EXHIBIT 10.51
EXHIBIT XVIII
[FORM OF PARTNERSHIP INTEREST SECURITY AGREEMENT]
PARTNERSHIP INTEREST SECURITY AGREEMENT
This PARTNERSHIP INTEREST SECURITY AGREEMENT (this "Agreement")
is dated as of August 25, 1995 and entered into by and between ________________,
a ("Grantor"), and FIRST INTERSTATE BANK OF NEVADA, N.A. ("FIB"), as
administrative agent for and representative of (in such capacity herein called
"Secured Party") the financial institutions ("Lenders") party to the Credit
Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Grantor is a party to that certain Partnership Agreement,
dated August 23, 1995 (as amended to the date hereof and as it may hereafter be
amended, supplemented or otherwise modified from time to time, the "Partnership
Agreement"), and Grantor is a general partner of Showboat Star Partnership, a
Louisiana general partnership formed pursuant thereto ("Company");
B. Secured Party, Lenders, FIB and Bankers Trust Company, as
Managing Agents, and FIB and BT Securities Corporation, as Co-Arrangers, have
entered into a Credit Agreement dated as of even date herewith (said Credit
Agreement, as it may hereafter be amended, supplemented or otherwise modified
from time to time, being the "Credit Agreement", the terms defined therein and
not otherwise defined herein being used herein as therein defined) with Players
International, Inc., a Nevada corporation ("Players") that owns all of the
outstanding capital stock of Grantor, pursuant to which Lenders have made
certain commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to Players.
C. Grantor has executed and delivered a Guaranty dated as of
even date herewith (said Guaranty, as it may hereafter be amended, supplemented
or otherwise modified from time to time, being the "Guaranty") in favor of
Secured Party for the benefit of Lenders, pursuant to which Grantor has
guarantied the prompt payment and performance when due of all obligations of
Players under the Credit Agreement.
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D. It is a condition precedent to the initial extensions of
credit by Lenders under the Credit Agreement that Grantor shall have granted the
security interests and undertaken the obligations contemplated by this
Agreement.
NOW, THEREFORE, in consideration of the premises and in order
to induce Lenders to make Loans and other extensions of credit and to issue the
Standby Letters of Credit under the Credit Agreement and for other good and
valuable consideration, the receipt and adequacy of which are hereby
acknowledged, Grantor hereby agrees with Secured Party as follows:
SECTION 1. Grant of Security. Grantor hereby assigns to
Secured Party, and hereby grants to Secured Party a security interest in, all of
Grantor's right, title and interest in and to the following (the "Collateral"):
(a) all of Grantor's right, title and interest as a general
partner in Company, whether now owned or hereafter acquired, including without
limitation all of Grantor's right, title and interest in, to and under the
Partnership Agreement (including without limitation Grantor's right to vote and
to manage and administer the business of Company), together with all other
rights, interests, claims and other property of Grantor in any manner arising
out of or relating to its general partnership interest in Company, whatever
their respective kind or character, whether they are tangible or intangible
property, and wheresoever they may exist or be located, and further including,
without limitation, all of the rights of Grantor as a general partner: (i) to
(x) receive money due and to become due (including without limitation dividends,
distributions, interest, income from partnership properties and operations,
proceeds of sale of partnership assets and returns of capital) under or pursuant
to the Partnership Agreement, (y) receive payments upon termination of the
Partnership Agreement, and (z) receive any other payments or distributions,
whether cash or noncash, in respect of Grantor's general partnership interest
evidenced by the Partnership Agreement; (ii) in and with respect to claims and
causes of action arising out of or relating to Company; and (iii) to have access
to Company's books and records and to other information concerning or affecting
Company;
(b) all books, records, ledger cards, files, correspondence,
computer programs, tapes, disks and related data processing software that at any
time evidence or contain information relating to any of the Collateral or are
otherwise necessary or helpful in the collection thereof or realization
thereupon; and
(c) all proceeds, products, rents and profits of or from any
and all of the foregoing Collateral and, to the extent not otherwise included,
all payments under insurance (whether or not Secured Party is the loss payee
thereof), or any indemnity, warranty or guaranty, payable by reason of loss or
damage to or otherwise with respect to any of the foregoing Collateral. For
purposes of this Agreement, the term "proceeds" includes whatever is receivable
or received when Collateral or proceeds are sold, exchanged, collected or
otherwise disposed of, whether such disposition is voluntary or involuntary.
