SECURITY AGREEMENT
THIS SECURITY AGREEMENT (this "SECURITY AGREEMENT") is made and entered into
this 22nd day of August, 1996, between CASINO MAGIC OF LOUISIANA, CORP., a
Louisiana corporation (the "DEBTOR"), and FIRST UNION BANK OF CONNECTICUT, a
Connecticut banking corporation, as trustee for the benefit of the holders of
the Notes (as defined below) (in such capacity, the "SECURED PARTY").
Recitals
A. Notes. Debtor is the issuer of those certain $115,000,000 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")
pursuant to that certain Indenture dated as of August 22, 1996 (the
"INDENTURE"), by and among Debtor, Jefferson Casino Corporation, a Louisiana
corporation, as guarantor, and Secured Party. Any capitalized term used in
this Security Agreement without definition, but defined in the Indenture,
shall have the same meaning here as in the Indenture.
B. XXXXXXX.Xx a material inducement to Secured Party to enter into the
Indenture, Debtor has agreed to execute this Security Agreement in favor of
Secured Party and to pledge all its right, title and interest in the
collateral described herein to Secured Party.
AGREEMENT
Now therefore, in consideration of the above recitals and the mutual covenants
hereinafter set forth, the parties hereto agree as follows:
1 . CREATION OF SECURITY INTEREST.Debtor hereby assigns, pledges and grants
to Secured Party, for the equal and ratable benefit of the Holders of the
Notes, a security interest in all of Debtor's right, title and interest in and
to the collateral described in Section 2 hereinbelow (the "COLLATERAL") in
each case whether now in existence or hereafter arising, now owned or
hereafter acquired by Debtor and wherever located, in order to secure the
payment and performance of the obligations of Debtor to Secured Party
described in Section 3 hereinbelow.
2. COLLATERAL.The Collateral under this Security Agreement is:
(a) all of Debtor's personal property, goods, furnishings, fixtures and
equipment, supplies, building and other materials of every nature whatsoever
and all other personal property, including, but not limited to, communication
systems, visual and electronic surveillance systems and transportation systems
and including all property and materials stored therein in which Debtor has an
interest and all tools, utensils, food and beverage, liquor, uniforms, linens,
housekeeping and maintenance supplies, vehicles, fuel, advertising and
promotional material, blueprints, surveys, plans and other documents relating
to the Project, all gaming and general equipment and devices which are or are
to be installed and used in connection with the operation of Casino
Magic-Bossier City (the "PROJECT"), and the Vessels (as hereinafter defined),
all computer equipment, calculators, adding machines, and gaming tables, video
game and slot machines and any other electronic equipment, all furniture,
fixtures, equipment, gaming equipment, appurtenances and personal property now
or in the future contained in, used in connection with, attached to, or
otherwise useful or convenient to the use, operation, or occupancy of, or
placed on, but unattached to, any part of the Project or the land upon which
the Project will be constructed, including all removable window and floor
coverings, all furniture and furnishings, heating, lighting, plumbing,
ventilating, air conditioning, refrigerating, incinerating and elevator and
escalator plants, cooking facilities, vacuum cleaning systems, public address
and communications systems, sprinkler systems and other fire prevention and
extinguishing apparatus and materials, motors, machinery, pipes, appliances,
equipment, fittings, fixtures, and building materials, together with all
venetian blinds, shades, draperies, drapery and curtain rods, brackets, bulbs,
cleaning apparatus, mirrors, lamps, ornaments, cooling apparatus and
equipment, ranges and ovens, garbage disposals, dishwashers, mantels, and any
and all such property which is at any time installed in affixed to or placed
upon the land upon which the Project will be constructed, all fixtures for
generating or distributing air, water, heat, electricity, light, fuel or
refrigeration, or for ventilating or sanitary purposes, or for the exclusion
of vermin or insects, or for the removal of dust, refuse or garbage, all
specifically designed installations and ftirnishings, and all other personal
property, furniture, fixtures and equipment of every nature used or located at
the Project (all of the foregoing property and similar or after-acquired
property included as Collateral under Section 2(i) below being hereinafter
referred to as "EQUIPMENT");
(b) all of Debtor's accounts and accounts receivable, including, without
limitation, all rights to payment for goods sold or leased or for services
rendered which are not evidenced by an instrument or chattel paper, all other
present or ftiture rights for money due or to become due, all of Debtor's
chattel paper, instruments, promissory notes (including, without limitation,
all inter-company notes), markers and general intangibles for money due or to
become due of any kind, in each case whether now existing or hereafter arising
and wherever arising and whether or not earned by performance and all
royalties, earnings, income, proceeds, products, rents, revenues, reversions,
remainders, issues, profits, avails, and other benefits directly or indirectly
derived or otherwise arising from any of the foregoing, (collectively, the
"RECEIVABLES"), other general intangibles, documents of title, warehouse
receipts, leases, deposit accounts, including, without limitation, the
Interest Reserve Account, the Construction Disbursement Account, the Operating
Reserve Account, the Completion Reserve Account, and the Escrow Account,
money, tax refund claims, partnership interests, indemnification and other
similar claims and contract rights, permits and licenses, including, without
limitation, any licenses held or to be held by Debtor necessary to operate the
Project (including, without limitation, licenses in favor of Debtor granted
pursuant to the Management Agreement or otherwise), franchises, variances,
special permits, rulings, validations, exemptions, filings, registrations,
authorizations, consents, approvals, waivers, orders, rights and agreements
(including, without limitation, options, option rights and contract rights)
certificates, stock, any and all books, records, customer lists, concession
agreements, supply or service contracts, documents, unearned premiums,
rebates, deposits, refunds, including, but not limited to, income tax refunds,
prepaid expenses, rebates, tax and insurance escrow and impound accounts, if
any, and all rights in, to and under all security agreements, mortgages, deeds
of trust, guarantees, leases and other agreements or contracts securing or
otherwise relating to any of the foregoing or now or hereafter obtained by
Debtor from any Goverrunental Authority having or claiming jurisdiction over
the Project, and all things in action, rights represented by judgments, awards
of damages, settlements and claims arising out of tort, warranty or contract
(including, without limitation, the right to assert and otherwise be the
proper party of interest to commence, control, prosecute and/or settle such
actions, whether as claims, counterclaims or otherwise, and whether involving
matters arising from casualty, condenmation, indemnification, negligence,
strict liability, other tort, contract, warranty or in any other manner), and
all securities of any Subsidiary, whether now in existence or hereafter
incorporated or formed, (all of the foregoing property, including, without
limitation, the Receivables, and similar or after-acquired property included
as Collateral under Section 2(i) below being hereinafter referred to as
"INTANGIBLES");
(c) all of the trademarks and service marks now held or hereafter acquired
by Debtor or licensed to Debtor, which are registered in the United States
Patent and Trademark Office or in any similar office or agency of the United
States or any state thereof or any political subdivision thereof and any
application for such trademarks and service marks, as well as any unregistered
marks used by Debtor in the United States and trade dress including logos,
