EXHIBIT 10.2
PLEDGE AGREEMENT
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THIS PLEDGE AGREEMENT (this "AGREEMENT"), dated as of July 26, 2004,
is made by EMPIRE RESORTS, INC., a Delaware corporation (the "COMPANY"), and
each of its Subsidiaries (such capitalized term and other capitalized terms used
but not defined herein having the meanings respectively ascribed thereto in the
Security Agreement (as defined below)) now or hereafter party hereto (such
Subsidiaries, together with Company, each, a "PLEDGOR" and, collectively, the
"PLEDGORS"), in favor of THE BANK OF NEW YORK ("BNY"), as collateral agent
(together with its successor(s) thereto in such capacity, "PLEDGEE") for the
Trustee and Holders, in light of the following:
RECITALS:
A. The Company and the other Pledgors and BNY, as collateral agent
and as trustee, have entered into an Indenture, dated as of July 26, 2004 (as
amended, restated, supplemented or otherwise modified from time to time, the
"INDENTURE"), pursuant to which the Company has issued $65,000,000 of its 5 1/2%
Convertible Senior Notes due 2014 (and, together with any additional notes that
may be issued by the Company from time to time thereunder or exchanged therefor
or for such additional notes, the "NOTES") and the other Pledgors have
guaranteed the payment of the Notes and the other Obligations of the Company
thereunder.
B. The Pledgors and the Pledgee have entered into that certain
Security Agreement, dated as of July 26, 2004 (as amended, restated,
supplemented or otherwise modified from time to time, the "SECURITY AGREEMENT"),
pursuant to which the Pledgors have granted security interests in certain of
their assets (including the Collateral) as more fully described therein.
C. One or more of the Pledgors may after the date hereof enter into
the Credit Agreement.
D. If the Credit Agreement is entered into, the Pledgors and lenders
under the Credit Agreement or their agent may enter into one or more pledge
agreements (as amended, restated, supplemented, replaced or otherwise modified
from time to time, the "CREDIT AGREEMENT PLEDGE AGREEMENT"), pursuant to which
the Pledgors will grant a security interest in the Collateral in favor of the
lenders under the Credit Agreement or their agent.
E. If the Credit Agreement Pledge Agreement is entered into, the
Pledgee, the lenders under the Credit Agreement or their agent and the Pledgors
may enter into an intercreditor agreement substantially in the form of Exhibit E
to the Indenture (as amended, restated, supplemented, replaced or otherwise
modified from time to time, collectively, the "INTERCREDITOR AGREEMENT"), which
agreement, among other things, will set forth, as between the Pledgee and the
lenders under the Credit Agreement or their agent, the relative priority of
their respective Liens in the Collateral and their rights with respect thereto.
F. The Company desires to secure its Obligations under the Notes,
the Indenture and each other Indenture Document to which it is or may become a
party and each other Pledgor desires to secure its Guarantee, the Indenture and
each other Indenture Document to which it is or may become a party by granting
to the Pledgee, for the benefit of itself and the other Secured Parties,
security interests in the Collateral as set forth herein.
G. To induce the Initial Purchaser to purchase the Notes, each
Holder to hold the Notes to be held by it and BNY to act in its capacities as
trustee and collateral agent, each Pledgor desires to pledge, grant, transfer,
and assign to the Pledgee, for the benefit of itself and the other Secured
Parties, a security interest in the Collateral to secure the Obligations, as
provided herein.
NOW, THEREFORE, in consideration of the premises set forth above,
the terms and conditions contained herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, and
each intending to be bound hereby, the Pledgee and each Pledgor agree as
follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is for the benefit of
the Pledgee and the other Secured Parties to secure the prompt and complete
payment and performance when due of any and all of the Obligations.
2. DEFINITION OF ISSUERS; CAPITAL STOCK; PLEDGED INTERESTS; PLEDGED
COLLATERAL. As used herein, (A) the term "ISSUERS" shall mean, with respect to
each Pledgor, each of the Persons identified as an Issuer on ANNEX A attached
hereto of such Pledgor (or any addendum or supplement thereto), and any
successors thereto, whether by merger or otherwise; (B) the term "PLEDGED
INTEREST" means, with respect to each Issuer, the Capital Stock identified as
Pledged Interests of such Issuer on ANNEX A attached hereto of the Pledgor that
is a holder of the Capital Stock of such Issuer (or any addendum or supplement
thereto); and (C) the term "PLEDGED COLLATERAL" means the "Pledged Interests"
and the "Future Rights" as defined in and acquired pursuant to SECTION 3.2
below, collectively. ANNEX A of any Pledgor may be supplemented from time to
time pursuant to SECTION 3.2 below; PROVIDED, HOWEVER, that "Pledged Collateral"
shall not include any of the Excluded Assets. Each Pledgor represents and
warrants to the Pledgee for the benefit of the Pledgee and the other Secured
Parties that on the date hereof (a) ANNEX A attached hereto of such Pledgor
correctly identifies the Pledged Interests and the Pledged Collateral owned by
such Pledgor with respect to Issuers; and (b) such Pledgor is the holder of
record and sole beneficial and legal owner of such Pledged Interests and Pledged
Collateral.
3. PLEDGE OF PLEDGED COLLATERAL AND OTHER COLLATERAL.
3.1 PLEDGE. (i) To secure the Obligations and for the purposes set
forth in SECTION 1 hereof, each Pledgor hereby pledges and collaterally assigns,
and grants a security interest in and lien on, in favor of Pledgee for the
benefit of the Pledgee and the other Secured Parties, all of such Pledgor's
right, title and interest in, to, and under (A) the Pledged Collateral, (B) any
additional Pledged Collateral acquired pursuant to SECTION 3.2 below (whether by
purchase, dividend, merger, consolidation, sale of assets, split, spin-off, or
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any other dividend or distribution of any kind or otherwise), (C) all
distributions, dividends, cash, certificates, liquidation rights and interests,
options, rights, warrants, instruments or other property from time to time
received, receivable or otherwise distributed in respect of or in exchange or
substitution for any and all of the Pledged Collateral, (D) such Pledgor's right
to vote the Pledged Collateral, and (E) all proceeds, products, replacements and
substitutions for any of the foregoing, in each case whether now owned or
hereafter acquired by such Pledgor (collectively, the "COLLATERAL").