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SECTION 2. Security for Obligations. This Agreement secures, and
the Collateral is collateral security for, the prompt payment or performance in
full when due, whether at stated maturity, by required prepayment, declaration,
acceleration, demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under Section 362(a) of
the Bankruptcy Code, 11 U.S.C. ss.362(a)), of all obligations and liabilities of
every nature of Grantor now or hereafter existing under or arising out of or in
connection with the Guaranty and all extensions or renewals thereof, whether for
principal, interest (including without limitation interest that, but for the
filing of a petition in bankruptcy with respect to Grantor, would accrue on such
obligations), reimbursement of amounts drawn under Letters of Credit, fees,
expenses, indemnities or otherwise, whether voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from Secured Party
or any Lender as a preference, fraudulent transfer or otherwise (all such
obligations and liabilities being the "Underlying Debt"), and all obligations of
every nature of Grantor now or hereafter existing under this Agreement (all such
obligations of Grantor, together with the Underlying Debt, being the "Secured
Obligations").
SECTION 3. No Assumption. Notwithstanding any of the foregoing,
this Agreement shall not in any way be deemed to obligate Secured Party, any
Lender or any purchaser at a foreclosure sale under this Agreement to assume any
of Grantor's obligations, duties, expenses or liabilities under the Partnership
Agreement (including without limitation Grantor's obligations as a general
partner for the debts and obligations of Company and to manage the business and
affairs of Company) or under any and all other agreements now existing or
hereafter drafted or executed (collectively, the "Grantor Obligations") unless
Secured Party, any Lender or any such purchaser otherwise expressly agrees to
assume any or all of said Grantor Obligations in writing. In the event of
foreclosure by Secured Party on behalf of Lenders, Grantor shall remain bound
and obligated to perform the Grantor Obligations and neither Secured Party nor
any Lender shall be deemed to have assumed any of such Grantor Obligations
except as provided in the preceding sentence. Without limiting the generality of
the foregoing, neither the grant of the security interest in the Collateral in
favor of Secured Party as provided herein nor the exercise by Secured Party of
any of its rights hereunder nor any action by Secured Party in connection with a
foreclosure on the Collateral shall be deemed to constitute Secured Party or any
Lender a general partner of Company; provided, however, that in the event
Secured Party or any purchaser of Collateral at a foreclosure sale elects to
become a substituted general partner of Company in place of Grantor, Secured
Party or such purchaser, as the case may be, shall adopt in writing the
Partnership Agreement and agree to be bound by the terms and provisions thereof.
SECTION 4. Representations and Warranties. Grantor represents and
warrants as follows:
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(a) Partnership Interests in Company. Schedule A annexed hereto
correctly sets forth the general partnership interests of all general partners
of Company as of the Closing Date. The general partnership interests described
in Schedule A annexed hereto together constitute 100% of the partnership
interests in Company.
(b) Partnership Agreement. The Partnership Agreement, a true and
complete copy of which has been furnished to Secured Party, has been duly
authorized, executed and delivered by Grantor and is in full force and effect
and has not been amended or modified except as disclosed in writing to Secured
Party. No default by Grantor exists under the Partnership Agreement and no event
has occurred or exists which, with notice or lapse of time or both, would
constitute a default by Grantor thereunder. No default by any other partner
exists under the Partnership Agreement and no event has occurred or exists
which, with notice or lapse of time or both, would constitute a default by any
other partner thereunder.
(c) Ownership of Collateral. Grantor is the legal and beneficial
owner of the Collateral free and clear of any Lien except for the security
interest created by this Agreement and any Liens permitted pursuant to Section
7.2 of the Credit Agreement. No effective financing statement or other
instrument similar in effect covering all or any part of the Collateral is on
file in any filing or recording office except such as may have been filed in
favor of Secured Party relating to this Agreement.
(d) Office Locations; Other Names. The chief place of business,
the chief executive office and the office where Grantor keeps its records
regarding the Collateral is, and has been for the four month period preceding
the date hereof, located at ___________________________________. Grantor has not
in the past done, and does not now do, business under any other name (including
any trade-name or fictitious business name).
