EXHIBIT 4.8(f)
SECURITY AGREEMENT
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(EEI)
THIS SECURITY AGREEMENT (EEI) ("Agreement") is made and entered into
as of June 17, 1998, by and between EMPRESS ENTERTAINMENT, INC., a Delaware
corporation, party of the first part (hereinafter referred to as "Debtor") and
XXXXX FARGO BANK, National Association, as administrative and collateral agent
for the Lenders, the Swingline Lender and the L/C Issuer, all of which are
defined in the Credit Agreement, referred to below, party of the second part
(hereinafter referred to, in such capacity, as "Secured Party").
R E C I T A L S:
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A. Reference is made to that certain Credit Agreement (as it may
be hereafter renewed, extended, amended, restated or otherwise modified, the
"Credit Agreement") executed concurrently, or substantially concurrent, herewith
by and among Debtor, Empress Casino Hammond Corporation, an Indiana corporation,
and Empress Casino Joliet Corporation, an Illinois corporation (collectively,
"Borrowers"), the Lenders therein named (each, together with their respective
successors and assigns, individually being referred to herein as a "Lender" and
collectively as the "Lenders"), the Swingline Lender therein named (referred to
herein, together with its successors and assigns, as the "Swingline Lender"),
the L/C Issuer therein named (referred to herein, together with its successors
and assigns, as the "L/C Issuer"), and Agent Bank. Agent Bank, the Lenders, the
Swingline Lender and the L/C Issuer are collectively referred to herein as the
"Banks".
B. Pursuant to the Credit Agreement, and subject to the terms and
conditions specified therein, the Lenders have agreed to provide a reducing
revolving credit facility to Borrowers with an initial maximum principal amount
of One Hundred Million Dollars ($100,000,000.00) available for Borrowings
thereunder (together with all extensions, renewals, amendments, substitutions
and other modifications thereof, the "Credit Facility"), which Credit Facility
includes: (i) a subfacility for funding of Swingline Advances by the Swingline
Lender on shorter notice and in lesser amounts than would otherwise be required
for Borrowings under the Credit Facility (together with all extensions,
renewals, amendments, substitutions, and other modifications thereof, the
"Swingline Facility"); and (ii) a subfacility for the issuance of Letters of
Credit by the L/C Issuer (together with all extensions,
renewals, amendments, substitutions and other modifications thereof, the "L/C
Facility" and, together with the Credit Facility and the Swingline Facility, the
"Bank Facilities"); all as more particularly set forth by the Credit Agreement.
C. In this Agreement all capitalized words and terms not otherwise
defined herein shall have the respective meanings and be construed herein as
provided in Section 1.01 of the Credit Agreement and any reference to a
provision of the Credit Agreement shall be deemed to incorporate that provision
as a part hereof in the same manner and with the same effect as if the same were
fully set forth herein.
D. The provisions of Section 1.02 of the Credit Agreement shall be
applied to this Agreement in the same manner as applied therein to the Credit
Agreement.
E. As a condition of their entry into the Credit Agreement, and
their commitment to provide the Bank Facilities for the benefit of Borrowers
(subject to the terms of the Credit Agreement and the other Loan Documents), the
Banks have required, among other things, that Debtor grant the security
interests, and undertake the obligations, contemplated by this Agreement.
NOW, THEREFORE, in order to induce the Banks to enter into the Credit
Agreement, and to provide the Bank Facilities, and for other good and valuable
consideration, the receipt and adequacy of which hereby is acknowledged, Debtor
and Secured Party hereby agree as follows:
ARTICLE I
SECURITY INTEREST AND COLLATERAL
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Section 1.01. Creation of Security Interest.
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(a) For valuable consideration, Debtor hereby assigns,
pledges and grants to Secured Party a continuing security interest in, and lien
upon, all presently existing and hereafter acquired Collateral (as defined
below), as security for the timely payment and performance of each and every
Secured Obligation (as also defined below). This Agreement is a continuing and
irrevocable agreement and all the rights, powers, privileges and remedies
hereunder shall apply to any and all Secured Obligations, including those
arising under successive transactions which shall either continue the Secured
Obligations, increase or decrease them, or from time to time create new Secured
Obligations after all
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or any prior Secured Obligations have been satisfied, and notwithstanding the
bankruptcy of Borrower, Debtor or any other Person or any other event or
proceeding affecting any Person.
(b) The security interest which is granted hereunder is
subject to the following:
(i) the right of Debtor to sell or otherwise dispose of
Personal Property in the ordinary course of business, free and clear of the lien
hereof, provided, and to the extent, that such sale or other disposition is
permitted under the terms of the Credit Agreement; and
(ii) as to the fixtures and equipment covered hereby,
the leases and/or purchase money security interests pursuant to which Debtor has
acquired an interest in such fixtures and equipment provided, and to the extent,
that such leases and/or purchase money security interests are permitted under
the terms of the Credit Agreement.