Notwithstanding the foregoing, "Collateral" shall not include any of the
Excluded Assets.
(ii) If the Pledged Collateral is evidenced by certificates, then
such Pledgor shall concurrently herewith deposit with the Pledgee, for the
benefit of itself and the other Secured Parties, the Pledged Collateral owned by
such Pledgor on the date hereof and the certificates representing the Pledged
Collateral endorsed in blank by such Pledgor or accompanied by undated stock
powers or instruments of transfer, in each case, duly executed in blank by such
Pledgor; PROVIDED, HOWEVER, that such Pledgor need not comply with its
obligations under this clause (ii) prior to the tenth day following the Issue
Date.
(iii) Whether or not the Pledged Collateral is evidenced by
certificates, such Pledgor shall, and hereby authorizes the Pledgee to, file a
Code Financing Statement naming such Pledgor as debtor and the Pledgee as
secured party with respect to the Collateral in the applicable filing office and
in such form and containing such substance as may be necessary to perfect the
security interest of the Pledgee in the Pledged Collateral by the filing of a
Code Financing Statement; PROVIDED, HOWEVER, that no such authorization shall
obligate the Pledgee to make any such filing. Notwithstanding anything to the
contrary contained in this Agreement, the Pledgee shall not as a result of this
Agreement be responsible or liable for any obligations or liabilities of such
Pledgor in such Pledgor's capacity as a holder of any Capital Stock of any
Issuer, and the Pledgee shall not be deemed to have assumed any of such
obligations or liabilities.
3.2 SUBSEQUENTLY ACQUIRED PLEDGED COLLATERAL. (i) If at any time or
from time to time after the date hereof during the term of this Agreement, any
Pledgor shall acquire any additional Pledged Interests, including any further
stock, or equity in each Issuer (whether by purchase, dividend, merger,
consolidation, sale of assets, split, spin-off, or any other dividend or
distribution of any kind or otherwise) (collectively, the "FUTURE RIGHTS").
(ii) Such Pledgor will forthwith pledge and, if applicable, deposit
such additional Pledged Collateral with the Pledgee, for the benefit of itself
and the other Secured Parties and deliver to the Pledgee for the benefit of
itself and the other Secured Parties, certificates or instruments therefor,
endorsed in blank by such Pledgor or accompanied by undated stock powers or
instruments of transfer, in each case, duly executed in blank by such Pledgor,
and will promptly thereafter deliver to the Pledgee, for the benefit of itself
and the other Secured Parties, a certificate (which shall be deemed to
supplement ANNEX A attached hereto of such Pledgor) executed by such Pledgor
describing such Pledged Collateral and the other Pledged Collateral pledged to
the Pledgee, and certifying that the same have been duly pledged with the
Pledgee hereunder.
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(iii) Whether or not such additional Pledged Collateral is evidenced
by certificates, such Pledgor shall, and hereby authorizes the Pledgee to, file
a Code Financing Statement naming such Pledgor as debtor and the Pledgee as
secured party with respect to the additional Collateral in the applicable filing
office and in such form and containing such substance as may be necessary to
perfect the security interest of the Pledgee in the additional Collateral by the
filing of a Code Financing Statement; PROVIDED, HOWEVER, that no such
authorization shall obligate the Pledgee to make any such filing.
3.3 UNCERTIFICATED PLEDGED COLLATERAL. In addition to anything
contained in SECTIONS 3.1 AND 3.2 hereof, if any Pledged Collateral (whether now
owned or hereafter acquired) is not certificated or becomes an uncertificated
security, the applicable Pledgor shall promptly notify the Pledgee thereof and
shall promptly take all actions required to perfect or improve the perfection of
the security interest and pledge in favor of the Pledgee under applicable law
(including, in any event, any action required or appropriate under this
Agreement or the Code). Such Pledgor further agrees to take such actions as may
be necessary to permit the Pledgee to exercise any of its rights and remedies
hereunder.
4. VOTING, ETC. Until the occurrence and continuance of an Event of
Default, each Pledgor shall be entitled to vote any and all of the Pledged
Collateral; PROVIDED, HOWEVER, that no vote shall be cast or any action taken by
such Pledgor with respect to any Pledged Collateral which would violate or be
materially inconsistent with any of the terms of this Agreement, the Indenture,
any other Indenture Document, or which would have the effect of materially
impairing the position or interests of the Pledgee or which would authorize or
effect actions prohibited under the terms of the Indenture or any Indenture
Document. All such rights of such Pledgor to vote any Pledged Collateral shall
cease upon the occurrence and during the continuance of an Event of Default, if
the Pledgee so directs and provides notice to such Pledgor to do so; PROVIDED,
HOWEVER, that upon the cure or waiver of such Event of Default, all rights of
the Pledgee to vote any and all of the Pledged Collateral shall cease.
