PLEDGE AGREEMENT
from
XXXXX HOTELS & CASINO RESORTS HOLDINGS, L.P.,
as Pledgor,
to
FIRST BANK NATIONAL ASSOCIATION,
as Trustee
PLEDGE AGREEMENT
PLEDGE AGREEMENT, together with any amendments, replacements and
supplements hereafter entered into (the "Pledge Agreement"), dated as of October
7, 1996, between Xxxxx Hotels & Casino Resorts Holdings, L.P. (together with its
successors and assigns, the "Pledgor") and First Bank National Association, as
trustee (the "Senior Note Trustee") under the indenture (as supplemented and
amended, the "Senior Note Indenture") relating to the 15 1/2% Senior Secured
Notes due 2005 (the "Senior Notes") of the Pledgor and Xxxxx Hotels & Casino
Resorts Funding, Inc., as joint obligors, is made for the equal and ratable
benefit of the holders of the Senior Notes (the "Holders"). As used herein, all
capitalized terms not otherwise defined herein shall have the meanings set forth
in the Senior Note Indenture.
W I T N E S S E T H:
WHEREAS, the Issuers have issued $155,000,000 aggregate principal amount of
Senior Notes pursuant to the Senior Note Indenture;
WHEREAS, in consideration of the waivers of certain provisions of the
Senior Note Indenture set forth in that certain Solicitation of Waivers of the
Issuers, dated May 13, 1996, as supplemented and amended by that certain
Supplement to Solicitation of Waivers of the Issuers, dated May 15, 1996, the
Issuers agreed, among other things, to pledge (or cause to be pledged), in the
event that the Pledgor acquired ownership of Trump's Castle Casino and Resort
("Trump's Castle"), any and all direct or indirect equity interests of THCR
Holdings in Trump's Castle Associates, L.P. ("Castle Associates"), the owner and
operator of Trump's Castle, to the Senior Note Trustee for the benefit of the
Holders;
WHEREAS, on the date hereof, the Pledgor has become the owner of Trump's
Castle as a result of the acquisition (the "Acquisition") of all the outstanding
equity interests of Castle Associates pursuant to that certain Agreement, dated
as of June 24, 1996, as amended (the "Acquisition Agreement"), by and among
Xxxxx Hotels & Casino Resorts, Inc., the Pledgor, Xxxxx Casinos II, Inc.
(formerly known as TC/GP, Inc.), Trump's Castle Hotel & Casino, Inc. ("TCHI")
and Xxxxx;
WHEREAS, as of the date hereof, as a result of the consummation of the
transactions contemplated in the Acquisition Agreement, (i) TCHI has become a
wholly owned subsidiary of the Pledgor and (ii) Castle Associates has become a
New Jersey limited partnership with the Pledgor as a 99% limited partner and
TCHI as a 1% general partner;
WHEREAS, the Pledgor desires to pledge the Pledged Collateral (as defined
below) to the Senior Note Trustee for the
benefit of the Holders to secure the prompt payment and full and complete
performance of the Issuers obligations under the Senior Note Indenture (the
"Indenture Obligations"); and
WHEREAS, concurrently with the execution of this Pledge Agreement, the
Pledgor has caused TCHI to pledge all of its equity interests in Castle
Associates to the Senior Note Trustee for the benefit of the Holders (the "TCHI
Pledge").
NOW, THEREFORE, in consideration of the premises and other benefits to the
Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto hereby agree as follows:
Section 1. Pledge. As collateral security for the due and prompt payment in
full and complete performance of the Indenture Obligations, and all indebtedness
and other liabilities and obligations, whether now existing or hereafter
arising, under, or arising out of, the Senior Note Indenture, the Pledgor hereby
pledges, assigns, transfers, sets over and delivers unto the Senior Note Trustee
and hereby grants unto the Senior Note Trustee for the benefit of the Holders
and unto their respective successors and assigns, a first priority security
interest in all of the right, title and interest of the Pledgor in, to and under
any and all of the following described property, rights and interests
(collectively, the "Pledged Collateral"):
(a) all of the issued and outstanding Equity Interests directly owned
by the Pledgor of the subsidiaries identified on Schedule A attached hereto (the
"Pledged Subsidiaries"), subject to obtaining the Approvals (as defined);
(b) all other Equity Interests, now or hereafter owned or acquired by
the Pledgor and wherever located, of the Pledged Subsidiaries and the
certificates representing such securities, and any present or future options,
warrants or other rights to subscribe for or purchase any of the foregoing
described in subsections 1(a) or 1(b) hereof or any notes, bonds, debentures or
other evidences of indebtedness that (i) are at any time convertible,
exchangeable or exercisable into Equity Interests of the Pledged Subsidiaries or
(ii) have or at any time could by their terms have voting rights with respect to
any matter affecting the Pledged Subsidiaries and all securities, certificates
and instruments representing or evidencing ownership of any of the foregoing
(the property described in subsections 1(a) and 1(b) hereof, being referred to
herein collectively as the "Pledged Securities");
(c) to the extent not included in the foregoing, all of Pledgor's
rights, claims or other general intangibles constituting, or arising out of or
relating to, its rights as a general partner, limited partner or managing
general partner of
2
any Pledged Subsidiary, including, without limitation, its share in the profits
and losses of any such Pledged Subsidiary and its right as such partner to
receive distributions of the Pledged Subsidiary's assets or income, in each case
whether arising under a partnership agreement or applicable law, created by
operation of law, or otherwise;
(d) to the extent not included in the foregoing, all rights, claims
and other general intangibles of such Pledged Subsidiary against any third
party, to the extent the same may be asserted or realized upon by Pledgor; and
(e) subject to the provisions of Section 6 hereof, all dividends,
distributions, cash, instruments and other property or securities (including,
without limitation, any security as such term is defined in Article 8 of the
Uniform Commercial Code as in effect in the applicable jurisdiction at such time
(the "UCC")), now or hereafter at any time or from time to time received or
receivable or otherwise distributed or distributable in respect of or in
exchange for any or all of the Pledged Collateral and all proceeds of the
Pledged Collateral.