(e) Consents or Governmental Authorizations. No consent of any
other Person (including without limitation any other partner of Company or any
creditor of Grantor), and no authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for either (i) the grant by Grantor of the security interest granted
hereby, (ii) the execution, delivery or performance of this Agreement by
Grantor, or (iii) the perfection of or the exercise by Secured Party of its
rights and remedies hereunder (except (x) authorization from any Gaming
Authorities for the exercise by Secured Party of certain of its rights and
remedies hereunder, (y) the filing of Uniform Commercial Code financing
statements with the Secretary of State of Nevada and the Clerk of Court of any
Louisiana parish (or recorder of mortgages for Orleans Parish), as the case may
be, and (z) as has been previously taken by or at the direction of Grantor).
(f) Perfection. This Agreement creates a valid and enforceable
security interest in the Collateral, securing the payment of the Secured
Obligations. Upon the filing of a UCC-1 financing statement with the Secretary
of State of Nevada and the Clerk of
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Court of any Louisiana parish (or recorder of mortgages for Orleans Parish),
Secured Party shall also have a perfected and first priority security interest
in the Collateral, subject only to Permitted Encumbrances, securing the payment
of the Secured Obligations.
(g) Other Information. All information heretofore, herein or
hereafter supplied to Secured Party by or on behalf of Grantor with respect to
the Collateral is accurate and complete in all respects.
SECTION 5. Further Assurances.
(a) Grantor agrees that from time to time, at the expense of
Grantor, Grantor will promptly execute and deliver all further instruments and
documents, and take all further action, that may be necessary or desirable, or
that Secured Party may reasonably request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to enable Secured
Party to exercise and enforce its rights and remedies hereunder with respect to
any Collateral and to preserve, protect and maintain the Collateral and the
value thereof. Without limiting the generality of the foregoing, Grantor will:
(i) at the reasonable request of Secured Party, xxxx conspicuously each of its
records pertaining to the Collateral with a legend, in form and substance
satisfactory to Secured Party, indicating that such Collateral is subject to the
security interest granted hereby, (ii) execute and file such financing or
continuation statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as Secured Party may reasonably
request, in order to perfect and preserve the security interests granted or
purported to be granted hereby, and (iii) at the reasonable request of Secured
Party, appear in and defend any action or proceeding that may affect Grantor's
title to or Secured Party's security interest in all or any part of the
Collateral.
(b) Grantor hereby authorizes Secured Party to file one or more
financing or continuation statements, and amendments thereto, relative to all or
any part of the Collateral without the signature of Grantor. Grantor agrees that
a carbon, photographic or other reproduction of this Agreement or of a financing
statement signed by Grantor shall be sufficient as a financing statement and may
be filed as a financing statement in any and all jurisdictions.
(c) Grantor will furnish to Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as Secured Party may
reasonably request, all in reasonable detail.
SECTION 6. Certain Covenants of Grantor. Grantor shall:
(a) not (i) cancel or terminate the Partnership Agreement or
consent to or accept any cancellation or termination thereof, (ii) sell, assign
(by operation of law or otherwise) or otherwise dispose of any part of its
general partnership interest in Company,
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(iii) amend, supplement or otherwise modify the Partnership Agreement (as in
effect on the date hereof) except as otherwise permitted pursuant to the Credit
Agreement, (iv) waive any default under or breach of the Partnership Agreement
or waive, fail to enforce, forgive or release any right, interest or entitlement
of any kind, howsoever arising, under or in respect of the Partnership Agreement
or vary or agree to the variation in any respect of any of the provisions of the
Partnership Agreement or of the performance of any other Person under the
Partnership Agreement, or (v) petition, request or take any other legal or
administrative action which seeks, or may reasonably be expected, to rescind,
terminate or suspend the Partnership Agreement or to amend or modify the
Partnership Agreement;
(b) at its expense (i) perform and comply in all material
respects with all terms and provisions of the Partnership Agreement required to
be performed or complied with by it, (ii) maintain the Partnership Agreement in
full force and effect, (iii) enforce the Partnership Agreement in accordance
with its terms, and (iv) take all such action to that end as from time to time
may be reasonably requested by Secured Party;
(c) not create or suffer to exist any Lien upon or with respect
to any of the Collateral to secure the indebtedness or other obligations of any
Person, except for the security interest created by this Agreement and any Lien
permitted pursuant to Section 7.2 of the Credit Agreement;
(d) not permit Company to enter into any transaction of merger or
consolidation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution);
(e) notify Secured Party of any change in Grantor's name,
identity or corporate structure within 15 days of such change;
(f) give Secured Party 30 days' prior written notice of any
change in Grantor's chief place of business, chief executive office or residence
or the office where Grantor keeps its records regarding the Collateral; and
(g) pay promptly when due all taxes, assessments and governmental
charges or levies imposed upon, and all claims against, the Collateral, except
to the extent the validity thereof is being contested in good faith; provided
that Grantor shall in any event pay such taxes, assessments, charges, levies or
claims not later than five days prior to the date of any proposed sale under any
judgement, writ or warrant of attachment entered or filed against Grantor or any
of the Collateral as a result of the failure to make such payment.
