PARTY HERETO ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT
TO ENTER INTO A BUSINESS RELATIONSHIP, THAT EACH HAS ALREADY RELIED ON THIS
WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL CONTINUE TO RELY ON
THIS WAIVER IN ITS RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS
AND REPRESENTS THAT IT HAS REVIEWED THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT
IT KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION
WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER
SPECIFICALLY REFERRING TO THIS SECTION 11.13 AND EXECUTED BY EACH OF THE PARTIES
HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS HERETO. IN THE EVENT OF LITIGATION, THIS AGREEMENT
MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.
11.14 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument.
11.15 GAMING LAWS AND LIQUOR LAWS.
(a) Secured Party acknowledges, understands and agrees that
the Gaming Laws and Liquor Laws may impose certain licensing or transaction
approval requirements prior to the exercise of the rights and remedies granted
to it under this Agreement with respect to the Collateral subject to the Gaming
Laws and Liquor Laws.
(b) If any consent under the Gaming Laws or Liquor Laws is
required in connection with the taking of any of the actions which may be taken
by Secured Party in the exercise of its rights hereunder, then Pledgor agrees to
use its best efforts to secure such consent and to cooperate with Secured Party
in obtaining any such consent. Upon the occurrence and
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during the continuation of any Event of Default, Pledgor shall promptly execute
and/or cause the execution of all applications, certificates, instruments, and
other documents and papers that Secured Party may be required to file in order
to obtain any necessary approvals under the Gaming Laws and Liquor Laws, and if
Pledgor fails or refuses to execute such documents, Secured Party or the clerk
of the court with jurisdiction may execute such documents on behalf of Pledgor.
(c) Notwithstanding any other provision of this Agreement to
the contrary other than as set forth in Section 7.5, nothing in this Agreement
shall (i) effect any transfer of any ownership interest in Company or (ii)
effect any transfer, sale, purchase, lease or hypothecation of, or any borrowing
or loaning of money against, or any establishment of any voting trust agreement
or other similar agreement with respect to any certificate of suitability or any
owner's license heretofore or hereafter issued to any person, including Pledgor
or Company, under any of the Gaming Laws or Liquor Laws.
11.16 EFFECTIVENESS. Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto and receipt by
Secured Party of written or telephonic notification of such execution and
authorization of delivery thereof.
11.17 ENTIRE AGREEMENT. This Agreement embodies the entire agreement
and understanding between Pledgor and Secured Party and supersede all prior
agreements and understandings between such parties relating to the subject
matter hereof and thereof. There are no unwritten oral agreements between the
parties.
11.18 INDENTURE CONTROLS. All terms, covenants, conditions, provisions
and requirements of the Indenture, including without limitation Article VII, are
incorporated by reference herein. In the event of any conflict or inconsistency
between the provisions of this Agreement and those of the Indenture, including,
without limitation, any conflicts or inconsistencies in any definitions herein
or therein, the provisions or definitions of the Indenture shall govern.
11.19 TRUST INDENTURE ACT CONTROLS. If any provision of this Agreement
limits, qualifies or conflicts with the duties imposed by the Trust Indenture
Act of 1939 as in effect on the date of this Agreement, the imposed duties shall
control.
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IN WITNESS WHEREOF, Pledgor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
MAJESTIC INVESTOR, LLC
By: /s/ Xxx X. Xxxxxx
-----------------------------------------------
Name: Xxx X. Xxxxxx
Title: Manager
THE BANK OF NEW YORK,
as Secured Party
By: /s/ Xxxxxx X. Xxxxxxxxxx
-----------------------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President
