EXHIBIT 4.11
PARTNERSHIP INTEREST PLEDGE AGREEMENT
MADE BY
HCS II, INC.
in favor of
STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE AND SECURED PARTY
August 10, 1999
PARTNERSHIP INTEREST PLEDGE AGREEMENT
THIS PARTNERSHIP INTEREST PLEDGE AGREEMENT (this "Agreement") is made as of
August 10, 1999 by HCS II, INC., Louisiana corporation, with principal offices
at Two Galleria Tower, Suite 2200, 00000 Xxxx Xxxx, XX 00, Xxxxxx, Xxxxx 00000
("Pledgor"), in favor of STATE STREET BANK AND TRUST COMPANY, Massachusetts
chartered trust company, with offices at Xxx Xxxxxx Xx Xxxxxxxxx, Xxxxxx,
Xxxxxxxxxxxxx 00000-0000, as Trustee acting on behalf of the Holders of the
Notes under (and as defined in) the Indenture described below ("Secured Party").
RECITALS
A. Hollywood Casino Shreveport, a Louisiana general partnership
("Hollywood Casino Shreveport"), Shreveport Capital Corporation, a Louisiana
corporation ("Shreveport Capital", and together with Hollywood Casino
Shreveport, the "Issuers"), HWCC-Louisiana, Inc., a Louisiana corporation, HCS
I, Inc., a Louisiana corporation, and Pledgor, each as a Guarantor, and Secured
Party, as Trustee, have entered into an Indenture dated as of August 10, 1999
(as the same may be amended, supplemented, restated or otherwise modified from
time to time, the "Indenture"), pursuant to which the Issuers will issue up to
$150,000,000 of their 13% First Mortgage Notes due 2006 with Contingent Interest
(as the same may be amended, supplemented, restated, exchanged, replaced or
otherwise modified from time to time, collectively, the "Notes").
B. Pledgor is a general partner of Hollywood Casino Shreveport and
holds a general partnership interest in Hollywood Casino Shreveport.
C. It is a condition to the issuance of the Notes that Pledgor execute
and deliver this Agreement, and Pledgor has agreed to enter into this Agreement.
D. Therefore, in order to comply with the terms and conditions of the
Indenture and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Pledgor hereby agrees with Secured
Party as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Terms Defined Above or in the Indenture. As used in this
Agreement, the terms defined herein shall have the meanings respectively
assigned to them. Other capitalized terms which are defined in the Indenture but
which are not defined herein shall have the same meanings as defined in the
Indenture.
Section 1.02 Certain Definitions. As used in this Agreement, the
following terms shall have the following meanings, unless the context otherwise
requires:
"Code" shall mean the Uniform Commercial Code as presently in effect
in the State of New York. Unless otherwise indicated by the context
herein, all uncapitalized
terms which are defined in the Code shall have their respective meanings as
used in Articles 8 and 9 of the Code; provided that, if by reason of
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interests in any Collateral is governed by
the Uniform Commercial Code as in effect in any jurisdiction other than the
State of New York, "Code" means the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to
such perfection or the effect of perfection or non-perfection.
"Collateral" shall mean the following types or items of property,
whether now owned or hereafter acquired:
(a) Pledgor's rights in any and all specific property of Hollywood
Casino Shreveport;
(b) Pledgor's interests in Hollywood Casino Shreveport, including all
general partnership interests, all of Pledgor's right, title and interest
in, to and under the Third Amended and Restated Joint Venture Agreement of
Hollywood Casino Shreveport dated as of July 21, 1999 (as heretofore
amended and as further amended, supplemented or otherwise modified from
time to time) (the "Partnership Agreement") and Pledgor's "JV Interests"
(as defined in the Partnership Agreement), and all options or other rights
to acquire such interests, now owned or hereafter acquired by Pledgor in
Hollywood Casino Shreveport, and including all of the rights of Pledgor in
and to the distributions, capital, profits and surplus of Hollywood Casino
Shreveport; and
(c) All other property hereinafter owned by, delivered to, or in the
possession or in the custody of, Pledgor, in substitution for or in
addition to the foregoing and all proceeds of the foregoing (excluding
distributions permitted under Section 4.02 hereof).
"Event of Default" shall mean any event specified in Section 6.01
hereof.
"Obligations" shall mean: (i) the payment when due of indebtedness
evidenced by the Notes in the aggregate principal sum not to exceed at any
time outstanding of $150,000,000, interest as set forth in the Indenture
and the Notes, and premiums, penalties, and late charges thereon; (ii) all
other indebtedness and other sums (including, without limitation, all
expenses, attorneys' fees, other fees, indemnifications, reimbursements,
damages, other monetary liabilities, and other charges) and obligations
that may or shall become due hereunder or under the Notes, the Guarantees,
the Indenture, or the other Collateral Documents, and (iii) any and all
renewals, modifications, amendments, extensions for any period, supplements
or restatements of any of the foregoing.
"Obligor" shall mean any Person, other than Pledgor, liable (whether
directly or indirectly, primarily or secondarily) for the payment or
performance of any of the Obligations whether as maker, co-maker, endorser,
guarantor, accommodation party, general partner or otherwise.