TO HAVE AND TO HOLD the Pledged Collateral, together with all rights, titles,
interests, powers, privileges and preferences pertaining or incidental thereto,
unto the Senior Note Trustee for the benefit of the Holders and unto its
respective successors and assigns.
Section 2. Gaming Approvals.
(a) No Pledged Securities shall be sold, assigned, transferred,
pledged or otherwise disposed of, whether pursuant to the Pledge Agreement or
the exercise of any right, power or remedy provided for herein or otherwise,
unless the grant of the security interest or such other disposition as the case
may be, has received in advance any necessary approvals (the "Approvals") by the
gaming authorities with jurisdiction over the issuer of such Pledged Securities
(the "Gaming Authorities"), and unless the transferee of such Pledged Securities
shall have first obtained any and all licenses, findings of suitability or
Approvals required by such Gaming Authorities, or shall have been found to be
individually qualified to be licensed, as appropriate. Without limiting the
generality of the foregoing, the Approval by such Gaming Authorities shall not
constitute permission to foreclose on the same or make any other disposition of
the Pledged Securities.
(b) The Senior Note Trustee agrees to comply with any order or
directive of applicable Gaming Authorities requiring such person or persons to
submit an application for any license, finding of suitability or other approval.
(c) The provisions of Section 2 of this Pledge Agreement shall not
modify or restrict the rights and remedies of
3
the Senior Note Trustee under the Pledge Agreement in any other Pledged
Collateral except as provided in Section 2(a) or (b); provided that, the Senior
Note Trustee acknowledges, understands and agrees that certain Gaming Laws and
the regulations thereunder may impose certain licensing or transaction approval
requirements prior to the exercise of such rights and remedies under the Pledge
Agreement with respect to the Pledged Securities and other pledged collateral
subject to such Gaming Laws and the regulations thereunder.
(d) Notwithstanding any provision contained in this Pledge Agreement
to the contrary, if the granting of a security interest in the capital stock of
any Subsidiary shall conflict with any Gaming Laws, the Senior Note Trustee
agrees to (i) release such capital stock from the pledge of this Pledge
Agreement to the extent necessary to avoid such conflict or violation, or (ii)
take any other action, including filing for applicable Approvals, sufficient to
avoid such conflict or violation. The Senior Note Trustee further acknowledges
and agrees that, prior to exercising any remedies set forth in the Pledge
Agreement with respect to the Equity Interests of any of the Pledged
Subsidiaries subject to or affected by any Gaming Laws, the Senior Note Trustee
shall obtain any and all Approvals as may be required by applicable Gaming Laws.
(e) If the consent of any Gaming Authority is required in connection
with any of the actions which may be taken by the Senior Note Trustee in the
exercise of its rights hereunder, then the Pledgor agrees to use its reasonable
efforts to secure such consent and to cooperate with the Senior Note Trustee in
obtaining any such consent. Upon the occurrence and during the continuation of
any Event of Default, Pledgor shall promptly execute and/or cause the execution
of all applications, certificates, instruments, and other documents and papers
that the Senior Note Trustee may be required to file in order to obtain any
necessary Gaming Authority approvals, and if Pledgor fails or refuses to execute
such documents, the clerk of the court with jurisdiction may execute such
documents on behalf of Pledgor.
Section 3. Representations, Warranties and Covenants of the Pledgor. The
Pledgor hereby represents and warrants, covenants and agrees that:
(a) The Pledgor is, and as to Pledged Collateral acquired by it from
time to time after the date hereof, will be, the sole legal and beneficial owner
of the Pledged Collateral, and holds, or will hold, the Pledged Collateral free
and clear of all Liens (except for the security interest granted hereunder to
the Senior Note Trustee for the benefit of Holders), and has not made and will
not make any other pledge, assignment, mortgage, hypothecation or transfer of
the Pledged Collateral. The Pledged Securities are not subject to any put, call,
option or other right in favor of any other person whatsoever.
4
(b) The Pledged Securities which are shares of stock have been duly
authorized and validly issued and are fully paid and nonassessable.
(c) Except as set forth below, upon delivery of the certificates
evidencing the Pledged Securities to the Senior Note Trustee and so long as the
Senior Note Trustee maintains possession of such certificates pursuant to this
Pledge Agreement, the Senior Note Trustee will have a valid and perfected first
priority security interest in the Pledged Securities. In the case of a Pledged
Security which represents an interest in a partnership, upon filing of a UCC-1
financing statement in the appropriate jurisdiction in connection with such
interest, upon delivery of the certificate evidencing such interest and so long
as the Senior Note Trustee maintains possession of such certificate, the Senior
Note Trustee will have a valid and perfected first priority security interest in
such Pledged Security, which together with the security interest in the other
Pledged Securities will secure the payment and performance in full of the
Indenture Obligations.
(d) The Pledgor has the valid right and legal authority to pledge the
Pledged Collateral in the manner hereby done or contemplated and will defend its
title thereto against the claims of all persons whomsoever and shall maintain
and preserve the security interest granted hereunder with respect to the Pledged
Collateral as long as this Pledge Agreement shall remain in full force and
effect.