Section 1.02. Description of Collateral. All references herein to
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the "Collateral" shall be to all right, title and interest of Debtor, whether
now owned or existing, or hereafter acquired or arising, in, to and under any of
the following:
(a) All present and future chattels, furniture, furnishings,
equipment and fixtures, all of every kind and nature, and other tangible
personal property in which Debtor now has or hereafter acquires an interest; all
including, without limitation: (aa) all office and administrative furniture,
equipment and supplies including, without limitation, office appliances, filing
cabinets, computers, peripheral computer equipment and other data processing and
storage equipment, stationery and other office supply items, and other office
and administrative furniture, equipment and supplies; (bb) all tools and other
maintenance and repair equipment; and (cc) all equipment and supplies utilized
in connection with any activity engaged in by Debtor;
(b) All present and future supplies, inventory and merchandise
which is used in connection with, or in the conduct of, the business of Debtor
or in which Debtor has or acquires an interest, including, without limitation:
(i) all present and future goods held for sale or lease or to be furnished under
a contract of service, all raw materials, work in process and finished goods,
all packing materials, supplies
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and containers relating to or used in connection with any of the foregoing, and
all bills of lading, warehouse receipts or documents of title relating to any of
the foregoing; (ii) all food stuffs, beverages, prepared food and other similar
items; and (iii) all cleaning supplies, office supplies, consumables and similar
items;
(c) All present and future goods, which are not otherwise set
forth herein, and which are used in connection with, or in the conduct of, the
business of Debtor or in which Debtor has or acquires an interest;
(d) All present and future accounts, accounts receivable,
rentals, deposits, rights to payment, instruments, documents, chattel paper,
security agreements, guaranties, undertakings, surety bonds, insurance policies
and notes and drafts which are owned, or used in connection with, or in the
conduct of, the business of Debtor, or in which Debtor has or acquires an
interest, however created or arising;
(e) All present and future contracts, or agreements and all other
present and future general intangibles which are owned, or used in connection
with, or in the conduct of, the business of Debtor, or in which Debtor has or
acquires an interest, including, without limitation: (aa) all leases and
purchase contracts for equipment, furniture and/or fixtures of any kind and
character; and (bb) all goodwill, choses in action, trade secrets, customer
lists, trademarks, trade names and service marks, patents, copyrights,
technology, processes, and proprietary information which are owned, or used in
connection with, or in the conduct of, the business of Debtor, or in which
Debtor has or acquires an interest (including, without limitation, the trade
names of "Empress", "Empress Casino", "Empress River Casino" and/or any
derivation thereof including any and all state and federal registrations
thereof);
(f) All present and future deposit accounts which are owned, or
used in connection with, or in the conduct of, the business of Debtor, or in
which Debtor has or acquires an interest including, without limitation, any
demand, time, savings, passbook or like account maintained with any bank,
savings and loan association, credit union or like organization, and all money,
cash and cash equivalents of Debtor, whether or not deposited in any such
deposit account;
(g) All present and future revenues, receipts, payments and
income of any nature whatsoever, in which Debtor
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now owns or hereafter acquires an interest, regardless of the source of such
items;
(h) All present and future books and records which are owned, or
used in connection with, or in the conduct of, the business of Debtor, or in
which Debtor, has or acquires an interest including, without limitation, books
of account and ledgers of every kind and nature, all electronically recorded
data relating to the business of Debtor, all receptacles and containers for such
records, and all files and correspondence;
(i) Other than with respect to Unrestricted Subsidiaries, All
present and future investment property, stocks, bonds, debentures, securities,
subscription rights, options, warrants, puts, calls, certificates, partnership
interests, joint venture interests, investments and/or brokerage accounts which
are owned, or used in connection with, or in the conduct of, the business of
Debtor, or in which Debtor has or acquires an interest and all rights,
preferences, privileges, dividends, distributions, redemption payments, or
liquidation payments with respect thereto;
(j) All right, title and interest of Debtor in and to all leases,
licenses, concessions, or similar agreements whether or not specifically herein
described and all amendments to the same, including, but not limited to the
following: (aa) all payments due and to become due under such agreements,
whether as rent, damages, insurance payments, condemnation awards, or otherwise;
(bb) all claims, rights, powers, privileges and remedies under such agreements;
and (cc) all rights of the Debtor under such leases to exercise any election or
option, or to give or receive any notice, consent, waiver or approval, or to
accept any surrender of the premises or any part thereof, together with full
power and authority in the name of Debtor or otherwise, to demand and receive,
enforce, collect, or receipt for any or all of the foregoing, to endorse or
execute any checks or any instruments or orders, to file any claims or to take
any action which Secured Party may deem necessary or advisable in connection
therewith;
(k) All plans, specifications, soil reports, engineering reports,
land planning maps and surveys together with all amendments and modifications
thereof;
(l) All present and future accessions, appurtenances, components,
repairs, repair parts, spare parts,
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replacements, substitutions, additions, issue and/or improvements to or of or
with respect to any of the foregoing;
(m) All rights, remedies, powers and/or privileges of Debtor with
respect to any of the foregoing; and
(n) Any and all proceeds and products of any of the foregoing,
including, without limitation, all money, accounts, general intangibles, deposit
accounts, documents, instruments, chattel paper, goods, insurance proceeds, and
any other tangible or intangible property received upon the sale or disposition
of any of the foregoing.
Section 1.03. Secured Obligations. This Agreement secures, and the
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Collateral is security for, the following (collectively, the "Secured
Obligations"):
(a) Payment when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including 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. (S) 362(a)), of: (i) the
principal sum which is, at any time, advanced and unpaid under the Credit
Facility not to exceed One Hundred Million Dollars ($100,000,000.00) at any one
time, all on a reducing revolving line of credit basis; (ii) interest and other
charges accrued on said principal sum, or accrued on interest and other charges
then outstanding under the Credit Facility (all including, without limitation,
interest and other charges that would accrue on such obligations, but for the
filing of a petition in bankruptcy with respect to Borrowers, or any of them);
and (iii) any other obligations of Borrowers, or any of them, under the RLC Note
referred to below; all according to the terms of a Revolving Credit Note dated
concurrently, or substantially concurrent, herewith which is made by Borrowers
and is payable to the order of Secured Party according to the tenor and effect
of said Revolving Credit Note, and all renewals, extensions, amendments,
restatements, replacements, substitutions and other modifications thereof
(hereinafter collectively referred to as the "RLC Note").