SECTION 7. Voting Rights; Profits, Interest and Dividends.
(a) So long as no Event of Default shall have occurred and be
continuing:
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(i) Grantor shall be entitled to exercise any and all
voting and other consensual rights pertaining to the Collateral or any
part thereof (including without limitation rights of approval arising
under the Partnership Agreement and the right to manage and administer
the business of Company) for any purpose not inconsistent with the
terms of this Agreement or the Credit Agreement; provided, however,
that Grantor shall give Secured Party at least five Business Days'
prior written notice of the manner in which it intends to exercise, or
the reasons for refraining from exercising, any such right; and
provided, further, that Grantor's consent to or approval of any action
otherwise permitted under this Agreement and the Credit Agreement shall
not be deemed inconsistent with the terms of this Agreement or the
Credit Agreement within the meaning of this Section 7(a)(i) and no
notice of any such voting or consent need be given to Secured Party;
(ii) Grantor shall be entitled to receive and retain, and
to utilize free and clear of the lien of this Agreement, any and all
payments, including but not limited to profits, dividends and other
distributions, paid in respect of the Collateral; provided, however,
that any and all profits, dividends, and other distributions paid or
payable other than in cash in respect of any Collateral, shall be, and
shall forthwith be delivered to Secured Party to hold as, Collateral
and shall, if received by Grantor, be received in trust for the benefit
of Secured Party, be segregated from the other property or funds of
Grantor and be forthwith delivered to Secured Party as Collateral in
the same form as so received (with all necessary endorsements); and
(iii) Secured Party shall execute and deliver (or cause to
be executed and delivered) to Grantor all such proxies and other
instruments as Grantor may from time to time reasonably request for the
purpose of enabling Grantor to exercise the voting and other consensual
rights that it is entitled to exercise pursuant to Section 7(a)(i) and
to receive the profits, dividends and other distributions that it is
authorized to receive and retain pursuant to Section 7(a)(ii).
(b) Upon the occurrence and during the continuation of an Event
of Default:
(i) upon written notice from Secured Party to Grantor,
any or all rights of Grantor to exercise the voting and other
consensual rights, and the rights to manage and administer the business
and affairs of Company, that it would otherwise be entitled to exercise
pursuant to Section 7(a)(i) shall cease, and all such rights (or such
of those rights as Secured Party may have elected) shall thereupon
become vested in Secured Party who shall thereupon have the sole right
to exercise such voting and other consensual rights;
(ii) all rights of Grantor to receive any and all
payments under or in connection with the Partnership Agreement,
including but not limited to the profits, dividends, and other
distributions which it would otherwise be authorized to receive
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and retain pursuant to Section 7(a)(ii), shall cease, and all such
rights shall thereupon become vested in Secured Party who shall
thereupon have the sole right to receive and hold such payments as
Collateral; and
(iii) all payments which are received by Grantor contrary
to the provisions of Section 7(b)(ii) shall be received in trust for
the benefit of Secured Party, shall be segregated from other funds of
Grantor and shall be forthwith paid over to Secured Party as Collateral
in the same form as so received (with any necessary endorsement).
SECTION 8. Secured Party Appointed Attorney-in-Fact. Grantor
hereby irrevocably appoints Secured Party as Grantor's attorney-in-fact, with
full authority in the place and stead of Grantor and in the name of Grantor,
Secured Party or otherwise, from time to time in Secured Party's discretion to
take any action and to execute any instrument that Secured Party may deem
necessary or advisable to accomplish the purposes of this Agreement, including
without limitation:
(a) to ask, demand, collect, xxx for, recover, compound, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral;
(b) to receive, endorse and collect all instruments made payable
to Grantor representing any payment of profits, dividends or any other
distribution in respect of any of the Collateral;
(c) to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral; and
(d) to do, at Secured Party's option and Grantor's expense, at
any time or from time to time, all acts and things that Secured Party deems
necessary to protect, preserve or realize upon the Collateral and Secured
Party's security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as Grantor might do.
