EXHIBIT 10.50
EXHIBIT XVII-A
[FORM OF SUBSIDIARY SECURITY AGREEMENT (ILLINOIS)]
SUBSIDIARY SECURITY AGREEMENT (ILLINOIS)
This SUBSIDIARY SECURITY AGREEMENT (this "Agreement") is dated
as of August 25, 1995 and entered into by and between SOUTHERN ILLINOIS
RIVERBOAT/CASINO CRUISES, INC., an Illinois corporation ("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. 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 ("Company"), of which Grantor is a
wholly-owned subsidiary, 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 Company.
B. Grantor has 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, along with other
Subsidiaries of Company, has guarantied the prompt payment and performance when
due of all obligations of Company under the Credit Agreement.
C. 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, in each case
whether now or hereafter existing or in which Grantor now has or hereafter
acquires an interest and wherever the same may be located (the "Collateral"):
(a) all present and future interest in and to those certain
barges and vessels presently moored, anchored or otherwise located on or around
the land or otherwise used in connection with the Illinois Facilities, whether
such barges or vessels in the present state of impoundment are deemed real,
personal or mixed property, which barges and vessels are described as follows:
(i) that certain vessel Players Riverboat Casino I having Official No. 989886,
built in Mermentau, Louisiana, formerly having its home port at St. Louis,
Missouri, together with (ii) all equipment, earnings, proceeds arising from
operation of any business upon such barges and vessels, parts, attachments and
all other property, whether real, personal or mixed, now or hereafter located
thereon, derived therefrom or used in connection therewith, including, but not
limited to, all moorings, cells, cofferdam enclosures and related ancillary
improvements (collectively, the "Barges").
(b) all present and future chattels, furniture, furnishings,
goods, equipment, fixtures and all other tangible personal property, of whatever
kind and nature, now or hereafter used in connection with or placed or located
within or on any part of the Illinois Facilities (including, without limitation,
any building or structure that is now or that may hereafter be erected within or
on the Illinois Facilities), including, but not limited to, machinery,
materials, goods and equipment now or hereafter used in the construction or
operation of the Illinois Facilities including, without limitation, air
conditioning, heating, electrical, lighting, fire fighting and fire prevention,
food and beverage service, laundry, plumbing, refrigeration, security, sound,
signaling, telephone, television, window washing and other equipment and
fixtures, of whatever kind or nature, including generators, transformers,
switching gear, boilers, burners, furnaces, piping, sprinklers, sinks, tubs,
valves, compressors, motors, carts, dumb waiters, elevators and other lifts,
floor coverings, hardware, keys, locks, organs, pianos, planters, railings,
scales, shelving, signs, tools, machinery, molds, dies, drills, presses,
planers, saws, furniture, business fixtures, trade fixtures, electric, gas and
other motor vehicles, uniforms, vacuum cleaners, hotel or Ship furniture,
furnishings and equipment, bathroom furniture and furnishings (including towels,
bathmats, hamperettes, shower curtains and other bath linens), beds and bedding
(including mattresses, springs, pillows, bed pads, sheets, blankets, comforters,
spreads and other bed linens and furnishings), bric-a-brac, chairs, chests,
vanities, secretaries, bureaus, chiffonniers, love seats, benches, costumers,
smoking stands, sand jars, desks, dressers, hangings, paintings, pictures,
frames, sculptures, lamps, light bulbs, mirrors, night stands, ornaments,
radios, stereo equipment, sofas, statuary, tables, telephones, televisions,
vases, window coverings, foodstuffs, beverages
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(including beer, wine, liquor and other alcoholic beverages), and other
consumables (including soap, shampoo, cleaning supplies and paper goods),
cutlery, cooking, baking and other kitchen utensils and apparatus (including
crockery, fryers, grills, kettles, mixers, pots, pans, pails, racks, steamers
and toasters), china and other dishes, flatware, glassware, hollowware,
serving pieces, trays, table linens, washers, dryers, irons, ironing
boards and other ironing equipment, cables, outlets, plugs, wiring and related
apparatus and fixtures, card readers, cash registers, adding machines,
calculators, computers, keyboards, monitors, printers, printing equipment,
envelopes, stationery, posting machines, blank forms, typewriters, typewriter
stands, other office and accounting equipment and supplies, time stamps, time
recorders, bookkeeping machines, checking machines, payroll machines, computer
reservations systems, equipment used in the operation of casinos within or on
the Illinois Facilities (including but not limited to, gaming equipment/supplies
(as defined in Section 3000.100 of the Rules of the Illinois Gaming Board),
including but not limited to, slot machines, cards, poker chips and gaming
