COLLATERAL ASSIGNMENT
THIS COLLATERAL ASSIGNMENT (the "ASSIGNMENT") is made as of August 22,
1996, by and among CASINO MAGIC OF LOUISIANA, CORP., a Louisiana corporation
(the "COMPANY"), in favor of FIRST UNION BANK OF CONNECTICUT, a Connecticut
banking corporation, as trustee for the benefit of the holders of the Notes
(in such capacity, the "TRUSTEE").
RECITALS
A. NOTES. Pursuant to that certain Indenture dated as of August 22,
1996, by and among the Company, as issuer, Jefferson Casino Corporation, a
Louisiana corporation, as guarantor, and the Trustee, as trustee (the
"INDENTURE"), the Company has issued $115,000,000 principal amount of 13%
First Mortgage Notes due 2003 With Contingent Interest (the "Series A Notes,"
and together with any Series B Notes issued in exchange therefor, the
"NOTES").
B. PURPOSE.The parties have entered into this Assignment to
evidence the Company's collateral assignment for security of certain contracts
and documents related to the construction and operation of Casino
Magic-Bossier City. Capitalized terms used herein without definition shall
have the meanings assigned to such terms in the Indenture.
Agreement
NOW, THEREFORE, in consideration of the foregoing premises and in order to
induce the
holders of the Notes to purchase the Notes, the Company agrees as follows:
1. XXXXXXXXXX.Xx security for the due and punctual payment and
performance of all indebtedness and obligations of the Company, now or
hereafter due under the Indenture, the Notes or any Collateral Documents,
whether or not arising after the commencement of a proceeding under Bankruptcy
Law (including post-petition interest) and whether or not recovery of any such
obligation or liability may be barred by a statute of limitations or
prescriptive period or such obligation or liability may otherwise be
unenforceable (collectively, the "OBLIGATIONS"), from the Company to the
Trustee, as trustee for the holders of the Notes under the Indenture, the
Company hereby assigns and transfers to the Trustee and hereby grants to the
Trustee a security interest in all of the Company's right, title and interest,
whether now existing or hereafter arising and whether now owned or hereafter
acquired, in and to (a) all contracts, including without limitation,
construction contracts and architectural design, engineering and development
contracts and agreements, subcontracts, service agreements, supply agreements
and other such contracts and agreements between the Company and other persons,
and all amendments, modifications, additions and changes thereto, related to
Casino Magic-Bossier City, (b) all plans, specifications, working drawings,
shop drawings, surveys and other such documents, and all amendments,
modifications, additions and changes thereto, related to Casino Magic-Bossier
City, (c) the Management Agreement, (d) all other contracts, agreements,
documents and instruments now existing or hereafter arising related to Casino
Magic-Bossier City, including without limitation, any and all construction,
architectural and engineering contracts, plans and specifications, drawings,
and surveys, bonds, permits, licenses and other governmental approvals
(collectively, the "CONTRACTS AND DOCUMENTS"), and (e) all proceeds of the
foregoing. Notwithstanding the foregoing, the Contracts and Documents shall
not include any license, permit or other approval of or by any Governmental
Authority to the extent that, under the terms and conditions of such approval
or under applicable law, it cannot be subjected to a Lien in favor of the
Trustee without the approval of the relevant Governmental Authority, to the
extent that such
approval has not been obtained (collectively, the "EXCLUDED Assets"); provided
further, that (I) any such Excluded Asset now or hereafter acquired by the
Company shall automatically become part of the Contracts and Documents when
and to the extent it may subsequently be made subject to such a lien and/or
such approval has been obtained and (ii) proceeds of any Excluded Assets, such
as Gaming Licenses, shall nevertheless be subject to the assignment hereunder.
The Contracts and Documents include, without limitation, those certain
contracts and agreements described in Exhibit "A" attached hereto.
2. RIGHTS OF THE COMPANY.This Assignment is an absolute assignment
for security purposes only. Accordingly, notwithstanding anything to the
contrary set forth herein, the Company is hereby granted a license and shall
retain all rights with respect to the Contracts and Documents, including
without limitation, the right to enforce all rights of the Company thereunder,
except during a period when a "Default" or an "Event of Default" (as such
terms are defined in the Indenture) has occurred and is continuing.
3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.The Company
represents and warrants to the Trustee (a) that it has not assigned or granted
a security interest in any of the Contracts and Documents or the proceeds
thereof to anyone other than the Trustee, and (b) that it is not in default
and that no event has occurred that with notice or lapse of time or both would
constitute a default by the Company, or to its knowledge any other party,
under any of the Contracts and Documents.
