Exhibit 10.33
SECURITY AGREEMENT
among
JCC HOLDING COMPANY,
JAZZ CASINO COMPANY, L.L.C.,
CERTAIN OF THEIR SUBSIDIARIES
and
THE BANK OF NEW YORK,
as Collateral Agent
Dated as October 29, 1998
TABLE OF CONTENTS
Page
ARTICLE I
SECURITY INTERESTS.........................................................................................4
1.1. Grant of Security Interests..........................................................................4
1.2. Power of Attorney....................................................................................5
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS..........................................................5
2.1. Necessary Filings....................................................................................5
2.2. No Liens.............................................................................................5
2.3. Other Financing Statements...........................................................................6
2.4. Chief Executive Office; Records......................................................................6
2.5. Location of Inventory and Equipment..................................................................6
2.6. Pledged Accounts.....................................................................................7
2.7. Trade Names; Change of Name..........................................................................7
2.8. Recourse.............................................................................................8
ARTICLE III
SPECIAL PROVISIONS CONCERNING RECEIVABLES; CONTRACT RIGHTS.................................................8
3.1. Maintenance of Records...............................................................................8
3.2. Direction to Account Debtors; Contracting Parties; etc...............................................8
3.3. Modification of Terms; etc...........................................................................9
3.4. Collection...........................................................................................9
3.5. The Assignors Remain Liable..........................................................................9
3.6. Further Actions.....................................................................................10
ARTICLE IV
SPECIAL PROVISIONS CONCERNING MARKS.......................................................................10
4.1. Additional Representations and Warranties...........................................................10
4.2. Licenses and Assignments............................................................................10
4.3. Infringements.......................................................................................10
4.4. Preservation of Marks...............................................................................10
4.5. Maintenance of Registration.........................................................................11
4.6. Future Registered Marks.............................................................................11
Page
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS AND COPYRIGHTS....................................................................................11
5.1. Additional Representations and Warranties...........................................................11
5.2. Licenses and Assignments............................................................................11
5.3. Infringements.......................................................................................12
5.4. Maintenance of Patents..............................................................................12
5.5. Prosecution of Patent Application...................................................................12
5.6. Other Patents and Copyrights........................................................................12
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL......................................................................12
6.1. Protection of Collateral Agents Security............................................................12
6.2. Warehouse Receipts Non-negotiable...................................................................13
6.3. Further Actions; Louisiana Matters..................................................................13
6.4. Financing Statements................................................................................14
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT..............................................................14
7.1. Remedies; Obtaining the Collateral Upon Default.....................................................14
7.2. Remedies; Disposition of the Collateral.............................................................16
7.3. Waiver of Claims....................................................................................16
7.4. Application of Proceeds.............................................................................17
7.5. Remedies Cumulative.................................................................................17
7.6. Discontinuance of Proceedings.......................................................................18
ARTICLE VIII
INDEMNITY.................................................................................................18
8.1. Indemnity...........................................................................................18
8.2. Indemnity Obligations Secured by Collateral; Survival...............................................19
ARTICLE IX
DEFINITIONS...............................................................................................20
ARTICLE X
MISCELLANEOUS.............................................................................................28
10.1. Notices............................................................................................28
(ii)
Page
10.2. Waiver; Amendment..................................................................................28
10.3. Obligations Absolute...............................................................................29
10.4. Successors and Assigns.............................................................................29
10.5. Headings...........................................................................................29
10.6. Severability.......................................................................................29
10.7. GOVERNING LAW......................................................................................29
10.8. Assignors Duties...................................................................................29
10.9. Termination; Release...............................................................................30
10.10. Counterparts.......................................................................................30
10.11. The Collateral Agent...............................................................................30
10.12. Gaming Regulations.................................................................................30
10.13. Additional Assignors...............................................................................31
10.14. Intercreditor Agreement...........................................................................31
10.15. No Third Party Beneficiaries......................................................................31
ANNEX A Schedule of Permitted Filings
ANNEX B Schedule of Chief Executive Offices/Record Locations
ANNEX C Schedule of Inventory and Equipment Locations
ANNEX D Form of Consent of Depositary Bank
ANNEX E Schedule of Pledged Accounts
ANNEX F Schedule of Trade, Fictitious and Other Names
ANNEX G Schedule of Marks
ANNEX H Schedule of License Agreements and Assignments
ANNEX I Schedule of Patents and Applications
ANNEX J Schedule of Copyrights and Applications
ANNEX K Assignment of Security Interest in United States Trademarks and Patents
ANNEX L Assignment of Security Interest in United States Copyrights
(iii)
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of October 29, 1998, among each
of the undersigned (each an "Assignor" and, together with any other entity that
becomes a party hereto pursuant to Section 10.13 hereof, the "Assignors") The
Bank of New York, as Collateral Agent (the "Collateral Agent") for the benefit
of (v) Xxxxxx'x Entertainment, Inc., a Delaware corporation ("HET"), and
Xxxxxx'x Operating Company, Inc., a Delaware corporation ("HOC"), under the
HET/JCC Agreement or any successor or substitute Minimum Payment Guarantor under
any other Minimum Payment Guarantor Documents referred to below (the "Minimum
Payment Guarantors"), (w) the Banks (as defined below) and the Administrative
Agent (as defined below) under, and any other lenders from time to time party
to, the Credit Agreement hereinafter referred to (such Banks, the Administrative
Agent and other lenders, if any, are hereinafter called the "Bank Creditors"),
(x) the holders from time to time of the Senior Subordinated Notes hereinafter
referred to (such holders of the Senior Subordinated Notes hereinafter called
the "Senior Subordinated Note Holders") and the Senior Subordinated Note Trustee
referred to below (the Senior Subordinated Note Holders, and together with the
Senior Subordinated Note Trustee in its capacity as such, are hereinafter called
the "Senior Subordinated Note Creditors"), (y) the holders from time to time of
the Senior Subordinated Contingent Notes hereinafter referred to (such holders
of the Senior Subordinated Contingent Notes hereinafter are called the "Senior
Subordinated Contingent Note Holders") and the Senior Subordinated Contingent
Note Trustee referred to below (the Senior Subordinated Contingent Note Holders,
and together with the Senior Subordinated Contingent Note Trustee, in its
capacity as such, are hereinafter called the "Senior Subordinated Contingent
Note Creditors") and (z) if one or more Banks (or any Affiliate thereof) enter
into one or more interest rate protection agreements (including, without
limitation, interest rate xxxxxx, swaps, caps, floors, collars and similar
agreements, collectively, the "Interest Rate Protection Agreements") with, or
guaranteed by, Jazz Casino Company, L.L.C., a Louisiana limited liability
company ("JCC"), any such Bank or Banks or any Affiliate of such Bank or Banks
(even if any such Bank subsequently ceases to be a Bank under the Credit
Agreement for any reason) so long as any such Bank or Affiliate thereof
participates in the extension of such Interest Rate Protection Agreements and
their subsequent assigns, if any (collectively, the "Other Creditors" and,
together with the Minimum Payment Guarantors, the Bank Creditors, the Senior
Subordinated Note Creditors and the Senior Subordinated Contingent Note
Creditors, are hereinafter called the "Secured Creditors"). Except as otherwise
defined herein, terms used herein and defined in the Intercreditor Agreement (as
in effect on the date hereof and without giving effect to any termination
thereof) shall be used herein as so defined and to the extent not defined herein
or in the Intercreditor Agreement, such terms shall be used herein as defined in
the Credit Agreement.
W I T N E S S E T H :
WHEREAS, HET and HOC have jointly and severally provided the
initial Minimum Payment Guaranty (and HET and HOC and/or one or more other
Minimum Payment Guarantors may hereafter provide one or more substitute or
replacement Minimum Payment Guaranties) and in connection therewith JCC, HET and
HOC have entered into that certain HET/JCC Agreement dated October 29, 1998 (as
amended, modified or supplemented from time to time, the "HET/JCC Agreement");
WHEREAS, JCC Holding Company ("JCC Holding"), JCC, the lenders
(the "Banks") from time to time party thereto, and Bankers Trust Company, as
Administrative Agent (together with any successor agent, the "Administrative
Agent"), have entered into a Credit Agreement, dated as of October 29, 1998,
providing for the making of certain loans and the issuance of, and participation
in, letters of credit as contemplated therein (as used herein, the term "Credit
Agreement" means the Credit Agreement described above in this paragraph, as the
same may be amended, modified, extended, renewed, replaced, restated,
supplemented or refinanced from time to time, and including any agreement
extending the maturity of, or refinancing or restructuring (including, but not
limited to, the inclusion of additional borrowers or guarantors thereunder or
any increase in the amount borrowed) all or any portion of, the indebtedness
under such agreement or any successor agreements, whether or not with the same
agent, trustee, representative, lenders or holders; provided that, with respect
to any agreement providing for the refinancing or replacement of indebtedness
under the Credit Agreement, such agreement shall only be treated as, or as part
of, the Credit Agreement hereunder if (i) either (A) all obligations under the
Credit Agreement being refinanced or replaced shall be paid in full at the time
of such refinancing or replacement, and all commitments and letters of credit
issued pursuant to the refinanced or replaced Credit Agreement shall have
terminated in accordance with their terms or (B) the Required Banks shall have
consented in writing to the refinancing or replacement indebtedness being
treated as indebtedness pursuant to the Credit Agreement, (ii) the refinancing
or replacement indebtedness shall be permitted to be incurred under the Credit
Agreement being refinanced or replaced (if such Credit Agreement is to remain
outstanding) and the other Credit Documents then in effect, under the Senior
Subordinated Note Documents referred to below (if the Senior Subordinated Notes
referred to below remain outstanding) and under the Senior Subordinated
Contingent Note Documents referred to below (if the Senior Subordinated
Contingent Notes referred to below remain outstanding) and (iii) a notice to the
effect that the refinancing or replacement indebtedness shall be treated as
issued under the Credit Agreement shall be delivered by JCC to the Collateral
Agent);
WHEREAS, JCC has issued $187,500,000 in aggregate principal
amount of its Senior Subordinated Notes with Contingent Payments due 2009 (the
"Senior Subordinated Notes") pursuant to an Indenture, dated as of October 30,
1998, among JCC, as issuer, JCC Holding, as guarantor, and Norwest Bank
Minnesota, National Association, as trustee (in such capacity, together with any
successor trustee, the "Senior Subordinated Note Trustee") (as amended, modified
or supplemented from time to time, the "Senior Subordinated Note Indenture"
2
and, together with the Senior Subordinated Notes and all other documents and