SECTION 9. Secured Party May Perform. If Grantor fails to perform
any agreement contained herein, Secured Party may itself perform, or cause
performance of, such agreement, and the reasonable expenses of Secured Party
incurred in connection therewith shall be payable by Grantor under Section 13
hereof.
SECTION 10. Standard of Care. The powers conferred on Secured
Party hereunder are solely to protect its interest in the Collateral and shall
not impose any duty upon it to exercise any such powers. Except for the exercise
of reasonable care in the custody of any Collateral in its possession and the
accounting for monies actually received by it hereunder, Secured Party shall
have no duty as to any Collateral or as to the taking of
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any necessary steps to preserve rights against prior parties or any other
rights pertaining to any Collateral. Secured Party shall be deemed to
have exercised reasonable care in the custody and preservation of any Collateral
in its possession if such Collateral is accorded treatment substantially equal
to that which Secured Party accords its own property of a similar nature.
SECTION 11. Remedies.
(a) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Collateral, in addition
to all other rights and remedies provided for herein or otherwise available to
it, all the rights and remedies of a secured party on default under the Uniform
Commercial Code as in effect in any relevant jurisdiction (or, in the case of
Louisiana, the Louisiana Commercial Laws - Secured Transactions (Louisiana
Revised Statutes, Title 10, Chapter 9))(the "Code") (whether or not the Code
applies to the affected Collateral), and Secured Party may also in its sole
discretion, without notice except as specified below, sell the Collateral or any
part thereof in one or more parcels at public or private sale, at any exchange
or broker's board or at any of Secured Party's offices or elsewhere, for cash,
on credit or for future delivery, at such time or times and at such price or
prices and upon such other terms as Secured Party may deem commercially
reasonable, irrespective of the impact of any such sales on the market price of
the Collateral. Secured Party or any Lender may be the purchaser of any or all
of the Collateral at any such sale and Secured Party, as agent for and
representative of Lenders (but not any Lender or Lenders in its or their
respective individual capacities unless Requisite Lenders shall otherwise agree
in writing), shall be entitled, for the purpose of bidding and making settlement
or payment of the purchase price for all or any portion of the Collateral sold
at any such public sale, to use and apply any of the Secured Obligations as a
credit on account of the purchase price for any Collateral payable by Secured
Party at such sale. Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of Grantor, and Grantor
hereby waives (to the extent permitted by applicable law) all rights of
redemption, stay and/or appraisal which it now has or may at any time in the
future have under any rule of law or statute now existing or hereafter enacted.
Grantor agrees that, to the extent notice of sale shall be required by law, at
least ten days' notice to Grantor of the time and place of any public sale or
the time after which any private sale is to be made shall constitute reasonable
notification. Secured Party shall not be obligated to make any sale of
Collateral regardless of notice of sale having been given. Secured Party 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. Grantor hereby waives any
claims against Secured Party arising by reason of the fact that the price at
which any Collateral may have been sold at such a private sale was less than the
price which might have been obtained at a public sale, even if Secured Party
accepts the first offer received and does not offer such Collateral to more than
one offeree. If the proceeds of any sale or other disposition of the Collateral
are insufficient to pay all the Secured Obligations, Grantor shall be liable for
the
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deficiency and the fees of any attorneys employed by Secured Party to collect
such deficiency.
(b) Grantor recognizes that, by reason of certain prohibitions
contained in the Securities Act and applicable state securities laws, Secured
Party may be compelled, with respect to any sale of all or any part of the
Collateral conducted without prior registration or qualification of such
Collateral under the Securities Act and/or such state securities laws, to limit
purchasers to those who will agree, among other things, to acquire the
Collateral for their own account, for investment and not with a view to the
distribution or resale thereof. Grantor acknowledges that any such private sales
may be at prices and on terms less favorable than those obtainable through a
public sale without such restrictions (including, without limitation, a public
offering made pursuant to a registration statement under the Securities Act)
and, notwithstanding such circumstances, Grantor agrees that any such private
sale shall be deemed to have been made in a commercially reasonable manner and
that Secured Party shall have no obligation to engage in public sales and no
obligation to delay the sale of any Collateral for the period of time necessary
to permit Company to register it for a form of public sale requiring
registration under the Securities Act or under applicable state securities laws,
even if Company would, or should, agree to so register it.