5. PAYMENTS AND OTHER DISTRIBUTIONS. Until the occurrence and
continuance of an Event of Default, all cash, dividends or distributions payable
in respect of the Pledged Collateral (to the extent such payments shall be
permitted pursuant to the terms and provisions of the Indenture) shall be paid
to the applicable Pledgor; PROVIDED, HOWEVER, upon the occurrence and during the
continuance of an Event of Default, all cash, dividends or distributions payable
in respect of the Pledged Collateral shall be paid to the Pledgee as security
for the Obligations if the Pledgee so directs and provides notice to such
Pledgor to that effect; PROVIDED FURTHER, that upon the cure or waiver of such
Event of Default, all cash dividends or distributions payable in respect of the
Pledged Collateral shall be paid to such Pledgor. The Pledgee shall be entitled
to receive directly, and to retain as part of the Collateral:
(a) all other or additional securities or investment
property, or rights to subscribe for or purchase any of the
foregoing, or property (other than cash) paid or distributed by way
of dividend in respect of the Pledged Collateral; and
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(b) all other or additional securities, investment
property or property (including cash) paid or distributed in respect
of the Pledged Collateral by way of split, spin-off, split-up,
reclassification, combination of shares or similar rearrangement.
If at any time any Pledgor shall obtain or possess any of the
foregoing Collateral described in this Section, such Pledgor shall be deemed to
hold such Collateral in trust for the Pledgee for the benefit of the Pledgee and
the other Secured Parties, and such Pledgor shall promptly surrender and deliver
such Collateral to the Pledgee.
6. REMEDIES IN CASE OF AN EVENT OF DEFAULT. Upon the occurrence and
during the continuance of an Event of Default, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement, the Indenture, any other Indenture Documents, and/or in equity or by
law, and including, without limitation, all rights and remedies of a secured
party of a debtor in default under the Code) for the protection and enforcement
of its rights in respect of the Pledged Collateral, and to the fullest extent
permitted by applicable law, the Pledgee shall be entitled (but shall not be
obligated), without limitation, to exercise the following rights, which each
Pledgor hereby agrees to be commercially reasonable:
(a) to receive all amounts payable to such Pledgor in
respect of the Pledged Collateral in accordance with SECTION 5
hereof;
(b) to transfer all or any part of the Pledged
Collateral into the Pledgee's name or the name of its nominee or
nominees for the benefit of the Pledgee and the other Secured
Parties;
(c) to vote all or any part of the Pledged Collateral
and otherwise act with respect thereto as though it were the
outright owner thereof in accordance with SECTION 4 hereof;
(d) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Pledged Collateral in one or more parcels, or any interest therein,
at any public or private sale at any exchange, broker's board or at
any of the Pledgee's offices or elsewhere, without demand of
performance, advertisement or notice of intention to sell or of time
or place of sale or adjournment thereof or to redeem (all of which,
except as may be required by mandatory provisions of applicable law,
are hereby expressly and irrevocably waived by such Pledgor) for
cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price
or prices and on such terms as the Pledgee in its commercially
reasonable judgment may determine. Such Pledgor agrees that to the
extent that notice of sale shall be required by law that at least
ten (10) calendar days' notice to such Pledgor of the time (which
shall be during normal business hours) and place of any public sale
or the time after which any private sale is to be made shall
constitute reasonable notification. The Pledgee shall not be
obligated to make any sale of Pledged Collateral regardless of
notice of sale having been given. The Pledgee may adjourn any public
or private sale from time to time by announcement at the time and
place fixed therefor, and any such sale may, without further notice,
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be made at the time and place to which it was so adjourned. Such
Pledgor hereby waives and releases to the fullest extent permitted
by law any right or equity of redemption with respect to the Pledged
Collateral, whether before or after sale hereunder, and all rights,
if any of marshalling the Pledged Collateral and any other security
for the Obligations or otherwise. At any such sale, unless
prohibited by applicable law, the Pledgee may bid for and purchase
all or any part of the Pledged Collateral so sold free from any such
right or equity of redemption. Neither the Pledgee nor any of the
other Secured Parties shall be liable for failure to collect or
realize upon any or all of the Pledged Collateral or for any delay
in so doing nor shall the Pledgee nor any of the other Secured
Parties be under any obligation to take any action whatsoever with
regard thereto;
(e) to settle, adjust, compromise and arrange all
accounts, controversies, questions, claims and demands whatsoever in
relation to all or any part of the Pledged Collateral;
(f) in respect of the Pledged Collateral, to execute all
such contracts, agreements, deeds, documents and instruments, to
bring, defend and abandon all such actions, suits and proceedings,
and to take all actions in relation to all or any part of the
Pledged Collateral as the Pledgee in its reasonable discretion may
determine;
(g) to appoint managers, sub-agents, officers and
servants for any of the purposes mentioned in the foregoing
provisions of this Section and to dismiss the same, all as the
Pledgee in its reasonable discretion may determine; and
(h) generally, to take all such other action as the
Pledgee in its reasonable discretion may determine as incidental or
conducive to any of the matters or powers mentioned in the foregoing
provisions of this Section and which the Pledgee may or can do
lawfully and to use the name of such Pledgor for the purposes
aforesaid and in any proceedings arising therefrom.
7. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of the
Pledgee (for the benefit of the Pledgee and the other Secured Parties) provided
for in this Agreement, the Indenture, any Indenture Document or any other
security agreement, mortgage, guaranty or now or hereafter existing at law or in
equity or by statute shall be cumulative and concurrent and shall be in addition
to every other such right, power or remedy. The exercise or beginning of the
exercise by the Pledgee (for the benefit of the Pledgee and the other Secured
Parties) of any one or more of the rights, powers or remedies provided for in
this Agreement, the Indenture, or any other Indenture Document or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee of all such other
rights, powers or remedies, and no failure or delay on the part of the Pledgee
to exercise any such right, power or remedy shall operate as a waiver thereof.
8. APPLICATION OF PROCEEDS. Subject to any mandatory requirements of
applicable law and the terms of the Indenture, all moneys collected by the
Pledgee (for the benefit of the Pledgee and the other Secured Parties) upon sale
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or other disposition of the Collateral, together with all other moneys received
by the Pledgee hereunder, shall be turned over to the Trustee for distribution
in accordance with Section 6.10 of the Indenture.