(e) Neither the execution and delivery of this Pledge Agreement by the
Pledgor nor the consummation of the transactions herein contemplated nor the
fulfillment of the terms hereof (i) violate the Pledgor's, or any of its
Subsidiary's, charter or by-laws, (ii) violate the terms of any agreement,
indenture, mortgage, deed of trust, equipment lease, instrument or other
document to which the Pledgor, or any of its Subsidiaries, is a party, or by
which any of them may be bound or to which any of their properties or assets may
be subject, which violation or conflict would have a material adverse effect on
the financial condition, business, assets or liabilities of the Pledgor and its
Subsidiaries taken as a whole, or on the value of the Pledged Collateral or a
material adverse effect on the security interests hereunder, or (iii) conflict
with any law, order, rule or regulation applicable to the Pledgor, or any of its
Subsidiaries, of any court or any government, regulatory body or administrative
agency or other governmental body having jurisdiction over the Pledgor, or any
of its Subsidiaries, or their Properties, or (iv) result in or require the
creation or imposition of any Lien (other than the Lien contemplated hereby),
upon or with respect to any of the property now owned or hereafter acquired by
the Pledgor, or any of its Subsidiaries, which violation or conflict would have
a material adverse effect on the financial condition, business, assets or
liabilities of
5
the Pledgor and its Subsidiaries taken as a whole, or on the value of the
Pledged Collateral or a material adverse effect on the security interests
hereunder.
(f) The Pledged Securities as described in Schedule A attached hereto,
include all of the issued and outstanding Equity Interests of the Pledged
Subsidiaries as of the date hereof (except for the Equity Interests pledged in
the TCHI Pledge), and all outstanding options, warrants, calls, commitments of
any character whatsoever or other rights to subscribe for or purchase any
property described in subsection 1(a) or any notes, bonds, debentures or other
evidences of indebtedness that (i) are at any time convertible into Equity
Interests of such Pledged Subsidiary or (ii) have or at any time could by its
terms have voting rights with respect to any matters affecting the Pledged
Subsidiary.
(g) Except for the Approvals referred to in Section 2, no consent or
approval which has not been obtained prior to the date hereof of any other
person or entity and no authorization, approval or other action by, and no
notice to or filing with any governmental body, regulatory authority or
securities exchange, was or is necessary as a condition to the validity of the
pledge hereunder of the Pledged Collateral, and subject to receipt of all
applicable Approvals with respect to the exercise of remedies by the Senior Note
Trustee hereunder, such pledge is effective to vest in the Senior Note Trustee
the rights of the Senior Note Trustee in the Pledged Collateral as set forth
herein.
(h) The Pledgor shall deliver to the Senior Note Trustee concurrently
with the execution of this Pledge Agreement: (i) all certificates and
instruments representing the Pledged Securities described in Schedule A, and
(ii) each other item of Pledged Collateral (including all certificates,
instruments, notes and writings representing or evidencing any such Pledged
Collateral) immediately upon the Pledgor's acquisition thereof, and in addition,
with respect to Pledged Securities, immediately upon receipt of applicable
Approvals. Any and all Pledged Securities delivered to the Senior Note Trustee
shall be accompanied by undated duly executed stock powers in blank and by such
other instruments of transfer or documents as the Senior Note Trustee may
reasonably request. Subject to the provisions of Section 2, the Senior Note
Trustee shall have the right (in its discretion) to hold the certificates
representing the Pledged Securities in its own name or in the name of its
nominee, all in form and substance sufficient to make effective the pledge
hereunder and otherwise satisfactory to the Senior Note Trustee.
(i) Upon reasonable request to the Pledgor, the Senior Note Trustee
shall have full and free access during normal business hours to all of the
books, correspondence and records of the Pledgor relating to the Pledged
Collateral, and the Senior Note Trustee and its representatives may examine the
same, xxxx
0
extracts therefrom and make photocopies thereof, and the Pledgor agrees to
render to the Senior Note Trustee, at the Pledgor's cost and expense, such
clerical and other assistance as may be reasonably requested by the Senior Note
Trustee with regard thereto.
(j) The Pledgor will comply in all material respects with all
requirements of law applicable to the Pledged Collateral or any part thereof and
use its best efforts to obtain all Approvals as may be required to effect any of
the granting clauses of this Pledge Agreement.
(k) The Pledgor shall not permit any of the Pledged Subsidiaries to
issue any securities of the type required to be pledged hereunder unless such
securities are promptly pledged and delivered hereunder to the Senior Note
Trustee in accordance with Section 1(b).
(l) If, while this Pledge Agreement is in effect, any stock dividend,
stock split, reclassification, readjustment, reorganization, merger,
consolidation, exchange offer, tender offer or other change in the capital
structure, including the creation of any subscription or other rights or other
Pledged Securities, is declared or made, or proposed to be declared or made, by
any of the Pledged Subsidiaries or any other issuer of Pledged Collateral, all
substituted and additional securities or interest issued with respect to the
Pledged Collateral and evidenced by certificates shall, subject to receipt of
all applicable Approvals, be endorsed in blank by the Pledgor promptly upon
receipt thereof or otherwise appropriately transferred to the Senior Note
Trustee in negotiable form, and all certificates or instruments evidencing such
securities shall be delivered to the Senior Note Trustee to be held under the
terms of this Pledge Agreement in the same manner as, and as a part of, the
Pledged Collateral. All Pledged Securities shall be evidenced by one or more
certificates. Any securities that may be issued upon exercise of any
subscription or other rights relating to the Pledged Securities shall, subject
to receipt of all applicable Approvals, be endorsed in blank and delivered to
the Senior Note Trustee with any necessary powers.
(m) The Pledgor shall pay and discharge all taxes, assessments and
governmental charges or levies against any Pledged Collateral prior to
delinquency thereof and shall keep all Pledged Collateral free of all unpaid
charges whatsoever, unless contested in good faith and appropriate reserves have
been set aside in accordance with GAAP.