agreements relating thereto are herein called the "Senior Subordinated Note
Documents");
WHEREAS, JCC has issued its Senior Subordinated Contingent
Notes due 2009 (the "Senior Subordinated Contingent Notes") pursuant to an
Indenture, dated as of October 30, 1998, among the Assignor, as issuer, JCC
Holding, as guarantor, and Norwest Bank Minnesota, National Association, as
trustee (in such capacity, together with any successor trustee, the "Senior
Subordinated Contingent Note Trustee") (as amended, modified or supplemented
from time to time, the "Senior Subordinated Contingent Note Indenture" and,
together with the Senior Subordinated Contingent Notes and all other documents
and agreements relating thereto are herein called the "Senior Subordinated
Contingent Note Documents");
WHEREAS, JCC may at any time and from time to time enter into,
or guarantee obligations of its Subsidiaries under, one or more Interest Rate
Protection Agreements with one or more Other Creditors;
WHEREAS, pursuant to (1) the JCC Holding Guaranty, JCC Holding
has guaranteed to the Bank Creditors and the Other Creditors the payment when
due of all obligations and liabilities of JCC under or with respect to (x) the
Credit Documents and (y) the Interest Rate Protection Agreements and (2) the
Subsidiaries Guaranty, each Pledgor (other than JCC Holding and JCC) has jointly
and severally guaranteed to the Bank Creditors and the Other Creditors the
payment when due of all obligations and liabilities of JCC under or with respect
to (x) the Credit Documents and (y) the Interest Rate Protection Agreements;
WHEREAS, pursuant to Article XII of the Senior Subordinated
Note Indenture, JCC Holding and each other Pledgor (other than JCC) have jointly
and severally guaranteed (the "Senior Subordinated Note Guaranty") to the Senior
Subordinated Note Creditors the payment when due of all obligations and
liabilities of JCC under or with respect to the Senior Subordinated Note
Documents;
WHEREAS, pursuant to Article XII of the Senior Subordinated
Contingent Note Indenture, JCC Holding and each other Pledgor (other than JCC)
have jointly and severally guaranteed (the "Senior Subordinated Contingent Note
Guaranty") to the Senior Subordinated Contingent Note Creditors the payment when
due of all obligations and liabilities of JCC under or with respect to the
Senior Subordinated Contingent Note Documents;
WHEREAS, the Secured Creditors and the Collateral Agent have
entered into that certain Intercreditor Agreement dated October 29, 1998 (the
"Intercreditor Agreement") setting forth the respective rights of the Secured
Creditors in the Collateral referred to in this Agreement, the Pledge Agreement
and the Mortgages;
WHEREAS, it is a condition precedent to each of the
above-described extensions of credit to JCC that the Assignors shall have
executed and delivered to the Collateral Agent this Agreement; and
3
WHEREAS, each Assignor desires to enter into this Agreement in
order to satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the extensions of credit
to be made to JCC and other benefits accruing to each Assignor, the receipt and
sufficiency of which are hereby acknowledged, each Assignor hereby make the
following representations and warranties to the Collateral Agent for the benefit
of the Secured Creditors and hereby covenants and agrees with the Collateral
Agent for the benefit of the Secured Creditors as follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for the
prompt and complete payment and performance when due of all of the Obligations,
each Assignor does hereby assign and transfer unto the Collateral Agent, and
does hereby grant to the Collateral Agent for the benefit of the Secured
Creditors, upon the terms and subject to the conditions of this Agreement and
further subject to the provisions of the Intercreditor Agreement, a continuing
security interest (subject to Liens to the extent permitted under the terms of
all Secured Debt Documents from time to time in effect) in, all of the right,
title and interest of such Assignor in, to and under all of the following,
whether now existing or hereafter from time to time acquired: (i) each and every
Receivable, (ii) all Contracts, together with all Contract Rights arising
thereunder (in each case except to the extent constituting Excluded Collateral),
(iii) all Inventory, (iv) the Cash Collateral Account established with the
Collateral Agent for such Assignor and all monies, securities, investments and
instruments deposited or required to be deposited in such Cash Collateral
Account, (v) all present and future bank accounts of such Assignor including,
without limitation, any demand, time savings, passbook, certificates of deposit,
or like accounts maintained by such Assignor with any bank, savings and loan
association, credit union or other organization, all money, cash and checks,
drafts, notes, bills, bills of exchange, securities, investments, bonds or other
instruments, writings or property of such Assignor from time to time received,
receivable or otherwise distributed in respect thereof, in renewal or extension
thereof, or in exchange therefor, whether or not deposited in any such deposit
account (collectively, in each case, except to the extent constituting Excluded
Collateral, the "Pledged Accounts"), (vi) all Equipment, (vii) all Fixtures,
(viii) all Marks, together with the registrations and right to all renewals
thereof, and the goodwill of the business of such Assignor symbolized by the
Marks, and all licenses of rights associated therewith, (ix) all Patents and
Copyrights, and all reissues, renewals or extensions thereof, (x) all computer
programs of such Assignor and all intellectual property rights therein and all
other proprietary information of such Assignor, including, but not limited to,
trade secrets, (xi) all other Goods, General Intangibles, Permits (other than
the Casino Operating Contract), Chattel Paper, Investment Property and
Documents, (xii) all Proceeds and products of any and all of the foregoing and
(xiii) all other personal property of any Assignor of any nature whatsoever,
including, without limitation, all accounts, bank accounts, deposits, credit
balances, contract rights, inventory, general intangibles, goods, equipment,
instruments, chattel paper, machinery,
4
furniture, furnishings, fixtures, tools, supplies, appliances, plans and
drawings and all property from time to time described in any financing statement
(UCC-1) signed by any Assignor naming the Collateral Agent as secured party for
the benefit of the Secured Creditors (all of the above, collectively, the
"Collateral"). Notwithstanding the foregoing, the term "Collateral" shall not
include any Excluded Collateral.
(b) The security interests of the Collateral Agent under this
Agreement extend to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the continuation of
this Agreement.
1.2. Power of Attorney. Each Assignor hereby constitutes and
appoints the Collateral Agent its true and lawful attorney, irrevocably, with
full power after the occurrence of and during the continuance of an Event of
Default (in the name of such Assignor or otherwise), in the Collateral Agent's
discretion, to take any action and to execute any instrument or document which
the Collateral Agent may reasonably deem necessary or advisable to accomplish
the purposes of this Agreement, which appointment as attorney is coupled with an
interest.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants to the
Collateral Agent, for the benefit of the Secured Creditors, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. All filings, registrations and
recordings necessary or appropriate to create, preserve, protect and perfect the
security interest granted by such Assignor to the Collateral Agent hereby in
respect of the Collateral have been accomplished and the security interest
granted to the Collateral Agent pursuant to this Agreement in and to the
Collateral constitutes a perfected security interest therein prior to the rights
of all other Persons therein and subject to no other Liens (except that the
Collateral may be subject to the security interests evidenced by the financing
statements disclosed on Annex A hereto (the "Permitted Filings") and to other
Liens permitted under all the Secured Debt Documents from time to time in
effect) and is entitled to all the rights, priorities and benefits afforded by
the Uniform Commercial Code or other relevant law as enacted in any relevant
jurisdiction to perfected security interests.
2.2. No Liens. Such Assignor is, and as to Collateral acquired
by it from time to time after the date hereof such Assignor will be, the owner
of all Collateral free from any Lien, security interest, encumbrance or other
right, title or interest of any Person (other than Liens created hereby, Liens
permitted under all the Secured Debt Documents from time to time in effect and
Liens evidenced by the Permitted Filings), and such Assignor shall defend the
Collateral against all claims and demands of all Persons at any time claiming
the same or any interest therein adverse to the Collateral Agent.
5
2.3. Other Financing Statements. As of the date hereof, there
is no financing statement (or similar statement or instrument of registration
under the law of any jurisdiction) on file or of record in any relevant
jurisdiction covering or purporting to cover any interest of any kind in the
Collateral except as disclosed in Annex A hereto and so long as the Termination
Date has not occurred, unless otherwise permitted under the terms of all the
Secured Debt Documents from time to time in effect, such Assignor will not
execute or authorize to be filed in any public office any financing statement
(or similar statement or instrument of registration under the law of any
jurisdiction) or statements relating to the Collateral, except financing
statements filed or to be filed in respect of and covering the security
interests granted hereby by the Assignor.
2.4. Chief Executive Office; Records. The chief executive
office of each Assignor is located, as of the date hereof, at the address or
addresses indicated on Annex B for such Assignor. Such Assignor will not move
its chief executive office except to such new location as such Assignor may
establish in accordance with the last sentence of this Section 2.4. The
originals of all documents evidencing all Receivables and Contract Rights of
such Assignor and the only original books of account and records of such
Assignor relating thereto are, and will continue to be, kept at such chief
executive office, at such other locations shown on Annex B hereto or at such new
locations as such Assignor may establish in accordance with the last sentence of
this Section 2.4. No Assignor shall establish new locations for such offices
until (i) it shall have given to the Collateral Agent not less than 30 days'
prior written notice of its intention so to do, clearly describing such new
location and providing such other information in connection therewith as the
Collateral Agent may reasonably request, (ii) with respect to such new location,
it shall have taken all action to maintain the security interest of the
Collateral Agent in the Collateral intended to be granted hereby at all times
fully perfected and in full force and effect and (iii) it shall have furnished
an opinion of counsel acceptable to the Collateral Agent to the effect that all
financing or continuation statements and amendments or supplements thereto have
been filed in the appropriate filing office or offices (and shall have
previously furnished any such forms or statements to the Collateral Agent for
execution), and all other actions (including, without limitation, the payment of
all filing fees and taxes, if any, payable in connection with such filings) have
been taken, in order to perfect (and maintain the perfection and priority of)
the security interests granted hereby.
2.5. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by each Assignor is located at one of the
locations for such Assignor shown on Annex C hereto. Each Assignor agrees that
all Inventory and all Equipment now held or subsequently acquired by it shall be
kept at (or shall be in transport to) any one of the locations for such Assignor
shown on Annex C hereto, or such new location as such Assignor may establish in
accordance with the last sentence of this Section 2.5. Any Assignor may
establish a new location for Inventory and Equipment only if (i) it shall have
given to the Collateral Agent not less than 30 days' prior written notice of its
intention so to do, clearly describing such new location and providing such
other information in connection therewith as the Collateral Agent may reasonably
request, (ii) with respect to such new location, as promptly as practicable and
in no event later than 30 days after the establishment thereof, it shall have
taken all action to maintain the security interests of the Collateral Agent in
the Collateral intended to be granted hereby at all
6
times fully perfected and in full force and effect and (iii) it shall have
furnished an opinion of counsel acceptable to the Collateral Agent to the effect
that all financing or continuation statements and amendments or supplements
thereto have been filed in the appropriate filing office or offices, and all
other actions (including, without limitation, the payment of all filing fees and
taxes, if any, payable in connection with such filings) have been taken, in
order to perfect (and maintain the perfection and priority of) the security
interests granted hereby.
2.6. Pledged Accounts. (a) The Pledged Accounts are, and will
continue to be, maintained at, and controlled and directed from, the respective
offices of those institutions set forth on Annex E hereto (such institutions,
the "Pledged Account Banks"). Concurrently with the establishment of any Pledged
Account, each Assignor will cause the applicable Pledged Account Bank to execute
and deliver to the Collateral Agent a consent substantially in the form of Annex
D hereto. No Assignor shall establish any additional Pledged Account until (i)
it shall have given to the Collateral Agent prior written notice of intention so
to do, clearly describing such new account and providing such other information
in connection therewith as Collateral Agent may reasonably request and (ii) with
respect to such new account, it shall have taken all action to maintain the
security interest of the Collateral Agent in such Collateral intended to be
granted hereby at all times fully perfected and in full force and effect,
including by having any bank or other institution which maintains such account
to execute and deliver to the Collateral Agent a consent substantially in the
form Annex D hereto.