9. INDEMNITY. Without duplication of any amounts payable under any
other similar indemnity provision set forth in the Indenture or any other
Indenture Documents, each Pledgor shall, jointly and severally: (i) pay all
out-of-pocket costs and expenses of the Pledgee incurred in connection with the
administration of and in connection with the preservation of rights under, and
enforcement of, and any renegotiation or restructuring of this Agreement and any
amendment, waiver or consent relating thereto (including, without limitation,
the reasonable fees and disbursements of counsel for the Pledgee); (ii) pay and
hold the Pledgee and the other Secured Parties harmless from and against any and
all present and future stamp or documentary taxes or any other excise or
property taxes, charges or similar levies which arise from any payment made
hereunder or from the execution, delivery or registration of, or otherwise with
respect to this Agreement and save the Pledgee and the other Secured Parties
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission to pay any such taxes, charges or levies; and (iii)
indemnify the Pledgee and each of the other Secured Parties, and each of their
respective officers, directors, shareholders, employees, representatives and
agents from and hold each of them harmless against any and all costs, losses,
liabilities, claims, obligations, suits, penalties, judgments, damages or
expenses incurred by or asserted against any of them (whether or not any of them
is designated a party thereto) arising out of or by reason of this Agreement or
any transaction contemplated hereby (including, without limitation, any
investigation, litigation or other proceeding related to this Agreement),
including, without limitation, the reasonable fees and disbursements of counsel
incurred in connection with any such investigation, litigation or other
proceeding. Notwithstanding anything in this Agreement to the contrary, such
Pledgor shall not be responsible to the Pledgee or any other Secured Party for
any costs, losses, damages, liabilities or expenses which result from the gross
negligence or willful misconduct on the part of such Pledgee or any other
Secured Party. Each Pledgor's obligations under this Section shall survive any
termination of this Agreement.
10. FURTHER ASSURANCES. Each Pledgor agrees that, at any time and
from time to time, such Pledgor will join with the Pledgee in executing and, at
such Pledgor's own expense, will file and refile under the Code such financing
statements, continuation statements and other documents in such offices as may
be necessary and wherever required or permitted by law in order to perfect and
preserve the Pledgee's security interest in the Collateral, and hereby
authorizes the Pledgee to file financing statements and amendments thereto
relative to all or any part of the Collateral (PROVIDED, HOWEVER, that no such
authorization shall obligate the Pledgee to make any such filing), and agrees to
do such further acts and things and to promptly execute and deliver to the
Pledgee such additional conveyances, assignments, agreements and instruments as
may be required to carry into effect the purpose of this Agreement or to further
assure and confirm unto the Pledgee its rights, powers and remedies hereunder.
11. REASONABLE CARE BY PLEDGEE. Beyond the exercise of reasonable
care in the custody thereof, the Pledgee shall have no duty as to any Collateral
in its possession or control or in the possession or control of any agent or
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bailee or any income thereon or as to the preservation of rights against prior
parties or any other rights pertaining thereto and the Pledgee shall not be
responsible for filing any financing or continuation statements or recording any
documents or instruments in any public office at any time or times or otherwise
perfecting or maintaining the perfection of any security interest in the
Collateral. The Pledgee shall be deemed to have exercised reasonable care in the
custody of the Collateral in its possession if the Collateral is accorded
treatment substantially equal to that which it accords its own property and
shall not be liable or responsible for any loss or diminution in the value of
any of the Collateral, by reason of the act or omission of any carrier,
forwarding agency or other agent or bailee selected by the Pledgee in good
faith.
The Pledgee shall not be responsible for the existence, genuineness
or value of any of the Collateral or for the validity, perfection, priority or
enforceability of the Liens in any of the Collateral, whether impaired by
operation of law or by reason of any of any action or omission to act on its
part hereunder, except to the extent such action or omission constitutes gross
negligence or willful misconduct on the part of the Pledgee, for the validity or
sufficiency of the Collateral or any agreement or assignment contained therein,
for the validity of the title of the Pledgor to the Collateral, for insuring the
Collateral or for the payment of taxes, charges, assessments or Liens upon the
Collateral or otherwise as to the maintenance of the Collateral. The Pledgee
shall have no duty to ascertain or inquire as to the performance or observance
of any of the terms of this Pledge Agreement or the Indenture Documents by the
Pledgors.
12. TRANSFER BY EACH PLEDGOR. Except as otherwise permitted under
the Indenture, if at all, the Pledgor shall not Dispose of, grant any option
with respect to, or pledge or otherwise encumber any of the Collateral or any
interest therein.
13. REPRESENTATIONS AND WARRANTIES OF EACH PLEDGOR. Each Pledgor
hereby represents and warrants to the Pledgee for the benefit of the Pledgee and
the other Secured Parties, which representations and warranties shall survive
the execution and delivery of this Agreement, as follows:
13.1 VALIDITY, PERFECTION AND PRIORITY. (a) The pledge and security
interests in the Pledged Collateral granted to the Pledgee constitute valid and
continuing security interests in the Pledged Collateral.
(b) The security interests in the Collateral granted to the Pledgee
for the benefit of itself and the other Secured Parties constitute valid and
perfected security interests therein superior and prior to the rights or claims
of any other person or entity therein.
13.2 NO LIENS; OTHER FINANCING STATEMENTS.
(a) Such Pledgor is the sole legal and beneficial owner of, and has
good and marketable title to, the Pledged Collateral.
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(b) Except for any filing made by the lenders under the Credit
Agreement or their agent, no financing statement or other evidence of lien
covering or purporting to cover any of the Pledged Collateral is on file in any
public office.