(n) The Pledgor has, independently and without reliance on the Senior
Note Trustee and/or any Holder and based on such documents and information as it
deemed appropriate, made its own credit analysis and decision to enter into this
Pledge Agreement.
7
(o) In the event that the Senior Note Trustee desires to exercise any
remedies, voting or consensual rights or attorney-in-fact powers set forth in
this Pledge Agreement and determines it necessary to obtain any Approvals
therefor, then, upon the reasonable request of the Senior Note Trustee, the
Pledgor agrees to use its best efforts to assist and aid the Senior Note Trustee
to obtain as soon as practicable any necessary Approvals for the exercise of any
such remedies, rights and powers.
(p) The Pledgor has delivered to the Senior Note Trustee a duly
executed acknowledgment from the respective issuers of the Pledged Securities
acknowledging the registration on its books and records of the pledge of the
Pledged Securities pursuant to this Agreement.
(q) There are no voting trusts or other agreements or understandings
to which Pledgor is a party or by which it may be bound with respect to voting,
managerial consent, election or other rights of Pledgor relating to the Pledged
Securities.
(r) The principal place of business and chief executive office of
Pledgor and the office where Pledgor keeps its records concerning the Pledged
Collateral is 0000 Xxxxxxxxx, Xxxxxxxx Xxxx, Xxx Xxxxxx 00000.
Section 4. Administration of the Pledged Collateral. Subject to the terms
of any applicable Approvals, the Senior Note Trustee shall administer the
Pledged Collateral in accordance with the provisions hereof and of the Senior
Note Indenture.
Section 5. Release and Substitution of Pledged Collateral. The Pledged
Collateral shall not be released from the security interest created hereunder
and no property shall be substituted for any of the Pledged Collateral, except
(i) in accordance with the provisions of Article IV of the Senior Note
Indenture, (ii) in the case of the release of Pledged Securities of Unrestricted
Subsidiaries designated as such in accordance with the provisions of the Senior
Note Indenture, all of which provisions are hereby incorporated herein by
reference, (iii) in accordance with the provisions of Sections 5 and 19 hereof
and (iv) pursuant to any requirements of any order, decree, rule or judgment of
any Gaming Authority applicable to Pledgor or any of the Pledged Subsidiaries.
Section 6. Voting Rights, Dividends, Etc.
(a) So long as no Event of Default (as defined below) shall have
occurred and be continuing and notwithstanding any other section hereof:
(i) the Pledgor shall be entitled to exercise any and all
voting or consensual rights
8
and powers, including subscription rights, accruing to an owner of the
Pledged Collateral or any part thereof for any purpose not inconsistent
with the terms of this Pledge Agreement or any agreement giving rise to any
of the Indenture Obligations;
(ii) the Pledgor shall be entitled to receive, retain and
use any and all dividends, distributions or other payments which are
permitted by the Senior Note Indenture and paid on the Pledged Collateral
in cash or property (other than securities which are subject to this
Agreement); and
(iii) the Senior Note Trustee shall execute and deliver to
the Pledgor or cause to be executed and delivered to the Pledgor, all such
proxies, powers of attorney, dividend orders and other instruments as the
Pledgor may reasonably request for the purpose of enabling it to exercise
the voting or consensual rights and powers which the Pledgor is entitled to
exercise pursuant to the foregoing subparagraph (i) or to receive the
dividends, distributions or other payments which the Pledgor is authorized
to retain pursuant to the foregoing subparagraph (ii).
(b) Upon the occurrence of an Event of Default, but prior to the
receipt of all applicable Approvals by the Senior Note Trustee or the Holders,
the Pledgor shall be entitled to exercise the rights provided in Section 6(a)(i)
hereof.
(c) Upon the occurrence and during the continuance of an Event of
Default and in the case of voting and consensual rights, upon receipt of all
applicable Approvals, all rights of the Pledgor to exercise the voting or
consensual rights and powers which the Pledgor would otherwise be entitled to
exercise pursuant to subparagraph (i) of Section 6(a) and Section 6(b) hereof
and to receive the dividends, distributions and other payments which the Pledgor
would otherwise be authorized to receive and retain pursuant to subsection (ii)
of Section 6(a) shall automatically cease, and all such rights shall thereupon
become vested in the Senior Note Trustee, which shall then have the sole and
exclusive right and authority to exercise all such voting and consensual rights
and powers and to receive and retain as Pledged Collateral all such dividends,
distributions and other payments. Any and all money and other property paid over
to or received by the Senior Note Trustee pursuant to the provisions of this
Section 6(c) shall be retained by the Senior Note Trustee as Pledged Collateral
hereunder and shall be administered and applied in accordance with the
provisions of this Pledge Agreement and the Senior Note Indenture. All dividends
and interest payments which are received by the Pledgor contrary to the
provisions of this subsection (c) shall be received in trust for the benefit of
the Senior Note Trustee, shall be segregated
9
from other funds of the Pledgor and shall be forthwith paid over to the Senior
Note Trustee as Pledged Collateral in the same form as so received (with any
necessary endorsement).
Section 7. Default; Remedies.
(a) Defined. For purposes of this Pledge Agreement, the term "Event of
Default" shall have the meaning provided in the Senior Note Indenture.
(b) Exercise of Remedies Under the Pledge Agreement. If an Event of
Default shall have occurred and be continuing, the Senior Note Trustee shall,
subject to obtaining all applicable Approvals, commence the taking of such
actions (or refrain from taking actions) toward collection or enforcement of
this Pledge Agreement and the Pledged Collateral (or any portion thereof),
including, without limitation, action toward foreclosure upon any Pledged
Collateral, as it deems appropriate in its sole discretion.
