SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "Security Agreement"), is entered into as
of June 8, 2007, among RIVIERA HOLDINGS CORPORATION, a Nevada corporation (the
"Borrower"), certain Domestic Subsidiaries of the Borrower from time to time
party hereto (individually a "Guarantor" and collectively the "Guarantors"; the
Guarantors, together with the Borrower, individually an "Obligor" and
collectively the "Obligors") and WACHOVIA BANK, NATIONAL ASSOCIATION, in its
capacity as Administrative Agent under the Credit Agreement referred to below
(in such capacity, the "Administrative Agent") for the several banks and other
financial institutions as may from time to time become parties to such Credit
Agreement (individually a "Lender" and collectively the "Lenders").
RECITALS
WHEREAS, pursuant to that certain Credit Agreement dated as of the date
hereof (as amended, modified, extended, restated, replaced, or supplemented from
time to time, the "Credit Agreement"), among the Borrower, the Guarantors, the
Lenders party thereto and the Administrative Agent, the Lenders have agreed to
make Loans and to issue and/or acquire participation interests in Letters of
Credit upon the terms and subject to the conditions set forth therein; and
WHEREAS, it is a condition precedent to the effectiveness of the Credit
Agreement and the obligations of the Lenders to make their respective Loans and
to issue and/or acquire participation interests in Letters of Credit under the
Credit Agreement that the Obligors shall have executed and delivered this
Security Agreement to the Administrative Agent for the ratable benefit of the
Lenders.
NOW, THEREFORE, in consideration of these premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. Definitions.
(a) Unless otherwise defined herein, capitalized terms used
herein shall have the meanings ascribed to such terms in the Credit
Agreement, and the following terms which are defined in the Uniform
Commercial Code from time to time in effect in the State of New York
(the "UCC") are used herein as so defined: Accessions, Accounts,
As-Extracted Collateral, Chattel Paper, Commercial Tort Claims,
Consumer Goods, Control, Deposit Accounts, Documents, Electronic
Chattel Paper, Equipment, Farm Products, Fixtures, General Intangibles,
Goods, Instruments, Inventory, Investment Property, Letter-of-Credit
Rights, Manufactured Homes, Proceeds, Securities Account, Securities
Intermediary, Software, Supporting Obligations and Tangible Chattel
Paper. For purposes of this Security Agreement, the term "Lender" shall
include any Secured Hedging Agreement Provider.
(b) In addition, the following term shall have the following
meaning:
"Secured Obligations" means: (i) all of the Credit Party
Obligations (including obligations under Secured Hedging Agreements),
howsoever evidenced, created, incurred or acquired, whether primary,
secondary, direct, contingent, or joint and several and (ii) all
expenses and charges, legal and otherwise, incurred by the
Administrative Agent, the Lenders and/or the Secured Hedging Agreement
Providers in collecting or enforcing any of the Credit Party
Obligations or in realizing on or protecting any security therefor,
including without limitation the security interest granted hereunder.
2. Grant of Security Interest in the Collateral.
(a) To secure the prompt payment and performance in full when
due, whether by lapse of time, acceleration, mandatory prepayment or
otherwise, of the Secured Obligations, each Obligor hereby grants to
the Administrative Agent, for the ratable benefit of the Lenders, a
continuing security interest in, and a right to set off against, any
and all right, title and interest of such Obligor in and to the
following, whether now owned or existing or owned, acquired, or arising
hereafter (collectively, the "Collateral"):
(i) all Accounts;
(ii) all cash and Cash Equivalents;
(iii) all Chattel Paper (including Electronic Chattel Paper);
(iv) those certain Commercial Tort Claims of such Obligor set
forth on Schedule 2(a)(iv) attached hereto (as such Schedule may be
updated from time to time by such Obligor);
(v) all Copyright Licenses;
(vi) all Copyrights;
(vii) all Deposit Accounts;
(viii) all Documents;
(ix) all Equipment;
(x) all Fixtures;
(xi) all General Intangibles;
(xii) all Goods;
(xiii) all Instruments;
(xiv) all Inventory;
(xv) all Investment Property;
(xvi) all Letter-of-Credit Rights;
(xvii) all Material Contracts and all such other agreements,
contracts, leases, licenses, tax sharing agreements
or hedging arrangements now or hereafter entered
into by an Obligor, as such agreements may be amended
or otherwise modified from time to time
(collectively, the "Assigned Agreements"),
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including without limitation, (A) all rights of
an Obligor to receive moneys due and to become due
under or pursuant to the Assigned Agreements, (B)
all rights of an Obligor to receive proceeds
of any insurance, indemnity, warranty or guaranty
with respect to the Assigned Agreements, (C) claims
of an Obligor for damages arising out of or for
breach of or default under the Assigned Agreements
and (D) the right of an Obligor to terminate the
Assigned Agreements, to perform thereunder and to
compel performance and otherwise exercise all
remedies thereunder;
(xviii) all Patent Licenses;
(xix) all Patents;
(xx) all Payment Intangibles;
(xxi) all Trademark Licenses;
(xxii) all Trademarks;
(xxiii) all Securities Accounts;
(xxiv) all Software;
(xxv) all Supporting Obligations;
(xxvi) all books, records, ledger cards, files,
correspondence, computer programs, tapes, disks, and related data
processing software (owned by such Obligor or in which it has an
interest) that at any time evidence or contain information relating to
any Collateral or are otherwise necessary or helpful in the collection
thereof or realization thereupon;
(xxvii) all other personal property of any kind or type
whatsoever owned by such Obligor; and
(xxviii) to the extent not otherwise included, all Accessions,
Proceeds and products of any and all of the foregoing.
(b) The Obligors and the Administrative Agent, on behalf of
the Lenders, hereby acknowledge and agree that the security interest
created hereby in the Collateral (i) constitutes continuing collateral
security for all of the Secured Obligations, whether now existing or
hereafter arising and (ii) is not to be construed as a present
assignment of any Intellectual Property.
(c) The term "Collateral" shall include any Secured Hedging
Agreement and any rights of the Obligors thereunder only for purposes
of this Section 2.
(d) Notwithstanding anything herein to the contrary, the term
"Collateral" shall not include the Excluded Assets or any portion
thereof.
3. Provisions Relating to Accounts, Contracts and Agreements.
(a) Anything herein to the contrary notwithstanding, each of
the Obligors shall remain liable under each of its Accounts, contracts
and agreements to observe and perform all of the conditions and
obligations to be observed and performed by it thereunder, all in
accordance with the terms of any agreement giving rise to each such
Account or the terms of such contract or agreement. Neither the
Administrative Agent nor any Lender shall have any obligation or
liability under any Account (or any agreement giving rise thereto),
contract or agreement by reason of or arising out of this Security
Agreement or the receipt by the Administrative Agent or any Lender of
any payment relating to such Account, contract or agreement pursuant
hereto, nor shall the Administrative Agent or any Lender be obligated
in any manner to perform any of the obligations of an Obligor under or
pursuant to any Account (or any agreement giving rise thereto),
contract or agreement, to make any payment, to make any inquiry as to
the nature or the sufficiency of any payment received by it or as to
the sufficiency of any performance by any party under any Account (or
any agreement giving rise thereto), contract or agreement, to present
or file any claim, to take any action to enforce any performance or to
collect the payment of any amounts which may have been assigned to it
or to which it may be entitled at any time or times.
(b) The Administrative Agent hereby authorizes the Obligors to
collect the Accounts; provided, that the Administrative Agent may
curtail or terminate such authority at any time after the occurrence
and during the continuation of an Event of Default. If required by the
Administrative Agent at any time after the occurrence and during the
continuation of an Event of Default, any payments of Accounts, when
collected by the Obligors (i) shall be forthwith (and in any event
within two (2) Business Days) deposited by the Obligors in a collateral
account maintained under the sole dominion and control of the
Administrative Agent, subject to withdrawal by the Administrative Agent
for the account of the Lenders only as provided in Section 12 hereof,
and (ii) until so turned over, shall be held by the Obligors in trust
for the Administrative Agent and the Lenders, segregated from other
funds of the Obligors.
(c) At any time and from time to time, the Administrative
Agent shall have the right, but not the obligation, to make test
verifications of the Accounts in any manner and through any medium that
it reasonably considers advisable, and the Obligors shall furnish all
such assistance and information as the Administrative Agent may require
in connection with such test verifications. Upon the occurrence and
during the continuance of an Event of Default and upon the
Administrative Agent's request and at the expense of the Obligors, the
Obligors shall cause independent public accountants or others
satisfactory to the Administrative Agent to furnish to the
Administrative Agent reports showing reconciliations, aging and test
verifications of, and trial balances for, the Accounts. The
Administrative Agent in its own name or in the name of others may
communicate with account debtors on the Accounts to verify with them to
the Administrative Agent's satisfaction the existence, amount and terms
of any Accounts.