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ARTICLE II
SECURITY INTEREST
Section 2.01 Pledge. Pledgor hereby assigns, endorses, delivers,
pledges, and grants to Secured Party a continuing security interest in and Lien
upon, the Collateral to secure the prompt and complete payment and performance
of the Obligations and the performance by Pledgor of this Agreement. This
security interest is granted as security only and shall not subject Secured
Party to, or transfer or in any way affect or modify, any obligation or
liability of the Pledgor or any Obligor with respect to any of the Collateral,
the Obligations or any transaction in connection therewith.
Section 2.02 Ratable Benefit of Holders of the Notes. Pledgor and
Secured Party agree that the security interest and lien granted hereby are for
the benefit of the Trustee for the equal and ratable benefit of the Holders of
the Notes.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
In order to induce Secured Party to accept this Agreement, Pledgor
represents and warrants to Secured Party (which representations and warranties
will survive the creation and payment of the Obligations) that:
Section 3.01 Ownership of Collateral; Location of Pledgor; Absence of
Encumbrances and Restrictions. Pledgor is a general partner of Hollywood Casino
Shreveport and owns the general partnership interest in Hollywood Casino
Shreveport described in the Partnership Agreement as in effect on the date
hereof. After giving effect to the use of proceeds of the Notes, Pledgor is, and
in the case of Collateral acquired after the date hereof, will be, the legal and
sole holder of record and the sole beneficial owner of the Collateral, free and
clear of all Liens except for Permitted Liens, and Pledgor has full right, power
and authority to pledge, assign and grant a security interest in the Collateral
to Secured Party. Pledgor's tax identification number, chief executive office,
principal place of business and the locations of Pledgor's records concerning
the Collateral are set forth on Exhibit A attached hereto. The Partnership
Agreement contains no restrictions preventing the pledge, assignment and grant
of a security interest in the Collateral to Secured Party as contemplated
herein. The exercise of remedies hereunder by the Secured Party does not violate
the Partnership Agreement, nor will such exercise give additional rights to or
allow exercise of rights by any other party to the Partnership Agreement. No
Collateral is evidenced by any certificate or instrument. All of the partnership
interests included in the Collateral have been duly and validly issued in
compliance with all applicable laws and regulations. Pledgor has not performed
any acts that might prevent Secured Party from enforcing any of the terms of
this Agreement or that would limit Secured Party in any such enforcement.
Section 3.02 No Required Consent. Except for such authorizations,
consents and other actions as shall have been obtained and shall be in effect,
no authorization, consent, approval or other action by, and no notice to or
registration, recordation or filing with, any
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Governmental Authority or third party is required for (i) the due execution,
delivery and performance by Pledgor of this Agreement, (ii) the grant by Pledgor
of the security interest granted by this Agreement, (iii) the perfection of such
security interest (except for the filing of any appropriate financing
statements) or (iv) except as may be required by applicable gaming laws or
except as may be required in connection with the disposition of Collateral by
federal and state securities laws or antitrust laws and the Xxxx-Xxxxx-Xxxxxx
Antitrust Improvements Act of 1976, the exercise by Secured Party of its rights
and remedies under this Agreement. Pledgor has not performed nor will perform
any acts which might prevent Secured Party from enforcing any of the terms and
conditions of this Agreement or which would limit Secured Party in any such
enforcement.
Section 3.03 First Priority Security Interest. The pledge, assignment
and delivery of the Collateral pursuant to this Agreement creates and grants a
valid first lien and perfected first priority security interest in the
Collateral, subject to Permitted Liens, enforceable against Pledgor and all
third parties and securing payment of the Obligations, except that (a) the
enforceability of any rights to indemnity and contribution hereunder may be
limited by federal or state securities laws or principles of public policy, (b)
the enforceability hereof may be subject to applicable bankruptcy, insolvency,
fraudulent conveyance or transfer, reorganization, moratorium and similar laws
affecting creditors' rights and remedies generally, and (c) the enforceability
hereof may be subject to general principles of equity (regardless of whether
enforcement is sought in a proceeding at law or in equity).
ARTICLE IV
COVENANTS AND AGREEMENTS
Pledgor will at all times comply with the covenants and agreements
contained in this Article IV from the date hereof and for so long as any part of
the Obligations are outstanding.
Section 4.01 Sale, Disposition or Encumbrance of Collateral. Except as
may be permitted by the provisions hereof or of the Indenture, Pledgor will not
in any way encumber any of its rights in or to any of the Collateral (or permit
or suffer any of the Collateral to be encumbered) or sell, pledge, assign, lend
or otherwise dispose of or transfer any of the Collateral to or in favor of any
Person other than Secured Party. The Pledgor is not, and will not become, a
party to or be otherwise bound by any agreement, other than this Agreement or as
permitted by the Indenture, which restricts in any manner the rights of any
present or future holder of any of the Collateral. Except as may be permitted by
the Indenture, Pledgor shall not consent to or approve the issuance to any
person of any additional partnership interests of any type in Hollywood Casino
Shreveport, or any other interest in the assets of, or rights to distributions
from, Hollywood Casino Shreveport.