(c) Remedies Generally. If an Event of Default shall have occurred and
be continuing, the Senior Note Trustee itself or by its agents or attorneys may,
subject to obtaining all applicable Approvals, (i) exercise any or all of its
rights and remedies hereunder, under the Senior Note Indenture or any other
instrument or agreement securing, evidencing or relating to the Indenture
Obligations or under applicable laws (including all of the rights and remedies
of a secured creditor under the Uniform Commercial Code then in effect in the
State of New York; the "NUCC"), (ii) retain the Pledged Collateral or (iii)
sell, assign, transfer, or dispose of, endorse and deliver the whole or, from
time to time, any part of the Pledged Collateral at public or private sale or
sales, at any exchanges, brokers board or at any of the Senior Note Trustee's
offices or elsewhere, for cash, upon credit or for other property, for immediate
or future delivery, and for such price or prices and on such other terms that
the Senior Note Trustee may deem commercially reasonable (in its liability for
loss or damage). Upon consummation of any such sale, the Senior Note Trustee
shall have the right to assign, transfer, endorse and deliver to the purchaser
or purchasers thereof the Pledged Collateral so sold. Each such purchaser at any
such sale shall hold the property sold absolutely free from any claim or right
on the part of the Pledgor, and the Pledgor hereby waives (to the full extent
permitted by law) all rights of redemption, stay or appraisal which the Pledgor
now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted. The Senior Note Trustee shall give the
Pledgor at least 10 Business Days' written notice (which the Pledgor agrees
shall be deemed to be reasonable notification within the meaning of Section
9-504(3) of the NUCC) of the Senior Note Trustee's intention to make any such
public or private sale. Any such sale shall be held at such time or times and at
such place or places as the Senior Note Trustee may deem commercially
reasonable. At any such sale, the Pledged Collateral, or portion
10
thereof to be sold, may be sold as an entirety or in separate portions, as the
Senior Note Trustee may deem commercially reasonable. The Senior Note Trustee
shall not be obligated to make any sale of the Pledged Collateral if it shall
determine not to do so, regardless of the fact that notice of sale of the
Pledged Collateral may have been given. The Senior Note Trustee may adjourn any
public or private sale or cause the same to be adjourned from time to time by
announcement at the time and place fixed for sale, and such sale may, without
further notice, be made at the time and place to which the same was so
adjourned. In case sale of all or any part of the Pledged Collateral is made on
credit for future delivery, the Pledged Collateral so sold may be retained by
the Senior Note Trustee until the sale price is paid by the purchaser or
purchasers thereof, but the Senior Note Trustee shall not incur any liability in
case any such purchaser or purchasers shall fail to take up and pay for the
Pledged Collateral so sold and, in case of any such failure, such Pledged
Collateral may be sold again upon like notice and upon receipt of all applicable
Approvals. As an alternative to exercising the power of sale herein conferred
upon it, the Senior Note Trustee may proceed by suit or suits at law or in
equity to exercise its remedies regarding the Pledged Collateral and sell the
Pledged Collateral or any portion thereof pursuant to judgment or decree of a
court or courts having competent jurisdiction. If under mandatory requirements
of applicable law, the Senior Note Trustee shall be required to make disposition
of the Pledged Collateral within a period of time that does not permit the
giving of notice to the Pledgor as herein before provided, the Senior Note
Trustee need give the Pledgor only such notice of disposition as shall be
reasonably practicable in view of such mandatory requirements of law.
(d) Preventing Impairment of the Pledged Collateral. Regardless of
whether or not there shall have occurred any Event of Default, the Senior Note
Trustee may institute and maintain or cause in its name of the Pledgor or in the
name to be instituted and maintained, such suits and proceedings as the Senior
Note Trustee may be advised by counsel shall be necessary or expedient to
prevent any impairment of the security interest in or perfection of the Pledged
Collateral in contravention of the terms of the Senior Note Indenture. The
Pledgor agrees not to knowingly take or permit to be taken any action which
would impair the Pledged Collateral or the Senior Note Trustee's rights in the
Pledged Collateral.
Section 8. Senior Note Trustee Appointed Attorney-in-Fact. The Pledgor
hereby constitutes and appoints the Senior Note Trustee its attorney-in-fact,
during the occurrence and continuance of an Event of Default, for the purpose of
carrying out the provisions, but subject to the terms and conditions, of this
Pledge Agreement and taking any action and executing any instrument, including,
without limitation, any financing statement or continuation statement, and
taking any other action to maintain the validity, perfection, priority and
enforcement of
11
the security interest intended to be created hereunder, that the Senior Note
Trustee may deem necessary or advisable to accomplish the purposes hereof, which
appointment is irrevocable and coupled with an interest; provided, however, that
nothing herein contained shall be construed as requiring or obligating the
Senior Note Trustee to make any commitment or to make any inquiry as to the
nature or sufficiency of any payment received by it, or to present or file any
claim or notice, or to take any action with respect to the Pledged Collateral or
any part thereof or the monies due or to become due in respect thereof or any
property covered thereby, and no action taken or omitted or any part thereof
shall give rise to any defense, counterclaim or right of action against the
Senior Note Trustee, unless the Senior Note Trustee's actions are taken or
omitted to be taken with gross negligence or bad faith or constitute willful
misconduct.