4. Representations and Warranties. Each Obligor hereby represents and
warrants to the Administrative Agent, for the benefit of the Lenders, that so
long as any of the Secured Obligations (other than contingent indemnity
obligations that survive termination of the Credit Documents pursuant to the
stated terms thereof) remain outstanding, any Credit Document or Secured Hedging
Agreement is in effect, and until all of the Commitments shall have been
terminated:
(a) Chief Executive Office; Books & Records; Legal Name; State
of Formation. As of the Closing Date, each Obligor's chief executive
office and chief place of business are (and for the prior four (4)
months has been) located at the locations set forth on Schedule 3.19(c)
to the Credit Agreement, and as of the Closing Date each Obligor keeps
its books and records at such locations. As of the Closing Date, each
Obligor's exact legal name is as shown in this Security Agreement and
its state of incorporation or organization is (and for the prior four
(4) months has been) the location set forth on Schedule 3.3 to the
Credit Agreement. No Obligor has in the four (4) months preceding the
Closing Date changed its name, been party to a merger, consolidation or
other change in structure or used any tradename not disclosed on
Schedule 4(a) attached hereto (as updated from time to time).
(b) Location of Tangible Collateral. As of the Closing Date,
the location of all tangible Collateral owned by each Obligor is as
shown on Schedule 3.19(b) to the Credit Agreement.
(c) Ownership. Each Obligor is the legal and beneficial owner
of its Collateral and, subject to Section 2(b), has the right to
pledge, sell, assign or transfer the same.
(d) Security Interest/Priority. This Security Agreement
creates a valid security interest in favor of the Administrative Agent,
for the benefit of the Lenders, in the Collateral of such Obligor and,
when properly perfected by filing, obtaining possession, the granting
of Control to the Administrative Agent or otherwise, shall constitute a
valid first priority, perfected security interest in such Collateral,
to the extent such security interest can be perfected by (i) filing,
obtaining possession, the granting of Control or otherwise under the
UCC, (ii) by filing an appropriate notice with the United States Patent
and Trademark Office or the United States Copyright Office, or (iii)
such other action as may be required pursuant to any applicable
jurisdictions' certificate of title statute, free and clear of all
Liens except for Permitted Liens.
(e) Consents. Except for (i) the filing or recording of UCC
financing statements, (ii) the filing of appropriate notices with the
United States Patent and Trademark Office and the United States
Copyright Office, (iii) obtaining Control to perfect the Liens created
by this Security Agreement, (iv) compliance with the Federal Assignment
of Claims Act or comparable state law, and/or (v) the filing,
registration or other action required pursuant to any applicable
certificate of title statute, no consent or authorization of, filing
with, or other act by or in respect of, any arbitrator or Governmental
Authority and no consent of any other Person (including, without
limitation, any stockholder, member or creditor of such Obligor) is
required (A) for the grant by such Obligor of the security interest in
the Collateral granted hereby or for the execution, delivery or
performance of this Security Agreement by such Obligor or (B) for the
perfection of such security interest or, subject to necessary approvals
from the applicable Gaming Authorities, the exercise by the
Administrative Agent of the rights and remedies provided for in this
Security Agreement.
(f) Types of Collateral. None of the Collateral consists of,
or is the Proceeds of, As-Extracted Collateral, Consumer Goods, Farm
Products, Manufactured Homes or standing timber (as such term is used
in the UCC).
(g) Accounts. With respect to the Accounts of the Obligors:
(i) the goods sold and/or services furnished giving rise to each
Account are not subject to any security interest or Lien except the
first priority, perfected security interest granted to the
Administrative Agent herein and except for Permitted Liens; (ii) each
Account and the papers and documents of the applicable Obligor relating
thereto are genuine and in all material respects what they purport to
be; (iii) each Account arises out of a bona fide transaction for goods
sold and delivered (or in the process of being delivered) by an Obligor
or for services actually rendered by an Obligor, which transaction was
conducted in the ordinary course of the Obligor's business and was
completed in accordance with the terms of any documents pertaining
thereto; (iv) no Account of an Obligor is evidenced by any Instrument
or Chattel Paper unless such Instrument or Chattel Paper has been
theretofore endorsed over and delivered to, or submitted to the Control
of, the Administrative Agent; (v) the amount of each Account as shown
on the applicable Obligor's books and records, and on all invoices and
statements which may be delivered to the Administrative Agent with
respect thereto, is due and payable to the applicable Obligor and is
not in any way contingent; (vi) to each of the Obligor's knowledge, the
account debtor with respect to each Account has the capacity to
contract; (vii) no surety bond was required or given in connection with
any Account of an Obligor or the contracts or purchase orders out of
which they arose; (viii) no Account is evidenced by a judgment, there
are no set-offs, counterclaims or disputes existing or asserted with
respect to any material Account, and no Obligor has made any agreement
with any account debtor for any deduction from any Account except for
deductions made in the ordinary course of its business; (ix) there are
no facts, events or occurrences which in any material respect impair
the validity or enforcement of any Account or tend to materially reduce
the amount payable thereunder as shown on the applicable Obligor's
books and records; and (x) the right to receive payment under each
Account is assignable except where the account debtor with respect to
such Account is a Governmental Authority, to the extent assignment of
any such right to payment is prohibited or limited by applicable law,
regulations, administrative guidelines or contract.
(h) Inventory. No Inventory of an Obligor is held by a third
party (other than an Obligor) pursuant to consignment, sale or return,
sale on approval or similar arrangement.
(i) Intellectual Property.
(i) Schedule 3.16 to the Credit Agreement includes
all Intellectual Property owned by or licensed by or to the
Obligors as of the date hereof.
(ii) All Intellectual Property of each Obligor is
valid, subsisting, unexpired, enforceable and has not been
abandoned, and each Obligor is legally entitled to use each of
its tradenames.
(iii) Except as set forth in Schedule 3.16 to the
Credit Agreement, none of the Intellectual Property of the
Obligors is the subject of any licensing or franchise
agreement.
(iv) No holding, decision or judgment has been
rendered by any Governmental Authority which would limit,
cancel or question the validity of any Intellectual Property
of the Obligors.
(v) No action or proceeding is pending seeking to
limit, cancel or question the validity of any Intellectual
Property of the Obligors, or which, if adversely determined,
would have a material adverse effect on the value of any such
Intellectual Property.
(vi) All applications pertaining to the Intellectual
Property of each Obligor have been duly and properly filed,
and all registrations or letters pertaining to such
Intellectual Property have been duly and properly filed and
issued, and all of such Intellectual Property is valid and
enforceable.
(vii) No Obligor has made any assignment or entered
into any agreement in conflict with the security interest of
the Administrative Agent in the Intellectual Property of each
Obligor hereunder.
(j) Documents, Instruments and Chattel Paper. Set forth on
Schedule 4(j) is a description of all Documents, Instruments, and
Tangible Chattel Paper of the Obligors as of the Closing Date. All
Documents, Instruments and Chattel Paper describing, evidencing or
constituting Collateral are, to the Obligors' knowledge, complete,
valid, and genuine.
(k) Equipment. With respect to each Obligor's Equipment: (i)
such Obligor has good and marketable title thereto and (ii) all such
Equipment is in normal operating condition and repair, ordinary wear
and tear alone excepted (subject to casualty events), and is suitable
for the uses to which it is customarily put in the conduct of such
Obligor's business.
(l) Restrictions on Security Interest. None of the Obligors is
party to any material license or any material lease that contains
legally enforceable restrictions on the granting of a security interest
therein, other than with respect to the Casino Licenses.
(m) Collateral Requiring Control to Perfect. Set forth on
Schedule 4(m) is a description of all Deposit Accounts, Electronic
Chattel Paper, Letter-of-Credit Rights, Securities Accounts and
uncertificated Investment Property of the Obligors as of the Closing
Date, including the name and address of (i) in the case of a Deposit
Account, the depository institution, (ii) in the case of Electronic
Chattel Paper, the account debtor, (iii) in the case of
Letter-of-Credit Rights, the issuer or nominated person, as applicable,
and (iv) in the case of a Securities Account or other uncertificated
Investment Property, the Securities Intermediary or issuer, as
applicable.