(c) If Secured Party determines to exercise its right to sell any
or all of the Collateral, upon written request, Grantor shall and shall cause
Company from time to time to furnish to Secured Party all such information as
Secured Party may reasonably request in order to determine the number and nature
of the interests included in the Collateral which may be sold by Secured Party
in exempt transactions under the Securities Act and the rules and regulations of
the Securities and Exchange Commission thereunder, as the same are from time to
time in effect.
(d) Further, as to all Collateral now or hereafter located in the
State of Louisiana, or as to which the laws of the State of Louisiana may now be
or hereafter become applicable, Grantor hereby acknowledges the Secured
Obligations, whether now or existing or to arise hereafter, and confesses
judgment thereon if the Secured Obligations are not paid at maturity, and does
by these presents consent, agree and stipulate that if any portion of the
Secured obligations is not promptly and fully paid when due, or if there should
occur an Event of Default, the Secured Obligations shall, at the option of the
Secured Party become immediately due and payable and it shall be lawful for the
Secured Party, without making a demand and without notice or putting in default,
the same being hereby expressly waived, to cause all and singular the Collateral
to be seized and sold by executory process, without appraisement (appraisement
being hereby expressly waived), either in its entirety or in lots or parcels, as
the Secured Party may determine, to the highest bidder for cash, or on such
terms as plaintiff in such proceedings may direct.
Grantor hereby expressly waives: (a) the benefit of appraisement,
as provided in Articles 2332, 2336, 2723 and 2724, Louisiana Code of Civil
Procedure, and all other laws conferring the same; (b) the demand and three (3)
days delays accorded by Articles 2639 and 2721, Louisiana Code of Civil
Procedure; (c) the notice of seizure
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required by Articles 2293 and 2721, Louisiana Code of Civil Procedure;
(d) the three (3) days delay provided by Articles 2331 and 2722,
Louisiana Code of Civil Procedure; and (e) the benefit of the other provisions
of Articles 2331, 2722 and 2723, Louisiana Code of Civil Procedure, and the
benefit of any other Articles or laws relating to rights of appraisement,
notice, or delay not specifically mentioned above; and Grantor expressly agrees
to the immediate seizure of the Collateral in the event of suit herein. Further,
Grantor acknowledges that Secured Party shall have all rights to appointment of
a keeper in connection with any action to foreclose the lien hereof, all in
accordance with Louisiana Revised Statutes 9:5136 et seq. The compensation of
the keeper is hereby fixed at 1% of the amount due or sued for or claimed or
sought to be protected or enforced, and shall constitute a portion of the
Secured Obligations secured by the lien hereof.
SECTION 12. Application of Proceeds. Except as expressly provided
elsewhere in this Agreement, all proceeds received by Secured Party in respect
of any sale of, collection from, or other realization upon all or any part of
the Collateral may, in the discretion of Secured Party, be held by Secured Party
as Collateral for, and/or then, or at any other time thereafter, applied in full
or in part by Secured Party against, the Secured Obligations in the following
order of priority:
FIRST: To the payment of all costs and expenses of such sale,
collection or other realization, including reasonable compensation to
Secured Party and its agents and counsel, and all other expenses,
liabilities and advances made or incurred by Secured Party in
connection therewith, and all amounts for which Secured Party is
entitled to indemnification hereunder and all advances made by Secured
Party hereunder for the account of Grantor, and to the payment of all
costs and expenses paid or incurred by Secured Party in connection with
the exercise of any right or remedy hereunder, all in accordance with
Section 13;
SECOND: To the payment of all other Secured Obligations (for
the ratable benefit of the holders thereof) in such order as Secured
Party shall elect; and
THIRD: To the payment to or upon the order of Grantor, or to
whosoever may be lawfully entitled to receive the same or as a court of
competent jurisdiction may direct, of any surplus then remaining from
such proceeds.
SECTION 13. Indemnity and Expenses.