designs, trade names, business names, fictitious business names and other
business identifiers in connection with which any of these registered or
unregistered marks are used in the United States ("MARKS"), together with the
registration and right to renewals thereof, and the goodwill of the business
of Debtor symbolized by the Marks and all licenses associated therewith;
(d) all United States copyrights which Debtor now or hereafter has
registered with the United States Copyright Office, as well as any application
for a United States copyright registration now or hereafter made with the
United States Copyright Office by Debtor (" COPYRIGHTS ");
(e) all patents and patent applications, and any divisions or
continuations thereof, which are registered in the United States Patent and
Trademark Office or any similar office or agency of the United States or any
state thereof or political subdivision thereof ("PATENTS") together with the
registration and right to renewals, reissues and extensions thereof, and the
goodwill of the business of Debtor symbolized by the Patents;
(f) all computer programs of Debtor and all intellectual property rights
therein and all other proprietary information of Debtor, including, but not
limited to, trade secrets;
(g) all contract rights, warranty rights and other intangible rights of the
debtor of any kind pertaining to (i) that certain riverboat gaming vessel "
MARY'S PRIZE, " U.S. Coast Guard Official Number 102801 1, (ii) that
certain riverboat gaming vessel "CRESCENT CITY QUEEN," U.S. Coast Guard
Official Number 1028319, and (iii) all other riverboat gaming vessels or other
vessels now or hereafter owned by Debtor, including, without limitation, any
and all engines, boilers, machinery, components, gaming equipment, masts,
boats, capstans, outfit, tools, pumps, gear, ftimishings, appliances,
fittings, spare and replacement parts and any and all other appurtenances
thereto or appertaining or belonging to any of the aforesaid vessels, whether
on board or not on board (collectively the "Vessels"); and
(h) all of Debtor's right, title and interest in and to any and all maps,
plans, preliminary plans, specifications, surveys, studies, tests, reports,
data and drawings relating to the development of the Project including,
without limitation, all marketing plans, feasibility studies, soils tests,
design contracts and all contracts and agreements of Debtor relating thereto
including, without limitation, architectural, structural, mechanical and
engineering plans and specifications, studies, data and drawings prepared for
or relating to the development of the Project or the construction, renovation
or restoration of the Project as finalized, amended, supplemented, or
otherwise modified from time to time by 2nd Opinion, Inc., a Louisiana
corporation (the "INDEPENDENT CONSTRUCTION CONSULTANT"), in accordance with
the terms of the Cash Collateral and Disbursement Agreement, or the extraction
of minerals, sand, gravel or other valuable substances from the land upon
which the Project will be constructed and purchase contracts or any agreement
granting Debtor a right to acquire any land situated within the Parish of
Bossier, Louisiana, or the Parish of Caddo, Louisiana; and
(i) the Collateral includes all items described in this Section 2, whether now
owned or hereafter at any time acquired by Debtor and wherever located, and
includes all replacements, additions, parts, appurtenances, accessions,
substitutions, repairs, proceeds, products, offspring, rents and profits,
relating thereto or therefrom, and all documents, records, ledger sheets and
files of Debtor relating thereto ("PROCEEDS"). Proceeds hereunder include (i)
whatever is now or hereafter receivable or received by Debtor upon the sale,
exchange, collection or other disposition of any item of Collateral, whether
voluntary or involuntary, whether such proceeds constitute Equipment,
Intangibles, Vessels, Receivables or other assets; (ii) to the extent
permitted by law, whatever is now or hereafter receivable or received by
Debtor upon the sale, exchange, collection or other disposition of any Gaming
License, regardless of whether such Gaming License is Collateral or an
Excluded Asset; (iii) any such items which are now or hereafter acquired by
Debtor with any proceeds of Collateral hereunder; and (iv) any insurance or
payments under any indemnity, warranty or guaranty now or hereafter payable by
reason of loss or damage or otherwise with respect to any item of Collateral
or any proceeds thereof. Notwithstanding the foregoing, "Collateral,"
"Equipment," "Receivables," and "Intangibles" shall not include any of the
following assets (the "EXCLUDED Assets"): (i) Gaming Licenses (as defined in
the Indenture) or any other governmental approval or permit, 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 Secured Party without the
approval of the relevant Govermnental Authority, to the extent that such
approval has not been obtained; (ii) any Equipment (A) the purchase of which
was not financed with the proceeds of the Notes and (B) that Debtor is
permitted to encumber and has encumbered pursuant to Section 4.09 of the
Indenture and (C) in which Secured Party is prohibited from maintaining a
security interest pursuant to the terms of the FF&E Financing Agreement (as
defined below) encumbering such Equipment; and (iii) if Debtor incurs
indebtedness on a secured basis to finance the costs of constructing the
Casino Magic-Bossier City Hotel pursuant to Section 4.09 of the Indenture and
satisfies any and all conditions set forth therein, any FF&E, Equipment or
other personal property that is used or located at olr in connection with the
operation of the Casino Magic-Bossier City Hotel; providedthat, in such
event, Secured Party shall execute and deliver any instruments necessary or
appropriate to release the lien of this Security Agreement on all such FF&E,
Equipment or other personal property.
3. SECURED OBLIGATIONS OF DEBTOR.The Collateral secures and shall
hereafter secure (i) the payment by Debtor to the Holders or Secured Party of
all indebtedness now or hereafter owed to the Holders or Secured Party by
Debtor in connection with the transactions related to the Notes and the
Indenture (the "BOSSIER CITY FINANCING"), whether at stated maturity, by
acceleration or otherwise, including, without limitation, Debtor's obligations
under the Indenture, the Notes or any related documents securing the
obligations thereunder, together with any interest thereon as provided
therein, payments for early termination, fees, expenses, increased costs,
indemnification or otherwise, in connection therewith and extensions,
modifications and renewals thereof, (ii) the perfon-xxxxx by Debtor of all
other obligations and the discharge of all other liabilities of Debtor to the
Holders or Secured Party of every kind and character arising from the Bossier
City Financing, whether direct or indirect, absolute or contingent, due or to
become due, now existing or hereafter arising, joint, several, joint and
several (i.e., solidary), whether or not arising after the commencement of a
proceeding under Bankruptcy Law (including postpetition 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, and whether created under this Security Agreement
or any other agreement to which Debtor and Secured Party are parties, (iii)
any and all sums advanced by Secured Party in order to preserve the Collateral
or preserve Secured Party's security interest in the Collateral (or the
priority thereof), and (iv) the expenses of retaking, holding, preparing for
sale or lease, selling or otherwise disposing of or realizing on the
Collateral, of any proceeding for the collection or enforcement of any
indebtedness, obligations or liabilities of Secured Party referred to above,
or of any exercise by Secured Party of its rights hereunder, together with
reasonable attorneys' fees and disbursements and court costs (collectively,
the "SECURED OBLIGATIONS"). All payments and performance by Debtor with
respect to any Secured Obligations shall be in accordance with the terms under
which said indebtedness, obligations and liabilities were or are hereafter
incurred or created.