5. Covenants. Each Obligor covenants that, so long as any of the
Secured Obligations (other than contingent indemnity obligations that survive
termination of the Credit Documents pursuant to the stated terms thereof) remain
outstanding, any Credit Document or Secured Hedging Agreement is in effect, and
until all of the Commitments shall have been terminated, such Obligor shall:
(a) Perfection of Security Interest by Filing, Etc. Execute
and deliver to the Administrative Agent and/or file such agreements,
assignments or instruments (including affidavits, notices,
reaffirmations, amendments and restatements of existing documents, and
any document as may be necessary if the law of any jurisdiction other
than New York becomes or is applicable to the Collateral or any portion
thereof, in each case, as the Administrative Agent may reasonably
request) and do all such other things as the Administrative Agent may
reasonably deem necessary or appropriate (i) to assure to the
Administrative Agent its security interests hereunder are perfected,
including (A) such financing statements (including continuation
statements) or amendments thereof or supplements thereto or other
instruments as the Administrative Agent may from time to time
reasonably request in order to perfect and maintain the security
interests granted hereunder in accordance with the UCC and any other
personal property security legislation in the appropriate state(s) or
province(s), (B) with regard to Copyrights and Copyright Licenses, a
Notice of Grant of Security Interest in Copyrights for filing with the
United States Copyright Office in the form of Exhibit A attached
hereto, (C) with regard to Patents and Patent Licenses, a Notice of
Grant of Security Interest in Patents for filing with the United States
Patent and Trademark Office in the form of Exhibit B attached hereto
and (D) with regard to Trademarks and Trademark Licenses, a Notice of
Grant of Security Interest in Trademarks for filing with the United
States Patent and Trademark Office in the form of Exhibit C attached
hereto, (ii) to consummate the transactions contemplated hereby and
(iii) to otherwise protect and assure the Administrative Agent of its
rights and interests hereunder. Each Obligor hereby authorizes the
Administrative Agent to prepare and file such financing statements
(including continuation statements) or amendments thereof or
supplements thereto or other instruments as the Administrative Agent
may from time to time deem necessary or appropriate in order to perfect
and maintain the security interests granted hereunder in accordance
with the UCC, including, without limitation, any financing statement
that describes the Collateral as "all personal property" or "all
assets" of such Obligor or that describes the Collateral in some other
manner as the Administrative Agent deems necessary or advisable. Each
Obligor agrees to xxxx its books and records to reflect the security
interest of the Administrative Agent in the Collateral.
(b) Perfection of Security Interest by Possession. If (i) any
amount payable under or in connection with any of the Collateral shall
be or become evidenced by any Document, Instrument, Tangible Chattel
Paper or Supporting Obligation or (ii) any Collateral shall be stored
or shipped subject to a Document or (iii) any Collateral shall consist
of Investment Property in the form of certificated securities, promptly
notify the Administrative Agent of the existence of such Collateral and
deliver such Instrument, Chattel Paper, Supporting Obligation, Document
or Investment Property to the Administrative Agent, duly endorsed in a
manner satisfactory to the Administrative Agent, to be held as
Collateral pursuant to this Security Agreement.
(c) Perfection of Security Interest Through Control. If any
Collateral shall consist of Deposit Accounts, Electronic Chattel Paper,
Letter-of-Credit Rights, Securities Accounts or uncertificated
Investment Property, execute and deliver (and, with respect to any
Collateral consisting of a Securities Account or uncertificated
Investment Property, cause the Securities Intermediary or the issuer,
as applicable, with respect to such Investment Property to execute and
deliver) to the Administrative Agent all control agreements,
assignments, instruments or other documents as reasonably requested by
the Administrative Agent for the purposes of obtaining and maintaining
Control of such Collateral. If any Collateral shall consist of Deposit
Accounts or Securities Accounts, comply with Section 6.14 of the Credit
Agreement.
(d) Other Liens. Defend its interests in the Collateral
against the claims and demands of all other parties claiming an
interest therein and keep the Collateral free from all Liens, except
for Permitted Liens. Neither the Administrative Agent nor any Lender
authorizes any Obligor to, and no Obligor shall, sell, exchange,
transfer, assign, lease or otherwise dispose of the Collateral or any
interest therein, except as permitted under the Credit Agreement.
(e) Preservation of Collateral. Keep the Collateral in good
order, condition and repair in all material respects, ordinary wear and
tear excepted; not use the Collateral in violation of the provisions of
this Security Agreement or any other agreement relating to the
Collateral or any policy insuring the Collateral or any applicable
Requirement of Law; not permit any Collateral to be or become a fixture
to real property or an accession to other personal property unless the
Administrative Agent has a valid, perfected and first priority security
interest for the benefit of the Lenders in such real or personal
property; and not, without the prior written consent of the
Administrative Agent, alter or remove any identifying symbol or number
on its Equipment.
(f) Changes in Structure or Location. Not, without providing
thirty (30) days prior written notice to the Administrative Agent and
without filing (or confirming that the Administrative Agent has filed)
such financing statements and amendments to any previously filed
financing statements as the Administrative Agent may require, (i) alter
its legal existence or, in one transaction or a series of transactions,
merge into or consolidate with any other entity, or sell all or
substantially all of its assets, (ii) change its state of incorporation
or organization, or (iii) change its registered legal name.
(g) Inspection. Allow the Administrative Agent or its
representatives to visit and inspect the Collateral as set forth in
Section 5.6 of the Credit Agreement.
(h) Collateral Held by Warehouseman, Bailee, etc. If any
Collateral is at any time in the possession or control of a
warehouseman, bailee or any agent or processor of such Obligor, (i)
notify the Administrative Agent of such possession, (ii) notify such
Person of the Administrative Agent's security interest for the benefit
of the Lenders in such Collateral, (iii) instruct such Person to hold
all such Collateral for the Administrative Agent's account subject to
the Administrative Agent's instructions and (iv) obtain an
acknowledgment from such Person that it is holding such Collateral for
the benefit of the Administrative Agent.
(i) Treatment of Accounts. (i) Not grant or extend the time
for payment of any Account, or compromise or settle any Account for
less than the full amount thereof, or release any person or property,
in whole or in part, from payment thereof, or allow any credit or
discount thereon, other than as normal and customary in the ordinary
course of an Obligor's business and (ii) maintain at its principal
place of business a record of Accounts consistent with customary
business practices.
(j) Covenants Relating to Inventory.
(i) Maintain, keep and preserve its Inventory in good
salable condition at its own cost and expense.
(ii) Comply with all reporting requirements set forth
in the Credit Agreement with respect to Inventory.
(iii) If any of the Inventory is at any time
evidenced by a document of title, promptly notify the
Administrative Agent thereof and, upon the request of the
Administrative Agent, deliver such document of title to the
Administrative Agent.
(k) Covenants Relating to Copyrights.
(i) Employ the Copyright for each material Work with
such notice of copyright as may be required by law to secure
copyright protection.
(ii) Not do any act or knowingly omit to do any act
whereby any Copyright may become invalidated and (A) not do
any act, or knowingly omit to do any act, whereby any
Copyright may become injected into the public domain; (B)
notify the Administrative Agent immediately if it knows, or
has reason to know, that any Copyright could reasonably be
expected to become injected into the public domain or of any
adverse determination or development (including, without
limitation, the institution of, or any such determination or
development in, any proceeding in any court or tribunal in the
United States or any other country) regarding an Obligor's
ownership of any such Copyright or its validity; (C) take all
necessary steps as it shall deem appropriate under the
circumstances, to maintain and pursue each application (and to
obtain the relevant registration) and to maintain each
registration of each Copyright owned by an Obligor including,
without limitation, filing of applications for renewal where
necessary; and (D) promptly notify the Administrative Agent of
any material infringement of any Copyright of an Obligor of
which it becomes aware and take such actions as it shall
reasonably deem appropriate under the circumstances to protect
such Copyright, including, where appropriate, the bringing of
suit for infringement, seeking injunctive relief and seeking
to recover any and all damages for such infringement.
(iii) Not make any assignment or agreement in
conflict with the security interest in the Copyrights of each
Obligor hereunder.
(l) Covenants Relating to Patents and Trademarks.