Section 9. Purchase of Pledged Collateral by Senior Note Trustee or
Holders. At any sale of the Pledged Collateral, whether pursuant to power of
sale or otherwise hereunder, Senior Note Trustee or any Holder may, to the
extent permitted by applicable law and subject to obtaining all applicable
Approvals, bid for and purchase, free from any right of redemption (all such
rights being hereby waived and released by the Pledgor to the extent permitted
by law), the Pledged Collateral or any part thereof or an interest therein and
upon compliance with the terms of such sale may hold, retain, exploit, resell or
otherwise dispose of such property without further accountability to the Pledgor
for the proceeds of such sale. The Pledgor will execute and deliver or cause to
be executed and delivered, such instruments, endorsements, assignments, waivers,
certificates and other documents and take such further action as the Senior Note
Trustee shall reasonably request in connection with any such sale.
Section 10. Payments and Proceeds.
In the event that the Senior Note Trustee ever receives any amounts
pursuant to this Pledge Agreement, or otherwise receives any amounts with
respect to the Pledged Collateral following the occurrence of an Event of
Default, such amounts shall first be applied to the reasonable costs and
expenses, including attorneys' fees, incurred by the Senior Note Trustee in
taking such action and thereafter shall be applied by the Senior Note Trustee as
provided in the Senior Note Indenture. After payment in full of all Indenture
Obligations, the remaining proceeds from any foreclosure hereunder shall be paid
to the Pledgor, or its successors or assigns, or to whomsoever may be lawfully
entitled to receive the same or as a court of competent jurisdiction may direct,
any surplus then remaining from such Proceeds.
Section 11. Waiver of Claims. Except as otherwise provided in this Pledge
Agreement, THE PLEDGOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE LAW,
NOTICE OF JUDICIAL
12
HEARING IN CONNECTION WITH THE SENIOR NOTE TRUSTEE'S TAKING POSSESSION OR THE
SENIOR NOTE TRUSTEE'S DISPOSITION OF ANY OF THE PLEDGED COLLATERAL, INCLUDING,
WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICES AND HEARINGS FOR ANY PREJUDGMENT
REMEDY OR REMEDIES AND ANY SUCH RIGHT THAT THE PLEDGOR WOULD OTHERWISE HAVE
UNDER THE CONSTITUTION OR ANY STATUTE OF THE UNITED STATES OR OF ANY STATE, and,
to the full extent permitted by applicable law, the Pledgor hereby further
waives:
(a) all damages occasioned by such taking of possession except any
damages which are the direct result of the Senior Note Trustee's gross
negligence, bad faith 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 Senior Note Trustee's
rights and powers hereunder; and
(c) except as provided in Section 7(c) hereof, all rights of
redemption, appraisal, valuation, stay, marshaling of assets, extension or
moratorium, existing at law or in equity, by statute or otherwise, now or
hereafter in force, in order to prevent or delay the enforcement of this Pledge
Agreement or the sale or other disposition of the Pledged Collateral or any
portion thereof, and the Pledgor, for itself and all who may claim under it,
insofar as it now or hereafter lawfully may, hereby waives all such rights.
Any sale of, or the exercise of any options to purchase, or any other
realization upon, any Pledged Collateral shall operate to divest all right,
title, interest, claim and demand, at law or in equity, of the Pledgor therein
and thereto, and shall be a perpetual bar both at law and in equity against the
Pledgor and against any and all persons claiming or attempting to claim the
Pledged Collateral so sold, optioned or realized upon, or any part thereof,
through and under the Pledgor.
Section 12. Remedies Cumulative; No Waiver. Each right, power and remedy of
the Senior Note Trustee provided for herein or in another agreement pursuant to
which a Lien is created in favor of the Senior Note Trustee for the benefit of
any Holder, or now or hereafter existing at law or in equity, by statute or
otherwise, shall be cumulative and concurrent and shall be in addition to every
other right, power or remedy of the Senior Note Trustee or any Holder provided
for herein or in another agreement pursuant to which a Lien is created in favor
of the Senior Note Trustee for the benefit of any Holder or now or hereafter
existing at law or in equity, by statute or otherwise. No failure on the part of
the Senior Note Trustee or any Holder to exercise, and no delay in exercising,
any right, power or remedy hereunder, or in another agreement pursuant to which
a Lien is created in favor of the Senior Note Trustee for the
13
benefit or any Holder or now or hereafter existing at law or in equity, by
statute or otherwise, shall operate as a waiver thereof, nor shall any single or
partial exercise of any such right, power or remedy preclude any other or
further exercise thereof or the exercise of any other right, power or remedy. No
notice to or demand on the Pledgor hereunder shall, of itself, entitle the
Pledgor to any other or further notice or demand in the same, similar or other
circumstances.
Section 13. Additional Collateral. Without notice or consent of any Pledgor
and without impairment of the security interests and rights created by this
Pledge Agreement, the Senior Note Trustee may accept from any person or persons
additional collateral or other security for the Indenture Obligations. Neither
the creation of the security interests created hereunder nor the acceptance of
any such additional collateral or security shall prevent the Senior Note Trustee
from resorting to such additional collateral or security or to the Pledged
Collateral, in any order without affecting the Senior Note Trustee's rights
hereunder.
Section 14. Further Assurances. The Pledgor agrees (i) that it shall, at
its own expense, promptly file or record such notices, financing statements,
continuation statements or other documents and take all further action as may be
necessary to perfect, maintain and protect the validity, perfection and priority
of the security interests of the Senior Note Trustee hereunder or to enable the
Senior Note Trustee to exercise and enforce its rights and remedies hereunder
with respect to the Pledged Collateral, and as the Senior Note Trustee may
reasonably request, such instruments to be in form and substance satisfactory to
the Senior Note Trustee, and (ii) that it shall, at its own expense, do such
further acts and things and execute and deliver to the Senior Note Trustee such
additional conveyances, assignments, agreements and instruments as the Senior
Note Trustee may at any time reasonably request in connection with the
administration and enforcement of this Pledge Agreement or relative to the
Pledged Collateral or any part thereof or in order to assure and confirm unto
the Senior Note Trustee its rights, powers and remedies hereunder.