(a) Grantor agrees to indemnify Secured Party and each Lender
from and against any and all claims, losses and liabilities in any way relating
to, growing out of or resulting from this Agreement and the transactions
contemplated hereby (including, without limitation, enforcement of this
Agreement), except to the extent such claims, losses or liabilities result
solely from Secured Party's or such Lender's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.
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(b) Grantor shall pay to Secured Party upon demand the amount of
any and all costs and expenses, including the reasonable fees and expenses of
its counsel and of any experts and agents, that Secured Party may incur in
connection with (i) the custody or preservation of, or the sale of, collection
from, or other realization upon, any of the Collateral, (ii) the exercise or
enforcement of any of the rights of Secured Party hereunder, or (iii) the
failure by Grantor to perform or observe any of the provisions hereof.
SECTION 14. Regulatory Matters. Grantor and Secured Party
acknowledge and agree that:
(a) The terms and provisions of this Agreement and the rights and
obligations created hereunder shall be subject to compliance with all applicable
Gaming Laws.
(b) Without limiting the generality of the foregoing, all
required prior approvals under applicable Gaming Laws will be obtained in
connection with Secured Party's exercise of any of the remedies set forth in
Section 11 upon the occurrence of an Event of Default including, without
limitation, any separate prior approvals required in connection with the sale,
transfer or other disposition of the Collateral; and
(c) Grantor agrees to assist Secured Party in obtaining all
approvals of the Gaming Authorities or any other Governmental Authority that are
required by law for or in connection with any action or transaction contemplated
by this Agreement and, at Secured Party's reasonable request upon the occurrence
and during the continuation of an Event of Default, to prepare, sign and file
with the appropriate Gaming Authorities the transferor's portion of any
application or applications for consent to the transfer of control thereof
necessary or appropriate under applicable Gaming Laws for approval of any sale
or transfer of the Collateral pursuant to the exercise of Secured Party's
remedies under Section 11.
SECTION 15. Continuing Security Interest; Transfer of Loans. This
Agreement shall create a continuing security interest in the Collateral and
shall (a) remain in full force and effect until the indefeasible payment in full
of the Secured Obligations, the cancellation or termination of the Commitments
and the cancellation or expiration of all outstanding Letters of Credit, (b) be
binding upon Grantor, its successors and assigns, and (c) inure, together with
the rights and remedies of Secured Party hereunder, to the benefit of Secured
Party and its successors, transferees and assigns. Without limiting the
generality of the foregoing clause (c), but subject to the provisions of
subsection 10.1 of the Credit Agreement, any Lender may assign or otherwise
transfer any Loans held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to
Lenders herein or otherwise. Upon the indefeasible payment in full of all
Secured Obligations, the cancellation or termination of the Commitments and the
cancellation or expiration of all outstanding Letters of Credit, the security
interest granted hereby shall terminate and all rights to the Collateral shall
revert to Grantor. Upon any such
XVIII-A-12
termination Secured Party will, at Grantor's expense, execute and
deliver to Grantor such documents as Grantor shall reasonably request to
evidence such termination.
SECTION 16. Secured Party as Agent.
(c) Secured Party has been appointed to act as Secured Party
hereunder by Lenders. Secured Party shall be obligated, and shall have the right
hereunder, to make demands, to give notices, to exercise or refrain from
exercising any rights, and to take or refrain from taking any action (including,
without limitation, the release or substitution of Collateral), solely in
accordance with this Agreement and the Credit Agreement.
(d) Secured Party shall at all times be the same Person that is
Agent under the Credit Agreement. Written notice of resignation by Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute notice
of resignation as Secured Party under this Agreement; removal of Agent pursuant
to subsection 9.5 of the Credit Agreement shall also constitute removal as
Secured Party under this Agreement; and appointment of a successor Agent
pursuant to subsection 9.5 of the Credit Agreement shall also constitute
appointment of a successor Secured Party under this Agreement. Upon the
acceptance of any appointment as Agent under subsection 9.5 of the Credit
Agreement by a successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring or removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly (i) transfer to such
successor Secured Party all sums, securities and other items of Collateral held
hereunder, together with all records and other documents necessary or
appropriate in connection with the performance of the duties of such successor
Secured Party under this Agreement, and (ii) execute and deliver to such
successor Secured Party such amendments to financing statements, and take such
other actions, as may be necessary or appropriate in connection with the
assignment to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall be discharged
from its duties and obligations under this Agreement. After any retiring or
removed Agent's resignation or removal hereunder as Secured Party, the
provisions of this Agreement shall inure to its benefit as to any actions taken
or omitted to be taken by it under this Agreement while it was Secured Party
hereunder.