(i) (A) Continue to use each Trademark in order to
maintain such Trademark in full force free from any claim of
abandonment for non-use, (B) maintain as in the past the
quality of products and services offered under such Trademark,
(C) employ such Trademark with the appropriate notice of
registration, (D) not adopt or use any xxxx which is
confusingly similar or a colorable imitation of such Trademark
unless the Administrative Agent, for the ratable benefit of
the Lenders, shall obtain a perfected security interest in
such xxxx pursuant to this Security Agreement, and (E) not
(and not permit any licensee or sublicensee thereof to) do any
act or knowingly omit to do any act whereby any Trademark may
become invalidated.
(ii) Not do any act, or omit to do any act, whereby
any Patent may become abandoned or dedicated.
(iii) Promptly notify the Administrative Agent if it
knows, or has reason to know, that any application or
registration relating to any Patent or Trademark may become
abandoned or dedicated, or of any adverse determination or
development (including, without limitation, the institution
of, or any such determination or development in, any
proceeding in the United States Patent and Trademark Office or
any court or tribunal in any country) regarding an Obligor's
ownership of any such Patent or Trademark or its right to
register the same or to keep, maintain and use the same.
(iv) Take all reasonable and necessary steps,
including, without limitation, in any proceeding before the
United States Patent and Trademark Office, or any similar
office or agency in any other country or any political
subdivision thereof, to maintain and pursue each application,
to obtain the relevant registration and to maintain each
registration of the Patents and Trademarks, including, without
limitation, filing of applications for renewal, affidavits of
use and affidavits of incontestability.
(v) Promptly notify the Administrative Agent after it
learns that any Patent or Trademark included in the Collateral
is infringed, misappropriated or diluted by a third party and
promptly xxx for infringement, misappropriation or dilution,
to seek injunctive relief where appropriate and to recover any
and all damages for such infringement, misappropriation or
dilution, or take such other actions as it shall reasonably
deem appropriate under the circumstances to protect such
Patent or Trademark.
(vi) Not make any assignment or agreement in conflict
with the security interest in the Patents or Trademarks of any
Obligor hereunder.
(m) New Patents, Copyrights and Trademarks. In accordance with
Section 5.2(c) of the Credit Agreement, provide the Administrative
Agent with (i) a listing of all applications, if any, for new
Copyrights, Patents or Trademarks (together with a listing of the
issuance of registrations or letters on present applications), which
new applications and issued registrations or letters shall be subject
to the terms and conditions hereunder, and (ii) (A) with respect to
Copyrights and Copyright Licenses, a duly executed Notice of Grant of
Security Interest in Copyrights, (B) with respect to Patents and Patent
Licenses, a duly executed Notice of Grant of Security Interest in
Patents, (C) with respect to Trademarks and Trademark Licenses, a duly
executed Notice of Grant of Security Interest in Trademarks or (D) such
other duly executed documents as the Administrative Agent may request
in a form acceptable to counsel for the Administrative Agent and
suitable for recording to evidence the security interest of the
Administrative Agent on behalf of the Lenders in the Copyright, Patent
or Trademark which is the subject of such new application, and the
goodwill and General Intangibles of such Obligor relating thereto or
represented thereby.
(n) Commercial Tort Claims; Notice of Litigation. Promptly (i)
forward to the Administrative Agent written notification of any and all
Commercial Tort Claims of the Obligors, including, but not limited to,
any and all actions, suits, and proceedings before any court or
Governmental Authority by or affecting such Obligor or any of its
Subsidiaries and (ii) execute and deliver such statements, documents
and notices and do and cause to be done all such things as may be
required by the Administrative Agent, or required by law, including all
things which may from time to time be necessary under the UCC to fully
create, preserve, perfect and protect the priority of the
Administrative Agent's security interest in any Commercial Tort Claims.
(o) Status of Collateral as Personal Property. At all times
maintain the Collateral as personal property and not affix any of the
Collateral to any real property in a manner which would change its
nature from personal property to real property or a Fixture.
(p) Regulatory Approvals. Promptly, and at its expense,
execute and deliver, or cause to be executed and delivered, all
applications, certificates, instruments, registration statements, and
all other documents and papers the Administrative Agent may reasonably
request and as may be required by law to acquire the consent, approval,
registration, qualification or authorization of any other Person deemed
necessary or appropriate for the effective exercise of any of the
rights under this Security Agreement, including, without limitation,
approvals from applicable Gaming Authorities (each a "Governmental
Approval"). Without limiting the generality of the foregoing, if an
Event of Default shall have occurred and be continuing, each Obligor
shall take any action which the Administrative Agent may reasonably
request in order to transfer and assign to the Administrative Agent, or
to such one or more third parties as the Administrative Agent may
designate, or to a combination of the foregoing, each Governmental
Approval (other than any Excluded Asset) of such Obligor. To enforce
the provisions of this subsection, upon the occurrence and during the
continuance of an Event of Default, the Administrative Agent is
empowered to request the appointment of a receiver from any court of
competent jurisdiction. Such receiver shall be instructed to seek from
the Governmental Authority an involuntary transfer of control of each
such Governmental Approval (other than any Excluded Asset) for the
purpose of seeking a bona fide purchaser to whom control will
ultimately be transferred. Each Obligor hereby agrees to authorize such
an involuntary transfer of control upon the request of the receiver so
appointed, and, if such Obligor shall refuse to authorize the transfer,
its approval may be required by the court. Upon the occurrence and
continuance of an Event of Default, such Obligor shall further use its
reasonable best efforts to assist in obtaining Governmental Approvals,
if required, for any action or transaction contemplated by this
Security Agreement, including, without limitation, the preparation,
execution and filing with the Governmental Authority of such Obligor's
portion of any necessary or appropriate application for the approval of
the transfer or assignment of any portion of the assets (including any
Governmental Approval but excluding any Excluded Asset) of such
Obligor. Because each Obligor agrees that the Administrative Agent's
remedy at law for failure of such Obligor to comply with the provisions
of this subsection would be inadequate and that such failure would not
be adequately compensable in damages, such Obligor agrees that the
covenants contained in this subsection may be specifically enforced,
and such Obligor hereby waives and agrees not to assert any defenses
against an action for specific performance of such covenants.
(q) Insurance. Insure, repair and replace the Collateral of
such Obligor as set forth in the Credit Agreement. Each Obligor shall
promptly notify the Administrative Agent, in accordance with Section
5.2(c)(iii) of the Credit Agreement, of any updates to its insurance
policies. All proceeds derived from insurance on the Collateral shall
be subject to the security interest of the Administrative Agent
hereunder.
(r) Covenants Relating to the Assigned Agreements.
(i) Upon the request of the Administrative Agent,
each Obligor shall, at its expense, (A) furnish to the
Administrative Agent copies of all notices, requests and other
documents received by such Obligor under or pursuant to the
Assigned Agreements, and such other information and reports
regarding the Assigned Agreements and (B) make to any other
party to any Assigned Agreement such demands and requests for
information and reports or for action as an Obligor is
entitled to make thereunder.
(ii) Unless the applicable Obligor believes it is
necessary in the prudent conduct of its business or is
otherwise in the ordinary course of such Obligor's business,
no Obligor shall (A) cancel or terminate any Assigned
Agreement of such Obligor or consent to or accept any
cancellation or termination thereof; (B) amend or otherwise
modify any Assigned Agreement of such Obligor or give any
consent, waiver or approval thereunder; (C) waive any default
under or breach of any Assigned Agreement of such Obligor; or
(D) take any other action in connection with any Assigned
Agreement of such Obligor which would impair the value of the
interest or rights of such Obligor thereunder or which would
impair the interests or rights of the Administrative Agent.
(s) Material Contracts. Promptly notify the Administrative
Agent, in accordance with Section 5.2(c) of the Credit Agreement, of
any new Material Contract. Upon the request of the Administrative
Agent, with respect to any Material Contract, each Obligor will (i)
execute and deliver (or cause to be executed and delivered) to the
Administrative Agent a collateral assignment of such Material Contract
and a consent to such collateral assignment, in each case in a form
acceptable to the Administrative Agent, (ii) use commercially
reasonable efforts to cause the other parties to such Material Contract
to execute such consent and (iii) do any act or execute any additional
documents required by the Administrative Agent to ensure to the
Administrative Agent the effectiveness and first priority of its
security interest in such Material Contract.
6. License of Intellectual Property. The Obligors hereby assign,
transfer and convey to the Administrative Agent, effective upon the occurrence
and during the continuance of any Event of Default, the nonexclusive right and
license to use all Intellectual Property owned or used by any Obligor that
relate to the Collateral and any other collateral granted by the Obligors as
security for the Secured Obligations, together with any goodwill associated
therewith, all to the extent necessary to enable the Administrative Agent to
use, possess and realize on the Collateral and to enable any successor or assign
to enjoy the benefits of the Collateral. This right and license shall inure to
the benefit of all successors, assigns and transferees of the Administrative
Agent and its successors, assigns and transferees, whether by voluntary
conveyance, operation of law, assignment, transfer, foreclosure, deed in lieu of
foreclosure or otherwise. Such right and license is granted free of charge,
without requirement that any monetary payment whatsoever be made to the
Obligors.