The Pledgor agrees that it will notify the Senior Note Trustee in writing
not less than 30 days prior to any change in location and the creation of a new
location of (a) the principal place of business or chief executive office and
(b) the offices where the Pledgor's books and records and related information
concerning the Pledged Collateral are kept; provided, however, that no such
change may be effected before all filings required to be made and all other
necessary action to preserve the perfection of the first priority security
interest of the Senior Note Trustee in the Pledged Collateral shall have been
made or taken.
14
The Pledgor will not change its name, identity or structure in any manner
which might make any financing statement filed hereunder incorrect or misleading
unless Pledgor shall have given the Senior Note Trustee at least 30 days' prior
written notice thereof and shall have properly amended all financing statements
and properly filed all additional financing statements necessary to maintain the
perfection of the security interest granted hereunder at all times and shall
have provided the Senior Note Trustee with an Officers' Certificate certifying
that the above steps have been taken.
Section 15. Indemnification. The Senior Note Trustee shall have such
indemnity as is provided under Section 8.7 of the Senior Note Indenture.
Section 16. Registration Rights, etc.
(a) If the Senior Note Trustee determines that the registration of any
of the securities included in the Pledged Collateral under, or other compliance
with, the Securities Act or any similar federal or state law is desirable, upon
or at any time after an Event of Default and acceleration of either issue of the
Notes, subject to any applicable Approvals, the Pledgor will use its best
efforts to cause such registration or compliance to be effectively made, at no
expense to the Senior Note Trustee or to the Holders, and to continue any such
registration effective for such time as may be reasonably necessary in the
opinion of the Senior Note Trustee. The Pledgor will reimburse the Senior Note
Trustee upon demand for any expenses incurred by the Senior Note
Trustee(including reasonable attorneys' fees) incurred in connection therewith,
which obligation to pay such expenses shall be secured hereunder.
(b) If the Pledgor is unable to effect a public sale of any or all of
the Pledged Collateral or if the Senior Note Trustee determines that it is
desirable to sell the Pledged Collateral in one or more private sales, subject
to any applicable Approvals, the Senior Note Trustee may limit such sales to a
restricted group of purchasers who will be obliged to agree, among other things,
to acquire such securities for its own account for investment and not with a
view to distribution or resale. The Pledgor acknowledges and agrees that any
such private sale may result in prices and other terms less favorable to the
seller than if such sale were a public sale and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner. The Senior Note Trustee shall be under
no obligation to delay a sale of any of the Pledged Collateral for the period of
time necessary to permit the issuer of such securities to register such
securities for public sale under the Securities Act or under applicable state
securities laws even if such issuer would agree to do so.
15
(c) The Pledgor further agrees to do or cause to be done all such
other acts and things as may be necessary to make such sale or sales of all or
any part of the Pledged Collateral valid and binding and in compliance with any
and all applicable law, rules, regulations, orders or decrees, all at the
Pledgor's expense. The Pledgor further agrees that a breach of any of the
covenants contained in this Pledge Agreement will cause irreparable injury to
the Senior Note Trustee, as secured party, for which the Senior Note Trustee
would have no adequate remedy at law in respect of such breach and, as a
consequence, agrees that each and every covenant contained in this Section 16
shall be specifically enforceable against the Pledgor and the Pledgor waives and
agrees not to assert any defenses against an action for specific performance of
such covenants.
Section 17. Pledgor's Indenture Obligations Absolute. The liability of the
Pledgor under this Pledge Agreement shall remain in full force and effect
without regard to, and shall not be released, suspended, discharged, terminated
or otherwise affected by (a) any change in the time, place or manner of payment
of all or any of the Indenture Obligations, or in any other term of the Senior
Note Indenture, the Senior Notes, 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 the Senior Note
Indenture, the Senior Notes or any assignment or transfer thereof; (b) any lack
of validity or enforceability, in whole or in part, of the Senior Note Indenture
or the Senior Notes; (c) any furnishing of any additional security for the
Indenture Obligations or any acceptance thereof or any release or non-perfection
of any security interest in the Pledged Collateral; (d) any limitation on any
party's liability or obligations under the Senior Note Indenture or the Senior
Notes; (e) any bankruptcy, insolvency, reorganization, composition, adjustment,
dissolution, liquidation or other like proceeding relating to a Pledgor, or any
action taken with respect to this Pledge Agreement by any trustee or receiver,
or by any court, in any such proceeding, whether or not the Pledgor shall have
notice or knowledge of any of the foregoing; (f) any exchange, release or
amendment or waiver of or consent to departure from any agreement pursuant to
which a Lien is created in favor of the Senior Note Trustee for the benefit of
the Holders, pursuant to which a person other than the Pledgor has granted a
security interest; or (g) any other circumstance that might otherwise constitute
a defense available to, or a discharge of the Pledgor.
Section 18. Waiver. To the extent permitted by applicable law, the Pledgor
hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the Indenture Obligations and this Pledge Agreement and
any requirement that the Senior Note Trustee protect, secure, perfect or insure
any security interest or any property subject thereto or exhaust any right or
take any action against the Pledgor or any other person or entity; provided,
however, that the Senior
16
Note Trustee shall in any event take such care in the handling of any Pledged
Collateral in its possession as it takes with respect to Property of a similar
nature in its possession.