tables) and all other goods, equipment, furnishings, apparatus and fixtures that
are now or may hereafter be located at or used within, at or in connection with
the Illinois Facilities) and all other tangible personal property used or to be
used at or in connection with, or placed or to be placed in, rooms, halls,
lounges, offices, lobbies, lavatories, basements, cellars, vaults or other
portions of the Illinois Facilities or of any other building or buildings
hereafter constructed or erected thereon, whether herein enumerated or not, and
whether or not contained in any such building, and which are used or to be used
or useful in the operation and maintenance thereof, or in any bar, casino,
hotel, restaurant, store, health spa, salon or other business conducted thereon,
together with all replacements and substitutions for any and all personal
property in which Grantor has an interest, including without limitation such
goods and equipment as shall from time to time be located, placed, installed or
used in or upon, or procured for use, or to be used or useful in connection with
the operation of the whole, or any part of, the Illinois Facilities and all
parts thereof and all accessions thereto (any and all such equipment,
replacements, substitutions, parts and accessions being the "Equipment");
(c) all present and future inventory and merchandise in all of
its forms used in connection with or placed or located within or on any part of
the Illinois Facilities (including, but not limited to, (i) all goods held by
Grantor for sale or lease or to be furnished under contracts of service or so
leased or furnished, (ii) all raw materials, work in process, finished goods,
and materials used or consumed in the manufacture, packing, shipping,
advertising, selling, leasing, furnishing or production of such inventory or
otherwise used or consumed in Grantor's business, (iii) all goods in which
Grantor has an interest in mass or a joint or other interest or right of any
kind, (iv) all goods that are returned to or repossessed by Grantor, and (v) all
packing materials, supplies and containers relating to or used in connection
with any of the foregoing, and all accessions thereto and products thereof (all
such inventory, accessions and products being the "Inventory") and all
negotiable documents of title (including without limitation warehouse receipts,
dock receipts and bills of lading) issued by any person covering any of the
foregoing (any such negotiable document of title being a "Negotiable Document of
Title");
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(d) all present and future accounts, accounts receivable,
rentals, revenues, receipts, payments, and income of any nature whatsoever
derived from or received with respect to hotel rooms, rooms on any Ship, banquet
facilities, convention facilities, retail premises, bars, restaurants, casinos
parking lots and garages and any other facilities within or on the Illinois
Facilities and services and amenities provided in connection therewith, all
agreements, contracts, leases, contract rights, rights to payment, instruments,
documents, chattel paper, security agreements, guaranties, undertakings, surety
bonds, insurance policies, condemnation deposits and awards, notes and drafts,
securities, certificates of deposit and the right to receive all payments
thereon or in respect thereof (whether principal, interest, fees or otherwise),
contract rights (other than rights under contracts or governmental permits that
may not be transferred by law), including, without limitation, rights to all
deposits from tenants and other users of the Illinois Facilities leased by
Grantor, rights under all contracts relating to the construction, renovation or
restoration of any of the improvements now or hereafter located within or on the
Illinois Facilities or the financing thereof and all rights under payment or
performance bonds, warranties, and guaranties, and all rights to payment from
any credit/charge card organization or entity such as or similar to, and
including, without limitation, the organizations or entities that sponsor and
administer, respectively, the American Express Card, the Xxxxx Xxxxxxx Card, the
Diners Club Card, the Discover Card, the MasterCard and the Visa Card, books of
account, and principal, interest and payments due on account of goods sold,
services rendered, loans made or credit extended, within, on or in connection
with the Illinois Facilities and all forms of obligations owing to and rights of
Grantor or in which Grantor may have any interest, however created or arising
(any and all such accounts, contract rights, chattel paper, documents,
instruments, general intangibles and other obligations being the "Accounts", and
any and all such security agreements, leases and other contracts being the
"Related Contracts");
(e) the agreements listed in Schedule I annexed hereto, as each
such agreement may be amended, supplemented or otherwise modified from time to
time (said agreements, as so amended, supplemented or otherwise modified, being
referred to herein individually as an "Assigned Agreement" and collectively as
the "Assigned Agreements"), including without limitation (i) all rights of