7. Special Provisions Regarding Inventory. Notwithstanding anything to
the contrary contained in this Security Agreement, each Obligor may, unless and
until an Event of Default occurs and is continuing and the Administrative Agent
instructs such Obligor otherwise, without further consent or approval of the
Administrative Agent, use, consume, sell, lease and exchange its Inventory in
the ordinary course of its business as presently conducted whereupon, in the
case of such a sale or exchange, the security interest created hereby in the
Inventory so sold or exchanged (but not in any Proceeds arising from such sale
or exchange) shall cease immediately without any further action on the part of
the Administrative Agent.
8. Performance of Obligations; Advances by Administrative Agent. On
failure of any Obligor to perform any of the covenants and agreements contained
herein, the Administrative Agent may, at its sole option and in its sole
discretion, perform or cause to be performed the same and in so doing may expend
such sums as the Administrative Agent may reasonably deem advisable in the
performance thereof, including, without limitation, the payment of any insurance
premiums, the payment of any taxes, a payment to obtain a release of a Lien or
potential Lien, expenditures made in defending against any adverse claim and all
other expenditures which the Administrative Agent may make for the protection of
the security interest hereof or may be compelled to make by operation of law.
All such sums and amounts so expended shall be repayable by the Obligors on a
joint and several basis promptly upon timely notice thereof and demand therefor,
shall constitute additional Secured Obligations and shall bear interest from the
date said amounts are expended at the ABR Default Rate. No such performance of
any covenant or agreement by the Administrative Agent on behalf of any Obligor,
and no such advance or expenditure therefor, shall relieve the Obligors of any
default under the terms of this Security Agreement, the other Credit Documents
or any Secured Hedging Agreement. The Administrative Agent may make any payment
hereby authorized in accordance with any xxxx, statement or estimate procured
from the appropriate public office or holder of the claim to be discharged
without inquiry into the accuracy of such xxxx, statement or estimate or into
the validity of any tax assessment, sale, forfeiture, tax lien, title or claim
except to the extent such payment is being contested in good faith by an Obligor
in appropriate proceedings and against which adequate reserves are being
maintained in accordance with GAAP.
9. Events of Default.
The occurrence of an event which under the Credit Agreement would
constitute an Event of Default shall be an event of default hereunder (an "Event
of Default").
10. Remedies.
(a) General Remedies. Subject to receipt of any necessary
approval from the Gaming Authorities and upon the occurrence of an
Event of Default and during continuation thereof, the Administrative
Agent and the Lenders shall have, in addition to the rights and
remedies provided herein, in the Credit Documents, in any Secured
Hedging Agreement or by law (including, but not limited to, levy of
attachment, garnishment and the rights and remedies set forth in the
UCC of the jurisdiction applicable to the affected Collateral), the
rights and remedies of a secured party under the UCC (regardless of
whether the UCC is the law of the jurisdiction where the rights and
remedies are asserted and regardless of whether the UCC applies to the
affected Collateral), and further, the Administrative Agent may, with
or without judicial process or the aid and assistance of others, (i)
enter on any premises on which any of the Collateral may be located
and, without resistance or interference by the Obligors, take
possession of the Collateral, (ii) dispose of any Collateral on any
such premises, (iii) require the Obligors to assemble and make
available to the Administrative Agent at the expense of the Obligors
any Collateral at any place and time designated by the Administrative
Agent which is reasonably convenient to both parties, (iv) remove any
Collateral from any such premises for the purpose of effecting the sale
or other disposition thereof, and/or (v) without demand and without
advertisement, notice, hearing or process of law, all of which each of
the Obligors hereby waives to the fullest extent permitted by law, at
any place and time or times, sell and deliver any or all Collateral
held by or for it at public or private sale, by one or more contracts,
in one or more parcels, for cash, upon credit or otherwise, at such
prices and upon such terms as the Administrative Agent deems advisable,
in its sole discretion (subject to any and all mandatory legal
requirements). Neither the Administrative Agent's compliance with any
applicable state or federal law in the conduct of such sale, nor its
disclaimer of any warranties relating to the Collateral, shall be
considered to adversely affect the commercial reasonableness of such
sale. In addition to all other sums due the Administrative Agent and
the Lenders with respect to the Secured Obligations, the Obligors shall
pay the Administrative Agent and each of the Lenders all reasonable
documented costs and expenses incurred by the Administrative Agent or
any such Lender, including, but not limited to, reasonable attorneys'
fees and court costs, in obtaining or liquidating the Collateral, in
enforcing payment of the Secured Obligations, or in the prosecution or
defense of any action or proceeding by or against the Administrative
Agent or the Lenders or the Obligors concerning any matter arising out
of or connected with this Security Agreement, any Collateral or the
Secured Obligations, including, without limitation, any of the
foregoing arising in, arising under or related to a case under the
Bankruptcy Code. To the extent the rights of notice cannot be legally
waived hereunder, each Obligor agrees that any requirement of
reasonable notice shall be met if such notice is personally served on
or mailed, postage prepaid, to the Borrower in accordance with the
notice provisions of Section 9.2 of the Credit Agreement at least ten
(10) days before the time of sale or other event giving rise to the
requirement of such notice. The Administrative Agent and the Lenders
shall not be obligated to make any sale or other disposition of the
Collateral regardless of notice having been given. To the extent
permitted by law, any Lender may be a purchaser at any such sale. To
the extent permitted by applicable law, each of the Obligors hereby
waives all of its rights of redemption with respect to any such sale.
Subject to the provisions of applicable law, the Administrative Agent
and the Lenders may postpone or cause the postponement of the sale of
all or any portion of the Collateral by announcement at the time and
place of such sale, and such sale may, without further notice, to the
extent permitted by law, be made at the time and place to which the
sale was postponed, or the Administrative Agent and the Lenders may
further postpone such sale by announcement made at such time and place.
(b) Remedies Relating to Accounts. Upon the occurrence of an
Event of Default and during the continuation thereof, whether or not
the Administrative Agent has exercised any or all of its rights and
remedies hereunder, the Administrative Agent shall have the right to
enforce any Obligor's rights against any account debtors and obligors
on such Obligor's Accounts. Each Obligor acknowledges and agrees that
the Proceeds of its Accounts remitted to or on behalf of the
Administrative Agent in accordance with the provisions of this Section
shall be solely for the Administrative Agent's own convenience and that
such Obligor shall not have any right, title or interest in such
Proceeds or in any such other amounts except as expressly provided
herein. After the occurrence and during the continuance of an Event of
Default, to the extent required by the Administrative Agent, each
Obligor agrees to execute any document or instrument, and to take any
action, necessary under applicable law (including the Federal
Assignment of Claims Act) in order for the Administrative Agent to
exercise its rights and remedies (or be able to exercise its rights and
remedies at some future date) with respect to any Accounts of such
Obligor where the account debtor is a Governmental Authority. The
Administrative Agent and the Lenders shall have no liability or
responsibility to any Obligor for acceptance of a check, draft or other
order for payment of money bearing the legend "payment in full" or
words of similar import or any other restrictive legend or endorsement
or be responsible for determining the correctness of any remittance.
Each Obligor hereby agrees to indemnify the Administrative Agent and
the Lenders and their respective officers, directors, employees,
partners, members, counsel, agents, representatives, advisors and
affiliates from and against all liabilities, damages, losses, actions,
claims, judgments, costs, expenses, charges and reasonable attorneys'
fees suffered or incurred by the Administrative Agent or the Lenders
(each, an "Indemnified Party") because of the maintenance of the
foregoing arrangements except, with respect to any Indemnified Party,
as relating to or arising out of the gross negligence or willful
misconduct of such Indemnified Party or its officers, employees or
agents. In the case of any investigation, litigation or other
proceeding, the foregoing indemnity shall be effective whether or not
such investigation, litigation or proceeding is brought by an Obligor,
its directors, shareholders or creditors or an Indemnified Party or any
other Person or any other Indemnified Party is otherwise a party
thereto.