Section 4.02 Distributions. So long as no Event of Default shall have
occurred and be continuing, Pledgor shall be entitled to receive and retain free
and clear of the Lien of this Agreement any and all distributions, interest and
principal payments, cash, instruments and other property and proceeds made upon
or with respect to the Collateral, which shall not constitute Collateral and may
be used by Pledgor subject to the terms and conditions of the Indenture;
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provided, however, that in the event Pledgor now is or hereafter becomes
entitled to distributions paid or payable in securities of Hollywood Casino
Shreveport, including all securities convertible into any Collateral, and
warrants, options or other rights to purchase stock or equity interests, in
Hollywood Casino Shreveport, receivable or otherwise distributed in respect of,
or in exchange for (including, without limitation, any certificate or share
purchased or exchanged in connection with a tender offer or merger agreement)
any Collateral, shall be, and shall be forthwith delivered to Secured Party to
hold as, Collateral and shall, if received by Pledgor, be received in trust for
the benefit of Secured Party, be segregated from the other Property or funds of
Pledgor, and be forthwith delivered to Secured Party as Collateral in the same
form as so received (with any necessary endorsement). Pledgor shall execute and
deliver all documents, and if required, certificates, necessary to perfect
Secured Party's Lien on such Collateral. Upon the occurrence and during the
continuance of an Event of Default, all rights of Pledgor to receive all
distributions, interest and principal payments, cash, instruments and other
property and proceeds shall cease, and such distributions, interests and
principal payments, cash, instruments and other property and proceeds shall
constitute Collateral and shall be paid or otherwise delivered to the Secured
Party.
Section 4.03 Records and Information. Pledgor shall keep accurate and
complete records of the Collateral (including proceeds, payments, distributions,
income and profits). Upon reasonable notice and without undue interference with
the Pledgor's business, Secured Party may at any time have access to, examine,
audit, make extracts from and inspect without hindrance or delay Pledgor's
records, files and the Collateral.
Section 4.04 Further Assurances. Upon the request of Secured Party,
Pledgor shall (at Pledgor's expense) execute and deliver all such assignments,
financing statements or other documents and give further assurances and do all
other acts and things as Secured Party may reasonably request to perfect Secured
Party's interest in the Collateral or which is necessary to protect, enforce or
otherwise effect Secured Party's rights and remedies hereunder.
Section 4.05 Certificates or Instruments; Change in Location of
Pledgor. Pledgor shall not cause or permit its general partnership interest in
the Collateral to be evidenced by any certificate or instrument. Pledgor will
not change the location of Pledgor's chief executive office, principal place of
business or the locations of Pledgor's records concerning the Collateral unless
Pledgor shall have given Secured Party at least thirty (30) days prior written
notice thereof and shall have delivered to Secured Party such new financing
statements or other documentation as may be reasonably necessary or required by
Secured Party to ensure the continued perfection and priority of its security
interest in the Collateral.
Section 4.06 Rights to Sell.
(a) If Secured Party shall determine to exercise its rights to sell all
or any of the Collateral pursuant to its rights hereunder, Pledgor agrees
that, upon request of the Secured Party, Pledgor will, at its own expense,
use its commercially reasonable best efforts to do or cause to be done all
such other acts and things as may be necessary to make such sale of the
Collateral or any part thereof valid and binding and in compliance with
applicable law and the Partnership Agreement.
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(b) Pledgor further acknowledges the impossibility of ascertaining the
amount of damages which would be suffered by Secured Party and the Holders
of the Notes by reason of the failure by Pledgor to perform any of the
covenants contained in this Section 4.06 and consequently agrees that if
Pledgor shall fail to perform any of such covenants, it shall be subject to
a suit for specific performance of such covenants.
Section 4.07 Voting and Other Consensual Rights. Except to the extent
otherwise provided in Section 6.06(d) hereof, Pledgor shall be entitled to
exercise any and all voting and other consensual rights pertaining to the
Collateral or any part thereof for any purpose not inconsistent with the terms
of this Agreement or the Indenture or any other Collateral Document.
ARTICLE V
RIGHT, DUTIES, AND POWERS OF SECURED PARTY
Secured Party shall have the following rights, duties and powers:
Section 5.01 Discharge Encumbrances. After the occurrence and during
the continuance of an Event of Default, Secured Party may, at its option,
discharge any taxes, Liens, security interests or other encumbrances at any time
levied or placed on the Collateral. Pledgor agrees to reimburse Secured Party as
provided in the Indenture.
Section 5.02 Cumulative and Other Rights. The rights, powers and
remedies of Secured Party hereunder are in addition to all rights, powers and
remedies given by law or in equity. The exercise by Secured Party of any one or
more of the rights, powers and remedies herein shall not be construed as a
waiver of any other rights, powers and remedies, including, without limitation,
any other rights of set-off (provided that set-off rights may not be exercised
prior to the acceleration of the Notes).
Section 5.03 Disclaimer of Certain Duties.
(a) The powers conferred upon Secured Party by this Agreement are to
protect its interest in the Collateral and shall not impose any duty upon
Secured Party to exercise any such powers. Pledgor hereby agrees that
Secured Party shall not be liable for, nor shall the indebtedness evidenced
by the Obligations be diminished by, Secured Party's delay or failure to
collect upon, foreclose, sell, take possession of or otherwise obtain value
for the Collateral.
(b) Except as may be required by the provisions of the Indenture, and
to the fullest extent permitted by applicable law, Secured Party shall be
under no duty whatsoever to make or give any presentment, notice of
dishonor, protest, demand for performance, notice of non-performance,
notice of intent to accelerate, notice of acceleration, or other notice or
demand in connection with any Collateral or the Obligations, or to take any
steps necessary to preserve any rights against any Obligor or other Person.