(b) Payment when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including 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. (S) 362(a)), of: (i) the
principal sum which is, at any time, advanced and
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unpaid under the Swingline Facility not to exceed Five Million Dollars
($5,000,000.00) at any one time, all on a revolving line of credit basis; (ii)
interest and other charges accrued on said principal sum, or accrued on interest
and other charges then outstanding under the Swingline Facility (all including,
without limitation, interest and other charges that would accrue on such
obligations, but for the filing of a petition in bankruptcy with respect to
Borrowers, or any of them); and (iii) any other obligations of Borrowers, or any
of them, under the S/L Note referred to below; all according to the terms of a
Swingline Note dated concurrently, or substantially concurrent, herewith which
is made by Borrowers and is payable to the order of Secured Party according to
the tenor and effect of said Swingline Note, and all renewals, extensions,
amendments, restatements, replacements, substitutions and other modifications
thereof (hereinafter referred to as the "S/L Note", and together with the RLC
Note, collectively referred to as the "Notes").
(c) Payment and performance of every obligation, warranty,
representation, covenant, promise and agreement of Borrowers, or any of them,
contained in that certain Certificate and Indemnification Regarding Hazardous
Substances, together with all extensions, renewals, amendments, restatements and
other modifications thereof, which is executed by Empress Casino Xxxxxxx
Corporation and Debtor concurrently, or substantially concurrent, herewith and
which is to be executed by Empress Casino Joliet Corporation on or before
July 31, 1998.
(d) Payment and performance of every obliga tion, covenant,
promise and agreement of Debtor herein contained or incorporated herein by
reference, including any sums paid or advanced by Secured Party or any of the
Banks pursuant to the terms hereof.
(e) Payment of the expenses and costs incurred or paid by Secured
Party or any of the Banks in the preservation and enforcement of the rights and
remedies of Secured Party and the duties and liabilities of Debtor hereunder,
including, but not by way of limitation, reasonable attorney's fees, court
costs, witness fees, expert witness fees, collection costs, and reasonable costs
and expenses paid by Secured Party or any of the Banks in performing for
Debtor's account any obligation of said Debtor.
(f) Payment of any sums which may hereafter be owing by
Borrowers, or any of them, to any of the Banks or any
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of their affiliates, under the terms of any interest rate swap agreement,
interest rate cap agreement, basis swap agreement, forward rate agreement,
interest collar agreement or interest floor agreement to which Borrowers, or any
of them, may be a party, or under any other agreement or arrangement to which
Borrowers, or any of them, may be a party, which in each case is designed to
protect Borrowers, or any of them, against fluctuations in interest rates or
currency exchange rates with respect to any indebtedness secured by this
Agreement.
(g) Payment of additional sums and interest thereon which may
hereafter be loaned to Borrowers, or any of them, pursuant to the Credit
Agreement when evidenced by a promissory note or notes which recite that this
Agreement is security therefor.
(h) Performance and payment of every obligation, warranty,
representation, covenant, agreement and promise of Borrowers, or any of them,
which are contained in the Credit Agreement.
Section 1.04. For Security Purposes Only. The assignment, pledge,
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and grant of a security interest in Debtor's interest(s) in the Collateral,
hereunder, is for security purposes only and shall not make Secured Party
responsible for, or otherwise affect or modify, any duty, obligation or
liability of Debtor under any of the Collateral, or under any transaction
related thereto.
ARTICLE II
REPRESENTATIONS, WARRANTIES AND COVENANTS
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Section 2.01. Certain Representations and Warranties. The Debtor
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represents and warrants to Secured Party as follows:
(a) The Debtor is and will be the lawful owner of good and
marketable title to all of the Collateral, free of all liens and claims
whatsoever, other than the security interest hereunder, and no presently
effective Uniform Commercial Code Financing Statement (as defined by the
Commercial Code referred to below) covering any of the Collateral is on file in
any public office.
(b) The execution and delivery of this Agreement and the
performance by the Debtor of its obligations hereunder have been duly authorized
by all necessary corporate action, and do not and will not contravene or
conflict with
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any provision of law or of the charter or bylaws of the Debtor or of any
agreement binding upon the Debtor, and this Agreement is a legal, valid and
binding obligation of the Debtor, enforceable in accordance with its terms,
except as such enforcement may be limited by bankruptcy, insolvency and other
laws of general application relating to or affecting the enforcement of
creditors' rights.
(c) This Agreement creates a first priority security interest in
the Collateral subject only to Permitted Encumbrances (as defined in the Credit
Agreement).
Section 2.02. Maintenance of Collateral. Except to the extent that
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any of the following would be prohibited under, or would constitute a violation
of, the terms and conditions of the Credit Agreement, Debtor agrees: (i) to
properly care for and keep the Collateral in good condition and repair; (ii) not
to remove, demolish or substantially alter the Vessels, except upon the prior
written consent of Secured Party; (iii) not to commit or permit any waste or
deterioration of the Collateral (ordinary wear and tear, casualty and
condemnation excepted); (iv) not to commit, suffer or permit any act to be done,
or condition to exist, in connection with any of said Collateral in material
violation of any law, covenant, condition or restriction now, or hereafter,
affecting said Collateral (v) to perform all obligations which it may have under
the Collateral; and (vi) except as otherwise permitted in the Credit Agreement,
to do all other acts, in a timely and proper manner, which, from the character
or use of the Collateral, may be reasonably necessary to maintain and preserve
its value, the specific enumerations herein not excluding the general.