4. Debtor's RepresentationsAND Warranties. Debtor represents and
warrants that:
(a) Debtor is (or, to the extent that the Collateral is acquired after the
date hereof, will be) the sole legal and beneficial owner of the Collateral
and has exclusive possession and control thereof; there are no security
interests in, Liens, charges or encumbrances on, or adverse claims of title
to, or any other interest whatsoever in, the Collateral or any portion thereof
except Permitted Liens (as defined in the Indenture, including, without
limitation, Liens that are created by this Security Agreement); and no
financing statement, notice of lien, mortgage, deed of trust or instrument
similar in effect covering the Collateral or any portion thereof ("LIEN
NOTICE") exists or is on file in any public office, and no Collateral or any
portion thereof is in the possession of any third party, except as relates to
Permitted Liens, including, without limitation, Liens as may have been filed
in favor of Secured Party relating to this Security Agreement or related
agreements, or for which duly executed termination statements have been
delivered to Secured Party for filing;
(b) Debtor has full right, power and authority to execute, deliver and
perform this Security Agreement. This Security Agreement constitutes a
legally valid and binding obligation of Debtor, enforceable against Debtor in
accordance with its terms. Subject to the completion of the items identified
in Section 4(c) below, the provisions of this Security Agreement are effective
to create in favor of Secured Party a valid and enforceable first, prior and
perfected security interest in the Collateral subject only to Permitted Liens;
(c) except for (i) the filing or recording of the financing statements and
fixture filings done concurrently with the execution and delivery hereof, (ii)
the actual taking of possession of instruments constituting Collateral by the
Trustee hereunder, if required by the Louisiana Uniform Connnercial Code,
Commercial Laws - Secured Transactions, (iii) all consents received and
actions taken in connection with the closing of the offering of the Notes, and
(iv) any filings necessary to perfect Secured Party's security interest in any
Patent, Trademark or Copyright, no authorization, approval or other action by,
no notice to or registration or filing with, any person or entity, including
without limitation, any stockholder or creditor of Debtor or any governmental
authority or regulatory body is required (x) for the grant by Debtor of the
security interest in the Collateral pursuant to this Security Agreement or for
the execution, delivery or performance of this Security Agreement by Debtor,
(y) for the perfection or maintenance of such security interest created
hereby, including the first priority nature of such security interest subject
to Permitted Liens, or (except for notices required under the Louisiana
Uniform Commercial Code, Commercial Laws - Secured Transactions) the exercise
by Secured Party of the rights and remedies provided for in this Security
Agreement (other than any required governmental consent or filing with respect
to any Patents, Trademarks, Copyrights, governmental claims, tax refunds,
licenses or permits or the exercise of remedies requiring prior court
approval, notices, consents, approvals or authorizations in connection with
the sale of any securities under laws affecting the offering and sale of
securities generally), or (z) for the enforceability of such security interest
against third parties, including, without limitation, judgment lien creditors;
(d) except as set forth on Exhibit "A" attached hereto, Debtor does not do
business, and for the previous five (5) years has not done business, under any
fictitious business names or trade names;
(e) the Collateral has not been and shall not be used or bought by Debtor
for personal, family or household purposes. In addition, the Collateral does
not include crops, timber, farm products, minerals or the like or accounts
resulting from the sale of such minerals at the wellhead or minehead;
(f) Debtor's chief executive office is located at 0000 Xxx Xxxxxx Xxxx,
Xxxxxxx Xxxx, Xxxxxxxxx 71 1 1 1, Debtor's federal tax identification number
is 6408781 10, and Debtor has no places of business other than such address
and the Collateral is now and shall at all times hereafter be located at
Debtor's places of business or as Debtor may otherwise notify Secured Party in
writing;
(g) Debtor does not maintain any deposit accounts other than those set
forth in Exhibit " B " hereto and Debtor is not now indebted to any
organization with which Debtor maintains a deposit account;
(h) Debtor has not purchased any Collateral, other than for cash, within
twenty-one (21) days prior to the date hereof;
(i) all originals of all promissory notes, other instruments or chattel
paper which evidence Receivables (other than checks received by Debtor in the
ordinary course of business, which Debtor promptly shall deposit into one of
the deposit accounts encumbered hereunder) have been delivered to Secured
Party (with all necessary or appropriate endorsements);
(j) none of the execution, delivery and performance of this Security
Agreement by Debtor, the consummation of the transactions herein contemplated,
the FTILFILLMENT of the terms hereof or the exercise by Secured Party of any
rights or remedies hereunder shall constitute or result in a breach of any of
the terms or provisions of, or constitute a default under, or constitute an
event which with notice or lapse of time or both shall result in a breach of
or constitute a default under, any material agreement, or any indenture,
mortgage, deed of trust, equipment lease, instrument or other document to
which Debtor is a party, conflict with or require approval, authorization,
notice or consent under any material law, order, rule, regulation, license or
pen-nit applicable to Debtor of any court or any federal or state government,
regulatory body or administrative agency, or any other governmental body
having jurisdiction over Debtor or its properties or require notice, consent,
approval or authorization by or registration or filing with any person or
entity (including, without limitation, any stockholder or creditor of Debtor)
other than (i) any notices to Debtor from Secured Party required hereunder,
(ii) notices and filings in connection with the perfection of Liens hereunder,
and (iii) notices, consents, approvals or authorizations in connection with
the sale of any securities under laws affecting the offering and sale of
securities generally. Except for documents entered into in connection with
Permitted Liens, none of the Collateral is subject to any material agreement,
or any indenture, mortgage, deed of trust, equipment lease, instrument or
other document to which Debtor is a party which may restrict or inhibit
Secured Party's rights or ability to sell or dispose of the Collateral or any
part thereof after the occurrence of a Default or an Event of Default (as
defined herein);
(k) Debtor is the true lawful exclusive owner or licensee of the Marks
listed in Annex 1, except those listed as being held under a non-exclusive
license, and that said listed Marks include all the United States federal
registrations or applications registered in the United States Patent and
Trademark office and that said Marks are valid, subsisting and have not been
cancelled. Debtor represents and warrants that, except as indicated on Annex
1, it owns or is licensed to use or not prohibited from using all Marks that
it uses. Debtor ftirther warrants that, except as indicated on Annex 1, it
is aware of no third party claim that any aspect of Debtor's present or
contemplated business operations infringes or will infringe Debtor's Marks.
Debtor represents and warrants that it is the owner of record of all United
States registrations and applications listed in Annex 1 hereto and that said
registrations are valid, subsisting, have not been cancelled and that such is
not aware of any third party claim that any of said registrations is invalid
or unenforceable; and
(l) Debtor is the true and lawful exclusive owner of all rights in the
Patents listed in Amex 2 hereto and in the Copyrights listed in Annex 3
hereto, that said Patents include all the United States patents and
applications for United States patents that Debtor owns and that said
Copyrights constitute all the United States copyrights registered in the
United States Copyright Office and applications for United States copyrights
that it now uses or practices under. Debtor further warrants that it is aware
of no third party claiirn that any aspect of Debtor's present or contemplated
business operations infringes or will infringe any Patent or any Copyright.