13.3 PLEDGED COLLATERAL.
(a) The Pledged Collateral described in ANNEX A attached hereto of
such Pledgor is, and all other Pledged Collateral in which such Pledgor shall
hereafter xxxxx x xxxx or security interest pursuant to SECTION 2 hereof will
be, duly authorized, validly issued, and fully paid, and, except for the pledge
provided in SECTION 3.1 hereof in favor of Pledgee and in the Credit Agreement
Pledge Agreement in favor of the lenders under the Credit Agreement or their
agent, none of such Pledged Collateral is or will be subject to any legal or
contractual restriction. The Pledged Collateral is, as of the date hereof, and
shall be at all times hereafter during the term of this Agreement, freely
transferable without restriction or limitation (except as limited by the terms
of this Agreement).
(b) The Pledged Collateral described in ANNEX A hereto of such
Pledgor constitutes all of the issued and outstanding securities and investment
property legally and beneficially owned by such Pledgor on the date hereof in or
relating to each of the Issuers.
13.4 POWER AND AUTHORITY. Such Pledgor has the power and authority
to pledge and collaterally assign all of the Pledged Collateral pursuant to this
Agreement.
13.5 ARTICLE 8 SECURITIES. The Pledged Interests that are Capital
Stock in general partnerships, limited partnerships or limited liability
companies (i) are not dealt in or traded on securities exchanges or in
securities markets, (ii) do not have terms expressly providing that they are
securities governed by Article 8 of the Code, and (iii) are not investment
company securities, and are not, therefore, "securities" governed by Article 8
of the Code.
13.6 LITIGATION. There are no actions, suits or proceedings pending
or, to such Pledgor's best knowledge, threatened against or involving such
Pledgor before any court with respect to any of the transactions contemplated by
this Agreement or the ability of such Pledgor to perform any of the obligations
of such Pledgor hereunder.
13.7 STATE OF ORGANIZATION. Such Pledgor's state of organization is
specified on ANNEX A of such Pledgor.
13.8 CONTINUED EXISTENCE. Upon any transfer of the Pledged
Collateral to any Person as permitted upon the occurrence and during the
continuance of an Event of Default in accordance with SECTION 6 hereof, each of
the Issuers shall continue in existence.
13.9 Neither the pledge of the Pledged Collateral pursuant to this
Agreement nor the extensions of credit represented by the Obligations violates
Regulation T, U or X of the Board of Governors of the Federal Reserve System.
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13.10 Each direct Subsidiary of such Pledgor (other than any such
Subsidiary that is an Immaterial Subsidiary) is an Issuer of Pledged Interests
that have been pledged hereunder.
14. COVENANTS OF EACH PLEDGOR. Each Pledgor covenants and agrees
with the Pledgee that on and after the date hereof and until all of the
Obligations shall have been paid and performed in full (other than contingent
indemnification obligations) or the Collateral Release Event shall have occurred
and this Agreement terminates in accordance with its terms:
14.1 COLLATERAL. (a) Such Pledgor will use its commercially
reasonable efforts to defend the Pledgee's right, title and security interest in
and to the Collateral against the claims and demands of all Persons whomsoever;
(b) such Pledgor will have good and marketable title to and right to pledge any
other property at any time hereafter constituting Collateral and will likewise
use its commercially reasonable efforts to defend the right thereto and security
interest therein of the Pledgee; and (c) such Pledgor will not, with respect to
any Pledged Collateral, enter into any shareholder type agreements, voting
agreements, voting trusts, trust deeds, irrevocable proxies or any other similar
agreements or instruments, other than any shareholder type agreements, voting
agreements, voting trusts, trust deeds, irrevocable proxies or any other similar
agreements or instruments which would not (x) be inconsistent with the terms of
this Agreement, (y) materially and adversely affect the Pledgee's interest in
any of the Pledged Collateral or (z) have a Material Adverse Effect.
14.2 RIGHT OF INSPECTION. The Pledgee and its representatives shall
have access to all the books, correspondence and records of such Pledgor
relating to the Collateral, if any, and the Pledgee and its representatives may
examine the same, take extracts therefrom and make photocopies thereof.
14.3 COMPLIANCE WITH LAWS. Such Pledgor will comply with all
requirements of law applicable to the Pledged Collateral or any part thereof,
except where the failure to comply could not reasonably be expected to have a
Material Adverse Effect.
14.4 NO IMPAIRMENT. Such Pledgor will not take or permit to be taken
any action which could materially impair the Pledgee's rights in the Pledged
Collateral. Such Pledgor will not create, incur or permit to exist, will use its
commercially reasonable efforts to defend the Pledged Collateral against and
will take such other action as is necessary to remove, any lien or claim on or
to the Pledged Collateral, other than the liens created hereby and liens in
favor of the lenders under the Credit Agreement or their agent, and will use its
commercially reasonable efforts to defend the right, title and interest of the
Pledgee in and to any of the Pledged Collateral against the claims and demands
of all Persons whomsoever.
14.5 PERFORMANCE BY PLEDGEE OF SUCH PLEDGOR'S OBLIGATIONS. If such
Pledgor fails to perform or comply with any of the agreements contained herein,
the Pledgee may, upon the occurrence and during the continuance of an Event of
Default, without notice to or consent by such Pledgor, perform or comply or
cause performance or compliance therewith; PROVIDED, HOWEVER, the Pledgee shall
not be under any obligation to take any such action.
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14.6 FURTHER IDENTIFICATION OF PLEDGED COLLATERAL. Such Pledgor will
furnish to the Pledgee from time to time such reports in connection with the
Pledged Collateral as the Pledgee may reasonably request from time to time.
14.7 CONTINUOUS PERFECTION. No Pledgor will change its name,
organizational identification number, state of organization or organizational
identity unless such Pledgor shall within ten Business Days of any such change
provide written notice to the Pledgee of such change and file any financing
statements or amendments thereto necessary to continue the perfection of the
Liens of the Pledgee on the Collateral.