Section 2.03. Insurance. During the continuance of this Agreement,
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Debtor shall obtain, or cause to be obtained, and shall maintain or cause to be
maintained, at all times throughout the term of the Bank Facilities, at its own
cost and expense, and shall deposit with Secured Party, Certificates of
Insurance, each in a form and substance, and at such times, as is required under
Section 5.09 of the Credit Agreement. All monies received from "All Risk"
insurance policies (including flood and earthquake policies) covering any of the
Collateral shall be: (i) paid directly to Secured Party and retained by Secured
Party or released to Debtor by Secured Party; or (ii) paid directly to Debtor;
all in accordance with Section 8.02 of the Credit Agreement. Nothing contained
in this Agreement shall be deemed to excuse Debtor from restoring, repairing and
maintaining the Collateral, as
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herein provided, regardless of whether or not insurance proceeds are available
for restoration, whether or not any such proceeds are sufficient in amount, or
whether or not the Collateral can be restored to the same condition and
character as existed prior to such damage or destruction.
Section 2.04. Taxes and Assessments. Debtor shall pay all taxes,
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assessments and other governmental charges levies affecting the Collateral, or
any part thereof, in the manner required by the Credit Agreement except such
taxes, assessments and other governmental levies as are being contested in good
faith in the manner provided by Section 4.07 or Section 5.10 of the Credit
Agreement.
Section 2.05. Eminent Domain. Any award of damages in connection
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with any condemnation or similar actions in regard to the Collateral, or any
part thereof, shall be: (i) paid directly to Secured Party and shall be retained
by Secured Party or released to Debtor by Secured Party; or (ii) paid directly
to Debtor; all in accordance with Section 8.02 of the Credit Agreement.
Section 2.06. Due on Sale. If Debtor shall be voluntarily, or
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involuntarily, divested of title or possession of any Collateral, by merger or
otherwise, or shall lease, sell, convey, further encumber or in any other manner
voluntarily or involuntarily alienate any of its interest in any of the
Collateral, or shall enter into an agreement to do any of the foregoing, other
than as permitted in the Credit Agreement, any indebtedness or obligation
secured hereby, irrespective of the maturity dates expressed in any notes
evidencing the same, shall at the option of Secured Party, and upon the giving
of any notice which may be required under the Credit Agreement, immediately
become due and payable.
Section 2.07. Preservation of Rights. Debtor shall, at its own
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expense, protect, warrant and defend forever its rights in the Collateral, as
represented in Section 2.01 (and the rights of the Secured Party therein),
against the claims and demands of all persons whomsoever.
Section 2.08. Other Assurances. Debtor shall execute and deliver to
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Secured Party all such financing statements and other instruments and documents,
each in a form and substance which is satisfactory to Secured Party, and shall
do and accomplish such other acts as Secured Party may, from time to time, deem
necessary or advisable to provide further assurances of, and where applicable,
to fully perfect,
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the rights and security interests that are granted hereunder or to carry out or
facilitate the intended purpose of this Agreement. With respect to any
Collateral consisting of certificated securities, instruments, documents,
investment property, certificates of title or the like, as to which Secured
Party's security interest need be perfected by, or the priority thereof need be
assured by, possession or control of such Collateral, Debtor will upon demand of
Secured Party deliver possession of same in pledge to Secured Party (except to
the extent that such Collateral is not capable of being reduced to possession,
in which case Debtor shall enter into a control agreement with the custodian of
such collateral containing sufficient provisions, for the benefit of Secured
Party, in order to provide for perfection and first priority of a security
interest in favor of Secured Party with respect to such Collateral).
Section 2.09. Maintenance of Name, etc. Debtor will not change its
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name, identity or structure (collectively an "Identity Change") in any manner
which might make any financing or continuation statement filed in respect of the
Collateral seriously misleading within the meaning of Section 9-402(7) (or any
other then applicable provision) of the Uniform Commercial Code-Secured
Transactions, as enacted in the State of Illinois pursuant to 810 ILCS 5/9-101
et. seq. as it may hereafter be amended or recodified, the "Commercial Code")
unless: (i) such Identity Change is permissible under the Credit Agreement; and
(ii) Debtor shall have given the Secured Party at least thirty (30) days' prior
written notice thereof.
Section 2.10. Maintenance of Office. Debtor shall at all times
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maintain its chief executive office within the State of Illinois.
Section 2.11. Records. At its own cost and expense, Debtor shall:
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(i) keep and maintain satisfactory and complete records pertaining to the
Collateral in such detail, form and scope as Secured Party shall require,
consistent with Secured Party's interests hereunder; and (ii) at any time, and
from time to time, at Secured Party's request, xxxx the Collateral and/or
Debtor's ledger cards, books of account and other records relating to the
Collateral with appropriate notations satisfactory to Secured Party disclosing
that they are subject to Secured Party's security interests hereunder. For the
Secured Party's further security, Debtor agrees that Secured Party shall have a
special property interest in all of Debtor's books and records which pertain to
the Collateral (including books and records which are maintained in a form
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for use by computers or data processing machines). Upon the occurrence and
during the continuation of any Event of Default (as defined by the Credit
Agreement), Debtor shall deliver and turn over any such books and records to
Secured Party or its representative at any time upon demand of Secured Party.
At any time and from time to time, whether or not any Event of Default has
occurred, but upon reasonable notice from Secured party, Debtor shall permit any
representative of Secured Party to inspect such books and records and shall
provide photocopies thereof to Secured Party.
Section 2.12. No Negotiable Documents. Debtor shall not deposit any
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Collateral in exchange for a negotiable Document of Title.
ARTICLE III
SECURED PARTY'S RIGHTS
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REGARDING COLLATERAL
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Section 3.01. General Rights. At any time, and from time to time,
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without notice or demand (except as otherwise set forth herein), and whether or
not an Event of Default has occurred, Secured Party may take any of the
following actions to the extent that such actions may be necessary or desirable
to protect the security hereunder:
(a) Enter upon any premises on which Collateral is situated and
examine the same.
(b) At the expense of Debtor, perform any obligation of Debtor
under this Agreement or under any of the Collateral.