5. COVENANTS OF DEBTOR.Debtor covenants and agrees that:
(a) Debtor shall not move or permit to be moved the Collateral or any
portion thereof to any location other than that set forth in Section 4(f)
hereof or the Project or locations established in compliance with Section 5(B)
hereof, in each case without the prior written consent of Secured Party, which
consent shall not be unreasonably withheld, and the prior filing of a
financing statement with the proper offices and in the proper form, to the
extent necessary or appropriate, to perfect or continue the perfection
(without loss of priority) of the security interests created herein, which
filing shall be satisfactory in form, substance and location to Secured Party
prior to such filing;
(b) Debtor shall not voluntarily or involuntarily change its name,
identity, corporate structure, or location of its chief executive office or
any of its other places of business, unless in any such case (i) Debtor shall
have first received the prior written consent of Secured Party, (ii) Debtor
shall have executed and caused to be filed financing statements with the
proper offices and in the proper form, to the extent necessary or appropriate,
to perfect or continue the perfection (without loss of priority) of the
security interests created herein, which filing shall be satisfactory in form,
substance and location to Secured Party prior to such filing, and (iii) Debtor
shall have delivered to Secured Party any other documents that may be required
by Secured Party in a form and substance reasonably satisfactory to Secured
Party to perfect or continue the perfection (without loss of priority) of the
security interest created herein;
(c) Debtor shall not establish or create any deposit accounts other than
those set forth in Exhibit "A" without the prior written consent of Secured
Party, and Debtor shall not hereafter incur any indebtedness to any
organization listed in said Exhibit "A" except any indebtedness permitted
under the terms of the Indenture;
(d) Debtor shall promptly, and in no event later than twenty-one (21) days
after a request by Secured Party, procure or execute and deliver all further
instruments and documents (including, without limitation, notices, legal
opinions, financing statements, mortgagee waivers, landlord disclaimers and
subordination agreements) satisfactory to Secured Party, and take any other
actions which are necessary or, in the judgment of Secured Party, desirable or
appropriate to perfect or to continue the perfection, priority and
enforceability of Secured Party's security interests in the Collateral, to
enable Secured Party to exercise and enforce its rights and remedies hereunder
with respect to any Collateral, to protect the Collateral against the rights,
claims or interests of third persons (other than holders of Permitted Liens),
or to effect or to assure further the purposes and provisions of this Security
Agreement, and shall pay all costs incurred in connection therewith. Without
limiting the generality of the foregoing, Debtor shall: (i) xxxx conspicuously
each item of chattel paper and each other contract included in the Collateral
with a legend, in fonn and substance satisfactory to Secured Party, indicating
that such chattel paper and other contracts are subject to the security
interests granted hereby; (ii) execute and file such financing or continuation
statements, or amendments thereto, and such other instruments or notices as
may be necessary or desirable, which Secured Party may reasonably request in
order to perfect and preserve the perfection and priority of the security
interests granted or purported to be granted hereby; (iii) if any Receivable
shall be evidenced by a promissory note or other instrument or chattel paper
(other than checks received by Debtor in the ordinary course of business,
which Debtor promptly shall deposit into one of the deposit accounts
encumbered hereunder), deliver and pledge to Secured Party such note or
instrument or chattel paper duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance reasonably
satisfactory to Secured Party; (iv) if any Collateral is at any time in the
possession or control of any warehouseman, bailee, consignee or any of
Debtor's agents or processors, Debtor shall notify such warehouseman, bailee,
consignee, agent or processor of the security interests created or purported
to be created hereby, shall cause such warehouseman, bailee, consignee, agent
or processor to execute any financing statements or other documents which
Secured Party may request, and, upon the request of Secured Party after the
occurrence and during the continuation of a Default or an Event of Default,
shall instruct such person to hold all such Collateral for Secured Party's
account subject to Secured Party's instructions; (v) deliver and pledge to
Secured Party all securities and instruments (other than checks, received by
Debtor in the ordinary course of business, which Debtor promptly shall deposit
into one of the deposit accounts encumbered hereunder) constituting Collateral
duly endorsed and accompanied by duly executed instruments of transfer or
assignment, all in form and substance satisfactory to Secured Party; and (vi)
at the request of Secured Party, deliver to Secured Party any and all
certificates of title, applications for title or similar evidence of ownership
of all Equipment and shall cause Secured Party to be named as lienholder on
any such certificate of title or other evidence of ownership;
(e) without the prior written consent of Secured Party pursuant to or as
expressly permitted by the Indenture, Debtor shall not in any way encumber, or
hypothecate, or create or permit to exist, any Lien, security interest, charge
or encumbrance or adverse claim upon or other interest in the Collateral,
except for Permitted Liens, including without limitation, encumbrances
permitted by the Indenture and the liens created by this Security Agreement,
and Debtor shall defend the Collateral against all claims and demands of all
persons at any time claiming the same or any interest therein (other than
holders of Permitted Liens), except as expressly provided herein. Debtor
shall not permit any Lien Notices to exist or be on file in any public office
with respect to all or any portion of the Collateral except, in each case, for
Lien Notices of holders of Permitted Liens, including without limitation,
encumbrances permitted by the Indenture or except as may have been filed by or
for the benefit of Secured Party relating to this Security Agreement or
related agreements. Debtor shall promptly notify Secured Party of any
attachment or other legal process levied against any of the Collateral and any
information received by Debtor relative to the Collateral, which may in any
material way affect the value of the Collateral or the rights and remedies of
Secured Party in respect thereto;
(f) except as expressly permitted by the Indenture, Debtor shall not sell,
transfer, assign (by operation of law or otherwise), exchange or otherwise
dispose of all or any portion of the Collateral or any interest therein. If
the proceeds of any such prohibited sale are notes, instruments, documents of
title, letters of credit or chattel paper, such proceeds shall be promptly
delivered to Secured Party to be held as Collateral hereunder (with all
necessary or appropriate endorsements). If the Collateral, or any part
thereof or interest therein, is sold, transferred, assigned, exchanged, or
otherwise disposed of in violation of these provisions, the security interest
of Secured Party shall continue in such Collateral or part thereof
notwithstanding such sale, transfer, assignment, exchange or other
disposition, and Debtor shall hold the proceeds thereof in a separate account
for Secured Party's benefit. Debtor shall, at Secured Party's request,
transfer such proceeds to Secured Party in kind, with such endorsements, if
any, that Secured Party requires;
(g) Secured Party is hereby authorized to file one or more financing
statements or fixture filings, and continuations thereof and amendments
thereto, relative to all or any part of the Collateral, without the signature
of Debtor where permitted by law;
(h) except as expressly permitted by the Indenture, Debtor shall not enter
into any indenture, mortgage, deed of trust, contract, undertaking, document,
instrument or other agreement, except for the Indenture and any documents,
instruments or agreements related thereto or issue any securities which may
restrict or inhibit Secured Party's rights or ability to sell or otherwise
dispose of the Collateral or any part thereof after the occurrence of a
Default or an Event of Default;
(i) except as expressly permitted by the Indenture, Debtor shall not enter
into, modify or amend any existing or future contracts or agreements relating
to the sale or disposition of the Collateral or any part thereof outside the
ordinary course of business without the prior written consent of Secured Party
pursuant to the Indenture. Upon request of Secured Party, Debtor shall
provide Secured Party with copies of all existing and hereafter created
contracts and agreements pertaining to any such sale or disposition and of all
amendments and modifications thereto;
(j) except as expressly permitted by the Indenture, Debtor shall pay and
discharge all taxes, assessments and governmental charges or levies against
the Collateral prior to delinquency thereof and shall keep the Collateral free
of all unpaid claims and charges (including claims for labor, materials and
supplies) whatsoever,
(k) Debtor shall keep and maintain the Collateral in good condition,
working order and repair, ordinary wear and tear excepted, and from time to