14.8 STAY OR EXTENSION LAWS. Such Pledgor will not at any time
claim, take, insist upon or invoke the benefit or advantage of or from any law
now or hereafter in force providing for the valuation or appraisement of the
Pledged Collateral prior to any sale or sales thereof to be made pursuant to the
provisions hereof or pursuant to the decree, judgment, or order of any court of
competent jurisdiction; nor, after such sale or sales, claim or exercise any
right under any statute now or hereafter made or enacted by any state to redeem
the property so sold or any part thereof, and such Pledgor hereby expressly
waives (to the extent not prohibited by applicable law), on behalf of such
Pledgor and each and every person or entity claiming by, through and under such
Pledgor, all benefit and advantage of any such law or laws, and covenants that
such Pledgor will not invoke or utilize any such law or laws or otherwise
hinder, delay or impede the execution of any power, right or remedy herein or
hereby granted and delegated to the Pledgee, but will authorize, allow and
permit the execution of every such power, right or remedy as though no such law
or laws had been made or enacted.
14.9 THE ISSUERS' RECORDS. Such Pledgor shall cause each of the
Issuers to make a notation on its respective records indicating the interest
granted hereby in favor of the Pledgee.
15. EACH PLEDGOR'S OBLIGATIONS ABSOLUTE, ETC. The obligations of
each Pledgor under this Agreement shall be absolute and unconditional in
accordance with its terms and shall remain in full force and effect (except as
otherwise provided herein under SECTION 19) without regard to, and shall not be
released, suspended, discharged, terminated or otherwise affected by, any
circumstance or occurrence whatsoever, including, without limitation: (a) any
change in the time, place or manner of payment of, or in any other term of, all
or any of the Obligations, any waiver, indulgence, renewal, extension, amendment
or modification of or addition, consent or supplement to or deletion from or any
other action or inaction under or in respect of this Agreement, the Indenture or
any other Indenture Document, or any of the other documents, instruments or
agreements relating to the Obligations or any other instrument or agreement
referred to therein or any assignment or transfer of any thereof; (b) any lack
of validity or enforceability of the Indenture, or any other Indenture Document,
or any other documents, instruments or agreement referred to therein or any
assignment or transfer of any thereof; (c) any furnishing of any additional
security or collateral to the Pledgee, for the benefit of the Pledgee and/or the
other Secured Parties; or its assignees or any acceptance thereof or any release
of any security by the Pledgee or its assignees; (d) any limitation on any
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party's liability or obligations under any such instrument or agreement or any
invalidity or unenforceability, in whole or in part, of any such instrument or
agreement or any term thereof; (e) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to such Pledgor or any other Person, as applicable, or any action taken
with respect to this Agreement by any trustee or receiver, or by any court, in
any such proceeding, whether or not such Pledgor shall have notice or knowledge
of any of the foregoing; (f) any exchange, release or nonperfection of any other
collateral, or any release, or amendment or waiver of or consent to departure
from any guaranty or security, for all or any of the Obligations; or (g) any
other circumstance which might otherwise constitute a defense available to, or a
discharge of, such Pledgor.
16. NOTICES, ETC. Except as otherwise expressly provided herein, any
notice required or desired to be served, given or delivered hereunder shall be
in the form and manner, and shall be addressed to the parties set forth in the
Indenture.
17. POWER OF ATTORNEY. Each Pledgor hereby absolutely and
irrevocably constitutes and appoints the Pledgee for the benefit of the Pledgee
and the other Secured Parties as such Pledgor's true and lawful agent and
attorney-in-fact with full power of substitution, in the name of such Pledgor
upon the occurrence and during the continuance of an Event of Default: (a) to
execute and do all such assurances, acts and things which such Pledgor ought to
do but has failed to do under the covenants and provisions contained in this
Agreement; (b) to take any and all such action as may be necessary for the
purpose of maintaining preserving or protecting the security constituted by this
Agreement or any of the rights, remedies, powers or privileges of the Pledgee
under this Agreement; and (c) generally, in the name of such Pledgor, exercise
all or any of the powers, authorities, and discretions conferred on or reserved
to the Pledgee by or pursuant to this Agreement, and (without prejudice to the
generality of any of the foregoing) to deliver or otherwise perfect any deed,
assurance, agreement, instrument or act as may be proper in or for the purpose
of exercising any of such powers, authorities or discretions. Such Pledgor
hereby ratifies and confirms, and hereby agrees to ratify and confirm, whatever
lawful acts the Pledgee or any of the Pledgee's sub-agents or attorneys shall do
or purport to do in the exercise of the power of attorney granted to the Pledgee
pursuant to this Section, which power of attorney, being coupled with an
interest and given for security, is irrevocable; PROVIDED, HOWEVER, that such
Pledgor neither ratifies nor confirms any acts of the Pledgee or any of the
Pledgee's sub-agents or attorneys do in the exercise of this power of attorney
if such acts constitute the negligence, bad faith or willful misconduct of such
Person.
18. MISCELLANEOUS. Each Pledgor agrees with the Pledgee that each of
the obligations and liabilities of such Pledgor to the Pledgee under this
Agreement may be enforced against such Pledgor without the necessity of joining
any other Person as a party. This Agreement shall create a continuing security
interest in the Pledged Collateral and shall be binding upon the heirs and legal
beneficiaries, and permitted successors and assigns, of such Pledgor, as
applicable, and shall inure to the benefit of and be enforceable by the Pledgee
and its successors and assigns; PROVIDED, HOWEVER, that no party may assign this
Agreement or any rights or duties hereunder other than pursuant to the terms of
the Indenture. Unless otherwise defined herein, terms defined in the Code are
used herein as therein defined. The headings and titles in this Agreement are
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for convenience of reference only and shall not limit or define the meaning
hereof. This Agreement may be executed in any number of counterparts, each of
which shall be an original, but all of which shall constitute one instrument. If
any provision of this Agreement shall prove to be invalid or unenforceable, such
provision shall be deemed to be severable from the other provisions of this
Agreement which shall remain binding on all parties hereto. No Pledgor shall
have any right of subrogation as to any of the Pledged Collateral until full and
complete performance and payment of the Obligations (other than contingent
indemnification obligations) or the occurrence of the Collateral Release Event.