Pledgor waives any right of marshaling in respect of any and all
Collateral, and waives any right to require Secured Party to proceed
against any
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Obligor or other Person, exhaust any Collateral or enforce any other remedy
which Secured Party now has or may hereafter have against any Obligor or
other Person.
(c) The security interests are granted as security only and shall not
subject Secured Party to, or transfer or in any way affect or modify, any
obligation or liability of the Pledgor with respect to any of the
Collateral or any transaction in connection therewith. The Pledgor shall
remain liable under the Partnership Agreement to the extent set forth
therein to perform its duties and obligations thereunder to the same extent
as if this Agreement had not been executed. The exercise by Secured Party
of any of its rights hereunder shall not release the Pledgor from any of
its duties or obligations under the Partnership Agreement and Secured Party
shall not have any obligation or liability under the Partnership Agreement
by reason of this Agreement or otherwise, nor shall Secured Party be
obligated to perform any of the obligations or duties of the Pledgor
thereunder, to make any payment, to make any inquiry as to the nature or
sufficiency of any payment received by the Pledgor or Secured Party or the
sufficiency of any performance by any party under the Partnership Agreement
or to take any action to collect or enforce any claim for payment assigned
hereunder. Secured Party shall not by reason of this Agreement or the
exercise of any remedies hereunder become responsible or liable in any
manner or to any extent for the obligations and liabilities of Hollywood
Casino Shreveport, whether now existing or hereafter incurred, except as a
result of obligations and liabilities of Hollywood Casino Shreveport first
arising after Secured Party's admission as a general partner in Hollywood
Casino Shreveport. The Pledgor specifically understands and agrees that
Secured Party shall have no responsibility for (i) collecting or protecting
any income, earnings, or proceeds with regard to the Collateral, (ii)
preserving any of the Pledgor's rights against parties to the Collateral or
against third persons, (iii) ascertaining any maturities, calls, conversion
rights, exchanges, offers, tenders or similar matters relating to the
Collateral, or (iv) informing the Pledgor about any of these matters,
whether or not Secured Party actually has or is deemed to have knowledge
thereof. Beyond the exercise of reasonable care in the custody thereof,
Secured Party shall have no duty as to any Collateral in its possession or
control or in the possession or control of any agent or bailee or any
income thereon. The Pledgor hereby agrees to indemnify and hold harmless
Secured Party and its directors, officers, employees and agents against any
and all claims, actions, liabilities, costs and expenses of any kind or
nature whatsoever (including reasonable fees and disbursements of counsel)
that may be imposed on, incurred by, or asserted against any of them, in
any way relating to or arising out of this Agreement or any action taken or
omitted by them hereunder (including such obligations and liabilities of
Hollywood Casino Shreveport), except to the extent that they directly
resulted from the gross negligence or willful misconduct of such persons.
Section 5.04 Modification of Obligations; Other Security. Except as
specifically provided for in the Indenture, Pledgor waives (i) any and all
notice of acceptance, creation, modification, rearrangement, renewal or
extension for any period of any instrument executed by any Obligor in connection
with the Obligations, and (ii) to the fullest extent permitted by applicable
law, any defense of any Obligor by reason of disability, lack of authorization,
cessation of the liability of any Obligor or for any other reason. Pledgor
authorizes Secured Party, without notice or demand and without any reservation
of rights against Pledgor and without affecting Pledgor's liability hereunder or
on the Obligations, from time to time after the
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occurrence and during the continuance of an Event of Default, to (x) apply the
Collateral in the manner permitted by this Agreement, and (y) after the
occurrence and during the continuance of an Event of Default, renew, extend for
any period, accelerate, amend or modify, supplement, enforce, compromise,
settle, waive or release the obligations of any Obligor or any instrument or
agreement of such other Person with respect to any or all of the Obligations or
Collateral.
Section 5.05 Custody and Preservation of the Collateral. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which comparable secured parties accord
comparable collateral, it being understood and agreed, however, that Secured
Party shall not have responsibility for (i) ascertaining or taking action with
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Collateral, whether or not Secured Party has or is deemed to
have knowledge of such matters, or (ii) taking any necessary steps to preserve
rights against Persons or entities with respect to any Collateral.
ARTICLE VI
EVENTS OF DEFAULT
Section 6.01 Events. It shall constitute an Event of Default under this
Agreement if an "Event of Default" occurs and is continuing under the Indenture.
Section 6.02 Remedies. Upon the occurrence and during the continuance
of any Event of Default, Secured Party may take any or all of the following
actions without notice (except where expressly required below or in the
Indenture) or demand to Pledgor:
(a) Sell, in one or more sales and in one or more parcels, or otherwise
dispose of any or all of the Collateral in any commercially reasonable
manner as Secured Party may elect, in a public or private transaction, at
any location as deemed reasonable by Secured Party for cash at such price
as Secured Party may deem fair; and (unless prohibited by the Code, as
adopted in any applicable jurisdiction) Secured Party may be the purchaser
of any or all Collateral so sold and may apply upon the purchase price
therefor any Obligations secured hereby. Any such sale or transfer by
Secured Party either to itself or to any other Person shall be absolutely
free from any claim of right by Pledgor, including any equity or right of
redemption, stay or appraisal which Pledgor has or may have under any rule
of law, regulation or statute now existing or hereafter adopted. Upon any
such sale or transfer, Secured Party shall have the right to deliver,
assign and transfer to the purchaser or transferee thereof the Collateral
so sold or transferred. If Secured Party deems it advisable to do so, it
may restrict the bidders or purchasers of any such sale or transfer to
Persons or entities who will represent and agree that they are purchasing
the Collateral for their own account and not with the view to the
distribution or resale of any of the Collateral. Secured Party may, at its
discretion, provide for a public sale, and any such public sale shall be
held at such time or times within ordinary business hours and at such place
or places as Secured Party may fix in the notice of such sale. Secured
Party shall not be obligated to make any sale pursuant to any such notice.