time shall make or cause to be made all repairs, replacements and other
improvements in connection therewith that are necessary or desirable toward
such end. Debtor shall not misuse or abuse the Collateral, or waste or allow
it to deteriorate except for the ordinary wear and tear of its normal and
expected use in Debtor's business in accordance with Debtor's policies as then
in effect ( ided that no changes are made to Debtor's policies as in effect on
the date hereof that would be materially adverse to the interests of Secured
Party), and shall comply with all material laws, statutes and regulations
pertaining to the use or ownership of the Collateral. Debtor shall promptly
notify Secured Party regarding any material loss or damage to any material
portion of the Collateral;
(l) Debtor shall take (i) all actions consistent with reasonable business
judgment, or (ii) upon the occurrence and during the continuation of a Default
or an Event of Default, all actions directed by Secured Party in Secured
Party's sole and absolute discretion, to create, preserve and enforce any
Liens or guaranties available to secure or guaranty payments due Debtor under
any contracts or other agreements with third parties, shall not voluntarily
permit any such payments to become more than thirty (30) days delinquent and
shall in a timely manner record and assign to Secured Party, to the extent and
at the earliest time permitted by law, any such Liens and rights under such
guaranties. Debtor shall give Secured Party written notice of any payments
due Debtor within five (5) days after any such payments become thirty (30)
days delinquent;
(m) upon Secured Party's request, Debtor shall promptly deliver to Secured
Party records and schedules that show the status, condition and location of
the Collateral, including accounts receivable aging reports and other reports
reasonably requested by Secured Party, all in reasonable detail; shall
promptly notify Secured Party in writing of any event, or change of law,
regulation, business practice, or business condition that may materially
adversely affect the value of the Collateral; and shall provide Secured Party
with current financial information concerning Debtor's business on a monthly,
quarterly and audited fiscal year end basis, with detail satisfactory to
Secured Party and which shall be prepared in accordance with generally
accepted accounting principles consistently applied. Secured Party shall have
the right to review and verify such records, schedules, financial information
and notices, and Debtor shall reimburse Secured Party for all costs incurred
thereby. Such review and verification shall include the right of Secured
Party to contact account debtors to confirm balances owing on and the terms of
Receivables, which right shall be subject to providing prior notice to Debtor
so long as no Default or Event of Default has occurred and is continuing;
(n) except as otherwise provided in this Section 5(n), Debtor shall continue
to collect, at its own expense, all amounts due or to be become due Debtor
under the Receivables or the Intangibles. In connection with such
collections, Debtor may take (and at Secured Party's reasonable direction,
shall take) such action as Debtor or Secured Party (or, upon the occurrence
and during the continuation of a Default or an Event of Default, Secured
Party) may deem necessary or advisable to enforce collection of the
Receivables or the Intangibles; provided, however, that Debtor shall not
adjust, settle or compromise the amount or payment of any Receivable or
Intangible, or release wholly or partly any account debtor or obligor thereof,
or allow any credit or discount thereon, other than adjustments, settlements,
or discounts that are in accordance with Debtor's policies as then in effect;
provided that no changes are made to Debtor's policies as in effect on the
date hereof that would be materially adverse to the interests of Secured
Party. Secured Party shall have the right at any time after the occurrence
and during the continuation of a Default or an Event of Default to notify the
account debtors or obligors under any of the Receivables or the Intangibles of
the assiginment of such Receivables or Intangibles to Secured Party and to
direct such account debtors or obligors to make payment of all amounts due or
to become due to Debtor thereunder directly to Secured Party and, upon such
notification and at the expense of Debtor, to enforce collection of any such
Receivables or Intangibles, and to adjust, settle or compromise the amount or
payment thereof, as Secured Party may deem appropriate in its sole discretion.
After the occurrence and during the continuation of a Default or an Event of
Default (i) all amounts and proceeds (including instruments) received by
Debtor in respect of the Receivables or the Intangibles shall be received in
trust for the benefit of Secured Party hereunder and, upon notice from Secured
Party, shall be segregated from other funds of Debtor and shall be forthwith
paid over to Secured Party in the sarne form as so received (with all
necessary or appropriate endorsements as required by Secured Party) to be held
as cash collateral and applied as provided by the Indenture, and (ii) Debtor
shall not adjust, settle or compromise the amount or payment of any Receivable
or Intangible, or release wholly or partly any account debtor or obligor
thereof, or allow any credit or discount thereon;
(o) Secured Party shall have the right during regular business hours and
upon prior notice to Debtor to enter into and upon any premises where any of
the Collateral or records with respect thereto are located for the purpose of
inspecting the same, performing any audit, making copies of records, observing
the use of any part of the Collateral, or otherwise protecting its security
interest in the Collateral. Debtor shall hold and preserve all records
concerning the Receivables and (unless required to be delivered to Secured
Party) all originals of all chattel paper that evidences any Receivables;
(p) Secured Party shall have the right at any time, but shall not be
obligated, to make any payments and do any other acts Secured Party may deem
necessary or desirable to protect its security interest in the Collateral,
including, without limitation, the right to pay, purchase, contest or
compromise any encumbrance, charge or Lien (excluding any Permitted Liens)
applicable or purported to be applicable to any Collateral hereunder, and
appear in and defend any action or proceeding purporting to affect its
security interest in and/or the value of any Collateral, and in exercising any
such powers or authority, the right to pay all expenses incurred in connection
therewith, including reasonable attorneys' fees. Debtor hereby agrees that it
shall be bound by any such payment made or incurred or act taken by Secured
Party hereunder and shall reimburse Secured Party for all payments made and
expenses incurred under this Security Agreement, which amounts shall be
secured under this Security Agreement. Secured Party shall have no obligation
to make any of the foregoing payments or perform any of the foregoing acts;
(q) if Debtor shall become entitled to receive or shall receive any
certificate, instrument, option or right (other than checks received by Debtor
in the ordinary course of business, which Debtor promptly shall deposit into
one of the deposit accounts encumbered hereunder), whether as an addition to,
in substitution of, or in exchange for any or all of the Collateral or any
part thereof, or otherwise, Debtor shall accept any such instruments as
Secured Party's agent, shall hold them in trust for Secured Party, and shall
deliver them forthwith to Secured Party in the exact form received, with
Debtor's endorsement when necessary or appropriate, or accompanied by duly
executed instruments of transfer or assignment in blank or, if requested by
Secured Party, an additional pledge agreement or security agreement executed
and delivered by Debtor, all in form and substance satisfactory to Secured
Party, to be held by Secured Party, subject to the terms hereof, as additional
Collateral to secure the obligations hereunder;
(r) Secured Party is hereby authorized to pay all reasonable costs and
expenses incurred in the exercise or enforcement of its rights hereunder,
including reasonable attorneys' fees, and, while a Default or an Event of
Default exists, to apply any Collateral or proceeds thereof against such
amounts, and then to credit or use any further proceeds of the Collateral in
accordance herewith;
(s)Secured Party may take any actions permitted hereunder or in connection
with the Collateral by or through agents or employees and shall be entitled to
retain counsel and to act in reliance upon the advice of counsel concerning
all such matters; and
(t) Debtor hereby agrees to take all actions necessary to maintain Secured
Party's first prior security interest (subject to Permitted Liens) in all
Marks, Patents and Copyrights, to preserve the value of all Marks, Patents and
Copyrights, to prosecute and defend such Marks, Patents and Copyrights against
infringement, and to provide Secured Party with notice of any material
pertinent information regarding any such infringement, any material actions
with the United States Patent and Trademark Office and any other information
which could have a material adverse effect on the Marks, Patents and
Copyrights.
6. DEFAULTS AND REMEDIES
(a) The occurrence of any "Default" or "Event of Default" under the
Indenture (subject to the cure rights set forth therein) shall constitute a
Default or an Event of Default, as the case may be, under this Security
Agreement.