(b) Upon the occurrence and during the continuance of any
Event of Default, and upon notice by the Collateral Agent to each Assignor
(although no such notice shall be required to be so given in the case of an
Event of Default of the types described in Section 10.06 of the Credit Agreement
or paragraph (5) or (6) of Section 7.1 of each of the Senior Subordinated Note
Indenture and the Senior Subordinated Contingent Note Indenture), the Assignors
shall no longer have the right to withdraw funds from any Pledged Account, and,
subject to the terms of the Intercreditor Agreement and the rights of the
landlord under the Casino Lease to certain of the funds in the Pledged Accounts
pursuant to Sections 5.3(e), 7.1(c) and 19.8(d) of the Casino Lease, the
Collateral Agent shall have the sole right to make withdrawals from the Pledged
Accounts, provided that (subject to the rights of the Collateral Agent under
Section 7.1(d) to withdraw such funds) (x) the Assignors may continue to
withdraw funds from the Pledged Accounts (to the extent that such funds have not
been withdrawn as permitted by Section 7.1 of this Agreement) to make payments
and pay operating expenses required under the terms of the Casino Lease and the
Casino Operating Contract and the Collateral Agent may rely on a certificate of
the Assignor as to such amounts and (y) the Manager may continue to withdraw
funds from the accounts referred to in Section 8.03 of the Management Agreement
to pay operating expenses of the Casino pursuant to the Annual Plan (under and
as defined in the Management Agreement) then in effect. All Collateral held in
the Pledged Accounts shall be held therein in accordance with the terms of this
Agreement.
2.7. Trade Names; Change of Name. No Assignor has or operates
in any jurisdiction under, or in the preceding 12 months has had or has operated
in any jurisdiction under, any trade names, fictitious names or other names
(including, without limitation, any names
7
of divisions or operations) except its legal name and such other trade,
fictitious or other names as are listed on Annex F hereto. No Assignor shall
change its legal name or assume or operate in any jurisdiction under any trade,
fictitious or other name except those names listed on Annex F hereto and new
names (including, without limitation, any names of divisions or operations)
established in accordance with the last sentence of this Section 2.7. No
Assignor shall assume or operate in any jurisdiction under any new trade,
fictitious or other name until (i) it shall have given to the Collateral Agent
not less than 30 days' prior written notice of its intention so to do, clearly
describing such new name and the jurisdictions in which such new name shall be
used and providing such other information in connection therewith as the
Collateral Agent may reasonably request, (ii) with respect to such new name, it
shall have taken all action to maintain the security interests of the Collateral
Agent in the Collateral intended to be granted hereby at all times fully
perfected and in full force and effect and (iii) at the request of the
Collateral Agent, it shall have furnished an opinion of counsel acceptable to
the Collateral Agent to the effect that all financing or continuation statements
and amendments or supplements thereto have been filed in the appropriate filing
office or offices, and all other actions (including, without limitation, the
payment of all filing fees and taxes, if any, payable in connection with such
filings) have been taken, in order to perfect (and maintain the perfection and
priority of) the security interest granted hereby.
2.8. Recourse. This Agreement is made with full recourse to
each Assignor and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Assignor contained herein, in the
Secured Debt Documents and otherwise in writing in connection herewith or
therewith. No Assignor shall assert against the Collateral Agent any claim or
defense which such Assignor may have against any seller of the Collateral or any
part thereof or against any person with respect to the Collateral or any part
thereof.
ARTICLE III
SPECIAL PROVISIONS CONCERNING
RECEIVABLES; CONTRACT RIGHTS
3.1. Maintenance of Records. Each Assignor will keep and
maintain at its own cost and expense records of its Receivables and Contracts in
accordance with good business practice, and such Assignor will make the same
available on its premises to the Collateral Agent for inspection, at such
Assignor's own cost and expense, at any and all reasonable times upon demand.
Upon the occurrence and during the continuance of an Event of Default, and if
the Collateral Agent (acting on the instructions of the Required Secured
Creditors under the Intercreditor Agreement) so directs, each Assignor shall
legend, in form and manner reasonably satisfactory to the Collateral Agent, the
Receivables and the Contracts, as well as books, records and documents of such
Assignor evidencing or pertaining to such Receivables and Contracts with an
appropriate reference to the fact that such Receivables and Contracts have been
assigned to the Collateral Agent and that the Collateral Agent has a security
interest therein.
3.2. Direction to Account Debtors; Contracting Parties; etc.
Upon the occurrence and during the continuance of an Event of Default, and if
the Collateral Agent so directs any
8
Assignor, such Assignor agrees (x) to cause all payments on account of the
Receivables and Contracts to be made directly to the Cash Collateral Account,
(y) that the Collateral Agent may, at its option, directly notify the obligors
with respect to any Receivables and/or under any Contracts to make payments with
respect thereto as provided in the preceding clause (x) and (z) that the
Collateral Agent may enforce collection of any such Receivables and Contracts
and may adjust, settle or compromise the amount of payment thereof, in the same
manner and to the same extent that such Assignor might have done. Without notice
to or assent by any Assignor, the Collateral Agent may apply any or all amounts
then in, or thereafter deposited in, the Cash Collateral Account in the manner
provided in Section 7.4 of this Agreement. The costs and expenses (including
reasonable attorneys' fees) of collection, whether incurred by any Assignor or
the Collateral Agent, shall be borne by the relevant Assignor.
3.3. Modification of Terms; etc. No Assignor shall rescind or
cancel any indebtedness evidenced by any Receivable or under any Contract, or
modify any term relating to such indebtedness or make any adjustment with
respect thereto, or extend or renew the same, or compromise or settle any
material dispute, claim, suit or legal proceeding relating thereto, or sell any
Receivable or Contract, or interest therein, without the prior written consent
of the Collateral Agent, except as permitted by Section 3.4. Each Assignor will
duly fulfill all obligations on its part to be fulfilled under or in connection
with the Receivables and Contracts and will do nothing to impair the rights of
the Collateral Agent in the Receivables or Contracts.
3.4. Collection. Each Assignor shall endeavor to cause to be
collected from the account debtor named in each of its Receivables or obligor
under any Contract, as and when due (including, without limitation, amounts
which are delinquent, such amounts to be collected in accordance with generally
accepted lawful collection procedures) any and all amounts owing under or on
account of such Receivable or Contract, and apply forthwith upon receipt thereof
all such amounts as are so collected to the outstanding balance of such
Receivable or under such Contract, except that, prior to the occurrence of an
Event of Default, any Assignor may allow in the ordinary course of business as
adjustments to amounts owing under its Receivables and Contracts (i) an
extension or renewal of the time or times of payment, or settlement for less
than the total unpaid balance, which the Assignor finds appropriate in
accordance with sound business judgment and (ii) a refund or credit due as a
result of returned or damaged merchandise or improperly performed services. The
costs and expenses (including, without limitation, attorneys' fees) of
collection, whether incurred by any Assignor or the Collateral Agent, shall be
borne by such Assignor.
3.5. The Assignors Remain Liable. Notwithstanding anything to
the contrary contained herein, (x) each Assignor shall remain liable under the
Contracts to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (y) the exercise by the Collateral Agent of any of the rights
hereunder shall not release any Assignor from any of its duties or obligations
under the Contracts and (z) the Collateral Agent and the Secured Creditors shall
not have any obligation or liability under the Contracts by reason of this
Agreement, nor shall the Collateral Agent or any Secured
9
Creditor be obligated to perform any of the obligations or duties of any
Assignor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.
3.6. Further Actions. Each Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, powers of attorney,
certificates, reports and other assurances or instruments and take such further
steps relating to its Receivables, Contracts and other property or rights
covered by the security interest hereby granted, as may be required to maintain
the perfection and priority of the security interests granted hereby, and to
carry out its obligations and covenants hereunder, or as the Collateral Agent
may reasonably require.
ARTICLE IV
SPECIAL PROVISIONS CONCERNING MARKS
4.1. Additional Representations and Warranties. Each Assignor
represents and warrants to the Collateral Agent, for the benefit of the Secured
Creditors, that it is the true and lawful exclusive owner of the Marks listed in
Annex G hereto and that said listed Marks include all the United States federal
registrations or applications registered in the United States Patent and
Trademark Office. The Assignor represents and warrants that it owns or is
licensed to use or is not prohibited from using all Marks that it uses. Each
Assignor further warrants that it is aware of no third party claim that any
aspect of such Assignor's present or contemplated business operations infringes
or will infringe any Xxxx. Each Assignor represents and warrants that it is the
owner of record of all United States registrations and applications listed in
Annex G hereto and that said registrations are valid, subsisting, have not been
cancelled and that such Assignor is not aware of any third-party claim that any
of said registrations is invalid or unenforceable.
4.2. Licenses and Assignments. Other than the license
agreements listed on Annex H hereto and any extensions or renewals thereof, each
Assignor hereby agrees not to divest itself of any right under any Xxxx that
such Assignor is required to maintain under Section 4.5 hereof absent prior
written approval of the Collateral Agent.
4.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to notify the Collateral Agent in writing of the name and
address of, and to furnish such pertinent information that may be available with
respect to, any party who such Assignor believes is infringing or otherwise
violating any of such Assignor's rights in and to any Xxxx, or with respect to
any party claiming that such Assignor's use of any Xxxx violates in any material
respect any property right of that party. Each Assignor further agrees, unless
otherwise agreed by the Collateral Agent, diligently to prosecute any Person
infringing any material Xxxx.
4.4. Preservation of Marks. Each Assignor agrees to use those
Marks that such Assignor is required to maintain under Section 4.5 hereof in
interstate commerce during the time
10
in which this Agreement is in effect, sufficiently to preserve such Marks as
trademarks or service marks registered under the laws of the United States.
4.5. Maintenance of Registration. Each Assignor shall, at
its own expense, diligently process all documents required by the Trademark
Act of 1946, 15 U.S.C. Sections 1051 et seq. to maintain trademark
registration, including but not limited to affidavits of use and applications
for renewals of registration in the United States Patent and Trademark Office
for all of its registered Marks pursuant to 15 U.S.C. Sections 1058(a), 1059
and 1065, and shall pay all fees and disbursements in connection therewith
and shall not abandon any such filing of affidavit of use or any such
application of renewal prior to the exhaustion of all administrative and
judicial remedies without prior written consent of the Collateral Agent;
provided, that no Assignor shall be obligated to maintain any Xxxx in the
event that such Assignor determines, in its reasonable business judgment,
that the maintenance of such Xxxx is no longer necessary or desirable in the
conduct of its business. Each Assignor agrees to notify the Collateral Agent
three (3) months prior to the date on which the affidavits of use or the
applications for renewal registration are due with respect to any registered
Xxxx that the affidavits of use or the renewal is being processed or being
abandoned, as the case may be.
4.6. Future Registered Marks. If any Xxxx registration
issues hereafter to any Assignor as a result of any application now or
hereafter pending before the United States Patent and Trademark Office,
within thirty (30) days of receipt of such certificate such Assignor shall
deliver a copy of such certificate, and a grant of security in such xxxx to
the Collateral Agent, confirming the grant thereof hereunder.