A signature hereto distributed by facsimile or electronic mail shall be deemed
to be as legally binding as a signed original.
19. TERMINATION; RECOVERY CLAIM. This Agreement shall terminate
after the Obligations are paid in full (other than contingent indemnification
obligations) or the Collateral Release Event shall have occurred. Upon the
termination of this Agreement, or as otherwise provided in the Indenture, the
Pledgee, at the request of any applicable Pledgor and at the cost and expense of
such Pledgor, will promptly execute and deliver to such Pledgor the proper
instruments acknowledging the termination of this Agreement and the security
interest and lien on the Pledged Collateral created hereby and will duly assign,
transfer and deliver to such Pledgor or to whomsoever shall be lawfully entitled
to receive the same (without recourse and without any representation or warranty
of any kind) such of the Pledged Collateral as may be in the possession of the
Pledgee and has not theretofore been sold or otherwise applied or released
pursuant to this Agreement. Should a claim ("RECOVERY CLAIM") be made upon the
Pledgee or any or all of the other Secured Parties at any time for recovery of
any amount received by the Pledgee or any or all of the other Secured Parties in
payment of the Obligations (whether received such Pledgor or otherwise) and
should the Pledgee or any or all of the other Secured Parties repay all or part
of said amount by reason of (a) any judgment, decree or order of any court or
administrative body having jurisdiction over the Pledgee or any or all of the
other Secured Parties or any of their respective property; or (b) any settlement
or compromise of any such Recovery Claim effected by the Pledgee or any or all
of the other Secured Parties with the claimant (including, without limitation,
such Pledgor), this Agreement and the security interests granted to the Pledgee
for the benefit of the Pledgee and the other Secured Parties hereunder shall
continue in effect with respect to the amount so repaid to the same extent as if
such amount had never originally been received by the Pledgee or any or all of
the other Secured Parties, notwithstanding any prior termination of this
Agreement, the return of this Agreement to such Pledgor, or the cancellation of
any note or other instrument evidencing the Obligations.
20. AMENDMENTS; MARSHALLING, ETC. (a) None of the terms or
provisions of this Agreement may be waived, amended, supplemented or otherwise
modified except by a written instrument executed by such Pledgor and the
Pledgee.
(b) The Pledgee shall be under no obligation to marshal any assets
or collateral in favor of such Pledgor or any other person or entity or against
or in payment of any or all of the Obligations. All indemnities set forth herein
shall survive the execution and delivery of this Agreement and the making and
repayment of the Obligations or the occurrence of the Collateral Release Event.
The Secured Parties (other than the Pledgee) are the intended third party
beneficiaries of this Agreement.
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21. REVIEW OF AGREEMENT BY EACH PLEDGOR. Each Pledgor acknowledges
that such Pledgor has thoroughly read and reviewed the terms and provisions of
this Agreement, and that such terms and provisions are clearly understood by
such Pledgor, and has been fully and unconditionally consented to by such
Pledgor with the full benefit and advice of counsel chosen by such Pledgor, and
that such Pledgor has freely and voluntarily signed this Agreement without
duress.
22. WAIVER OF CLAIMS. Except as otherwise provided in this Agreement
or prohibited by law, EACH PLEDGOR HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE
PLEDGEE'S TAKING POSSESSION OR SALE OR THE PLEDGEE'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 PLEDGOR
WOULD OTHERWISE HAVE UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES
OR OF ANY STATE, and each Pledgor hereby further waives (and releases any cause
of action and claim against the Pledgee as a result of), to the fullest extent
permitted by law: (a) all damages occasioned by such taking of possession,
collection or sale except any damages which are the direct result of the
Pledgee'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 Pledgee's rights hereunder; (c) demand of performance or
other demand, notice of intent to demand or accelerate, notice of acceleration,
presentment, protest, advertisement or notice of any kind to or upon such
Pledgor or any other person or entity; and (d) all rights of redemption,
appraisement, valuation, diligence, stay, extension or moratorium now or
hereafter in force under any applicable law in order to delay the enforcement of
this Agreement.
23. REVIVAL AND REINSTATEMENT OF OBLIGATIONS. If the incurrence or
payment of the Obligations by any Pledgor or the transfer by any Pledgor to the
Pledgee of any property of such Pledgor should for any reason subsequently be
declared to be void or voidable under any state or federal law relating to
creditors' rights, including provisions of the Bankruptcy Code relating to
fraudulent conveyances, preferences, or other voidable or recoverable payments
of money or transfers of property (collectively, a "VOIDABLE TRANSFER"), and if
the Pledgee is required to repay or restore, in whole or in part, any such
Voidable Transfer, or elects to do so upon the reasonable advice of its counsel,
then, as to any such Voidable Transfer, or the amount thereof that the Pledgee
is required or elects to repay or restore, and as to all reasonable costs,
expenses, and attorneys fees of the Pledgee related thereto, the liability of
such Pledgor automatically shall be revived, reinstated, and restored and shall
exist as though such Voidable Transfer had never been made.
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24. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, AS APPLIED TO CONTRACTS
MADE AND PERFORMED WITHIN THE STATE OF NEW YORK, WITHOUT REGARD TO PRINCIPLES OF
CONFLICT OF LAWS. EACH OF THE PARTIES HERETO AGREES TO SUBMIT TO THE
JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING
ARISING OUT OF OR RELATING TO THIS AGREEMENT.
25. WAIVER OF TRIAL BY JURY. EACH PLEDGOR HEREBY IRREVOCABLY WAIVES,
TO THE FULLEST EXTENT PERMITTED BY LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION
OR PROCEEDING ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED BY THIS AGREEMENT.