(b) Upon the occurrence and continuation of a Default or an Event of
Default hereunder, Debtor expressly covenants and agrees that Secured Party
may, at its option, subject to the terms of the Indenture, in addition to
other rights and remedies provided herein or otherwise available to it,
without notice to or demand upon Debtor (except as otherwise required
herein), exercise any one or more of the rights as set forth as follows:
i) declare all advances made by Secured Party to Debtor hereunder, all
other indebtedness owed by Debtor to Secured Party and all Secured Obligations
to be immediately due and payable, whereupon all unpaid principal and interest
on said advances and other indebtedness and Secured Obligations shall become
and be immediately due and payable;
ii) iniinediately take possession of any of the Collateral wherever it may
be found or require Debtor to assemble the Collateral or any part thereof and
make it available at one or more places as Secured Party may designate, and to
deliver possession of the Collateral or any part thereof to Secured Party, who
shall have ftill right to enter upon any or all of Debtor's places of
business, premises and property to exercise Secured Party's rights hereunder;
iii) exercise any or all of the rights and remedies provided for by the
Louisiana Uniform Commercial Code, Commercial Laws - Secured Transactions,
specifically including, without limitation, the right to recover the
attorneys' fees and other expenses incurred by Secured Party in the
enforcement of this Security Agreement or in connection with Debtor's
redemption of the Collateral. Secured Party may exercise its rights under
this Security Agreement independently of any other collateral or guaranty that
Debtor may have granted or provided to Secured Party in order to secure
payment and performance of the Secured Obligations, and Secured Party shall be
under no obligation or duty to foreclose or levy upon any other collateral
given by Debtor to secure any Secured Obligation or to proceed against any
guarantor before enforcing its rights under this Security Agreement;
iv) use, manage, operate and control the Collateral and Debtor's business
and property to preserve the Collateral or its value, or to pay the Secured
Obligations, including, without limitation, the rights to take possession of
all of Debtor's premises and property, to exclude Debtor and any third
parties, whether or not claiming under Debtor, from such premises and
property, to make repairs, replacements, alterations, additions and
improvements to the Collateral and to dispose of all or any portion of the
Collateral in the ordinary course of Debtor's business;
v) except as herein provided or as may be required by mandatory provisions
of law, sell the Collateral or any part thereof at public or private sale, for
cash, upon credit or for future delivery, and at such price or prices as
Secured Party may deem satisfactory. Secured Party may be the purchaser of
any or all of the Collateral so sold at any public sale (or, if the Collateral
is of a type customarily sold in a recognized market or is of a type which is
the subject of widely distributed standard price quotations, at any private
sale). Debtor shall execute and deliver such documents and take such other
action as Secured Party deems necessary or advisable in order that any such
sale may be made in compliance with law. Upon any such sale Secured Party
shall have the right to deliver, assign and transfer to the purchaser thereof
the Collateral so sold. Each purchaser at any such sale shall hold the
Collateral so sold to it absolutely and free from any claim or right of
whatsoever kind, including any equity or right of redemption of Debtor which
may be waived, and Debtor, to the extent permitted by law, hereby specifically
waives all rights of redemption, stay or appraisal which it has or may have
under any law now existing or hereafter adopted. Debtor agrees that ten (10)
days prior written notice of the time and place of any sale or other intended
disposition of any of the Collateral constitutes "reasonable notification"
within the meaning of Section 9:504(3) (or any comparable section in any other
jurisdiction) of the Louisiana Uniform Conimercial Code, Commercial Laws
Secured Transactions, except that shorter or no notice shall be reasonable as
to any Collateral which is perishable or threatens to decline speedily in
value or is of a type customarily sold on a recognized market. The notice (if
any) of such sale shall (i) in case of a public sale, state the tirne and
place fixed for such sale, (ii) in the case of a private sale, state the day
after which such sale may be consunnnated. Any such public sale shall be held
at such time or times within ordinary business hours and at such place or
places as Secured Party may FIX and the notice of such sale. At any such sale
the Collateral may be sold in one lot as an entirety or in separate parcels or
portions, as Secured Party may determine and with or without any attendant
foreclosure or sale of real property also serving as collateral for any of the
Secured Obligations. Secured Party shall not be obligated to make any such
sale pursuant to any such notice. Secured Party may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for
the sale, and such sale may be made at any time or place to which the same may
be so adjourned. In case of any sale of all or any part of the Collateral on
credit or for ftiture delivery, the Collateral so sold may be retained by
Secured Party until the selling price is paid by the purchaser thereof, but
Secured Party shall not incur any liability in case of the failure of such
purchaser to take up and pay for the Collateral so sold and, in case of any
such failure, such Collateral may again be sold upon like notice;
vi) proceed by an action or actions at law or in equity to recover the
indebtedness secured hereunder or to foreclose this Security Agreement and
sell the Collateral, or any portion thereof, pursuant to a judgment or decree
of a court or courts of competent jurisdiction in any xxxxx permitted by law,
or provided for herein;
vii) in the event Secured Party recovers possession of all or any part of
the Collateral pursuant to a writ of possession or other judicial process,
whether prejudgment or otherwise, Secured Party may retain, sell or otherwise
dispose of such Collateral in accordance with this Security Agreement or the
Louisiana Uniform Commercial Code, Commercial Laws - Secured Transactions, and
following such retention, sale or other disposition, Secured Party may
voluntarily dismiss without prejudice the judicial action in which such writ
of possession or other judicial process was issued. Debtor hereby consents to
the voluntary dismissal without prejudice by Secured Party of such judicial
action, and Debtor further consents to the exoneration of any bond which
Secured Party files in such action;
viii) with respect to the sale of securities constituting Collateral, to the
extent Secured Party deems it advisable to do so, in its sole discretion or as
may be required by applicable law, restrict the prospective bidders or
purchasers to persons who in Secured Party's sole judgment are sufficiently
sophisticated and who shall represent and agree that they are purchasing the
securities constituting Collateral then being sold for their own account and
not with a view to the distribution or resale thereof, and upon consunmiation
of any such sale, Secured Party shall have the right to assign, transfer and
deliver to the purchaser or purchasers thereof the securities constituting
Collateral so sold;
ix) Secured Party, in its sole discretion, if permitted by law, may bid
(which bid may be, in whole or in part, in the form of cancellation of
indebtedness) for and purchase for its account the whole or any part of the
Collateral at any public sale or sale on any securities exchange or other
recognized market;
x) to the full extent provided by law, have a court having jurisdiction
appoint a receiver, which receiver shall take charge and possession of and
protect, preserve, replace and repair the Collateral or any part thereof, and
manage and operate the same, and receive and collect all rents, income,
receipts, royalties, revenues, issues and profits therefrom. Debtor shall
irrevocably consent and shall be deemed to have hereby irrevocably consented
to the appointment thereof, and upon such appointment, Debtor shall
immediately deliver possession of such Collateral to the receiver. Debtor
also irrevocably consents to the entry of an order authorizing such receiver
to invest upon interest any funds held or received by the receiver in
connection with such receivership. Secured Party shall be entitled to such
appointment as a matter of right, if it shall so elect, without the giving of
notice to any other party and without regard to the adequacy of the security
of the Collateral;
xi) enforce one or more remedies hereunder, successively or concurrently,
and such action shall not operate to estop or prevent Secured Party from
pursuing any other or further remedy which it may have hereunder or by law,
and any repossession or retaking or sale of the Collateral pursuant to the
terms hereof shall not operate to release Debtor until full and final payment
of any deficiency has been made in cash. Debtor shall reimburse Secured Party
upon demand for, or Secured Party may apply any proceeds of Collateral to, the
costs and expenses (including attorneys' fees, transfer taxes and any other
charges) incurred by Secured Party in connection with any sale, disposition,
repair, replacement, alteration, addition, improvement or retention of any
Collateral hereunder;
xii) upon the occurrence of a Default or an Event of Default hereunder,
any cash held by Secured Party as Collateral and all cash proceeds received by
Secured Party in respect of any sale of, collection from, or other realization
upon all or any part of the Collateral may, in the discretion of Secured
Party, be held by Secured Party as collateral for and/or then or at any time
thereafter applied (including application to the payment of any costs,
expenses, indemnification and other amounts payable to Secured Party
hereunder, which amounts may be paid in whole or in part prior to the other
Secured Obligations) in whole or in part by Secured Party against all or any
part of the Secured Obligations in such order as Secured Party shall elect.