(c) Where applicable: (i) notify obligors on the Collateral that
the Collateral has been pledged and assigned to Secured Party; (ii) request from
obligors under the Collateral, in the name of Debtor or in the name of Secured
Party, information concerning the Collateral and the amounts owing thereof; and
(iii) cause the Collateral to be registered in the name of Secured Party, as
legal holder.
(d) Secured Party shall at all reasonable times, and on
reasonable notice, have full access to and the right to audit any and all of
Debtor's books and records pertaining to the Collateral, and to confirm and
verify the value of the Collateral and to do whatever else Secured Party
reasonably may deem necessary or desirable to protect its interests.
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Any of the foregoing actions which are undertaken by Secured Party shall be at
the expense of Debtor. However, Secured Party shall be under no duty or
obligation whatsoever to take any of such actions or to take any other action to
preserve, maintain or protect, the Collateral or any of it, or to preserve any
rights of or against any prior or other parties in connection with the
Collateral, to exercise any voting rights or managerial rights with respect to
any Collateral, whether or not an Event of Default shall have occurred, or to
make or give any presentments, demands for performance, notices of non-
performance, protests, notices of protests, notices of dishonor or notices of
any other nature whatsoever in connection with the Collateral or the Secured
Obligations.
Section 3.02. Collections on the Collateral.
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(a) Notwithstanding the security interest in the Collateral which
is granted pursuant to Section 1.01 hereof, and except as otherwise provided
hereunder or in any Loan Document, Debtor shall have the right to use and to
continue to make collections on and receive any payments which may be made to,
or for the benefit of, Debtor under any of the Collateral so long as no Event of
Default shall have occurred and be continuing.
(b) Upon the occurrence and during the continuance of an Event of
Default, at the option of Secured Party, and except as prohibited by applicable
law, Debtor's right to make collections on and receive dividends and other
proceeds of the Collateral and to use or dispose of such collections and
proceeds shall terminate, and any and all dividends, proceeds and collections,
including all partial or total prepayments, then held or thereafter received on
or on account of the Collateral will be held or received by Debtor in trust for
Secured Party and immediately delivered in kind to Secured Party.
(c) Any remittance received by Debtor from any Person shall be
presumed to relate to the Collateral and to be subject to the security interests
which are granted to Secured Party hereunder.
(d) Upon the occurrence and during the continuance of an Event of
Default, Secured Party shall have the right at all times to receive, issue
receipt for, endorse, assign, deposit and deliver, in the name of Secured Party
or in the name of Debtor, any and all checks, notes, drafts and other
instruments for the payment of money constituting
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proceeds of or otherwise relating to the Collateral; and Debtor hereby
authorizes Secured Party to affix, by facsimile signature or otherwise, the
general or special endorsement of Debtor, in such manner as Secured Party shall
deem advisable, to any such instrument in the event the same has been delivered
to or obtained by Secured Party without appropriate endorsement, and Secured
Party and any collection bank are hereby authorized to consider such endorsement
to be a sufficient, valid and effective endorsement by Debtor, to the same
extent as though it were manually executed by the duly authorized officer of
Debtor, regardless of by whom or under what circumstances or by what authority
such facsimile signature or other endorsement actually is affixed, without duty
of inquiry or responsibility as to such matters, and Debtor hereby expressly
waives demand, presentment, protest and notice of protest or dishonor and all
other notices of every kind and nature with respect to any such instrument.
Section 3.03. Possession of Collateral by Secured Party.
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(a) All the Collateral now, heretofore or hereafter delivered to
Secured Party shall be held by Secured Party in its possession, custody and
control. Any or all of the Collateral delivered to Secured Party, which is held
in an account, may be held in an interest bearing or non-interest bearing
account, in Secured Party's sole and absolute discretion, and Secured Party may,
in its discretion, apply any such interest to payment of the Secured
Obligations. Nothing herein shall obligate Secured Party to invest any
Collateral or obtain any particular return thereon.
(b) Upon the occurrence and during the continuance of an Event of
Default, whenever any of the Collateral is in Secured Party's possession,
custody or control, Secured Party may use, operate and consume the Collateral,
whether for the purpose of preserving and/or protecting the Collateral, or for
the purpose of performing any of Debtor's obligations with respect thereto, or
otherwise. Secured Party may at any time deliver or redeliver the Collateral or
any part thereof to Debtor, and the receipt of any of the same by Debtor shall
be complete and full acquittance for the Collateral so delivered, and Secured
Party thereafter shall be discharged from any liability or responsibility
therefor.
(c) So long as Secured Party exercises reasonable care with
respect to any Collateral in its
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possession, custody or control, Secured Party shall have no liability for any
loss of or damage to such Collateral, and in no event shall Secured Party have
liability for any diminution in value of Collateral occasioned by economic or
market conditions or events. Secured Party shall be deemed to have exercised
reasonable care within the meaning of the preceding sentence if the Collateral
in the possession, custody or control of Secured Party is accorded treatment
substantially equal to that which Secured Party accords its own property, it
being understood that Secured Party shall not have any responsibility for (a)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Collateral, whether or not
Secured Party has or is deemed to have knowledge of such matters, or (b) taking
any necessary steps to preserve rights against any Person with respect to any
Collateral.