4. COVENANTS OF THECOMPANY. The Company covenants and agrees in
favor of the Trustee (a) that it will not further assign, encumber or suffer
the assignment or encumbrance of any of the Contracts and Documents or the
proceeds thereof without the prior written consent of the Trustee pursuant to
or as expressly permitted under the Indenture, (b) that it will faithfully
abide by, perform and discharge each and every obligation, covenant and
agreement of the Company under the Contracts and Documents, (c) that it will
not modify, amend, supplement or in any way join in the release or discharge
of any obligations or rights of the Company under any of the Contracts and
Documents in any material way unless (i) such change is commercially
reasonable, as certified by the Company to the Independent Construction
Consultant, and (ii) the Independent Construction Consultant under the Cash
Collateral and Disbursement Agreement consents to such change in writing, and
(d) that it will not perform any work pursuant to any change order or
directive unless the same is issued and executed in accordance with the terms
and conditions of the applicable Contract or Document.
5. LIMITATION OF TRUSTEE'S OBLIGATIONS. Nothing in this Assignment
shall constitute an assumption of any obligation by the Trustee under the
Contracts and Documents. The Company shall continue to be liable for all
obligations thereunder and hereby agrees to perform all such obligations, to
comply with all terms and conditions of the Contracts and Documents, and to
take such steps as may be necessary or appropriate to secure performance by
all other parties thereto. The Company shall defend, indemnify and hold the
Trustee harmless from and against all losses, costs, liabilities and expenses,
including attorneys' fees, arising from or related to any failure by the
Company to perform any obligation of the Company under any of the Contracts
and Documents, such indemnity and hold harmless agreement to survive the
payment and performance of the Obligations.
6. CURE BY TRUSTEE. At any time upon and during the continuation of a
Default or an Event of Default, the Trustee shall have the right, but shall
have no obligation, to take all actions that the Trustee may determine to be
necessary or appropriate to cure any default under any of the Contracts and
Documents and to protect the rights of the Company or the Trustee thereunder,
and may do so in the Trustee's name, in the name of the Company or otherwise.
If any such action taken by the Trustee shall prove to be inadequate or
invalid in whole or in part, the Trustee shall not incur any liability on
account thereof, and the Company hereby agrees to defend, indemnify and hold
the Trustee harmless from and against all losses, costs, liabilities and
expenses, including reasonable attorneys' fees, which the Trustee may incur or
to which it may become subject in exercising any of its rights under this
Assignment, except for those arising from the gross negligence or willful
misconduct of the Trustee, such indemnity and hold harmless agreement to
survive the payment and performance of the Obligations.
7. RIGHTS AND REMEDIES.
(a) Upon the occurrence of a Default or an Event of Default under the
Indenture irrespective of whether a notice of default has been given with
respect to such Default or Event of Default (unless required by the Indenture
or any other Collateral Document), and with or without bringing any action or
proceeding, the Trustee may, at its option, succeed to and proceed to enforce
all of the rights, interests and remedies of the Company under the Contracts
and Documents, amend, modify, cancel, terminate or replace the same, reassign
the Company's right, title and interest therein to any other person, and
exercise any and all other rights of the Company under the Contracts and
Documents, either in person or through an agent, receiver or keeper, without
further notice to or consent by the Company, and without regard to the
adequacy of security for the Obligations or the availability of any other
remedies. The exercise of any of the foregoing rights or remedies shall not
cure or waive any Default under the Indenture, or waive, modify or affect any
notice of default thereunder, or invalidate any act done pursuant to any such
notice. In addition to the rights and remedies of the Trustee as set forth in
this Assignment, the Trustee shall be entitled to the benefit of all other
rights and remedies set forth in the Indenture, at law or in equity.
(b) The provisions of this Subparagraph 7(b) shall, without limiting the
generality of any other provision of this Assignment, be applicable in the
event any foreclosure shall take place in Louisiana on any right, title or
interest of the Company in and to the Contracts and Documents or any proceeds
thereof or, in connection with any foreclosure hereunder, Louisiana law shall
otherwise be applicable. Trustee, 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 this Assignment and sell its right, title and interest to the
Contracts and Documents and the proceeds, or any portion thereof, under a
judgment or decree of a court or courts of competent jurisdiction. For the
purposes of Louisiana executory process procedures, the Company does hereby
acknowledge the Obligations and confess judgment in favor of Trustee for the
FULL amount of such Obligations. The Company does by these presents consent
and agree that upon the occurrence of a Default or Event of Default under the
Indenture it shall be lawful for Trustee to cause all of its right, title and
interest to the Contract and Documents and the proceeds, or any portion
thereof, to be seized and sold under executory or ordinary process, at
Trustee's sole option, without appraisement, appraisement being hereby
expressly waived, 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 (2) 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 Company hereby waives in favor of Trustee:
(a) 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; (b) the demand and three (3) days delay accorded by Louisiana Code
of Civil Procedure Articles 2639 and 2721; (c) the notice of seizure required
by Louisiana Code of Civil Procedure Articles 2293 and 2721; (d) the three (3)
days delay provided by Louisiana Code of Civil Procedure Articles 2331, 2722;
and (e) benefit of the other provisions of Louisiana Code of Civil Procedure
Articles 2331, 2722 and 2723 not specifically mentioned above. In the event
the Company's right, title or interest in and to the Contracts and Documents
or any proceeds thereof, or any part thereof, is seized as an incident to an
action for the recognition or enforcement of this assignment by executory
process, ordinary process, sequestration, writ of fieri facias, or otherwise,
the Company and Trustee agree that the court issuing any such order shall, if
petitioned for by Trustee, direct the applicable sheriff or marshal to appoint
as a keeper of the Company's right, title or interest in and to the Contracts
and Documents and the proceeds, if applicable, Trustee or any agent designated
by Trustee or any Person named by Trustee at the time such seizure is
effected. This designation is pursuant to Louisiana Revised Statutes
9:5136-9:5140.2 and Trustee shall be entitled to all the rights and benefits
afforded thereunder as the same may be amended. It is hereby agreed that the
keeper shall be entitled to receive as compensation, in excess of its
reasonable costs and expenses incurred in the administration or preservation
of the Company's right, title or interest in and to the Contracts and
Documents and the proceeds, an amount equal to $250.00 per day payable on a
monthly basis. The designation of keeper made herein shall not be deemed to
require Trustee to provoke the appointment of such a keeper.