26. INTEGRATION. This Agreement, together with the other Indenture
Documents, reflects the entire understanding of the parties with respect to the
transactions contemplated hereby and shall not be contradicted or qualified by
any other agreement, oral or written, before the date hereof
27. APPLICABLE GAMING LAW RESTRICTIONS. All rights, remedies, and
powers provided in this Agreement relative to the Pledged Collateral may be
exercised only to the extent that the exercise thereof does not violate any
applicable mandatory provision of the Applicable Gaming Laws and all provisions
of this Agreement relative to the Pledged Collateral are intended to be subject
to all applicable mandatory provisions of the Applicable Gaming Laws and to be
limited solely to the extent necessary to not render the provisions of this
Agreement invalid or unenforceable, in whole or in part.
28. INTERCREDITOR AGREEMENT. If the Intercreditor Agreement is in
effect,
(a) the Liens granted hereunder in favor of the Pledgee for the
benefit of itself and the other Secured Parties in respect of the Collateral and
the exercise of any right related thereto thereby shall be subject, in each
case, to the terms of the Intercreditor Agreement;
(b) in the event of any direct conflict between the express terms
and provisions of this Agreement and of the Intercreditor Agreement, the terms
and provisions of the Intercreditor Agreement shall control; and
(c) notwithstanding anything to the contrary herein, any provision
hereof that requires any Pledgor to (i) deliver any Collateral to Collateral
Agent or (ii) provide that the Collateral Agent have control over such
Collateral may be satisfied by (A) the delivery of such Collateral by such
Pledgor to the lenders under the Credit Agreement or their agent for the benefit
of the Collateral Agent for the benefit of itself and the other Secured Parties
pursuant to Section 3.02 of the Intercreditor Agreement and (B) providing that
the lenders under the Credit Agreement or their agent be provided with control
with respect to such Collateral of such Pledgor for the benefit of the
Collateral Agent for the benefit of itself and the other Secured Parties
pursuant to Section 3.02 of the Intercreditor Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed and delivered as of the date first above written.
EMPIRE RESORTS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
GUARANTORS:
ALPHA MONTICELLO, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
ALPHA CASINO MANAGEMENT INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
PLEDGEE:
THE BANK OF NEW YORK, as Collateral
Agent
By: /s/ Xxxxxx X. Xxxxxxxxxx
--------------------------------
Name: Xxxxxx X. Xxxxxxxxxx
Title: Vice President
ACKNOWLEDGED AND AGREED:
-----------------------
Each of the undersigned hereby (i) acknowledges the pledge of the
Pledged Collateral described above pursuant to the terms of this Pledge
Agreement and agrees to register such pledge in its books and records, and (ii)
agrees, upon receipt of notice from Pledgee of the occurrence and continuance of
an Event of Default, to comply with the written instructions originated by
Pledgee, without further consent of the registered holder of the Pledged
Collateral, including, without limitation, instructions to pay and remit to
Pledgee all distributions and other amounts payable to the Pledgor that is a
holder of its Capital Stock (upon redemption, termination and dissolution of
each of the undersigned or otherwise), and to transfer to, and register the
Pledged Collateral in the name of, Pledgee or its nominee, and (iii) agrees to
promptly honor its payment obligations contained in this Pledge Agreement.
EMPIRE RESORTS, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: Chief Financial Officer
GUARANTORS:
ALPHA MONTICELLO, INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
ALPHA CASINO MANAGEMENT INC.
By: /s/ Xxxxx X. Xxxxxxxxx
--------------------------------
Name: Xxxxx X. Xxxxxxxxx
Title: President
ANNEX A TO PLEDGE AGREEMENT
(Empire Resorts, Inc., a Delaware corporation)
NO. OF %
ISSUER SHARES CLASS CERT. NO. OWNERSHIP JURISDICTION CERT./UNCERT.
Alpha Monticello, Inc. 100 Common 1 100% Delaware Cert.
Alpha Casino Management Inc. 200 Common 1 100% Delaware Cert.
Monticello Casino Management, N/A N/A N/A 60% New York Uncert.
LLC
Mohawk Management, LLC X/X X/X X/X 00% Xxx Xxxx Uncert.
Monticello Raceway Development N/A N/A N/A 100% New York Uncert.
Company, LLC
Monticello Raceway Management, 60 Common 3 60% New York Cert.
Inc.
Alpha Gulf Coast, Inc. 850 Common 1 100% Delaware Cert.
Alpha St. Regis, Inc. 100 Common 1 100% Delaware Cert.
Alpha Missouri, Inc. 100 Capital 1 100% Delaware Cert.
Alpha Rising Sun, Inc. 850 Common 1 100% Delaware Cert.
Jubilation Lakeshore, Inc. 10,000 Common 1 100% Mississippi Cert.
Alpha Greenville Hotel, Inc. 100 Common 1 100% Delaware Cert.
Alpha Entertainment, Inc. 100 Common 1 100% Delaware Cert.
Alpha Peach Tree Corporation 100 1 1 100% Delaware Cert.
Alpha Florida Entertainment, N/A N/A N/A 100% Florida Uncert.
L.L.C.
New York Gaming, LLC N/A N/A N/A 100% Georgia Uncert.
ANNEX A TO PLEDGE AGREEMENT
(Alpha Monticello, Inc., a Delaware corporation)
NO. OF %
ISSUER SHARES CLASS CERT. NO. OWNERSHIP JURISDICTION CERT./UNCERT.
Mohawk Management, LLC X/X X/X X/X 00% Xxx Xxxx Uncert.
Monticello Raceway 40 Common 2 40% New York Cert.
Management, Inc.
ANNEX A TO PLEDGE AGREEMENT
(Alpha Casino Management Inc., a Delaware corporation)
NO. OF %
ISSUER SHARES CLASS CERT. NO. OWNERSHIP JURISDICTION CERT./UNCERT.
Monticello Casino N/A N/A N/A 40% New York Uncert.
Management, LLC