ARTICLE V
SPECIAL PROVISIONS CONCERNING
PATENTS AND COPYRIGHTS
5.1. Additional Representations and Warranties. Each Assignor
represents and warrants to the Collateral Agent, for the benefit of the Secured
Creditors, that it is the true and lawful exclusive owner of all rights in the
Patents listed in Annex I hereto and in the Copyrights listed in Annex J hereto,
that said Patents include all the United States patents and applications for
United States patents that such Assignor now owns and that said Copyrights
constitute all the United States copyrights registered with the United States
Copyright Office and applications for United States copyrights that such
Assignor now owns. Each Assignor represents and warrants that it owns or is
licensed to practice under all Patents and Copyrights that it now uses or
practices under. Each Assignor further warrants that it is aware of no third
party claim that any aspect of such Assignor's present or contemplated business
operations infringes or will infringe any Patent or any Copyright.
5.2. Licenses and Assignments. Other than the license
agreements listed on Annex H hereto and any extensions or renewals thereof, each
Assignor hereby agrees not to
11
divest itself of any right under any significant Patent or significant Copyright
absent prior written approval of the Collateral Agent.
5.3. Infringements. Each Assignor agrees, promptly upon
learning thereof, to furnish the Collateral Agent in writing with all pertinent
information available to such Assignor with respect to any infringement or other
violation of such Assignor's rights in any Patent or Copyright, or with respect
to any claim that practice of any Patent or use of any Copyright violates any
property right of a third party. Each Assignor further agrees, absent direction
of the Collateral Agent to the contrary, diligently to prosecute any Person
infringing any Patent or Copyright.
5.4. Maintenance of Patents. At its own expense, each Assignor
shall make timely payment of all post-issuance fees required pursuant to 35
U.S.C. Section 41 to maintain in force rights under each significant Patent.
5.5. Prosecution of Patent Application. At its own expense,
each Assignor shall diligently prosecute all applications for Patents listed in
Annex G hereto and shall not abandon any such application prior to exhaustion of
all administrative and judicial remedies, absent written consent of the
Collateral Agent, unless such Assignor determines, in its reasonable discretion,
that prosecuting such application is no longer necessary or desirable in the
conduct of its business.
5.6. Other Patents and Copyrights. Within 30 days of
acquisition of a Patent or Copyright, or of filing of an application for a
Patent or Copyright, the relevant Assignor shall deliver to the Collateral Agent
a copy of said Patent or Copyright or such application, as the case may be, with
a grant of security as to such Patent or Copyright, as the case may be,
confirming the grant thereof hereunder.
ARTICLE VI
PROVISIONS CONCERNING ALL COLLATERAL
6.1. Protection of Collateral Agent's Security. (a) Each
Assignor will do nothing to impair the rights of the Collateral Agent in the
Collateral. Each Assignor will at all times keep its Inventory and Equipment
insured in favor of the Collateral Agent, at such Assignor's own expense to the
extent and in the manner provided in the Secured Debt Documents from time to
time in effect. Each Assignor assumes all liability and responsibility in
connection with the Collateral acquired by it and the liability of such Assignor
to pay the Obligations shall in no way be affected or diminished by reason of
the fact that such Collateral may be lost, destroyed, stolen, damaged or for any
reason whatsoever unavailable to such Assignor.
(b) Each Assignor shall furnish to the Collateral Agent from
time to time, without notice or demand by the Collateral Agent, (i) not later
than 10 Business Days prior to the expiration date of each insurance policy
maintained pursuant to this Section 6.1, a binding commitment (issued by the
insurer or an insurance agent for the insurer authorized to issue such
12
certificate who shall certify its authority) evidencing the issuance of a
replacement policy or the extension of such existing policy and that such new or
extended insurance policy is in full force and effect and (ii) evidence
satisfactory to the Collateral Agent of payment of the premium therefor within
30 days of any request by the Collateral Agent and (iii) within 30 days of any
request by the Collateral Agent, a certificate as to the coverage of any such
new or extended insurance policy required to be maintained hereunder (issued by
the insurer or an insurance agent for the insurer authorized to issue such
certificate who shall certify its authority) to the effect that such insurance
policy is in force and effect.
6.2. Warehouse Receipts Non-negotiable. Each Assignor agrees
that if any warehouse receipt or receipt in the nature of a warehouse receipt is
issued with respect to any of its Inventory, such warehouse receipt or receipt
in the nature thereof shall not be "negotiable" (as such term is used in Section
7-104 of the Uniform Commercial Code as in effect in any relevant jurisdiction
or under other relevant law).
6.3. Further Actions; Louisiana Matters. (a) Each Assignor
will, at its own expense, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such lists, descriptions and
designations of its Collateral, warehouse receipts, receipts in the nature of
warehouse receipts, bills of lading, documents of title, vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, reports and other assurances or
instruments and take such further steps relating to the Collateral and other
property or rights covered by the security interest hereby granted, are
reasonably appropriate or advisable to perfect, preserve or protect the security
interest of the Collateral Agent in the Collateral.
(b) Notwithstanding anything contained in this Agreement to
the contrary, this Agreement shall be governed by Chapters 8 and 9 of the
Louisiana Commercial Laws, Louisiana R.S. 10:8-101 et seq. and 10:9-101 et seq.
(collectively, the "Louisiana UCC") to the extent that any security interest in
any of the Collateral located in the State of Louisiana, and any remedies
hereunder with respect thereto, are required to be governed by, and interpreted
in accordance with, the laws of the State of Louisiana.
(c) If an Event of Default shall occur and be continuing, the
Collateral Agent shall have all remedies available to a secured party under the
Louisiana UCC in addition to the other remedies provided elsewhere in this
Agreement. For purposes of executory process under the laws of the State of
Louisiana, each Assignor hereby acknowledges the Obligations and confesses
judgment in favor of the Collateral Agent for the benefit of the Secured
Creditors, for the full amount of the Obligations, including, without
limitation, principal, interest, attorneys' fees, court costs, and all other
fees, expenses and charges.
(d) Each Assignor hereby expressly waives, to the fullest
extent permitted by Louisiana law, the benefit of appraisement provided for in
Articles 2332, 2336, 2723 and 2724 of the Louisiana Code of Civil Procedure and
all other laws of the State of Louisiana conferring such benefits and the demand
and three days' delay accorded by Articles 2639 and 2721 of the Louisiana Code
of Civil Procedure.
13
(e) Pursuant to Louisiana R.S. 27:275 et seq., the Collateral
Agent is hereby authorized and empowered to file a petition to foreclose the
liens created hereby in which the Louisiana Gaming Control Board is named a
nominal defendant and the Assignors request the appointment of a receiver as
contemplated by and in accordance with the provisions of the cited statutes. The
filing of a verified petition by the Collateral Agent shall constitute prima
facie proof of the Collateral Agent's right to enforce the liens created hereby
in executory or ordinary proceedings, at the Collateral Agent's option, and to
appointment of a receiver pursuant to the cited statutes.
(f) In the event the Collateral or any part thereof is seized
as an incident to an action for the recognition or the enforcement of this
Agreement by executory process, ordinary process, sequestration, writ of fieri
facias, or otherwise, the Assignors and the Collateral Agent hereby agree that
the court issuing any such order shall, if petitioned for by the Collateral
Agent, direct the Sheriff to appoint as a keeper of the Collateral, the
Collateral Agent or any agent designated by the Collateral Agent or any person
named by the Collateral Agent at the time such seizure is effected. This
designation is made pursuant to La. R.S. 9:5136 through 5140.2, inclusive, as
the same may be amended, and the Collateral Agent shall be entitled to all the
rights and benefits afforded thereunder, including reasonable compensation,
which compensation shall be secured by this Agreement, and which reasonable
compensation shall not exceed one-tenth of one percent (0.1%) of the amount due
or sued for or claimed or sought to be protected, preserved or enforced in the
proceeding for the recognition of the liens created hereby.
6.4. Financing Statements. Each Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, as are necessary or
desirable to establish and maintain a valid, enforceable and perfected security
interest in the Collateral as provided herein and the other rights and security
contemplated hereby all in accordance with the Uniform Commercial Code as
enacted in any and all relevant jurisdictions or any other relevant law. Each
Assignor will pay any applicable filing fees, recordation taxes and related
expenses. Each Assignor authorizes the Collateral Agent to file any such
financing statements without the signature of such Assignor where permitted by
law.
ARTICLE VII
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
7.1. Remedies; Obtaining the Collateral Upon Default. Each
Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, subject to any mandatory requirements
of applicable law then in effect and further subject to the terms of the
Intercreditor Agreement, the Collateral Agent, in addition to any rights now or
hereafter existing under applicable law, shall have all rights as a secured
creditor under the Uniform Commercial Code in all relevant jurisdictions and may
also:
(a) personally, or by agents or attorneys, immediately retake
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has
14
possession of any part thereof with or without notice or process of
law, and for that purpose may enter upon such Assignor's premises where
any of the Collateral is located and remove the same and use in
connection with such removal any and all services, supplies, aids and
other facilities of such Assignor; and
(b) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables and the Contracts and, as contemplated by such terms, any
policy of insurance or any payment or performance bond) constituting
the Collateral to make any payment required by the terms of such
agreement, instrument or other obligation directly to the Collateral
Agent and may exercise any and all rights and remedies of such Assignor
in respect of such Collateral; and
(c) withdraw all monies, securities and instruments in the
Cash Collateral Account for application to the Obligations in
accordance with Section 7.4 hereof; and
(d) withdraw all monies, securities and instruments in the
Reserve Fund (subject to the rights of the landlord under the Casino
Lease pursuant to Sections 5.3(e), 7.1(c) and 19.8(d) of the Casino
Lease) and the other Pledged Accounts for application to the
Obligations in accordance with Section 7.4 hereof, and in connection
therewith, deliver to the Reserve Fund Bank and the Pledged Account
Banks the notice referred to in the form of consent attached hereto as
Annex D; and
(e) sell, assign or otherwise liquidate, or direct such
Assignor to sell, assign or otherwise liquidate, any or all of the
Collateral or any part thereof, and take possession of the proceeds of
any such sale or liquidation; and
(f) take possession of the Collateral or any part thereof, by
directing such Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral
Agent, in which event such Assignor shall at its own expense forthwith
cause the same to be moved to the place or places so designated by the
Collateral Agent and there delivered to the Collateral Agent; and
(g) effect an absolute assignment of all of such Assignor's
right, title and interest in and to each Xxxx (and the goodwill of the
business of such Assignor associated therewith), Patent and Copyright;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. The
Secured Creditors agree that this Agreement may be enforced only by the action
of the Collateral Agent acting upon the instructions of the Required Secured
Creditors (as defined in the Intercreditor Agreement) and that no Secured
Creditor, except as otherwise provided in the Intercreditor Agreement, shall
have any right individually to seek to enforce this Agreement or to realize upon
the security to be granted hereby, it being understood and agreed
15
that such rights and remedies may be exercised by the Collateral Agent for the
benefit of the Secured Creditors upon the terms of this Agreement and the
Intercreditor Agreement.