(c) Access. In addition to the rights and remedies hereunder,
upon the occurrence of an Event of Default and during the continuation
thereof, the Administrative Agent shall have the right to enter and
remain upon the various premises of the Obligors without cost or charge
to the Administrative Agent, and use the same, together with materials,
supplies, books and records of the Obligors for the purpose of
collecting and liquidating the Collateral, or for preparing for sale
and conducting the sale of the Collateral, whether by foreclosure,
auction or otherwise. In addition, the Administrative Agent may remove
Collateral, or any part thereof, from such premises and/or any records
with respect thereto, in order to effectively collect or liquidate such
Collateral. If the Administrative Agent exercises its right to take
possession of the Collateral, each Obligor shall also at its expense
perform any and all other steps reasonably requested by the
Administrative Agent to preserve and protect the security interest
hereby granted in the Collateral, such as placing and maintaining signs
indicating the security interest of the Administrative Agent,
appointing overseers for the Collateral and maintaining inventory
records.
(d) Nonexclusive Nature of Remedies. Failure by the
Administrative Agent or the Lenders to exercise any right, remedy or
option under this Security Agreement, any other Credit Document, any
Secured Hedging Agreement or as provided by law, or any delay by the
Administrative Agent or the Lenders in exercising the same, shall not
operate as a waiver of any such right, remedy or option. No waiver
hereunder shall be effective unless it is in writing, signed by the
party against whom such waiver is sought to be enforced and then only
to the extent specifically stated, which in the case of the
Administrative Agent or the Lenders shall only be granted as provided
herein. To the extent permitted by law, neither the Administrative
Agent, the Lenders, nor any party acting as attorney for the
Administrative Agent or the Lenders, shall be liable hereunder for any
acts or omissions or for any error of judgment or mistake of fact or
law other than their gross negligence or willful misconduct hereunder.
The rights and remedies of the Administrative Agent and the Lenders
under this Security Agreement shall be cumulative and not exclusive of
any other right or remedy which the Administrative Agent or the Lenders
may have.
(e) Retention of Collateral. In addition to the rights and
remedies hereunder, upon the occurrence of an Event of Default and
during the continuation thereof, the Administrative Agent may, after
providing the notices required by Sections 9-620 and 9-621 of the UCC
(or any successor sections of the UCC) or otherwise complying with the
notice requirements of applicable law of the relevant jurisdiction,
accept or retain all or any portion of the Collateral in satisfaction
of the Secured Obligations. Unless and until the Administrative Agent
shall have provided such notices, however, the Administrative Agent
shall not be deemed to have retained any Collateral in satisfaction of
any Secured Obligations for any reason.
(f) Deficiency. In the event that the proceeds of any sale,
collection or realization are insufficient to pay all amounts to which
the Administrative Agent or the Lenders are legally entitled, the
Obligors shall be jointly and severally liable for the deficiency,
together with interest thereon at the ABR Default Rate, together with
the costs of collection and the reasonable fees of any attorneys
employed by the Administrative Agent to collect such deficiency. Any
surplus remaining after the full payment and satisfaction of the
Secured Obligations shall be returned to the Obligors or to whomsoever
a court of competent jurisdiction shall determine to be entitled
thereto.
(g) Other Security. To the extent that any of the Secured
Obligations are now or hereafter secured by property other than the
Collateral (including, without limitation, real and other personal
property and securities owned by an Obligor), or by a guarantee,
endorsement or property of any other Person, then the Administrative
Agent shall have the right to proceed against such other property,
guarantee or endorsement upon the occurrence and during the
continuation of any Event of Default, and the Administrative Agent
shall have the right, in its sole discretion, to determine which
rights, security, Liens, security interests or remedies the
Administrative Agent shall at any time pursue, relinquish, subordinate,
modify or take with respect thereto, without in any way modifying or
affecting any of them or any of the Administrative Agent's and the
Lenders' rights or the Secured Obligations under this Security
Agreement, under any other of the Credit Documents or under any Secured
Hedging Agreement.
11. Rights of the Administrative Agent.
(a) Power of Attorney. Subject to any necessary consent or
approval by the applicable Gaming Authorities, each Obligor hereby
designates and appoints the Administrative Agent, on behalf of the
Lenders, and each of its designees or agents, as attorney-in-fact of
such Obligor, irrevocably and with power of substitution, with
authority to take any or all of the following actions upon the
occurrence and during the continuation of an Event of Default:
(i) to demand, collect, settle, compromise, adjust
and give discharges and releases concerning the Collateral of
such Obligor, all as the Administrative Agent may reasonably
determine in respect of such Collateral;
(ii) to commence and prosecute any actions at any
court for the purposes of collecting any Collateral and
enforcing any other right in respect thereof;
(iii) to defend, settle, adjust or compromise any
action, suit or proceeding brought with respect to the
Collateral and, in connection therewith, give such discharge
or release as the Administrative Agent may deem reasonably
appropriate;
(iv) to receive, open and dispose of mail addressed
to an Obligor and endorse checks, notes, drafts, acceptances,
money orders, bills of lading, warehouse receipts or other
instruments or documents evidencing payment, shipment or
storage of the goods giving rise to the Collateral of such
Obligor, or securing or relating to such Collateral, on behalf
of and in the name of such Obligor;
(v) to sell, assign, transfer, make any agreement in
respect of, or otherwise deal with or exercise rights in
respect of, any Collateral or the goods or services which have
given rise thereto, as fully and completely as though the
Administrative Agent were the absolute owner thereof for all
purposes;
(vi) to adjust and settle claims under any insurance
policy relating to the Collateral;
(vii) to execute and deliver and/or file all
assignments, conveyances, statements, financing statements,
continuation financing statements, security agreements,
affidavits, notices and other agreements, instruments and
documents that the Administrative Agent may determine
necessary in order to perfect and maintain the security
interests and Liens granted in this Security Agreement and in
order to fully consummate all of the transactions contemplated
herein;
(viii) to institute any foreclosure proceedings that
the Administrative Agent may deem appropriate;
(ix) to execute any document or instrument, and to
take any action, necessary under applicable law (including the
Federal Assignment of Claims Act) in order for the
Administrative Agent to exercise its rights and remedies (or
to be able to exercise its rights and remedies at some future
date) with respect to any Account of an Obligor where the
account debtor is a Governmental Authority; and
(x) to do and perform all such other acts and things
as the Administrative Agent may reasonably deem to be
necessary, proper or convenient in connection with the
Collateral.
This power of attorney is a power coupled with an interest and shall be
irrevocable for so long as any of the Secured Obligations (other than
contingent indemnity obligations that survive termination of the Credit
Documents pursuant to the stated terms thereof) remain outstanding, any
Credit Document or Secured Hedging Agreement is in effect, and until
all of the Commitments shall have been terminated. The Administrative
Agent shall be under no duty to exercise or withhold the exercise of
any of the rights, powers, privileges and options expressly or
implicitly granted to the Administrative Agent in this Security
Agreement, and shall not be liable for any failure to do so or any
delay in doing so. The Administrative Agent shall not be liable for any
act or omission or for any error of judgment or any mistake of fact or
law in its individual capacity or its capacity as attorney-in-fact
except acts or omissions resulting from its gross negligence or willful
misconduct. This power of attorney is conferred on the Administrative
Agent solely to perfect, protect, preserve and realize upon its
security interest in the Collateral.
(b) Assignment by the Administrative Agent. The Administrative
Agent may from time to time assign the Secured Obligations or any
portion thereof and/or the Collateral or any portion thereof to a
successor Administrative Agent, and the assignee shall be entitled to
all of the rights and remedies of the Administrative Agent under this
Security Agreement in relation thereto.
(c) The Administrative Agent's Duty of Care. Other than the
exercise of reasonable care to assure the safe custody of the
Collateral while being held by the Administrative Agent hereunder, the
Administrative Agent shall have no duty or liability to preserve rights
pertaining thereto, it being understood and agreed that the Obligors
shall be responsible for preservation of all rights in the Collateral,
and the Administrative Agent shall be relieved of all responsibility
for the Collateral upon surrendering it or tendering the surrender of
it to the Obligors. The Administrative Agent 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 the Administrative Agent accords its
own property, which shall be no less than the treatment employed by a
reasonable and prudent agent in the industry, it being understood that
the Administrative Agent shall not have responsibility for taking any
necessary steps to preserve rights against any parties with respect to
any of the Collateral. In the event of a public or private sale of
Collateral pursuant to Section 10 hereof, the Administrative Agent
shall have no obligation to clean-up, repair or otherwise prepare the
Collateral for sale.