ARTICLE IV
DEFAULT
-------
Section 4.01. Remedies. Upon the occurrence and during the
--------
continuance of an Event of Default (as defined in the Credit Agreement), Secured
Party shall have, in any jurisdiction where enforcement hereof is sought: (i)
in addition to all other rights and remedies that Secured Party may have under
applicable law, in equity, under this Agreement or under any other Loan
Document; and (ii) in addition to all rights and remedies of a Secured Party
under the Commercial Code; the following rights and remedies, all of which may
be exercised with or without notice to Debtor and without affecting the
obligations of Debtor hereunder or under any other Loan Document, or the
enforceability of the liens and security interests created hereby:
(a) To foreclose the liens and security interests created
hereunder or under any other agreement relating to any Collateral by any
available judicial procedure or without judicial process;
(b) To enter any premises where any Collateral may be located for
the purpose of securing, protecting, inventorying, appraising, inspecting,
repairing, preserving, storing, preparing, processing, taking possession of or
removing the same;
(c) To sell, assign, lease or otherwise dispose of any Collateral
or any part thereof either at public or private sale or at any broker's board,
in lot or in bulk,
15
for cash, on credit or otherwise, with or without representation or warranties
and upon such terms as shall be acceptable to Secured Party;
(d) To notify obligors on the Collateral that the Collateral has
been assigned to Secured Party and that all payments thereon are to be made
directly and exclusively to Secured Party;
(e) To collect by legal proceedings or otherwise all dividends,
distributions, interest, principal or other sums now or hereafter payable upon
or on account of the Collateral;
(f) To enter into any extension, reorganization, deposit, merger
or consolidation agreement, or any other agreement relating to or affecting the
Collateral, and in connection therewith Secured Party may deposit or surrender
control of the Collateral and/or accept other property in exchange for the
Collateral;
(g) To settle, compromise or release, on terms acceptable to
Secured Party, in whole or in part, any amounts owing on the Collateral and/or
disputes with respect thereto;
(h) To amend the terms of, extend the time of payment, make
allowances and adjustments to, and issue credits in connection with, the
Collateral in the name of Secured Party or in the name of Debtor;
(i) To enforce payment and prosecute any action or proceeding
with respect to any or all of the Collateral and take or bring, in the name of
Secured Party or in the name of Debtor, any and all steps, actions, suits or
proceedings deemed by Secured Party necessary or desirable to effect collection
of or to realize upon the Collateral, including any judicial or nonjudicial
foreclosure thereof or thereon, and Debtor specifically consents to any
nonjudicial foreclosure of any or all of the Collateral or any other action
taken by Secured Party which may release any obligor from personal liability on
any of the Collateral, and Debtor waives any right not expressly provided for in
this Agreement to receive notice of any public or private judicial or
nonjudicial sale or foreclosure of any security or any of the Collateral; and
any money or other property received by Secured Party in exchange for or on
account of the Collateral, whether representing collections or proceeds of
Collateral (and whether resulting from voluntary payments or foreclosure
16
proceedings or other legal action taken by Secured Party or Debtor) may be
applied to the Secured Obligations by Secured Party (without notice to Debtor)
in such order and manner as Secured Party in its sole discretion shall
determine, unless otherwise provided by the Credit Agreement or by any other
Loan Documents;
(j) To insure, process and preserve the Collateral;
(k) To exercise all rights, remedies, powers or privileges
provided under any of the Loan Documents or the Collateral;
(l) To remove, from any premises where the same may be
located,the Collateral and any and all documents, instruments, files and
records, and any receptacles and cabinets containing the same, relating to the
Collateral, and Secured Party may, at the cost and expense of Debtor, use such
of Debtor's supplies, equipment, facilities and space at Debtor's places of
business as may be necessary or appropriate to properly administer, process,
store,control, prepare for sale or disposition and/or sell or dispose of the
Collateral or to properly administer and control the handling of collections and
realizations thereon, and Secured Party shall be deemed to have a rent-free
tenancy of any premises of Debtor for such purposes and for such periods of time
as reasonably required by Secured Party;
(m) To receive, open and dispose of all mail addressed to Debtor
and notify postal authorities to change the address for delivery thereof to such
address as Secured Party may designate; provided that Secured Party agrees that
it will promptly deliver over to Debtor such opened mail as does not relate to
the Collateral; and
(n) To exercise all other rights, powers, privileges and remedies
of an owner of the Collateral; all at Secured Party's sole option and as Secured
Party in its sole discretion may deem advisable. Debtor will, at Secured Party's
request, assemble the Collateral and make it available to Secured Party at
places which Secured Party may designate, whether at the premises of Debtor or
elsewhere, and will make available to Secured Party, free of cost, all premises,
equipment and facilities of Debtor for the purpose of Secured Party's taking
possession of the Collateral or storing same or removing or putting the
Collateral in salable form or selling or disposing of same.
17
Section 4.02. Possession. Upon the occurrence and during the
----------
continuance of an Event of Default, Secured Party also shall have the right,
without notice or demand, either in person, by agent or by a receiver to be
appointed by a court of competent jurisdiction (and Debtor hereby expressly
consents upon the occurrence and during the continuance of an Event of Default
to the appointment of such a receiver), and without regard to the adequacy of
any security for the Secured Obligations, to take possession of the Collateral
or any part thereof and to collect and receive the rents, issues, profits,
income and proceeds thereof. Secured Party's taking posses sion of the
Collateral shall not cure or waive any Event of Default or notice thereof or
invalidate any act done pursuant to such notice. The rights, remedies and
powers of any receiver appointed by a court shall be as ordered by said court.
Section 4.03. Conduct of Sale.
---------------
(a) Any public or private sale or other disposition of the
Collateral may be held at any office of Secured Party, or at Debtor's place of
business, or at any other place permitted by applicable law, and without the
necessity of the Collateral being within the view of the prospective purchasers.
Secured Party may direct the order and manner of sale of the Collateral, or
portions thereof, as it in its sole and absolute discretion may determine, and
Debtor expressly waives any right to direct the order and manner of sale of any
Collateral. Secured Party or any Person on Secured Party's behalf may bid and
purchase at any such sale or other disposition. The net cash proceeds resulting
from the collection, liquidation, sale, lease or other disposition of the
Collateral shall be applied, first, to the expenses (including reasonable
attorneys' fees and disburse ments) of retaking, holding, storing, processing
and preparing for sale or lease,selling, leasing, collecting, liquidating and
the like, and then to the satisfaction of the Secured Obligations in such order
as shall be determined by Secured Party in its sole and absolute discretion, all
unless otherwise provided by the Credit Agreement or any other Loan Documents.