7.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 7.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent or after any overhaul or repair which the Collateral Agent
shall determine to be commercially reasonable. Any such disposition which shall
be a private sale or other private proceedings permitted by such requirements
shall be made upon not less than 10 days' written notice to the relevant
Assignor specifying the time at which such disposition is to be made and the
intended sale price or other consideration therefor, and shall be subject, for
the 10 days after the giving of such notice, to the right of the relevant
Assignor or any nominee of such Assignor to acquire the Collateral involved at a
price or for such other consideration at least equal to the intended sale price
or other consideration so specified. Any such disposition which shall be a
public sale permitted by such requirements shall be made upon not less than 10
days' written notice to the relevant Assignor specifying the time and place of
such sale and, in the absence of applicable requirements of law, shall be by
public auction (which may, at the Collateral Agent's option, be subject to
reserve), after publication of notice of such auction not less than 10 days
prior thereto in two newspapers in general circulation in the City of New York.
The Collateral Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Collateral Agent may adjourn
any public or private sale from time to time by announcement at the time and
place fixed therefor, and such sale may, without further notice, be made at the
time and place to which it was so adjourned. To the extent permitted by any such
requirement of law, the Collateral Agent and the Secured Creditors may bid for
and become the purchaser of the Collateral or any item thereof, offered for sale
in accordance with this Section without accountability to the relevant Assignor.
If, under mandatory requirements of applicable law, the Collateral Agent shall
be required to make disposition of the Collateral within a period of time which
does not permit the giving of notice to any Assignor as hereinabove specified,
the Collateral Agent need give such Assignor only such notice of disposition as
shall be reasonably practicable in view of such mandatory requirements of
applicable law. Each Assignor agrees to do or cause to be done all such other
acts and things as may be reasonably necessary to make such sale or sales of all
or any portion of the Collateral valid and binding and in compliance with any
and all applicable laws, regulations, orders, writs, injunctions, decrees or
awards of any and all courts, arbitrators or governmental instrumentalities,
domestic or foreign, having jurisdiction over any such sale or sales, all at
such Assignor's expense.
7.3. Waiver of Claims. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL
16
AGENT'S TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES AND ANY SUCH RIGHT WHICH SUCH ASSIGNOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and, except as otherwise provided in this Agreement, such
Assignor hereby further waives, to the extent permitted by law:
(a) all damages occasioned by such taking of possession except
any damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
(b) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder; and
(c) all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Agreement or
the absolute sale of the Collateral or any portion thereof, and each
Assignor, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all
such laws.
Any sale of, or the grant of options to purchase, or any other realization upon,
any Collateral shall operate to divest all right, title, interest, claim and
demand, either at law or in equity, of the relevant Assignor therein and
thereto, and shall be a perpetual bar both at law and in equity against such
Assignor and against any and all Persons claiming or attempting to claim the
Collateral so sold, optioned or realized upon, or any part thereof, from,
through and under such Assignor.
7.4. Application of Proceeds. All moneys collected by the
Collateral Agent upon any sale or other disposition of the Collateral, together
with all other moneys received by the Collateral Agent hereunder, shall be
applied in the manner provided in Section 11 of the Intercreditor Agreement.
7.5. Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the Collateral Agent shall be in addition to
every other right, power and remedy specifically given under this Agreement, the
other Secured Debt Documents or now or hereafter existing at law or in equity,
or by statute and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time or
simultaneously and as often and in such order as may be deemed expedient by the
Collateral Agent. All such rights, powers and remedies shall be cumulative and
the exercise or the beginning of exercise of one shall not be deemed a waiver of
the right to exercise of any other or others. No delay or omission of the
Collateral Agent in the exercise of any such right, power or remedy, renewal or
extension of any of the Obligations and no course of dealing between any
Assignor and the Collateral Agent or any holder of any of the Obligations shall
impair any such right, power or
17
remedy or shall be construed to be a waiver of any Default or Event of Default
or an acquiescence therein. No notice to or demand on any Assignor in any case
shall entitle it to any other or further notice or demand in similar or other
circumstances or constitute a waiver of any of the rights of the Collateral
Agent to any other or further action in any circumstances without notice or
demand. In the event that the Collateral Agent shall bring any suit to enforce
any of its rights hereunder and shall be entitled to judgment, then in such suit
the Collateral Agent may recover reasonable expenses, including attorneys' fees,
and the amounts thereof shall be included in such judgment.
7.6. Discontinuance of Proceedings. In case the Collateral
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case the relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
ARTICLE VIII
INDEMNITY
8.1. Indemnity. (a) Each Assignor agrees to indemnify,
reimburse and hold the Collateral Agent, each Secured Creditor and their
respective successors, assigns, employees, agents and servants (hereinafter in
this Section 8.1 referred to individually as "Indemnitee," and collectively as
"Indemnitees") harmless from any and all liabilities, obligations, damages,
injuries, penalties, claims, demands, actions, suits, judgments and any and all
costs, expenses or disbursements (including reasonable attorneys' fees and
expenses) (for the purposes of this Section 8.1 the foregoing are collectively
called "expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnitees in any way relating to or arising out of this
Agreement or any other document executed in connection herewith or in any other
way connected with the administration of the transactions contemplated hereby or
the enforcement of any of the terms of, or the preservation of any rights under
any thereof, or in any way relating to or arising out of (a) the manufacture,
ownership, ordering, purchase, delivery, control, acceptance, lease, financing,
possession, operation, condition, sale, return or other disposition, or use of
the Collateral (including, without limitation, latent or other defects, whether
or not discoverable), any contract claim or, to the maximum extent permitted
under applicable law, the violation of the laws of any country, state or other
governmental body or unit, or any tort (including, without limitation, claims
arising or imposed under the doctrine of strict liability, or for or on account
of injury to or the death of any Person (including any Indemnitee), or property
damage) or (b) the actual or alleged presence of hazardous materials in the air,
surface water or groundwater or on the surface or subsurface of any real
property owned, leased or at any time operated by such Assignor or any of its
Subsidiaries, the release, generation, storage, transporta-
18
tion, handling or disposal of hazardous materials at any location, whether or
not owned or operated by such Assignor or any of their Subsidiaries, the
non-compliance of any real property with foreign, federal, state and local laws,
regulations, and ordinances (including applicable permits thereunder) applicable
to any real property, or any environmental claim relating in any way to such
Assignor or any of its Subsidiaries, their operations, or any real property
owned, leased or at any time operated by such Assignor or any of its
Subsidiaries, including, in each case, without limitation, the reasonable fees
and disbursements of counsel and other consultants incurred in connection with
any such investigation, litigation or other proceeding; provided that no
Indemnitee shall be indemnified pursuant to this Section 8.1(a) for expenses to
the extent caused by the gross negligence or willful misconduct of such
Indemnitee. Each Assignor agrees that upon written notice by any Indemnitee of
the assertion of such a liability, obligation, damage, injury, penalty, claim,
demand, action, suit or judgment, such Assignor shall assume full responsibility
for the defense thereof. Each Indemnitee agrees to use its best efforts to
promptly notify the relevant Assignor of any such assertion of which such
Indemnitee has knowledge.
(b) Without limiting the application of Section 8.1(a) hereof,
each Assignor, jointly and severally, agrees to pay, or reimburse the Collateral
Agent for any and all fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) Without limiting the application of Section 8.1(a) or (b)
hereof, each Assignor, jointly and severally, agrees to pay, indemnify and hold
each Indemnitee harmless from and against any loss, costs, damages and expenses
which such Indemnitee may suffer, expend or incur in consequence of or growing
out of any misrepresentation by any Assignor in this Agreement or in any writing
contemplated by or made or delivered pursuant to or in connection with this
Agreement.
(d) If and to the extent that the obligations of any Assignor
under this Section 8.1 are unenforceable for any reason, any Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
8.2. Indemnity Obligations Secured by Collateral; Survival.
Any amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VIII shall
continue in full force and effect notwithstanding the full payment of all the
Notes issued under the Credit Agreement, all of the Senior Subordinated Notes
issued under the Senior Subordinated Note Indenture and all of the Senior
Subordinated Contingent Notes issued under the Senior Subordinated Contingent
Note Indenture, the termination of all Interest Rate
19
Protection Agreements and all obligations under the HET/JCC Agreement or any
other Minimum Payment Guaranty Documents and the payment of all other
Obligations and notwithstanding the discharge thereof.
ARTICLE IX
DEFINITIONS
The following terms shall have the meanings herein specified.
Such definitions shall be equally applicable to the singular and plural forms of
the terms defined.
"Administrative Agent" shall have the meaning provided in the
Recitals to this Agreement.
"Agreement" shall mean this Security Agreement as the same may
be modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first
paragraph of this Agreement.
"Bank Creditors" shall have the meaning provided in the first
paragraph of this Agreement.
"Banks" shall have the meaning provided in the Recitals to
this Agreement.
"Cash Collateral Account" shall mean a non-interest bearing
cash collateral account maintained with the Collateral Agent for the benefit of
the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in the Intercreditor
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a)
of this Agreement.
"Collateral Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Component Parts" shall mean those things or goods which after
they are incorporated or permanently attached into a tract of land, a building
or other construction become an integral part of it, and/or those things or
goods which after they are permanently attached to a building or other
construction cannot be removed without substantial damage to themselves or to
the immovable property to which they are attached.
20
"Contract Rights" shall mean all rights of any Assignor
(including, without limitation, all rights to payment) under each Contract.
"Contracts" shall mean (i) the General Development Agreement,
(ii) the Management Agreement, (iii) the Construction Contracts, (iv) all other
construction contracts and sub-contracts relating thereto and payment and
performance bonds related thereto, (v) all architectural, engineering,
maintenance, management, leasing and service documents and franchise contracts
relating to the Project, or (vi) all other contracts between any Assignor and
one or more additional parties (including, without limitation any Interest Rate
Protection Agreement). Notwithstanding the foregoing, the definition of
"Contracts" shall not include the Casino Operating Contract.
"Copyrights" shall mean any United States copyright which any
Assignor 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 any Assignor.
"Credit Agreement" shall have the meaning provided in the
Recitals to this Agreement.
"Default" shall mean any event which, with notice or lapse of
time, or both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor and, in any event,
shall include, but shall not be limited to, all machinery, equipment (including,
without limitation, all gaming equipment, gaming devices, appliances, chattels,
furnishings, furniture, fixtures, accessories, apparatus, building or
construction materials and supplies, china, glassware, silverware, pots, pans,
linens, stoves, refrigerators, freezers and other restaurant, bar, food service
or kitchen appliances and equipment), furnishings, movable trade fixtures and
vehicles now or hereafter owned by any Assignor and any and all additions,
substitutions and replacements of any of the foregoing, wherever located,
together with all attachments, components, parts, equipment and accessories
installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under, and
as defined in, the Intercreditor Agreement or any other default hereunder not
constituting an Event of Default enumerated above in this definition after
notice and 30 days' opportunity to cure, and shall in any event, include,
without limitation, any payment default on any of the Obligations after the
expiration of any applicable grace period.