Any surplus of such cash or cash proceeds held by Secured Party and remaining
after payment in full of all the Seeured Obligations shall be paid over to
Debtor or to whomever may be lawfully entitled to receive such surplus or as a
court of competent jurisdiction may direct; provided, however, that in the
event that all of the conditions to termination of this Security Agreement
under Section 7(l) shall have not been fulfilled, such balance shall be held
as additional Collateral hereunder and applied from time to thne to Secured
Party's costs and expenses and as otherwise provided hereunder until all such
conditions shall have been fulfilled; and
xiii) effect an absolute assignment of all of Debtor's right, title and
interest in and to each Xxxx (and the goodwill of the business of Debtor
associated therewith), Patent and Copyright.
(c) The provisions of this Subsection 6(c) shall, without limiting the
generality of any other provision of this Security Agreement, be applicable in
the event any foreclosure shall take place in Louisiana on any Collateral or,
in connection with any foreclosure hereunder, Louisiana law shall otherwise be
applicable. Secured Party, instead of exercising the power of sale herein
conferred upon it, may proceed by a suit or suits at law or in equity to
foreclose this Security Agreement and sell the Collateral, 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,
Debtor does hereby acknowledge the Secured Obligations and confess judgment in
favor of Secured Party for the full amount of such Secured Obligations.
Debtor does by these presents consent and agree that upon the occurrence of a
Default or an Event of Default it shall be lawful for Secured Party to cause
all and singular the Collateral to be seized and sold under executory or
ordinary process, at Secured Party's sole option, without appraisement,
appraisement being hereby expressly waived, in one lot as an entirety or in
separate parcels or portions as Secured Party may determine, to the highest
bidder, and otherwise exercise the rights, powers and remedies afforded herein
and under applicable Louisiana law. Any and all declarations of fact made by
authentic act before a Notary Public in the presence of two (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. Debtor
hereby waives in favor of Secured Party: (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 and 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 Collateral, or any part
thereof, is seized as an incident to an action for the recognition or
enforcement of this Security Agreement by executory process, ordinary process,
sequestration, writ of fieri facias, or otherwise, Debtor and Secured Party
agree that the court issuing any such order shall, if petitioned for by
Secured Party, direct the applicable sheriff or xxxxxxxx to appoint as a
keeper of the Collateral, Secured Party or any agent designated by Secured
Party or any Person named by Secured Party at the thne such seizure is
effected. This designation is pursuant to Louisiana Revised Statutes
9:51369:5140.2 and Secured Party 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 Collateral, 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
Secured Party to provoke the appointment of such a keeper.
7. MISCELLANEOUS PROVISIONS
(a) Notices. All notices, requests, approvals, consents and other
communications required or permitted to be made hereunder shall, except as
otherwise provided, be in writing and may be delivered personally or sent by
telegram, telecopy, facsimile, telex, first class mail or overnight courier,
postage prepaid, to the parties addressed as follows:
To Debtor: Casino Magic of Louisiana Corp. 0000 Xxx Xxxxxx Xxxx Xxxxxxx
Xxxx, Xxxxxxxxx 71 1 1 1
Attn: Xxxxxx X. Xxxxxxxx, Esq.
Ph: (000) 000-0000
Fax: (000) 000-0000
To Secured Party: First Union Bank of Connecticut 00 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxx 00000-0000
Ph: (203) 247-1353
Fax: (000) 000-0000
Attn: Corporate Trust Administration
With a copy to:
Xxxxx Xxxxxxxxxx, Esq.
Xxxx, Scholer, Fierman, Xxxx & Handler, LLP
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ph: (000) 000-0000
Fax: (000) 000-0000
Such notices, requests and other communications sent as provided hereinabove
shall be effective when received by the addressee thereof, unless sent by
registered or certified mail, postage prepaid, in which case they shall be
effective exactly three (3) business days after being deposited in the United
States mail. The parties hereto may change their addresses by giving notice
thereof to the other parties hereto in conformity with this section.
(b) Headings. The various headings in this Security Agreement are
inserted for convenience only and shall not affect the meaning or
interpretation of this Security Agreement or any provision hereof.
(c) Amendments. This Security Agreement or any provision hereof may be
changed, waived, or terminated only by a statement in writing signed by the
party against which such change, waiver or termination is sought to be
enforced, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
(d) No Waiver. No failure on the part of Secured Party to exercise, and
no delay in exercising, and no course of dealing with respect to, any power,
privilege or right under this Security Agreement or any related agreement
shall operate as a waiver thereof nor shall any single or partial exercise by
Secured Party of any power, privilege or right under this Security Agreement
or any related agreement preclude any other or further exercise thereof or the
exercise of any other power, privilege or right. The powers, privileges and
rights in this Security Agreement are cumulative and are not exclusive of any
other remedies provided by law. No waiver by Secured Party of any default
hereunder shall be effective unless in writing, nor shall any waiver operate
as a waiver of any other default or of the same default on a future occasion.
(e) Binding Agreement. All rights of Secured Party hereunder shall
inure to the benefit of its successors and assigns. Debtor shall not assign
any of its interest under this Security Agreement without the prior written
consent of Secured Party. Any purported assigrunent inconsistent with this
provision shall, at the option of Secured Party, be null and void.
(f) Entire Agreement. This Security Agreement, together with any other
agreement executed in connection herewith, is intended by the parties as a
final expression of their agreement and is intended as a complete and
exclusive statement of the terms and conditions thereof. Acceptance of or
acquiescence in a course of performance rendered under this Security Agreement
shall not be relevant to determine the meaning of this Security Agreement even
though the accepting or acquiescing party had knowledge of the nature of the
performance and opportunity for objection.
(g) Choice of Law. The existence, validity, construction, operation and
effect of any and all terms and provisions of this Security Agreement shall be
determined in accordance with and governed by the substantive laws of the
State of Louisiana, without giving effect to its conflicts of law principles.
(h) Severabiliiy. If any provision or obligation of this Security
Agreement should be found to be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions and obligations or any other agreement executed in connection
herewith, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby and shall nonetheless remain in
FTILL force and effect to the maximum extent permitted by law.
(i) Survival of Provisions. ALL representations, warranties and
covenants of Debtor contained herein shall survive the execution and delivery
of this Security Agreement, and shall terminate only upon the termination of
this Security Agreement pursuant
to Subsection 7(l) hereof.