Debtor and any other Person then obligated therefor shall pay to Secured Party
on demand any deficiency with regard thereto which may remain after such sale,
disposition, collection or liquidation of the Collateral.
(b) Unless the Collateral is perishable or threatens to decline
speedily in value or is of a type customarily sold on a recognized market,
Secured Party will
18
send or otherwise make available to Debtor reasonable notice of the time and
place of any public sale thereof or of the time at, or after, which any private
sale thereof is to be made. The requirement of sending reasonable notice
conclusively shall be met if such notice is mailed, first class mail, postage
prepaid, to Debtor at its address set forth in the Credit Agreement, or
delivered or otherwise sent to Debtor, at least five (5) days before the date of
the sale. Debtor expressly waives any right to receive notice of any public or
private sale of any Collateral or other security for the Secured Obligations
except as expressly provided for in this paragraph.
(c) With respect to any Collateral consisting of securities,
partnership interests, joint venture interests, other investments or the like,
and whether or not any of such Collateral has been effectively registered under
the Securities Act of 1933 or other applicable laws, Secured Party may, in its
sole and absolute discretion, sell all or any part of such Collateral at private
sale in such manner and under such circumstances as Secured Party may deem
necessary or advisable in order that the sale may be lawfully conducted. Without
limiting the foregoing, Secured Party may (i) approach and negotiate with a
limited number of potential purchasers; and (ii) restrict the prospective
bidders or purchasers to persons who will represent and agree that they are
purchasing such Collateral for their own account for investment and not with a
view to the distribution or resale thereof. In the event that any such
Collateral is sold at private sale, Debtor agrees that if such Collateral is
sold for a price which Secured Party in good faith believes to be reasonable
under the circumstances then existing, then: (aa) the sale shall be deemed to
be commercially reasonable in all respects; (bb) the credit against the Secured
Obligations, to which Debtor may be entitled, shall not exceed the purchase
price; and (cc) Secured Party shall not incur any liability or responsibility to
Debtor in connection therewith, notwithstanding the possibility that a
substantially higher price might have been realized at a public sale. Debtor
recognizes that a ready market may not exist for such Collateral if it is not
regularly traded on a recognized securities exchange, and that a sale by Secured
Party of any such Collateral for an amount substantially less than a pro rata
share of the fair market value of the issuer's assets minus liabilities may be
commercially reasonable in view of the difficulties that may be encountered in
attempting to sell a large amount of such Collateral or Collateral that is
privately traded.
19
(d) Upon consummation of any sale of Collateral hereunder,
Secured Party shall have the right to assign, transfer and deliver to the
purchaser or purchasers thereof the Collateral so sold. Each such purchaser at
any such sale shall hold the Collateral so sold absolutely free from any claim
or right upon the part of Debtor or any other Person except a third party
lienholder permitted under the Loan Documents, and Debtor hereby waives (to the
extent permitted by applicable laws) all rights of redemption, stay and
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. If the sale of all or any
part of the Collateral is made on credit or for future delivery, Secured Party
shall not be required to apply any portion of the sales price to the Secured
Obligations until such amount actually is received by Secured Party, and any
Collateral so sold may be retained by Secured Party until the sale price is paid
in full by the purchaser or purchasers thereof. Secured Party shall not incur
any liability in case any such purchaser or purchasers shall fail to pay for the
Collateral so sold, and, in case of any such failure, the Collateral may be sold
again.
ARTICLE V
MISCELLANEOUS
-------------
Section 5.01. Attorney-in-Fact. Debtor hereby irrevocably nominates
----------------
and appoints Secured Party as its attorney-in-fact for the following purposes:
(a) to do all acts and things which Secured Party may deem necessary or
advisable to perfect, and continue perfected, the security interests created by
this Agreement and, upon the occurrence and during the continuance of an Event
of Default, to preserve, process, develop, maintain and protect the Collateral;
(b) upon the occurrence and during the continuance of an Event of Default, to do
any and every act which Debtor is obligated to do under this Agreement, at the
expense of the Debtor, and without any obligation to do so; (c) to prepare,
sign, file and/or record, for Debtor, in the name of the Debtor, any financing
statement, application for registration, or like paper, and to take any other
action deemed by Secured Party necessary or desirable in order to perfect or
maintain perfected the security interests granted hereby; and (d) upon the
occurrence and during the continuance of an Event of Default, to execute any and
all papers and instruments and do all other things necessary or desirable to
preserve and protect the Collateral and to protect Secured Party's security
interests therein; provided, however, that Secured Party shall be under no
obligation whatsoever to take any of the foregoing
20
actions, and, absent bad faith or actual malice, Secured Party shall have no
liability or responsibility for any act taken or omission with respect thereto.
Debtor hereby consents and agrees that, where applicable, the issuers of, the
obligors on, or the parties to any of the Collateral, shall be entitled to
accept the provisions of this Agreement as conclusive evidence of the right of
Secured Party to effect any transfer or exercise any right hereunder or with
respect to any such Collateral, notwithstanding any other notice or direction to
the contrary heretofore or hereafter given by Debtor or any other Person to such
issuers, obligors or parties.