21
"Excluded Collateral" shall mean (i) the Casino Operating
Contract, (ii) the House Bank, and (iii) the Louisiana Gross Gaming Revenue
Share Payments, including the States' Interest in Daily Collections, each as
defined in the Casino Operating Contract.
"Fixtures" shall mean those things which after placement on
any real estate or immovable property, become Component Parts of the respective
land, buildings and other constructions, and which are used in the conduct of
business on such land or in such building or other constructions.
"General Intangibles" shall have the meaning provided in the
Uniform Commercial Code as in effect on the date hereof in the State of New York
and shall in any event include, without limitation, any and all of the relevant
Assignor's present and future contract rights, instruments, documents and
general intangibles necessary for use in connection with the operation of the
Casino or the ownership of any Collateral, whether now existing or hereinafter
created, or otherwise owned or acquired by such Assignor, and all liens,
security interests, guaranties, remedies, privileges and other rights pertaining
to such general intangibles, and all of the relevant Assignor's claims, rights,
powers, privileges, authority, options, security interests, liens and remedies
under any partnership or limited liability company agreement to which such
Assignor is a party or with respect to any partnership or limited liability
company of which such Assignor is a partner or member, respectively, and all
inventions, processes, production methods, proprietary information and
knowledge, and all licenses or other agreements granted to such Assignor with
respect to the foregoing; all information, customer lists, identification of
suppliers, data, plans, blueprints, specifications, designs, drawings, recorded
knowledge, surveys, engineering reports, test reports, manuals, materials
standards, processing standards, performance standards, catalogs, books,
records, computer and automatic machinery software and programs and the like
pertaining to operations by or the business of such Assignor; all field repair
data, sales data and other information relating to sales or service of products
manufactured or sold by such Assignor; all present and future Permits (other
than the Casino Operating Contract) of governmental agencies held by such
Assignor pertaining to its operations or business, except for licenses that
cannot be transferred or encumbered by such Assignor without causing a default
thereunder or termination thereof, including, without limitation, liquor and
gaming licenses of such type; all rights of such Assignor to receive return of
deposits and trust payments; all rights of such Assignor to payment under
letters of credit and similar agreements; all tax refunds (including, without
limitation, all foreign, federal, state and local income tax and property tax
refunds) owed to such Assignor; all causes of action, rights, claims and
warranties of such Assignor; all rights of such Assignor as lessor or lessee
under any lease or rental agreement; all rights of such Assignor under any
insurance, surety or similar contract or arrangement; all written guaranties and
express or implied warranties regarding the Collateral and any part or parts
thereof; and all goodwill.
"Goods" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"HET/JCC Agreement" shall have the meaning provided in the
Recitals to this Agreement.
22
"House Bank" shall have the meaning provided in the Management
Agreement.
"Indemnitee" shall have the meaning provided in Section 8.1 of
this Agreement.
"Intercreditor Agreement" shall have the meaning provided in
the Recitals to this Agreement.
"Inventory" shall mean merchandise, inventory, goods and other
assets (including, without limitation, gaming equipment and gaming devices to
the extent not included in the definition of "Equipment" and food and food
products), and all additions, substitutions and replacements thereof, wherever
located, together with all goods, supplies, incidentals, packaging materials,
labels, materials and any other items used or usable in manufacturing,
processing, packaging or shipping same; in all stages of production -- from raw
materials through work-in-process to finished goods -- and all products and
proceeds of whatever sort and wherever located and any portion thereof which may
be returned, rejected, reclaimed or repossessed by the Collateral Agent from any
Assignor's customers, and shall specifically include all "inventory" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York, now or hereafter owned by any Assignor.
"Investment Property" shall mean any "investment property" as
such term is defined in the Uniform Commercial Code as in effect on the date
hereof in the State of New York.
"JCC" shall have the meaning provided in the first paragraph
of this Agreement.
"JCC Holding" shall have the meaning provided in the Recitals
to this Agreement.
"Marks" shall mean any trademarks and service marks now held
or hereafter acquired by any Assignor, 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 any Assignor in the United States and trade dress including logos,
designs, trade names, company 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.
"Minimum Payment Guarantors" shall have the meaning provided
in the first paragraph of this Agreement.
"Minimum Payment Guaranty" shall have the meaning assigned
that term in the Intercreditor Agreement.
"Minimum Payment Guaranty Documents" shall have the meaning
assigned that term in the Intercreditor Agreement.
23
"Obligations" shall mean (i) the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of (x) the
principal of and interest on all Protective Advances (as defined in the
Intercreditor Agreement) made in accordance with the requirements of Section
4(e) of the Intercreditor Agreement and (y) all other obligations and
indebtedness (including, without limitation, indemnities, fees, expenses,
enforcement costs (including reasonable attorneys' fees) and interest on such
obligations and indebtedness), of each Credit Party to the Secured Creditors,
whether now existing or hereafter incurred, to the extent relating to Protective
Advances made in accordance with Section 4(e) of the Intercreditor Agreement and
the due performance and compliance by each Credit Party with all the terms,
conditions and agreements relating to such Protective Advances; (ii) the full
and prompt payment when due (whether at the stated maturity, by acceleration or
otherwise) of all obligations and indebtedness (including, without limitation,
indemnities, fees, expenses, enforcement costs (including reasonable attorneys'
fees) and interest on such obligations and indebtedness) of such Assignor to the
Minimum Payment Guarantors now existing or hereafter incurred under, arising out
of, or in connection with any Minimum Payment Guaranty Document (in each case,
to the extent such obligations and indebtedness relate to the Minimum Payment
Guaranty) to which it is a party (including, without limitation, all such
obligations and indebtedness under the HET/JCC Agreement) and the due
performance and compliance by such Assignor with all of the terms, conditions
and agreements contained in each such Minimum Payment Guaranty Document; (iii)
the full and prompt payment when due (whether at the stated maturity, by
acceleration or otherwise) of all obligations and indebtedness (including,
without limitation, the principal of and interest on the notes issued, and Loans
made, under the Credit Agreement, all reimbursement obligations and unpaid
drawings with respect to letters of credit issued under the Credit Agreement,
and all indemnities, fees, expenses, enforcement costs (including reasonable
attorneys' fees) and interest on such obligations and indebtedness) of each
Assignor to the Bank Creditors now existing or hereafter incurred under, arising
out of, or in connection with any Credit Document (including, without
limitation, all such obligations and indebtedness under the Credit Agreement,
the JCC Holding Guaranty and the Subsidiaries Guaranty) to which such Assignor
is a party and the due performance and compliance by each Assignor with all of
the terms, conditions and agreements contained in the Credit Agreement and the
other Credit Documents; (iv) the full and prompt payment when due (whether at
the stated maturity, by acceleration or otherwise) of all obligations and
indebtedness (including, without limitation, the principal of, premium, if any,
and interest on, the Senior Subordinated Notes, and all indemnities, fees,
expenses, enforcement costs (including reasonable attorneys' fees) and interest
on such obligations and indebtedness) of each Assignor to the Senior
Subordinated Note Creditors now existing or hereafter incurred under, arising
out of or in connection with the Senior Subordinated Notes, the other Senior
Subordinated Note Documents and the Security Documents (including, without
limitation, all such obligations and indebtedness under the Senior Subordinated
Note Guaranty) to which such Assignor is a party and the due performance and
compliance by each Assignor with all of the terms, conditions and agreements
contained therein; (v) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
indebtedness (including, without limitation, the principal of, premium, if any,
and interest on, the Senior Subordinated Contingent Notes, and all indemnities,
fees, expenses, enforcement costs (including reasonable attorneys' fees) and
interest on such obligations and
24
indebtedness) of each Assignor to the Senior Subordinated Contingent Note
Creditors now existing or hereafter incurred under, arising out of or in
connection with the Senior Subordinated Contingent Notes, the other Senior
Subordinated Contingent Note Documents and the Security Documents (including,
without limitation, all obligations and indebtedness under the Senior
Subordinated Contingent Note Guaranty) to which such Assignor is a party and the
due performance and compliance by each Assignor with all of the terms,
conditions and agreements contained therein; (vi) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of all
obligations and liabilities owing by each Assignor to the Other Creditors under,
or with respect to, any Interest Rate Protection Agreement, whether such
Interest Rate Protection Agreement is now in existence or hereafter arising
(including, without limitation, all such obligations and indebtedness under the
JCC Holding Guaranty and the Subsidiaries Guaranty), and the due performance and
compliance by such Assignor with all of the terms, conditions and agreements
contained therein; (vii) any and all sums advanced by the Collateral Agent in
order to preserve the Collateral or preserve its security interest in the
Collateral, and any and all amounts (but without any interest thereon) owing by
the Borrower to the Minimum Payment Guarantors to reimburse the Minimum Payment
Guarantors for amounts paid by the Minimum Payment Guarantors to the Collateral
Agent pursuant to the indemnity provisions contained in Section 6(c) and (d) of
the Intercreditor Agreement; (viii) in the event of any proceeding for the
collection or enforcement of any indebtedness, obligations, or liabilities of
any Assignor referred to in clauses (i), (ii), (iii), (iv), (v) and (vi), after
an Event of Default shall have occurred and be continuing, the reasonable
expenses of the Collateral Agent in re-taking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the Collateral, or of
any exercise by the Collateral Agent of its rights hereunder, together with
reasonable attorneys' fees and court costs; and (ix) all amounts paid by any
Indemnitee as to which such Indemnitee has the right to reimbursement under
Section 8.1 of this Agreement. It is acknowledged and agreed that the
"Obligations" shall include extensions of credit described above, whether
outstanding on the date of this Agreement or extended from time to time after
the date of this Agreement.
"Other Creditors" shall have the meaning provided in the first
paragraph of this Agreement.
"Patents" shall mean any United States patent to which any
Assignor now or hereafter has title and any divisions or continuations thereof,
as well as any application for a United States patent now or hereafter made by
any Assignor.
"Permits" shall mean any and all actions, approvals,
certificates, consents, waivers, exemptions, variances, franchises, orders,
permits, authorizations, rights or licenses of or from any governmental
authority or agency, including, without limitation the Casino Operating
Contract.
"Permitted Filings" shall have the meaning provided in Section
2.1 of this Agreement.
"Pledged Account Bank" shall have the meaning provided in
Section 2.6(a) of this Agreement.
25
"Pledged Accounts" shall have the meaning provided in Section
1.1(a) of this Agreement.