Secured Party may, without notice or publication, adjourn any public or
private sale by announcement at any time and place fixed for such sale, and
such sale may be made at any time or place to which the same may be so
adjourned. In the event any
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sale or transfer hereunder is not completed or is defective in the opinion
of Secured Party, such sale or transfer shall not exhaust the rights of
Secured Party hereunder, and Secured Party shall have the right to cause
one or more subsequent sales or transfers to be made hereunder. If only
part of the Collateral is sold or transferred such that the Obligations
remain outstanding (in whole or in part), Secured Party's rights and
remedies hereunder shall not be exhausted, waived or modified, and Secured
Party is specifically empowered to make one or more successive sales or
transfers until all the Collateral shall be sold or transferred and all the
Obligations are paid. In the event that Secured Party elects not to sell
the Collateral, Secured Party retains its rights to dispose of or utilize
the Collateral or any part or parts thereof in any manner authorized or
permitted by law or in equity, and to apply the proceeds of the same
towards payment of the Obligations. Each and every method of disposition of
the Collateral described in this Section 6.02 shall constitute disposition
in a commercially reasonable manner.
(b) Apply proceeds of the disposition of the Collateral to the
Obligations as provided by the Indenture. Such application may include,
without limitation, the reasonable attorneys' fees and legal expenses
incurred by Secured Party.
(c) Appoint any Person as agent to perform any act or acts necessary or
incident to any sale or transfer by Secured Party of the Collateral.
(d) Execute, assign and endorse negotiable and other instruments for
the payment of money, documents of title or other evidences of payment,
shipment or storage for any form of Collateral on behalf of and in the name
of Pledgor.
(e) Secured Party, instead of exercising the power of sale herein
conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose the security interests and sell the Collateral, or any portion
thereof, under a judgment or decree of a court or course of competent
jurisdiction. For the purposes of Louisiana executory process procedures,
the Pledgor does hereby acknowledge the Obligations and does hereby confess
judgment in favor of Secured Party for the full amount of the Obligations.
The Pledgor does by these presents, consent, agree and stipulate that
during the continuance of an Event of Default it shall be lawful for
Secured Party, and the Pledgor does hereby authorize Secured Party, to
cause all and singular the Collateral to be seized and sold under executory
or ordinary process, at Secured Party's sole option, without appraisement,
appraisement being hereby expressly waived, in one lot as an entirety or in
separate portions or parcels as Secured Party may determine, to the highest
bidder, and otherwise exercise the rights, powers and remedies afforded
herein and under applicable Louisiana law. Any and all declarations of fact
made by authentic act before a Notary Public in the presence of two
witnesses by a person declaring that such facts lie within his knowledge
shall constitute authentic evidence of such facts for the purpose of
executory process. The Pledgor hereby waives in favor of Secured Party: (i)
the benefit of appraisement as provided in Louisiana Code of Civil
Procedure Articles 2332, 2336, 2723 and 2724, and all other laws conferring
the same; (ii) the demand and three days delay accorded by Louisiana Code
of Civil Procedure Articles 2639 and 2721; (iii) the notice of seizure
required by Louisiana Code of Civil Procedure Articles 2293 and 2721; (iv)
the three days delay provided by Louisiana Code of Civil Procedure Articles
2331 and 2722; and (v) the benefit of the other provisions of Louisiana
Code of Civil Procedure Articles 2331, 2722 and 2723, not specifically
mentioned above.
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(f) Exercise all other rights and remedies permitted by law or in
equity.
Section 6.03 Attorney-in-Fact. Pledgor hereby irrevocably appoints
Secured Party as Pledgor's attorney-in-fact, with full authority in the place
and stead of Pledgor and in the name of Pledgor or otherwise, from time to time
in Secured Party's reasonable discretion upon the occurrence and during the
continuance of an Event of Default, but at Pledgor's cost and expense, to take
any action and to execute any assignment, certificate, financing statement,
stock power, notification, document or instrument which Secured Party may
reasonably deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation, to receive, endorse and collect all
instruments made payable to Pledgor representing any dividend, interest payment
or other distribution in respect of the Collateral or any part thereof and to
give full discharge for the same.
Section 6.04 Liability for Deficiency. If any sale or other disposition
of Collateral by Secured Party or any other action of Secured Party hereunder
results in reduction of the Obligations, such action will not release Pledgor
from its liability to Secured Party for any unpaid Obligations, including
reasonable costs, charges and expenses incurred in the liquidation of Collateral
and the same shall be immediately due and payable to Secured Party at Secured
Party's address set forth in the opening paragraph hereof.
Section 6.05 Reasonable Notice. If any applicable provision of any law
requires Secured Party to give reasonable notice of any sale or disposition or
other action, Pledgor hereby agrees that ten (10) days' prior written notice
shall constitute reasonable notice thereof. Such notice, in the case of public
sale, shall state the time and place fixed for such sale and, in the case of
private sale, the time after which such sale is to be made.