SECTION 17. Amendments; Etc. No amendment or waiver of any
provision of this Agreement, or consent to any departure by Grantor herefrom,
shall in any event be effective unless the same shall be in writing and signed
by Secured Party, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.
SECTION 18. Notices. Any notice or other communication herein
required or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or courier
service and shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex, or five
XVIII-A-13
Business Days after depositing it in the United States mail with postage
prepaid and properly addressed. For the purposes hereof, the address of
each party hereto shall be as set forth under such party's name on the signature
pages hereof or, as to either party, such other address as shall be designated
by such party in a written notice delivered to the other party hereto.
SECTION 19. Failure or Indulgence Not Waiver; Remedies
Cumulative. No failure or delay on the part of Secured Party in the exercise of
any power, right or privilege hereunder shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement are cumulative
to, and not exclusive of, any rights or remedies otherwise available.
SECTION 20. Severability. In case any provision in or obligation
under this Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
SECTION 21. Headings. Section and subsection headings in this
Agreement are included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be given any
substantive effect.
SECTION 22. Governing Law; Terms. THIS AGREEMENT SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEVADA, WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT
OF ANY PARTICULAR COLLATERAL ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER
THAN THE STATE OF NEVADA. Unless otherwise defined herein or in the Credit
Agreement, terms used in Articles 8 and 9 of the Uniform Commercial Code in the
State of Nevada are used herein as therein defined.
SECTION 23. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR ARISING OUT OF OR RELATING TO THIS
AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
IN THE STATE OF NEVADA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT GRANTOR
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO BE BOUND
XVIII-A-14
BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT.
Grantor hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail, return
receipt requested, to Grantor at its address provided in Section 18, such
service being hereby acknowledged by Grantor to be sufficient for personal
jurisdiction in any action against Grantor in any such court and to be otherwise
effective and binding service in every respect. Nothing herein shall affect the
right to serve process in any other manner permitted by law or shall limit the
right of Secured Party to bring proceedings against Grantor in the courts of any
other jurisdiction.
SECTION 24. Waiver of Jury Trial. GRANTOR AND SECURED PARTY
HEREBY AGREE TO WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT. The scope of this
waiver is intended to be all- encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty
claims, and all other common law and statutory claims. Grantor and Secured Party
each acknowledge that this waiver is a material inducement for Grantor and
Secured Party to enter into a business relationship, that Grantor and Secured
Party have already relied on this waiver in entering into this Agreement and
that each will continue to rely on this waiver in their related future dealings.
Grantor and Secured Party further warrant and represent that each has reviewed
this waiver with its legal counsel, and that each knowingly and voluntarily
waives its jury trial rights following consultation with legal counsel. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN
WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
SECTION 25. Counterparts. This Agreement may be executed in one
or more counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document.
[Remainder of page intentionally left blank]
XVIII-A-15
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
PLAYERS RIVERBOAT, LLC,
as Grantor
By: ____________________________________
Title: _________________________________
Notice Address:
c/o Players International, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention: President and Chief Financial
Officer
With copies to:
c/o Players International, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention: Chief Financial Officer
c/o Players International, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention: General Counsel
S-1
IN WITNESS WHEREOF, Grantor and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
PLAYERS RIVERBOAT MANAGEMENT, INC.,
as Grantor
By: ____________________________________
Title: _________________________________
Notice Address:
c/o Players International, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention: President and Chief Financial
Officer
With copies to:
c/o Players International, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention: Chief Financial Officer
c/o Players International, Inc.
0000 Xxxxxxxx Xxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention: General Counsel
S-1
FIRST INTERSTATE BANK OF NEVADA, N.A.,
as Secured Party
By: ____________________________________
Title: __________________________________
Notice Address:
0000 Xxxxxx Xxxxxx Xxxxxxx, Xxxxx 000
Xxx Xxxxx, Xxxxxx 00000
Attention: Xxxxx Xxxxx
S-2
SCHEDULE A
Partnership Interests
Partner Percentage Interest
------- -------------------
Players Riverboat, LLC 99%
Players Riverboat Management, Inc. 1%
A-1