Grantor to receive moneys due or to become due under or pursuant to the Assigned
Agreements, (ii) all rights of Grantor to receive proceeds of any insurance,
indemnity, warranty or guaranty with respect to the Assigned Agreements, (iii)
all claims of Grantor for damages arising out of any breach of or default under
the Assigned Agreements, and (iv) all rights of Grantor to terminate, amend,
supplement, modify or exercise rights or options under the Assigned Agreements,
to perform thereunder and to compel performance and otherwise exercise all
remedies thereunder;
(f) all present and future right, title and interest of Grantor
in and to all leases, subleases, licenses, concessions, franchises and other use
or occupancy agreements (excepting, however, agreements made by Grantor in the
ordinary course of business for short-term use by members of the public of any
guest rooms and public rooms, including banquet and meeting facilities, located
within or on the Illinois Facilities, and any amendments, modifications,
extensions or renewals thereof (collectively, "Leases"), whether
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or not specifically herein described, that now or may hereafter pertain to or
affect the Illinois Facilities or any portion thereof and all amendments to the
same, including, but not limited to, the following: (i) all payments due and to
become due under such Leases, whether as rent, damages, insurance payments,
condemnation awards, or otherwise; (ii) all claims, rights, powers, privileges
and remedies under such Leases; and (iii) all rights of Grantor under such
Leases to exercise any election or option (including without limitation, any
right of Grantor under any ground lease to purchase the fee interest of the
lessor thereunder (the "Options")), or to give or receive any notice, consent,
waiver or approval, or to accept any surrender of the premises or any part
thereof, together with full power and authority in the name of Grantor, or
otherwise, to demand and receive, enforce, and collect any receipt for any or
all of the foregoing, to endorse or execute any checks or any instruments or
orders, to file any claims, and to take any other action that Secured Party may
deem necessary or advisable in connection therewith;
(g) all present and future deposit accounts of Grantor,
including, without limitation, those deposit accounts set forth on Schedule II
hereto, any demand, time, savings, passbook or like account maintained by
Grantor with any bank, savings and loan association, credit union or like
organization, and all money, cash and cash equivalents of Grantor, whether or
not deposited in any such deposit account and all such accounts maintained with
Secured Party;
(h) all present and future general intangibles (including but
not limited to all governmental permits relating to construction or other
activities within or on the Illinois Facilities), the Options, all tax refunds
of every kind and nature to which Grantor now or hereafter may become entitled,
however arising, all other refunds, and all deposits, goodwill, choses in
action, rights to payment or performance, gambling debts or gaming debts owed to
Grantor by Grantor's patrons (whether or not evidenced by a note), judgments
taken on any rights or claims included in the Collateral, trade secrets,
computer programs, software, customer lists, business names, trademarks, trade
names and service marks (including, but not limited to: "Players Riverboat
Casino," "Merv's Landing," and "Players' Show Lounge" and any derivation
thereof, including any and all state and federal applications and registrations
thereof), patents, patent applications, licenses, copyrights, registration and
franchise rights, technology, processes, proprietary information, insurance
proceeds and all goodwill associated with any of the foregoing;
(i) all present and future books and records, including,
without limitation, books of account and ledgers of every kind and nature,
ledger cards, computer programs, tapes, disks and other information storage
devices, all related data processing software, and all electronically recorded
data relating to Grantor or its business related to the Illinois Facilities, all
receptacles and containers for such records, and all files and correspondence;
(j) all present and future maps, plans, specifications,
surveys, studies, reports, data and drawings (including, without limitation,
architectural, structural, mechanical and engineering plans and specifications,
studies, data and drawings) prepared for or relating
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to the development of the Illinois Facilities or the construction, renovation or
restoration of any improvements within or on the Illinois Facilities or the
extraction of minerals, sand, gravel or other valuable substances from the
Illinois Facilities, together with all amendments and modifications thereto;
(k) all present and future licenses, permits, variances,
special permits, franchises, certificates, rulings, certifications, validations,
exemptions, filings, registrations, authorizations, consents, approvals,
waivers, orders, rights and agreements (including options, option rights and