Section 6.06 Collateral. Upon the occurrence and during the continuance
of an Event of Default:
(a) All rights of Pledgor to receive the property which it would
otherwise be authorized to receive and retain pursuant to Section 4.02
hereof shall cease, and all such rights shall thereupon become vested in
Secured Party who shall thereupon have the sole right to receive and hold
as Collateral such property, but Secured Party shall have no duty to
receive and hold such property and shall not be responsible for any failure
to do so or delay in so doing.
(b) All property which is received by Pledgor contrary to the
provisions of this Section 6.06 shall be received in trust for the benefit
of Secured Party, shall be segregated from other funds of Pledgor and shall
be forthwith paid over to Secured Party as Collateral in the same form as
so received (with any necessary endorsement).
(c) Secured Party may exercise any and all rights of conversion,
exchange, or any other rights, privileges or options pertaining to any of
the Collateral as if it were the absolute owner thereof, including without
limitation, the right to exchange at its discretion, any and all of the
Collateral upon the merger, consolidation, reorganization, recapitalization
or other readjustment of Hollywood Casino Shreveport or upon the exercise
by Hollywood Casino Shreveport or Secured Party of any right, privilege or
option pertaining to any of the Collateral,
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and in connection therewith, to deposit and deliver any and all of the
Collateral with any committee, depository, transfer agent, registrar or
other designated agency upon such terms and conditions as it may determine,
all without liability except to account for property actually received by
it, but Secured Party shall have no duty to exercise any of the aforesaid
rights, privileges or options and shall not be responsible for any failure
to do so or delay in so doing.
(d) All rights of Pledgor to exercise the voting and other consensual
rights which Pledgor would otherwise be entitled to exercise pursuant to
Section 4.07 hereof with respect to the Collateral shall cease, and all
such rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to exercise such voting and other consensual
rights, but Secured Party shall have no duty to exercise any such voting or
other consensual rights and shall not be responsible for any failure to do
so or delay in so doing. Notwithstanding the foregoing, Secured Party's
ability to exercise voting rights is subject to Secured Party foreclosing
on or acquiring the Collateral hereunder and being admitted as a partner of
Hollywood Casino Shreveport in accordance with the Partnership Agreement,
and therefore, during the continuance of an Event of Default, if Secured
Party shall not be entitled under the Partnership Agreement to exercise
voting or other consensual rights regarding the Collateral, then until
Secured Party shall be so entitled in accordance with the Partnership
Agreement to exercise such voting or other consensual rights, the Pledgor
shall be permitted to exercise such voting or other consensual rights, but
only at the sole direction of Secured Party.
Section 6.07 Non-judicial Enforcement. Secured Party may enforce its
rights hereunder without prior judicial process or judicial hearing, and to the
extent permitted by law, Pledgor expressly waives any and all legal rights which
might otherwise require Secured Party to enforce its rights by judicial process.
Section 6.08 Private Sale of Collateral. Pledgor recognizes that
Secured Party may deem it impracticable to effect a public sale of all or any
part of the Collateral and that Secured Party may, therefore, determine to make
one or more private sales of any such Collateral to a restricted group of
purchasers who will be obligated to agree, among other things, to acquire such
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Pledgor acknowledges that any such private sale
may be at prices and on terms less favorable to the seller than the prices and
other terms which might have been obtained at a public sale and, notwithstanding
the foregoing, agrees that such private sale shall be deemed to have been made
in a commercially reasonably manner and that Secured Party shall have no
obligation to delay sale of any such securities for the period of time necessary
to permit Pledgor to register such Collateral for public sale under the
Securities Act of 1933, as amended (the "Securities Act"). Pledgor further
acknowledges and agrees that any offer to sell such Collateral which has been
(i) publicly advertised on a bona fide basis in a newspaper or other publication
of general circulation in the financial community of New York, New York (to the
extent that such an offer may be so advertised without prior registration under
the Securities Act), or (ii) made privately in the manner described above to not
less than fifteen (15) bona fide offerees shall be deemed to involve a "public
sale" for the purposes of Section 9-504(c) of the Code (or any successor or
similar, applicable statutory provision) as then in effect in the State of New
York, notwithstanding that such sale may not constitute a "public offering"
under the Securities Act and that Secured Party may, in such event, bid for the
purchase of such Collateral.
11
ARTICLE VII
MISCELLANEOUS
Section 7.01 Notices. Any notice required or permitted to be given
under or in connection with this Agreement shall be given in accordance with the
notice provisions of the Indenture.
Section 7.02 Amendments and Waivers. Secured Party's acceptance of
partial or delinquent payments or any forbearance, failure or delay by Secured
Party in exercising any right, power or remedy hereunder shall not be deemed a
waiver of any obligation of Pledgor or any Obligor, or of any right, power or
remedy of Secured Party, and no partial exercise of any right, power or remedy
shall preclude any other or further exercise thereof. Secured Party may remedy
any Event of Default hereunder or in connection with the Obligations without
waiving the Event of Default so remedied. Pledgor hereby agrees that if Secured
Party and the Holders of the Notes agree to a waiver of any provision hereunder,
as provided by the Indenture, or an exchange of or release of the Collateral, or
the addition or release of any Obligor or other Person, any such action shall
not constitute a waiver of any of Secured Party's other rights or of Pledgor's
obligations hereunder. This Agreement may be amended only by an instrument in
writing in the manner set forth in the Indenture and may be supplemented only by
documents delivered or to be delivered in accordance with the express terms
hereof.