(j) Power of Attorney. Debtor hereby irrevocably appoints Secured Party
its attorney-in-fact, which appointment is coupled with an interest, with full
authority in THE place and stead of Debtor and in the name of Debtor, Secured
Party or otherwise, from time to time in Secured Party's discretion (a) to
execute and file financing and continuation statements (and amendments thereto
and modifications thereof) on behalf and in the name of Debtor with respect to
the security interests granted or purported to be granted hereby, (b) to take
any action and to execute any instrument which Secured Party may deem
necessary or advisable to exercise its rights under Section 5(r) hereunder,
and (c) upon the occurrence and during the continuance of a Default or an
Event of Default, to take any action and to execute any instrument which
Secured Party may deem necessary or advisable to accomplish the purposes of
this Security Agreement, including, without limitation:
(i) to obtain and adjust insurance required to be paid to Secured Party
pursuant hereto;
(ii) to ask, demand, collect, xxx for, recover, compound, receive and give
acquittance and receipts for moneys due and to become due under or in respect
of any of the Collateral;
(iii) to receive, endorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clauses (i) and (ii) above;
(iv) to sell, convey or otherwise transfer any item of Collateral to any
purchaser thereof; and
(v) to file any claims or take any action or institute any proceedings
which Secured Party may deem necessary or desirable for the collection of any
of the Collateral or otherwise to enforce the rights of Secured Party with
respect to any of the Collateral.
(k) Counterparts. This Security Agreement and any amendments, waivers,
consents or supplements may be executed in any number of counterparts, each of
which when so executed and delivered shall be deemed an original, but all of
which shall together constitute one and the same agreement.
(1) Termination of Agreement. Subject to Section 10.01 of the
Indenture, this Security Agreement and the security interest hereunder shall
not terminate until full and final payment and performance of all of the
Secured Obligations. At such time, Secured Party shall reassign and redeliver
to Debtor all of the Collateral hereunder which has not been sold, disposed
of, retained or applied by Secured Party in accordance with the terms hereof,
and execute and deliver to Debtor such documents as Debtor may reasonably
request to evidence such termination. Such reassigm-nent and redelivery shall
be without warranty by or recourse to Secured Party, and shall be at the
expense of Debtor; provided, however, that this Security Agreement
(including all representations, warranties and covenants contained herein and
the priority of the security interests hereunder) shall continue to be
effective or be reinstated, as the case may be, if at any time any amount
received by Secured Party in respect of the indebtedness and obligations
secured hereunder is rescinded or must otherwise be restored or returned by
Secured Party upon or in connection with the insolvency, bankruptcy,
dissolution, liquidation or reorganization of Debtor or any other person or
upon or in connection with the appointment of any intervenor or conservator
of, or trustee or similar official for, Debtor or any other person or any
substantial part of its assets, or otherwise, all as though such payments had
not been made and Debtor shall take all action required by Secured Party in
connection therewith.
(m) Release of Collateral. If pursuant to Section 4.09 of the
Indenture, Debtor is permitted to encumber any portion of the Casino
Magic-Bossier City Hotel, then, upon the satisfaction of any and all
conditions set forth in such Section and Section 10.03 of the Indenture,
Secured Party shall execute and deliver any instruments necessary or
appropriate to effectuate or confirm any encumbrance, free from the lien of
this Security Agreement.
(n) Successors and Assigns. This Security Agreement shall inure to the
benefit of Secured Party, its successors and assigns, including the assignees
of any Secured Obligation or of the benefit of any Secured Obligation and
shall bind the heirs, executors, administrators, successors and assigns of
Debtor. This Security Agreement is assignable by Secured Party with respect
to all or any portion of the Secured Obligations, and when so assigned, Debtor
shall be liable to the assignees under this Security Agreement without in any
manner affecting the liability of Debtor hereunder with respect to any of the
Secured Obligations retained by Secured Party. Each reference herein to
powers or rights of Secured Party shall also be deemed a reference to the same
power or right of such assignees, to the extent of the interest assigned to
them.
(o) Interaction with Financing Documents.
(i) IncoLporation by Reference. All terms, covenants, conditions,
provisions and requirements of the Indenture are incorporated by reference in
this Security Agreement.
(ii) Conflicts with Indenture. Notwithstanding any other provision of
this Security Agreement, the terms and provisions of this Security Agreement
shall be subject and subordinate to the terms of the Indenture. To the extent
that the Indenture provides Debtor with a particular cure or notice period, or
establishes any limitations or conditions on Secured Party's actions with
regard to a particular set of facts, Debtor shall be entitled to the same cure
periods and notice periods, and Secured Party 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, that such cure periods, notice periods, limitations and conditions
shall not be cumulative as between the Indenture and this Security Agreement.
In the event of any conflict or inconsistency between the provisions of this
Security Agreement and those of the Indenture, including without limitation,
any conflicts or inconsistencies in any definitions
herein or therein, the provisions or definitions of the Indenture shall
govern.
(p) Gaming Laws and Regulations. Debtor and Secured Party acknowledge
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, g s"e ., 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. Debtor and Secured Party further
acknowledge that the Gaming License held by Debtor is not part of the
collateral of this Security Agreement and that, under the above described
legislation and rules promulgated thereunder, the Secured Party may be
precluded from or otherwise limited in taking possession of or in selling the
collateral of this Security Agreement under the Defaults and Remedies
provisions of this Security Agreement. Debtor and Secured Party 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 gaming operation, the sale of
collateral may be denied by Gaming Authorities or delayed pending Gaming
Authority approval.
IN WITNESS WHEREOF, the parties hereto have caused this Security Agreement to
be duly executed and delivered by their respective undersigned duly authorized
officers as of the date first above written.
DEBTOR:
CASINO MAGIC OF LOUISIANA, CORP.,
a Louisiana corporation
By: /s/ Xxxxxx X. Xxxxxxxx
Name: Xxxxxx X. Xxxxxxxx
Title: Executive Vice President, General
Council
SECURED PARTY:
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"
OTHER BUSINESS OR TRADE NAMES USED BY DEBTOR
NONE.
A-1
EXHIBIT "B"
DEPOSIT ACCOUNTS
Casino Magic of Louisiana Corp.
Open Bank Accounts as of August 21, 1996
o The Peoples Bank-
Address
X.X. Xxxxxx 000
Xxxxxx, XX 00000
Telephone 000-000-0000
Account number 0000000
ABA number 000000000
o Hibernia National Bank-
Address
X.X. Xxx 00000
Xxx Xxxxxxx, XX 00000
Telephone 000-000-0000
Account number 762079313
ABA number 000000000
B-1
ANNEX 1
A. SCHEDULE OF U.S. TRADEMARK REGISTRATIONS
PURSUANT TO SECTION 10 OF THE MANAGEMENT AGREEMENT DATED AUGUST 22,1996,
BETWEEN DEBTOR AND CASINO MAGIC CORP. ("LICENSOR"), LICENSOR GRANTED TO DEBTOR
THE NON-EXCLUSIVE LICENSE TO USE "CASINO MAGIC" AS A SERVICE XXXX AND AS PART
OF ITS TRADE NAME SOLELY IN CONNECTION WITH THE BUSINESS OF GAMING FACILITIES
AND RELATED AMENITIES IN BOSSIER CITY, LOUISIANA.
B. SCHEDULE OF PENDING APPLICATIONS FOR U.S. TRADEMARK REGISTRATIONS ON
THE BASIS OF USE IN COMMERCE UNDER 17 USC 1051(a)
NONE.
C. SCHEDULE OF PENDING APPLICATION FOR U.S. TRADEMARK REGISTRATIONS ON THE
BASIS OF INTENT TO USE THE XXXX IN COMMERCE UNDER 17 USC 1051(b)
NONE.
AX-1
ANNEX2
SCHEDULE OF PATENTS AND APPLICATIONS
NONE.
AX-2
ANNEX3
SCHEDULE OF COPYRIGHTS AND APPLICATIONS
NONE.
AX-3