8. ADDITIONAL INSTRUMENTS. With respect to both existing and future
Contracts and Documents, the Company hereby agrees to execute and deliver such
additional assignments and other documents as the Trustee may reasonably
request in order to implement the purpose and intent of this Assignment.
9. MISCELLANEOUS. This Assignment shall inure to the BENEFIT of and
be binding upon the parties hereto and their respective heirs, legal
representatives, successors and assigns. In any action or proceeding arising
from or related to this Assignment, the prevailing party shall be entitled to
recover its reasonable costs and attorneys' fees. The reference to
"attorneys' fees" in this Paragraph and in all other places in this Assignment
shall include without limitation such reasonable amounts as may then be
charged by the Trustee for legal services furnished by attorneys in the employ
of the Trustee, at rates not exceeding those that would be charged by outside
attorneys for comparable services. This Assignment shall be governed by the
laws of the State of Louisiana.
10. GAMING LAWS AND REGULATIONS.The Company acknowledges that, 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.
4:501, et seq, and the Louisiana Gaming Control Law, La. R.S. 27:1-3,
11-26, 31 and 32, and the regulations promulgated pursuant to each such law,
all as amended from time to time. The parties hereto further acknowledge that
the Gaming License held by the Company is not part of the collateral of this
Assignment and that, 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 Assignment under
the Defaults and Remedies provisions of this Assignment. The parties hereto
also acknowledge that 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 gaining operation, the sale of
collateral may be denied by Gaming Authorities or delayed pending Gaming
Authority Approval.
11. CONFLICTS WITH INDENTURE.Notwithstanding any other provision of this
Assignment, the terms and provisions of this Assignment shall be subject and
subordinate to the terms of the Indenture. To the extent that the Indenture
provides the Company with a particular cure or notice period, or establishes
any limitations or conditions on Trustee's actions with regard to a particular
set of facts, the Company shall be entitled to the same cure periods and
notice periods, and Trustee shall be subject to the same limitations and
conditions in place of the cure periods, notice periods, limitations and
conditions provided for under the Indenture; provided, however, such cure
periods, notice periods, limitations and conditions shall not be cumulative as
between the Indenture and this Assignment. In the event of any conflict or
provisions of this Assignment and those of the Indenture, including without
limitation, any conflicts or inconsistencies in any definitions herein or
therein, the provisions or definitions of the Indenture shall govern.
IN WITNESS WHEREOF, the Company has executed this Assignment as of the date
first above
COMPANY:
CASINO MAGIC OF LOUISIANA, CORP., a Louisiana
corporation
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President and General Council
ACKNOWLEDGED AND AGREED
FIRST UNION BANK OF CONNECTICUT, a Connecticut banking corporation, as trustee
for the benefit of the holders of the Notes
By: /s/ W. Xxxxxxx Xxxxxx
Name: W. Xxxxxxx Xxxxxx
Title:Vice President
S-1
EXHIBIT "A"
CONTRACTS AND DOCUMENTS
1 . Standard Form of Agreement Between Owner and Contractor dated June 12,
1996, by and between Casino Magic of Louisiana, Corp., as successor in
interest to Casino Magic Corp., and X. X. Xxxxxxx Construction
Corporation.
2. Standard Form of Agreement Between Owner and Architect dated June 18,
1996, by and between Casino Magic Corp. of Louisiana, and Xxxxxxxx Design
Group, Inc.
3. Management Agreement dated August 21, 1996, by and among Casino Magic
Corp., Casino Magic of Louisiana, Corp., and Casino Magic Management Services,
Inc.
4. Letter Agreement dated July 26, 1996, by and between Service Marine
Industries, Inc. and Casino Magic of Louisiana, Corp., as successor in
interest to Casino Magic, Corp.
5. Contract for demolition and removal services dated August 7, 1996, by
and between Bird & Son and Casino Magic of Louisiana, Corp., as successor in
interest to Casino Magic, Corp.
6. Contract for fill and compaction work dated June 3, 1996, by and
between Xxx Xxxxx Construction Company and Casino Magic of Louisiana, Corp.,
as successor in interest to Casino Magic Corp.
A-1