Section 7.03 Redelivery of Collateral. If any sale or transfer of
Collateral by Secured Party results in full satisfaction of the Obligations, and
after such sale or transfer and discharge there remains a surplus of proceeds,
Secured Party will deliver to Pledgor or such other Person as may be required by
a Governmental Authority such excess proceeds in a commercially reasonable time;
provided, however, that neither Secured Party nor any Holders of the Notes shall
have any liability for any interest, cost or expense in connection with any
reasonable delay in delivering such proceeds to Pledgor.
Section 7.04 Gaming Laws and Regulations. To the extent required under
applicable law, the consummation of the transactions contemplated hereby and the
exercise of remedies hereunder may be subject to the Louisiana Riverboat
Economic Development and Gaming Control Act, La. R.S. 27:41, et seq., and the
Louisiana Gaming Control Law, La. R.S. 27:1, and the regulations promulgated
pursuant to each such law, all as amended from time to time. The Gaming License
held by Hollywood Casino Shreveport is not part of the Collateral of this
Agreement and, under the above described legislation and rules promulgated
thereunder, the Trustee may be precluded from or otherwise limited in taking
possession of or in selling the Collateral of this Agreement under the defaults
and remedies provisions of this Agreement. Due to various legal restrictions,
including, without limitation, licensing of operators of gaming facilities and
prior approval of the sale or disposition of assets of a licensed gaming
operation, the sale of Collateral may be denied by Gaming Authorities or delayed
pending Gaming Authority approval.
12
Section 7.05 Governing Law; Jurisdiction. This Agreement and the
security interest granted hereby shall be construed in accordance with and
governed by the laws of the State of New York (except to the extent that the
laws of any other jurisdiction govern the perfection and priority of the
security interests granted hereby).
Section 7.06 Continuing Security Agreement.
(a) Except as may be expressly applicable pursuant to Section 9-505 of
the Code, no action taken or omission to act by Secured Party hereunder,
including, without limitation, any exercise of voting or consensual rights
pursuant to Section 6.06(d) hereof or any other action taken or inaction
pursuant to Section 6.02 hereof, shall be deemed to constitute a retention
of the Collateral in satisfaction of the Obligations or otherwise to be in
full satisfaction of the Obligations, and the Obligations shall remain in
full force and effect until Secured Party shall have applied payments
(including, without limitation, collections from Collateral) towards the
Obligations in the full amount then outstanding or until such subsequent
time as is hereinafter provided in Section 7.06(b) hereof.
(b) To the extent that any payments on the Obligations or proceeds of
the Collateral are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee, debtor in
possession, receiver or other Person under any bankruptcy law, common law
or equitable cause, then to such extent the Obligations so satisfied shall
be revived and continue as if such payment or proceeds had not been
received by Secured Party, and Secured Party's security interests, rights,
powers and remedies hereunder shall continue in full force and effect. In
such event, this Agreement shall be automatically reinstated if it shall
theretofore have been terminated pursuant to Section 7.07 or Section 7.08
hereof.
Section 7.07 Termination. The grant of a security interest hereunder
and all of Secured Party's rights, powers and remedies in connection therewith
shall, unless otherwise provided in the Indenture or in this Agreement, remain
in full force and effect until the payment in full of (a) the Notes under the
terms of the Indenture and (b) all Obligations then due and owing under the
Indenture, the Notes and the Collateral Documents; provided, however, that after
receipt from the Pledgor by the Secured Party of a request for a release of any
Collateral permitted under the Indenture upon the sale, transfer, assignment,
exchange or other disposition of the Collateral not prohibited by the Indenture
(and upon receipt by the Secured Party of all proceeds of such sale, transfer,
assignment, exchange or other disposition to the extent required to be remitted
to the Secured Party under the Indenture), such Collateral shall be released
from the Lien and security interest created hereunder in accordance with the
provisions of the Indenture and no longer constitute Collateral. Notwithstanding
the foregoing, the provisions of Section 7.06(b) hereof shall survive the
termination of this Agreement.
Section 7.08 Release. Subject to the provisions of Section 7.06(b)
hereof, this Agreement shall terminate upon payment in full of (a) the Notes
under the terms of the Indenture and (b) all Obligations then due and owing
under the Indenture, the Notes and the Collateral Documents. At such time, the
Secured Party shall, at the request of the Pledgor, reassign and redeliver to
the Pledgor all of the Collateral hereunder that has not been sold, disposed of,
retained or applied by the Secured Party in accordance with the terms of the
Indenture or the
13
Collateral Documents. Such reassignment and redelivery shall be without warranty
by or recourse to the Secured Party, except as to the absence of any prior
assignments by the Secured Party of its interest in the Collateral, and shall be
at the expense of the Pledgor. Notwithstanding the foregoing, the provisions of
Section 7.06(b) hereof shall survive the termination of this Agreement.
Section 7.09 Counterparts, Effectiveness. This Agreement may be
executed in two or more counterparts, each of which shall be deemed to be an
original, but all of which taken together shall constitute one and the same
instrument. This Agreement becomes effective upon the execution hereof by
Pledgor and delivery of the same to Secured Party, and it is not necessary for
Secured Party to execute any acceptance hereof or otherwise signify or express
its acceptance hereof.