12. Application of Proceeds. After the exercise of remedies by the
Administrative Agent or the Lenders pursuant to Section 7.2 of the Credit
Agreement (or after the Commitments shall automatically terminate and the Loans
(with accrued interest thereon) and all other amounts under the Credit Documents
(including without limitation the maximum amount of all contingent liabilities
under Letters of Credit) shall automatically become due and payable in
accordance with the terms of such Section), any proceeds of the Collateral, when
received by the Administrative Agent, any of the Lenders or any Hedging
Agreement Provider in cash or its equivalent, will be applied in reduction of
the Secured Obligations in the order set forth in Section 2.11(b) of the Credit
Agreement, and each Obligor irrevocably waives the right to direct the
application of such payments and proceeds and acknowledges and agrees that the
Administrative Agent shall have the continuing and exclusive right to apply and
reapply any and all such proceeds in the Administrative Agent's sole discretion,
notwithstanding any entry to the contrary upon any of its books and records.
13. Indemnification and Costs and Expenses. The Obligors shall
indemnify the Administrative Agent and the Lenders and pay all costs and
expenses of the Administrative Agent and the Lenders in accordance with Section
9.5 of the Credit Agreement.
14. Continuing Agreement.
(a) This Security Agreement shall be a continuing agreement in
every respect and shall remain in full force and effect so long as any
of the Secured Obligations (other than contingent indemnity obligations
that survive termination of the Credit Documents pursuant to the stated
terms thereof) remain outstanding, any Credit Document or Secured
Hedging Agreement is in effect, and until all of the Commitments shall
have been terminated. Upon such payment and termination, this Security
Agreement shall be automatically terminated and the Administrative
Agent and the Lenders shall, upon the request and at the expense of the
Obligors, forthwith release all of the Liens and security interests
granted hereunder and shall execute and/or deliver all UCC termination
statements and/or other documents reasonably requested by the Obligors
evidencing such termination. Notwithstanding the foregoing all releases
and indemnities provided hereunder shall survive termination of this
Security Agreement.
(b) This Security Agreement shall continue to be effective or
be automatically reinstated, as the case may be, if at any time
payment, in whole or in part, of any of the Secured Obligations is
rescinded or must otherwise be restored or returned by the
Administrative Agent or any Lender as a preference, fraudulent
conveyance or otherwise under any bankruptcy, insolvency or similar
law, all as though such payment had not been made; provided that in the
event that payment of all or any part of the Secured Obligations is
rescinded or must be restored or returned, all reasonable costs and
expenses (including without limitation any reasonable legal fees and
disbursements) incurred by the Administrative Agent or any Lender in
defending and enforcing such reinstatement shall be deemed to be
included as a part of the Secured Obligations.
15. Amendments; Waivers; Modifications. This Security Agreement and the
provisions hereof may not be amended, waived, modified, changed, discharged or
terminated except as set forth in Section 9.1 of the Credit Agreement.
16. Successors in Interest. This Security Agreement shall create a
continuing security interest in the Collateral and shall be binding upon each
Obligor, its successors and assigns and shall inure, together with the rights
and remedies of the Administrative Agent and the Lenders hereunder, to the
benefit of the Administrative Agent and the Lenders and their successors and
permitted assigns; provided, however, that none of the Obligors may assign its
rights or delegate its duties hereunder without the prior written consent of
each Lender or the Required Lenders, as required by the Credit Agreement. To the
fullest extent permitted by law, each Obligor hereby releases the Administrative
Agent and each Lender, each of their respective officers, employees and agents
and each of their respective successors and assigns, from any liability for any
act or omission relating to this Security Agreement or the Collateral, except
for any liability arising from the gross negligence or willful misconduct of the
Administrative Agent or such Lender or their respective officers, employees and
agents, in each case as determined by a court of competent jurisdiction pursuant
to a final non-appealable judgment.
17. Notices. All notices required or permitted to be given under this
Security Agreement shall be in conformance with Section 9.2 of the Credit
Agreement.
18. Counterparts. This Security Agreement may be executed in any number
of counterparts, each of which where so executed and delivered shall be an
original, but all of which shall constitute one and the same instrument. It
shall not be necessary in making proof of this Security Agreement to produce or
account for more than one such counterpart. Delivery of executed counterparts of
the Security Agreement by telecopy or other electronic means shall be effective
as an original and shall constitute a representation that an original shall be
delivered upon the request of the Administrative Agent.
19. Headings. The headings of the sections and subsections hereof are
provided for convenience only and shall not in any way affect the meaning,
construction or interpretation of any provision of this Security Agreement.
20. Governing Law; Submission to Jurisdiction and Service of Process;
Waiver of Jury Trial; Venue. THIS SECURITY AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. The terms of
Sections 9.13 and 9.16 of the Credit Agreement are incorporated herein by
reference, mutatis mutandis, and the parties hereto agree to such terms.
21. Severability. If any provision of this Security Agreement is
determined to be illegal, invalid or unenforceable, such provision shall be
fully severable and the remaining provisions shall remain in full force and
effect and shall be construed without giving effect to the illegal, invalid or
unenforceable provisions.
22. Entirety. This Security Agreement, the other Credit Documents and
the Secured Hedging Agreements represent the entire agreement of the parties
hereto and thereto, and supersede all prior agreements and understandings, oral
or written, if any, including any commitment letters or correspondence relating
to this Security Agreement, the other Credit Documents, the Secured Hedging
Agreements or the transactions contemplated herein and therein.
23. Survival. All representations and warranties of the Obligors
hereunder shall survive the execution and delivery of this Security Agreement,
the other Credit Documents and the Secured Hedging Agreements, the delivery of
the Notes and the making of the Loans and the issuance of the Letters of Credit
under the Credit Agreement.
24. Joint and Several Obligations of Obligors.
(a) Each of the Obligors is accepting joint and several
liability hereunder in consideration of the financial accommodations to
be provided by the Lenders under the Credit Agreement, for the mutual
benefit, directly and indirectly, of each of the Obligors and in
consideration of the undertakings of each of the Obligors to accept
joint and several liability for the obligations of each of them.
(b) Each of the Obligors jointly and severally hereby
irrevocably and unconditionally accepts, not merely as a surety but
also as a co-debtor, joint and several liability with the other
Obligors with respect to the payment and performance of all of the
Secured Obligations arising under this Security Agreement, the other
Credit Documents and the Secured Hedging Agreements, it being the
intention of the parties hereto that all the Secured Obligations shall
be the joint and several obligations of each of the Obligors without
preferences or distinction among them.
(c) Notwithstanding any provision to the contrary contained
herein, in any other of the Credit Documents or in any Secured Hedging
Agreement, to the extent the obligations of an Obligor shall be
adjudicated to be invalid or unenforceable for any reason (including,
without limitation, because of any applicable state or federal law
relating to fraudulent conveyances or transfers) then the obligations
of such Obligor hereunder shall be limited to the maximum amount that
is permissible under applicable law (whether federal or state and
including, without limitation, the Bankruptcy Code).
25. Rights of Required Lenders. All rights of the Administrative Agent
hereunder, if not exercised by the Administrative Agent, may be exercised by the
Required Lenders.
26. Regulatory Matters. The Administrative Agent, on behalf of itself
and the Lenders, acknowledges and agrees that in the event the Administrative
Agent exercises one or more of the remedies set forth in this Security Agreement
with respect to the collateral consisting of gaming devices, gaming equipment,
mobile gaming systems and cashless wagering systems (as those terms are defined
in the Gaming Laws), including, but not limited to, the foreclosure, transfer,
sale, distribution or other disposition of such collateral, such exercise of
remedies would require, depending on the remedy that is exercised, (x) the
separate and prior approval of the Gaming Authorities pursuant to the Gaming
Laws as in effect on the date hereof or (y) the licensing of the Administrative
Agent or one or more of the Lenders by the applicable Gaming Authorities.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
RIVIERA HOLDINGS CORPORATION
SECURITY AGREEMENT
CHAR1\989865v6
Each of the parties hereto has caused a counterpart of this Security
Agreement to be duly executed and delivered as of the date first above written.
BORROWER: RIVIERA HOLDINGS CORPORATION,
--------
a Nevada corporation
By:
------------------------------------
Name:
Title:
GUARANTORS: RIVIERA OPERATING CORPORATION,
a Nevada corporation
By:
------------------------------------
Name:
Title:
RIVIERA BLACK HAWK, INC.,
a Colorado corporation
By:
------------------------------------
Name:
Title:
RIVIERA GAMING MANAGEMENT OF COLORADO, INC., a
Colorado corporation
By:
------------------------------------
Name:
Title:
Accepted and agreed to as of the date first above written.