"Proceeds" shall have the meaning provided in the Uniform
Commercial Code as in effect in the State of New York on the date hereof or
under other relevant law and, in any event, shall include, but not be limited
to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Collateral Agent or any Assignor from time to time with respect
to any of the Collateral, (ii) any and all payments (in any form whatsoever)
made or due and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Receivables" shall mean any "account" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York, now or hereafter owned by any Assignor and, in any event, shall
include, but shall not be limited to, all of such Assignor's rights to payment
for goods sold or leased or services performed by such Assignor, whether now in
existence or arising from time to time hereafter, including, without limitation,
rights evidenced by an account, note, contract, security agreement, chattel
paper, or other evidence of indebtedness or security, together with (i) all
security pledged, assigned, hypothecated or granted to or held by such Assignor
to secure the foregoing, (ii) all of such Assignor's right, title and interest
in and to any goods, the sale of which gave rise thereto, (iii) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing, (iv) all
powers of attorney for the execution of any evidence of indebtedness or security
or other writing in connection therewith, (v) all books, records, ledger cards,
and invoices relating thereto, (vi) all evidences of the filing of financing
statements and other statements and the registration of other instruments in
connection therewith and amendments thereto, notices to other creditors or
secured parties, and certificates from filing or other registration officers,
(vii) all credit information, reports and memoranda relating thereto, (viii) all
claims, rights, powers or privileges and remedies of any Assignor relating
thereto or arising in connection therewith, including, without limitation, all
rights of such Assignor to make determinations, to exercise any election
(including, but not limited to, election of remedies) or option or to give or
receive any notice, consent, waiver or approval, together with full power and
authority to demand, receive, enforce, collect or give receipt for any of the
foregoing, to enforce or execute any checks, or other instruments or orders, to
file any claims and to take any action which in the reasonable discretion of the
Collateral Agent may be necessary or advisable in connection with any of the
foregoing, and (ix) all other writings related in any way to the foregoing.
"Reserve Fund" shall have the meaning provided in the Credit
Agreement.
"Secured Creditors" shall have the meaning provided in the
first paragraph of this Agreement.
"Secured Debt Documents" shall mean and include each of this
Agreement, the Credit Agreement, the other Credit Documents, the Senior
Subordinated Note Documents, the
26
Senior Subordinated Contingent Note Documents, the HET/JCC Agreement and the
other Minimum Payment Guaranty Documents, all Interest Rate Protection
Agreements from time to time in effect and all Shared Security Documents.
"Senior Subordinated Contingent Note Creditors" shall have the
meaning provided in the first paragraph of this Agreement.
"Senior Subordinated Contingent Note Holders" shall have the
meaning provided in the first paragraph of this Agreement.
"Senior Subordinated Note Creditors" shall have the meaning
provided in the first paragraph of this Agreement.
"Senior Subordinated Note Holders" shall have the meaning
provided in the first paragraph of this Agreement.
"Senior Subordinated Contingent Note Documents" shall have the
meaning provided in the Recitals to this Agreement.
"Senior Subordinated Contingent Note Indenture" shall have the
meaning provided in the Recitals to this Agreement.
"Senior Subordinated Contingent Notes" shall have the meaning
provided in the Recitals to this Agreement.
"Senior Subordinated Contingent Note Trustee" shall have the
meaning provided in the Recitals to this Agreement.
"Senior Subordinated Note Documents" shall have the meaning
provided in the Recitals to this Agreement.
"Senior Subordinated Note Indenture" shall have the meaning
provided in the Recitals to this Agreement.
"Senior Subordinated Notes" shall have the meaning provided in
the Recitals to this Agreement.
"Senior Subordinated Note Trustee" shall have the meaning
provided in the Recitals to this Agreement.
"Termination Date" shall have the meaning provided in Section
10.9 of this Agreement.
27
ARTICLE X
MISCELLANEOUS
10.1. Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been duly given or made when delivered to
the party to which such notice, request, demand or other communication is
required or permitted to be given or made under this Agreement, addressed as
follows:
(a) if to any Assignor, at the address set forth opposite
its signature below;
(b) if to the Collateral Agent:
Attention:
(c) if to any Minimum Payment Guarantor, at the address set
forth in the Intercreditor Agreement.
(d) if to any Bank Creditor, either (x) to the Administrative
Agent, at the address of the Administrative Agent specified in the
Credit Agreement or (y) at such address as such Bank Creditor shall
have specified in the Credit Agreement;
(e) if to any Senior Subordinated Note Creditor, to the Senior
Subordinated Note Trustee at the address set forth in the Intercreditor
Agreement;
(f) if to any Senior Subordinated Contingent Note Creditor, to
the Senior Subordinated Contingent Note Trustee at the address set
forth in the Intercreditor Agreement;
(g) if to any Other Creditor, either (x) to the representative
for the Other Creditors, at such address as such representative may
have provided to each Assignor and the Collateral Agent from time to
time, or (y) directly to the Other Creditors at such address as the
Other Creditors shall have specified in writing to each Assignor and
the Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder or, as to any
Secured Creditor, as may otherwise be specified in the applicable Secured Debt
Document.
10.2. Waiver; Amendment. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever except in accordance with the terms of Section 16 of the
Intercreditor Agreement.
28
10.3. Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement, the Intercreditor Agreement or
any other Secured Debt Document except as specifically set forth in a waiver
granted pursuant to Section 10.2 hereof; (c) any amendment to or modification of
any Secured Debt Document or any security for any of the Obligations; whether or
not any Assignor shall have notice or knowledge of any of the foregoing; or (d)
any defect or any invalidity of this Agreement as same applies to any Assignor.
10.4. Successors and Assigns. This Agreement shall be binding
upon each Assignor and its successors and assigns and shall inure to the benefit
of the Collateral Agent and each Secured Creditor and their respective
successors and assigns, provided that no Assignor may transfer or assign any or
all of its rights or obligations hereunder except pursuant to an amendment to
the terms of this Agreement effected in accordance with the requirements of
Section 10.2 hereof. All agreements, statements, representations and warranties
made by each Assignor herein or in any certificate or other instrument delivered
by such Assignor or on its behalf under this Agreement shall be considered to
have been relied upon by the Secured Creditors and shall survive the execution
and delivery of this Agreement and the other Secured Debt Documents regardless
of any investigation made by the Secured Creditors or on their behalf.
10.5. Headings. The headings of the several sections of this
Agreement are inserted for convenience only and shall not in any way affect the
meaning or construction of any provision of this Agreement.
10.6. Severability. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.7. GOVERNING LAW. EXCEPT AS MAY BE REQUIRED PURSUANT TO
SECTIONS 6.3(b) THROUGH 6.3(f) HEREOF, THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK.
10.8. Assignors' Duties. It is expressly agreed, anything
herein contained to the contrary notwithstanding, that each Assignor shall
remain liable to perform all of the obligations, if any, assumed by it with
respect to the Collateral and the Collateral Agent shall not have any
obligations or liabilities with respect to any Collateral by reason of or
arising out of this Agreement, nor shall the Collateral Agent be required or
obligated in any manner to perform or fulfill any of the obligations of any
Assignor under or with respect to any Collateral.
29
10.9. Termination; Release. (a) After the Termination Date,
this Agreement and the security interests created hereby shall terminate
(provided that all indemnities set forth herein including, without limitation,
in Article VIII hereof, shall survive any such termination) and the Collateral
Agent, at the request and expense of the respective Assignor, will execute and
deliver to such Assignor a proper instrument or instruments (including Uniform
Commercial Code termination statements on form UCC-3) acknowledging the
satisfaction and termination of this Agreement, and will duly assign, transfer
and deliver to such Assignor (without recourse and without any representation or
warranty) such of the Collateral of such Assignor as may be in the possession of
the Collateral Agent and as has not theretofore been sold or otherwise applied
or released pursuant to this Agreement. As used in this Agreement, "Termination
Date" shall mean the date upon which no obligations remain pursuant to the
HET/JCC Agreement or any other Minimum Payment Guaranty Documents and all
Minimum Payment Guaranties have been terminated, the total commitments under the
Credit Agreement have been terminated, all Interest Rate Protection Agreements
and Minimum Payment Guaranties have been terminated, no Note under the Credit
Agreement is outstanding (and all Loans thereunder have been repaid in full),
all letters of credit issued under the Credit Agreement have been terminated, no
Senior Subordinated Notes or Senior Subordinated Contingent Notes are
outstanding and all Obligations then owing have been paid in full.
(b) The Collateral Agent shall release any or all of the
Collateral in accordance with the terms of Section 17 of the Intercreditor
Agreement. Furthermore, one or more Assignors (other than JCC Holding and JCC)
may be released from time to time as Assignors hereunder in accordance with the
terms of Section 17 of the Intercreditor Agreement.
10.10. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with JCC and the
Collateral Agent.
10.11. The Collateral Agent. The Collateral Agent will hold in
accordance with this Agreement and the Intercreditor Agreement all items of the
Collateral at any time received under this Agreement. It is expressly understood
and agreed that the obligations of the Collateral Agent as holder of the
Collateral and interest therein and with respect to the disposition thereof, and
otherwise under this Agreement, are only those expressly set forth in this
Agreement and the Intercreditor Agreement.
10.12. Gaming Regulations. This Agreement and the security
interests granted hereby and any remedies contemplated hereby, are and shall
remain subject to the Louisiana Economic Development and Gaming Corporation Act,
La. R.S. 27:1 et seq., La. R.S. 27:201 et seq. and the rules and regulations
thereunder, as amended from time to time (collectively, the "Louisiana Gaming
Regulations"), and the exercise of remedies hereunder will be subject to the
Louisiana Gaming Regulations.
30
10.13. Additional Assignors. It is understood and agreed that
any Subsidiary of JCC Holding that is required to execute a counterpart of this
Agreement after the date hereof pursuant to any Secured Debt Document shall
automatically become an Assignor hereunder by executing a counterpart hereof and
by delivering the same to the Collateral Agent.
10.14. Intercreditor Agreement. Notwithstanding any other
provision of this Agreement or any document or instrument executed by any
Assignor, this Agreement and all liens and security interests and rights granted
herein, and the priority thereof, are expressly subject to the provisions of the
Intercreditor Agreement which are incorporated herein by reference and made
applicable hereto. In addition, the Collateral Agent is the collateral agent
under and pursuant to the terms of the Intercreditor Agreement, and,
notwithstanding anything herein to the contrary, the rights, powers, remedies
and obligations of the Collateral Agent hereunder shall be subject to the
provisions of the Intercreditor Agreement. Any exercise or waiver by the
Collateral Agent of any of its rights, powers or remedies hereunder or any other
act by the Collateral Agent hereunder shall be conclusive evidence of the
Collateral Agent's authority pursuant to the Intercreditor Agreement against all
persons other than the Secured Creditors.
10.15. No Third Party Beneficiaries. This Agreement is entered
into solely for the benefit of the parties hereto and their respective
successors and assigns and for the benefit of the Secured Creditors from time to
time and their respective successors and assigns and, except for the Secured
Creditors and their successors and assigns, there shall be no third party
beneficiaries hereof, nor shall any Person other than the parties hereto and
their respective successors and assigns, and the Secured Creditors and their
respective successors and assigns, be entitled to enforce the provisions hereof
or have any claims against any party hereto (or any Secured Creditor) or their
successors and assigns arising from, or under, this agreement.
31
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers, as the
case may be, as of the date first above written.