Section 7.10 Interpretation of Agreement. To the extent a term or
provision of this Agreement conflicts with the Indenture, the Indenture shall
control with respect to the subject matter of such term or provision.
Section 7.11 Rights of Holders. No Holder of Notes shall have any
independent rights hereunder other than those rights granted to individual
Holders of Notes pursuant to the Indenture; provided that, nothing in this
Section 7.11 shall limit any rights granted to the Secured Party under the
Notes, the Indenture or the Collateral Documents.
Section 7.12 No Personal Liability of Directors, Officer, Employees,
and Stockholders. Other than as set forth in the Indenture or the documents
executed and delivered pursuant thereto, no past, present or future director,
officer, employee, incorporator or stockholder of the Pledgor, as such or any
successor Person, as such, shall have any liability for any obligations of the
Pledgor under this Agreement or for any claim based on, in respect of, or by
reason of, such Obligations or their creation.
Section 7.13 Trustee. State Street Bank and Trust Company is acting
hereunder solely in its capacity as Trustee under the Indenture, and all of the
rights of Trustee set forth in the Indenture shall apply to Trustee's actions
hereunder. To the extent this Agreement contemplates payments by the Secured
Party, the Trustee shall have no liability therefor, such liability continuing
to be the liability of Pledgor or realized through the value of any collateral
for the obligations under the Indenture.
[SIGNATURE PAGE FOLLOWS]
14
IN WITNESS WHEREOF, Pledgor has caused this Partnership Interest
Pledge Agreement to be executed as of the date first above written.
Pledgor: HCS II, INC., a Louisiana corporation
By: /s/ XXXX X. XXXXX
----------------------------------
Name: Xxxx X. Xxxxx
--------------------------------
Title: Executive Vice President and
-------------------------------
Chief Financial Officer
-------------------------------
[SIGNATURE PAGE TO PARTNERSHIP PLEDGE AGREEMENT (HCS II, INC.)]
S-1
EXHIBIT A
PERFECTION
(a) Legal Name of Pledgor:
HCS II, Inc.
(b) Other Names:
None
(c) (i) Chief Executive Office and Principal Place of Business of Pledgor:
Chief Executive Office: Dallas County, Texas
Principal Place of Business: Dallas County, Texas
(ii) Other Premises at which Collateral is Stored or Located:
Caddo Parish, Louisiana
Bossier Parish, Louisiana
(iii) Locations of Records Concerning Collateral:
Dallas County, Texas
(d) Tax Identification Number:
00-0000000
A-1
ACKNOWLEDGMENT OF HOLLYWOOD CASINO SHREVEPORT
The undersigned hereby:
(a) acknowledges receipt of a copy of the foregoing Partnership
Interest Pledge Agreement (the "Agreement") and that such receipt
constitutes notice to it of the Pledgor's authorization and direction to it
to comply with the terms and provisions hereof and of the Agreement and of
the Partnership Agreement (as defined in the Agreement), and accepts,
consents to, confirms and agrees to be bound by such terms and provisions;
(b) acknowledges that, pursuant to the Agreement, and as permitted by
the Partnership Agreement, the Pledgor has pledged and assigned to Secured
Party, and granted to Secured Party a continuing first-priority security
interest in, all right, title and interest of the Pledgor, whether now
existing or hereafter arising or acquired, in, to and under the Collateral,
and hereby consents to such assignment;
(c) agrees, upon notice from Secured Party, to make direct payment to
Secured Party of any amounts due or to become due to the Pledgor in respect
of the Collateral, and to do every act and thing necessary or appropriate
to carry out the terms and provisions hereof and of the Agreement and of
the Partnership Agreement, and agrees to make no payments or distributions
contrary to such terms and provisions; and
(d) waives notice of acceptance of the Agreement by Secured Party.
DELIVERED on August 10, 1999.
HOLLYWOOD CASINO SHREVEPORT, a
Louisiana general partnership
By: HCS I, Inc., a Louisiana
corporation, its managing
general partner
By: /s/ XXXX X. XXXXX
-----------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President
and Chief Financial Officer
ACKNOWLEDGMENT OF GENERAL PARTNER
The undersigned, in its capacity as a General Partner of Hollywood
Casino Shreveport, hereby:
(a) acknowledges receipt of a copy of the foregoing Partnership Interest
Pledge Agreement (the "Agreement");
(b) consents to the pledge and assignment by the Pledgor to Secured Party,
and the grant by the Pledgor to Secured Party of a continuing first-priority
security interest in, all right, title and interest of the Pledgor, whether now
existing or hereafter arising or acquired, in, to and under the Collateral, and
the exercise by Secured Party of its rights and remedies pursuant to the
Agreement (including any sale or transfer of the Collateral in accordance with
the Agreement), and agrees to do every act and thing necessary or appropriate to
carry out the terms and provisions hereof and of the Agreement, including
without limitation, upon request of Secured Party or any transferee of the
Collateral, confirming and ratifying the admission of such transferee as a
partner in Hollywood Casino Shreveport, and electing any transferee of the
Collateral as the Managing General Partner, under Hollywood Casino Shreveport's
partnership agreement.
DELIVERED on August 10, 1999.
HCS I, INC., a Louisiana corporation
By: /s/ XXXX X. XXXXX
---------------------------------
Name: Xxxx X. Xxxxx
Title: Executive Vice President
and Chief Financial Officer