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:
-----------------------------------------
Name:
Title:
SCHEDULE 2(a)(iv)
COMMERCIAL TORT CLAIMS
None.
SCHEDULE 4(a)
NAME CHANGES/CHANGES IN
CORPORATE STRUCTURE/TRADENAMES
None.
SCHEDULE 4(j)
INSTRUMENTS, TANGIBLE CHATTEL PAPER AND DOCUMENTS
None.
SCHEDULE 4(m)
DEPOSIT ACCOUNTS, ELECTRONIC CHATTEL PAPER,
LETTER-OF-CREDIT RIGHTS, SECURITIES ACCOUNTS
AND UNCERTIFICATED INVESTMENT PROPERTY
Deposit Accounts
ACCT NO. Holder Account Depository Institution
990086639 ROC 100.111205 B OF A OPERATING Bank of America
990086639 ROC 100.111205 B OF A OP TO CONCENTRATION Bank of America
990086605 ROC 100.111277 B OF A PAYROLL (FUNDED BY US DISBURSEMENT ACCT) Bank of America
990086605 ROC 100.111277 B OF A PAYROLL TO CONCENTRATION Bank of America
990102873 ROC 100.111223 B OF A POS Bank of America
990102873 ROC 100.111223 B OF A POS TO CONCENTRATION Bank of America
990086662 ROC 100.111243 B OF A NABANCO Bank of America
990086662 ROC 100.111243 B OF A NABANCO TO CONCENTRATION Bank of America
990086654 ROC 100.111214 B OF A CONCENTRATION Bank of America
990086654 ROC * 100.111227 B OF A INVST SWEEP - DAILY @ 3.5496% Bank of America
04/30/07
4030006407 ROC 100.111260.CAGE XXXXX OPERATING DEPOSITS Xxxxx Fargo
153700353250 ROC 100.111215.OPDEP US OPERATING DEPOSITS US Bank
153700353250 ROC 100.111215.OPDEP US OP DEP TO CONCENT US Bank
153700353276 ROC 100.111215.DISB US OPERATING DISBURSEMENTS US Bank
153700353276 ROC 100.111215.DISB US OP DIS TO CONCENTRATION US Bank
153700353276 ROC 100.111215.DISB US OP DISB PR TAX DISTRIBUTION US Bank
153700353276 ROC 100.111215.DISB US OP DISB TO CONCENTRATION US Bank
153700353276 ROC 100.111215 US CONCENTRATION US Bank
253710021598 ROC * 100.111215 US BANK INVST SWEEP @ 4.84% 04/30/07 US Bank
990086696 ROC 100.111250 B OF A PARIMUTUEL RESERVE Bank of America
990044830 ROC 100.111253 B OF A SPORTS RESERVE Bank of America
990086704 ROC 100.111285 CASH EXCHANGE B of A Bank of America
990086647 ROC 100.111280 TRAVEL AGENT COMMISSION B of A Bank of America
0290526904 ROC 100.111265-XXXXXXX HILLS Xxxxx Xxxxx Fargo
004964914827 ROC 100.111219 B OF A GILSBAR CLAIMS Bank of America
2272161320 ROC 100.111255 XXXXX - Nevada Comp First (SIIS) Xxxxx Fargo
308418 RHC 00050.111273 BANK OF NEW YORK Bank of New York
00000000 RHC * 00050.111260 XXXXX FARGO MONEY MARKET @ Xxxxx Fargo
5.122% 04/30/07
4000054445 RHC 00050.111260 XXXXX FARGO Xxxxx Fargo
4000054445 RHC 00050.111260 XXXXX FARGO - SWEEP Xxxxx Fargo
4000054445 RHC * 00050.111260 XXXXX FARGO INVST SWEEP - DAILY Xxxxx Fargo
@ 4.32% 04/30/07
4375672540 RBH 1800.111260.WELLSGEN (XXXXX) GEN-XX Xxxxx Fargo
4040016891 RBH 1800.111260.DISB XXXXX FARGO Xxxxx Fargo
4040016883 RBH 1800.111260.PAYROLL XXXXX FARGO Xxxxx Fargo
4126119601 RBH 1800.111260.LOTTERY XXXXX LOTTERY Xxxxx Fargo
91000047001178 * Bank of America Certificate of Deposit (Beneficiary
- State of Nevada, Division Bank of America
of Insurance, Self-Insured Workers Comp Section)
91000064396769 * Bank of America Certificate of Deposit (Beneficiary
- State of Nevada, Division Bank of America
of Insurance, Self-Insured Workers Comp Section)
* Denotes Investment Account or CD
ROC - Riviera Operating Corporation
RBH - Riviera Black Hawk, Inc.
RHC - Riviera Holdings Corporation
EXHIBIT A
[FORM OF]
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
COPYRIGHTS
[United States Copyright Office][Canadian Intellectual Property Office]
Ladies and Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of
June 8, 2007 (as amended, modified, extended, restated, replaced, or
supplemented from time to time, the "Security Agreement") by and among the
Obligors party thereto (each an "Obligor" and collectively, the "Obligors") and
Wachovia Bank, National Association, as Administrative Agent (the
"Administrative Agent") for the lenders referenced therein (the "Lenders"), the
undersigned Obligor has granted a continuing security interest in and continuing
lien upon [the copyrights, copyright licenses and copyright applications] shown
on Schedule 1 attached hereto (the "Copyrights") to the Administrative Agent for
the ratable benefit of the Lenders.
The Obligors and the Administrative Agent, on behalf of the Lenders,
hereby acknowledge and agree that the security interest in the Copyrights (i)
may only be terminated in accordance with the terms of the Security Agreement
and (ii) is not to be construed as an assignment of any Copyright.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Very truly yours,
[OBLIGOR]
By:
--------------------------------------------------
Name:
------------------------------------------------
Title:
-----------------------------------------------
Acknowledged and Accepted:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Schedule 1
CHAR1\824001v1
CHAR1\989865v6
EXHIBIT B
[FORM OF]
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
PATENTS
[United States Patent and Trademark Office][Canadian Intellectual
Property Office]
Ladies and Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of
June 8, 2007 (as amended, modified, extended, restated, replaced, or
supplemented from time to time, the "Security Agreement") by and among the
Obligors party thereto (each an "Obligor" and collectively, the "Obligors") and
Wachovia Bank, National Association, as Administrative Agent (the
"Administrative Agent") for the lenders referenced therein (the "Lenders"), the
undersigned Obligor has granted a continuing security interest in and continuing
lien upon [the patents, patent licenses and patent applications] shown on
Schedule 1 attached hereto (the "Patents") to the Administrative Agent for the
ratable benefit of the Lenders.
The Obligors and the Administrative Agent, on behalf of the Lenders,
hereby acknowledge and agree that the security interest in the Patents (i) may
only be terminated in accordance with the terms of the Security Agreement and
(ii) is not to be construed as an assignment of any Patent.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Very truly yours,
[OBLIGOR]
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Acknowledged and Accepted:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Schedule 1
EXHIBIT C
[FORM OF]
NOTICE
OF
GRANT OF SECURITY INTEREST
IN
TRADEMARKS
[United States Patent and Trademark Office][Canadian Intellectual
Property Office]
Ladies and Gentlemen:
Please be advised that pursuant to the Security Agreement dated as of
June 8, 2007 (as amended, modified, extended, restated, replaced, or
supplemented from time to time, the "Security Agreement") by and among the
Obligors party thereto (each an "Obligor" and collectively, the "Obligors") and
Wachovia Bank, National Association, as Administrative Agent (the
"Administrative Agent") for the lenders referenced therein (the "Lenders"), the
undersigned Obligor has granted a continuing security interest in and continuing
lien upon [the trademarks, trademark licenses and trademark applications] shown
on Schedule 1 attached hereto (the "Trademarks") to the Administrative Agent for
the ratable benefit of the Lenders.
The Obligors and the Administrative Agent, on behalf of the Lenders,
hereby acknowledge and agree that the security interest in the Trademarks (i)
may only be terminated in accordance with the terms of the Security Agreement
and (ii) is not to be construed as an assignment of any Trademark.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Very truly yours,
[OBLIGOR]
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Acknowledged and Accepted:
WACHOVIA BANK, NATIONAL ASSOCIATION,
as Administrative Agent
By:
-----------------------------------------
Name:
---------------------------------------
Title:
--------------------------------------
Schedule 1