JCC HOLDING COMPANY,
as Assignor
By /s/ L. Xxxxxxx Xxxxxx
------------------------------
Title: Vice President & Secretary
JAZZ CASINO COMPANY, L.L.C.,
as Assignor
By /s/ L. Xxxxxxx Xxxxxx
------------------------------
Title: Vice President & Secretary
CP DEVELOPMENT, L.L.C.,
as Assignor
By: /s/ L. Xxxxxxx Xxxxxx
------------------------------
Title: Vice President & Secretary
FP DEVELOPMENT, L.L.C.,
as Assignor
By: /s/ L. Xxxxxxx Xxxxxx
------------------------------
Title: Vice President & Secretary
JCC DEVELOPMENT COMPANY, L.L.C.,
as Assignor
By: /s/ L. Xxxxxxx Xxxxxx
------------------------------
Title: Vice President & Secretary
THE BANK OF NEW YORK,
as Collateral Agent
By: /s/ R. Xxxxxxx Xxxx
-----------------------------
Title: Agent
ANNEX A
to
Security Agreement
SCHEDULE OF PERMITTED LIENS
ANNEX B
to
Security Agreement
SCHEDULE OF CHIEF EXECUTIVE OFFICE AND RECORD LOCATIONS
Name of Assignor Location Address
---------------- -------- -------
ANNEX C
to
Security Agreement
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
NAME OF ASSIGNOR LOCATION ADDRESS FUNCTION
---------------- -------- ------- --------
ANNEX D
FORM OF CONSENT OF DEPOSITARY BANK
------------, ----
[Name and Address of Pledged Account Bank]
re Security Agreement
----------------------
Ladies and Gentlemen:
This will confirm the arrangements regarding the account of
[name of Assignor] (the "Assignor"), Account Number ______, which is currently
maintained with you (the "Account").
Pursuant to a Security Agreement, dated as of _________ ___,
1998, as amended from time to time (the "Agreement"), between the Assignor,
various other Assignors and , as Collateral Agent (the "Collateral Agent"), the
Assignor has granted to the Collateral Agent a security interest in all cash,
securities, certificates, checks, drafts, investments and instruments from time
to time deposited in the Account.
All monies, securities, certificates, checks, drafts,
investments and instruments in the Account will become subject to the security
interest under the Agreement and subject to the terms of this letter arrangement
as soon as deposited therein. The Account shall not be subject to deduction,
setoff, banker's lien, or any other right in favor of any person other than the
Collateral Agent. The undersigned hereby waives any contractual or statutory
security interest and/or right of offset the undersigned has in the Account and
acknowledges receipt of the Security Agreement. The undersigned further agrees
to xxxx its records to reflect the security interest in favor of the Collateral
Agent in accordance with the Security Agreement and confirms that its records
indicate that no other party has been granted a security interest in the Account
The undersigned further agrees not to acknowledge or accept any other parties'
security interest in the Account or to enter into any other agreement granting
or acknowledging any other parties' control over or right to make entitlement
orders with respect to the Account.
Pursuant to the Agreement, the Assignor also has granted the
Collateral Agent an irrevocable power of attorney to give the notice referred to
in the immediately succeeding sentence. Until you have received written notice
from an officer of the Collateral Agent stating that an Event of Default as
defined in the Agreement has occurred, the Assignor shall be entitled to make
withdrawals from the Account and to invest the funds therein. Upon your receipt
of such
ANNEX D
Page 2
a written notice from an officer of the Collateral Agent directing you to do so,
at the end of each business day until further written notice only from an
officer of the Collateral Agent, each day's deposit to the Account are to be
sent by wire and intact to the account designated below or to such other account
designated in writing by an officer of the Collateral Agent:
The Bank of New York
ABA# 000000000
GLA# 111-565
Collateral Account 154992
This new arrangement will start upon your agreement to the
foregoing. This agreement cannot be amended or terminated without at least
thirty (30) days prior written notice to the Collateral Agent.
Very truly yours,
--------------------
By______________________
Title:
ACCEPTED this ____ day of
----------------, ----:
[name of Assignor],
as Assignor
By______________________
Title:
[NAME OF PLEDGED ACCOUNT BANK]
By__________________________
Title:
ANNEX D
Page 3
ANNEX A
PLEDGED ACCOUNTS
Name of Assignor Name of Institution ADDRESS Account Number
---------------- ------------------- ------- --------------
ANNEX E
PLEDGED ACCOUNTS
Name of Assignor Name of Institution ADDRESS Account Number
---------------- ------------------- ------- --------------
ANNEX F
to
Security Agreement
SCHEDULE OF TRADE, FICTITIOUS AND OTHER NAMES
---------------------------------------------
ANNEX G
to
Security Agreement
I. SCHEDULE OF U.S. TRADEMARK REGISTRATIONS
NAME OF REGISTERED REGISTRATION REGISTRATION
ASSIGNOR XXXX NO. DATE
-------- ---- --- ----
II. SCHEDULE OF PENDING APPLICATIONS FOR U.S. TRADEMARK
REGISTRATIONS ON THE BASIS OF USE IN COMMERCE
UNDER 17 USC Section 1051(a)
III. SCHEDULE OF PENDING APPLICATION FOR U.S. TRADEMARK
REGISTRATION ON THE BASIS OF INTENT TO USE THE
XXXX IN COMMERCE UNDER 17 USC Section 1051(b)
NAME OF
ASSIGNOR XXXX SERIAL NO.
-------- ---- ----------
ANNEX H
to
Security Agreement
SCHEDULE OF LICENSE AGREEMENTS AND ASSIGNMENTS
NAME OF PARTIES AND
ASSIGNOR DESCRIPTION SUBJECT REMARKS
-------- ----------- ------- -------
ANNEX I
to
Security Agreement
SCHEDULE OF PATENTS AND APPLICATIONS
Name of Assignor Patent Number Date Issued Title
---------------- ------------- ----------- -----
ANNEX I
Page 2
Application Serial No. Date Filed
---------------------- ----------
ANNEX J
to
Security Agreement
SCHEDULE OF COPYRIGHTS AND APPLICATIONS
---------------------------------------
ANNEX K
to
Security Agreement
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES TRADEMARKS AND PATENTS
---------------------------------------
FOR GOOD AND VALUABLE CONSIDERATION, receipt and sufficiency
of which are hereby acknowledged, [Assignor], a ___________
[corporation/partnership/limited liability company] (the "Assignor") with
principal offices at _____________, hereby assigns and grants to The Bank of New
York, as Collateral Agent, with principal offices at 00000 Xxxxxxxxx Xxxxx.,
Xxxxxxxxxxxx, XX 00000 (the "Assignee"), a security interest in (i) all of the
Assignor's right, title and interest in and to the United States trademarks,
trademark registrations and trademark applications (the "Marks") set forth on
Schedule A attached hereto, (ii) all of the Assignor's right, title and interest
in and to the United States patents (the "Patents") set forth on Schedule B
attached, in each case together with (iii) all Proceeds (as such term is defined
in the Security Agreement referred to below) and products of the Marks and
Patents, (iv) the goodwill of the businesses symbolized by the Marks and (v) all
causes of action arising prior to or after the date hereof for infringement of
any of the Marks and Patents or unfair competition regarding the same.
THIS ASSIGNMENT is made to secure the full and prompt
performance and payment of all the Obligations, as such term is defined in the
Security Agreement among the Assignor, the other assignors from time to time
party thereto and the Assignee, dated as of October 29, 1998 (as amended from
time to time, the "Security Agreement"). Upon the occurrence of the Termination
Date (as defined in the Security Agreement), the Assignee shall,
ANNEX K
Page 2
upon such satisfaction, execute, acknowledge, and deliver to the Assignor an
instrument in writing releasing the security interest in the Marks and Patents
acquired under this Assignment.
This Assignment has been granted in conjunction with the
security interest granted to the Assignee under the Security Agreement. The
rights and remedies of the Assignee with respect to the security interest
granted herein are without prejudice to, and are in addition to those set forth
in the Security Agreement, all terms and provisions of which are incorporated
herein by reference. In the event that any provisions of this Assignment are
deemed to conflict with the Security Agreement, the provisions of the Security
Agreement shall govern.
ANNEX K
Page 3
IN WITNESS WHEREOF, the undersigned have executed this
Agreement as of the ____ day of ____________, 199_.
[ASSIGNOR], as Assignor
By_____________________________
Title:
THE BANK OF NEW YORK
as Collateral Agent, Assignee
By_____________________________
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
On this ____ day of __________, 199_ before me personally came
_________________ who, being by me duly sworn, did state as follows: that he is
_______________ of [Assignor], that he is authorized to execute the foregoing
Assignment on behalf of said corporation and that he did so by authority of the
Board of Directors of said corporation.
-------------------------
Notary Public
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
On this ____ day of ___________, 199_, before me personally
came _____________________ who, being by me duly sworn, did state as follows:
that he is __________________ of The Bank of New York, that he is authorized to
execute the foregoing Assignment on behalf of said corporation and that he did
so by authority of the Board of Directors of said corporation.
----------------------------
Notary Public
SCHEDULE A
XXXX REG. NO. REG. DATE
---- -------- ---------
SCHEDULE B
PATENT PATENT NO. ISSUE DATE
------ ---------- ----------
ANNEX L
to
Security Agreement
ASSIGNMENT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS
WHEREAS, [Assignor], a ____________
[corporation/partnership/limited liability company] (the "Assignor"), having its
chief executive office at ________________, is the owner of all right, title and
interest in and to the United States copyrights and associated United States
copyright registrations and applications for registration set forth in Schedule
A attached hereto;
WHEREAS, The Bank of New York, as Collateral Agent, having its
principal offices at 00000 Xxxxxxxxx Xxxxx., Xxxxxxxxxxxx, XX 00000 (the
"Assignee"), desires to acquire a security interest in, and lien on, said
copyrights and copyright registrations and applications therefor and the
goodwill of the business symbolized by said copyrights; and
WHEREAS, the Assignor is willing to assign to the Assignee,
and to grant to the Assignee a security interest in and lien upon the copyrights
and copyright registrations and applications therefor described above;
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, and subject to the terms and conditions
of the Security Agreement, dated as of October 29, 1998, among the Assignor, the
other assignors from time to time party thereto and the Assignee (as amended
from time to time, the "Security Agreement"), the Assignor hereby assigns to the
Assignee, and grants to the Assignee a security interest in and a lien upon, the
copyrights and copyright registrations and applications therefor set forth in
Schedule A attached hereto and the goodwill of the business symbolized by said
copyrights.
This Assignment has been granted in conjunction with the
security interest granted to the Assignee under the Security Agreement. The
rights and remedies of the Assignee with respect to the security interest
granted herein are without prejudice to, and are in addition to those set forth
in the Security Agreement, all terms and provisions of which are incorporated
herein by reference. In the event that any provisions of this Assignment are
deemed to conflict with the Security Agreement, the provisions of the Security
Agreement shall govern.
Executed at New York, New York, the __ day of _________, 199_.
[ASSIGNOR], as Assignor
By__________________________
Name:
Title:
THE BANK OF NEW YORK,
as Assignee
By__________________________
Name:
Title:
STATE OF NEW YORK )
) ss.:
COUNTY OF NEW YORK)
On this __ day of ___________, 199_ before me personally came
_______________, who being duly sworn, did depose and say that he is
___________________ of [Assignor], that he is authorized to execute the
foregoing Assignment on behalf of said corporation and that he did so by
authority of the Board of Directors of said corporation.
-------------------------
Notary Public
SCHEDULE A
U.S. COPYRIGHTS
REGISTRATION PUBLICATION
NUMBERS DATE COPYRIGHT TITLE
------- ---- ---------------