Section 5.02. Costs and Expenses. Debtor agrees to pay to Secured
------------------
Party all costs and expenses (including, without limitation, reasonable
attorneys' fees and disbursements) incurred by Secured Party in the enforcement
or attempted enforcement of this Agreement, whether or not an action is filed in
connection therewith, and in connection with any waiver or amendment of any term
or provision hereof. All advances, charges, costs and expenses, including
reasonable attorneys' fees and disbursements, incurred or paid by Secured Party
in exercising any right, privilege, power or remedy conferred by this Agreement
(including, without limitation, the right to perform any Secured Obligation of
Debtor under the Loan Documents), or in the enforcement or attempted enforcement
thereof, shall be secured hereby and shall become a part of the Secured
Obligation and shall be paid to the Secured Party by Debtor, immediately upon
demand, together with interest thereon at the rate(s) provided for under the
Credit Agreement.
Section 5.03. Statute of Limitations and Other Laws. Until the
-------------------------------------
Secured Obligations shall have been paid and performed in full, and all
obligations of the Banks, or any of them, to advance funds under the Bank
Facilities, have been unconditionally and indefeasibly terminated and Bank
Facility Termination shall have occurred, the power of sale and all other
rights, remedies, and privileges which are granted hereunder shall continue to
exist and may be exercised by Secured Party at any time and from time to time
irrespective of the fact that any of the Secured Obligations may have become
barred by any statute of limitations. Debtor expressly waives the benefit of
any and all statutes of limitation, and any and all laws providing for exemption
of property from execution or for valuation and appraisal upon foreclosure, to
the maximum extent permitted by applicable law.
21
Section 5.04. Other Agreements. The rights and remedies of Secured
----------------
Party upon the occurrence and continuance of an Event of Default (whether such
rights and remedies are conferred by statute, by rule of law, by this Agreement,
the Loan Documents or otherwise) may be exercised by Secured Party, in the sole
discretion of Secured Party, either alternatively, concurrently, or
consecutively in any order. The exercise by Secured Party of any one or more of
such rights and remedies shall not be construed to be an election of remedies
nor a waiver of any other rights and remedies which may be available to Secured
Party.
Section 5.05. Understandings With Respect to Waivers and Consents.
---------------------------------------------------
Debtor warrants and agrees that each of the waivers and consents set forth
herein are made after consultation with legal counsel and with full knowledge of
their significance and consequences, with the understanding that events giving
rise to any defense or right waived may diminish, destroy or otherwise adversely
affect rights which Debtor otherwise may have against Secured Party or others,
or with respect to the Collateral, and that, under the circumstances, the
waivers and consents herein given are reasonable and not contrary to public
policy or law. If any of the waivers or consents herein are determined to be
contrary to any applicable law or public policy, such waivers and consents shall
be effective to the maximum extent permitted by law.
Section 5.06. Release of Debtor. This Agreement and all Secured
-----------------
Obligations of Debtor hereunder shall be released when all Secured Obligations
have been paid in full in cash or otherwise performed in full and when all
obligations which the Banks, or any of them, may have to advance funds under the
Bank Facilities, have been unconditionally and indefeasibly terminated and Bank
Facility Termination shall have occurred. Upon such release of Debtor's Secured
Obligations hereunder, Secured Party shall return any pledged Collateral to
Debtor, or to the Person or Persons legally entitled thereto, and shall endorse,
execute, deliver, record and file all instruments and documents, and do all
other acts and things, reasonably required for the return of the Collateral to
Debtor, or to the Person or Persons legally entitled thereto, and to evidence or
document the release of Secured Party's interests arising under this Agreement,
all as reasonably requested by, and at the sole expense of, Debtor.
22
Section 5.07. Indemnity. Neither Secured Party nor any of the Banks
---------
shall be obligated to perform or discharge any obligation or duty to be
performed or discharged by Debtor with respect to the Collateral or hereunder.
Debtor hereby agrees to indemnify Secured Party and each of the Banks
(collectively, the "Indemnified Parties") for, and to save them harmless from,
any and all liability arising from the Collateral or this Agreement. This
Agreement shall not place responsibility for the control, care, management,
operation or repair of the Collateral upon any of the Indemnified Parties; nor
shall this Agreement cause any of the Indemnified Parties to be responsible or
liable for any negligence in the management, operation, upkeep, repair or
control of the Collateral which results in loss, injury or death to any tenant,
guest, licensee, employee or stranger (provided that this Section 5.07 shall not
act to relieve any Indemnified Party from liability which results from such
Indemnified Party's own gross negligence or willful misconduct).
Section 5.08 Governing Law. This Agreement shall be governed by,
-------------
and shall be construed and enforced in accordance with, the internal laws of the
State of Illinois without regard to conflict of law principles.
Section 5.09. Counterparts. This Agreement may be executed in any
------------
number of separate counterparts with the same effect as if the signatures hereto
and hereby were upon the same instrument. All such counterparts shall together
constitute one and the same document.
23
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
DEBTOR: SECURED PARTY:
EMPRESS ENTERTAINMENT, INC., XXXXX FARGO BANK, National Association
a Delaware corporation
By /s/ Xxxx Xxxxxxxx By /s/ Xxxxxx X. Xxxxx
-------------------------- -------------------------
Name Xxxx Xxxxxxxx Name Xxxxxx X. Xxxxx
------------------------ ------------------------
Title V.P. ; CFO Title SVP
----------------------- -----------------------
STATE OF ILLINOIS )
) ss
COUNTY OF XXXX )
The foregoing instrument was acknowledged before me on June 17, 1998,
by Xxxx Xxxxxxxx as Vice President - CFO of EMPRESS ENTERTAINMENT, INC.
Xxxxxx Xxxxx [SEAL]
----------------------
Notary Public
STATE OF ILLINOIS )
) ss
COUNTY OF XXXX )
The foregoing instrument was acknowledged before me on June 17, 1998,
by Xxxxxx X. Xxxxx as Senior Vice President of XXXXX FARGO BANK, National
Association.
Xxxxxx Xxxxx
----------------------
Notary Public
[SEAL]
24