Section 19. Termination. Upon payment and performance in full and
satisfaction of all of the obligations of the Issuers or their successors or
assigns under the Senior Note Indenture and all other amounts payable under this
Pledge Agreement, this Pledge Agreement shall terminate and the Senior Note
Trustee shall assign and redeliver to the Pledgor all of the Pledged Collateral
hereunder that has not been sold, disposed of, retained or applied by the Senior
Note Trustee in accordance with the terms hereof. Such reassignment and
redelivery shall be without warranty by or recourse to the Senior Note Trustee,
and shall be at the expense of the Pledgor. At such time, this Pledge Agreement
shall no longer constitute a Lien upon or grant any security interest in any of
the Pledged Collateral, and the Senior Note Trustee shall, at the Pledgor's
expense deliver to the Pledgor written acknowledgment thereof and of
cancellation of this Pledge Agreement in a form reasonably requested by the
Pledgor; provided, however, that this Pledge Agreement shall continue to be
effective or be reinstated, as the case may be, if at any time any payment of
any of the Indenture Obligations is rescinded or must otherwise be returned upon
the insolvency, bankruptcy or reorganization of the Pledgor or any of its
Subsidiaries all as though such payment had not been made.
Section 20. Notices. Any notices or other communications required or
permitted hereunder shall be in writing, and shall be sufficiently given if made
by hand delivery, by telex, by facsimile or registered or certified mail,
postage prepaid, return receipt requested, addressed as provided in Section 12.2
of the Senior Note Indenture.
Any party hereto may by notice to the other party designate such additional
or different addresses as shall be furnished in writing by such party. Any
notice or communication to any party shall be deemed to have been given or made
as of the date so delivered, if personally delivered; when answered back, if
telexed; when receipt is acknowledged, if faxed; and five calendar days after
mailing, if sent by registered or certified mail (except that a notice of change
of address shall not be deemed to have been given until actually received by the
addressee). The Pledgor may give notice to the Holders at the addresses set
forth for them in the register kept by the Registrar under the Senior Note
Indenture or may request that the Senior Note Trustee notify the Holders at such
addresses.
Section 21. Binding Agreement; Assignment. This Pledge Agreement shall be
binding upon and inure to the benefit the Senior Note Trustee, the Pledgor and
its respective successors and permitted assigns. Neither this Pledge Agreement
nor any interest herein or in the Pledged Collateral, or any part thereof, may
be assigned by the Pledgor without the prior written
17
consent of the Senior Note Trustee (which consent shall not be unreasonably
withheld). This Pledge Agreement shall be deemed to be automatically assigned by
the Senior Note Trustee to any person who succeeds such Senior Note Trustee in
accordance with Article VIII of the Senior Note Indenture, and its assignee
shall have all rights and powers of, and act as, such Senior Note Trustee
hereunder.
Section 22. Governing Law. THIS PLEDGE AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT GIVING
EFFECT TO CONFLICT OF LAWS PRINCIPLES THEREOF.
Section 23. Amendments. This Pledge Agreement may not be amended or
modified, except with the consent of the Pledgor and the Senior Note Trustee in
accordance with Article X of the Senior Note Indenture.
Section 24. Severability. In the event that any provision contained in this
Pledge Agreement shall for any reason be held to be illegal or invalid under the
laws of any jurisdiction, such illegality or invalidity shall in no way impair
the effectiveness of any other provision hereof, or of such provision under the
laws of any other jurisdiction; provided, that in the construction and
enforcement of such provision under the laws of the jurisdiction in which such
holding of illegality or invalidity exists, and to the extent only of such
illegality or invalidity, this Pledge Agreement shall be construed and enforced
as though such illegal or invalid provision had not been contained herein.
Section 25. Headings. Section headings used herein are inserted for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Pledge Agreement.
Section 26. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be an
original, and all of which shall together constitute but one and the same
instrument. A complete set of counterparts shall be lodged with the Senior Note
Trustee.
Section 27. Expenses. The Pledgor will upon demand pay to the Senior Note
Trustee the amount of any and all reasonable expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, which the Senior
Note Trustee may incur in connection with (i) the administration of this Pledge
Agreement, (ii) the custody or presentation of, or the sale of, collection from,
or other realization upon, any of the Pledged Collateral, (iii) the exercise or
enforcement of any of the rights of the Senior Note Trustee hereunder or (iv)
the failure by the Pledgor to perform or observe any of the provisions hereof.
18
Section 28. Gaming Laws. This Agreement is subject to any applicable Gaming
Law.
Section 29. No Recourse Against Others. A direct or indirect partner,
director, officer, employee or stockholder, as such, past, present or future of
the Pledgor or any successor entity shall not have any personal liability in
respect of the obligations of the Pledgor under this Agreement by reason of its
status as such partner, stockholder, employee, officer or director, to the
extent such liabilities may be waived under applicable law.
19
IN WITNESS WHEREOF, the parties hereto have caused this Pledge Agreement to
be duly executed and delivered as of the day and year first written above.
XXXXX HOTELS & CASINO RESORTS HOLDINGS, L.P.,
as Pledgor
By: XXXXX HOTELS & CASINO RESORTS, INC.
its general partner
By: /s/ Xxxxxx X. Xxxxxx
------------------------------------
Name: Xxxxxx X. Xxxxxx
Title: Executive Vice President
and Secretary
FIRST BANK NATIONAL ASSOCIATION,
as Senior Note Trustee
By: /s/ Xxxxxxx Xxxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Trust Officer
20
SCHEDULE A
Pledged Securities
================================================================================
Percentage
Issuer Class of Number of
(Pledged Equity Certificate Par of Outstanding
Subsidiary) Interest No.(s) Value Shares Equity
================================================================================
Trump's Castle limited 103 N/A N/A 99%
Associates, L.P. partnership
interest
================================================================================
Trump's Castle common 101 $.01 100 100%
Hotel & Casino, stock
Inc.
================================================================================