contract rights), other than those (including non-transferrable gaming permits)
that may not be transferred by law, now or hereafter obtained by Grantor from
any governmental authority having or claiming jurisdiction over the Illinois
Facilities or any other element of the Collateral or providing access thereto,
or the operation of any business within, on, at, or from the Illinois
Facilities;
(l) all present and future goods, including, without
limitation, all consumer goods, inventory, equipment, and other supplies, of
whatever kind or nature, and any and all other goods, wherever located, used or
to be used in connection with or in the conduct of Grantor's business or the
Illinois Facilities;
(m) all present and future stocks, bonds, debentures,
securities, subscription rights, options, warrants, puts, calls, certificates,
partnership interests, joint venture interests, investments, brokerage accounts
and all rights, preferences, privileges, dividends, distributions, redemption
payments and liquidation payments received or receivable with respect thereto;
(n) all present and future accessions, appurtenances,
components, repairs, repair parts, spare parts, replacements, substitutions,
additions, issue and improvements to or of or with respect to any of the
foregoing;
(o) all other fixtures and storage and office facilities, and
all accessions thereto and products thereof and all water stock relating to
the Illinois Facilities;
(p) to the extent not covered by any of the preceding clauses,
any and all of Grantor's present and future machinery, equipment, furniture,
furnishings and fixtures, of every type and description, now or hereafter
located on any of the Illinois Ships or any Barge or used in connection
therewith, together with all accessories, attachments, accessions,
substitutions, replacements and additions thereto;
(q) all other tangible and intangible personal property of
Grantor used in connection with or placed or located within or on any part of
the Illinois Facilities;
(r) all rights, remedies, powers and privileges of Grantor
with respect to any of the foregoing; and
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(s) any and all proceeds, products, rents, income and profits
of any of the foregoing, including, without limitation, all money, accounts,
general intangibles, deposit accounts, documents, instruments, chattel paper,
goods, insurance proceeds (whether or not Secured Party is the loss payee), and
any other tangible or intangible property received upon the sale or disposition
of any of the foregoing (it being agreed, for purposes hereof, that the term
"proceeds" includes whatever is receivable or received when any of the
Collateral is sold, collected, exchanged or otherwise disposed of, whether such
disposition is voluntary or involuntary).
Notwithstanding anything to the contrary contained herein,
Secured Party acknowledges that it has no security interest in any cash of
Grantor described in clauses (f), (g) and (l) above, to the extent such a
security interest is prohibited by the Illinois Riverboat Gambling Act.
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. Grantor Remains Liable. Anything contained herein to
the contrary notwithstanding, (a) Grantor shall remain liable under any
contracts and agreements included in the Collateral, to the extent set forth
therein, to perform all of its duties and obligations thereunder to the same
extent as if this Agreement had not been executed, (b) the exercise by Secured
Party of any of its rights hereunder shall not release Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (c) Secured Party shall not have any obligation or liability
under any contracts and agreements included in the Collateral by reason of this
Agreement or otherwise, nor shall Secured Party be obligated to perform any of
the obligations or duties of Grantor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.
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SECTION 4. Representations and Warranties. Grantor represents
and warrants as follows:
(a) Ownership of Collateral. Except for the security interest
created by this Agreement and any Liens permitted pursuant to subsection 7.2A of
the Credit Agreement, Grantor owns the Collateral free and clear of any Lien.
Except such as may have been filed in favor of Secured Party relating to this
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.
(b) Location of Equipment and Inventory. All of the Equipment
and Inventory is, as of the date hereof, located at the places specified in
Schedule III annexed hereto.
(c) Office Locations; Other Names. The chief place of business,
the chief executive office and the office where Grantor keeps its records
regarding the Accounts is, and has been for the four month period preceding the
date hereof, located at the place listed on Schedule IV annexed hereto. 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).
(d) Delivery of Certain Collateral. All chattel paper and all
notes and other instruments (excluding checks) comprising any and all items of
Collateral have been delivered to Secured Party duly endorsed and accompanied by
duly executed instruments of transfer or assignment in blank.
(e) Governmental Authorizations. 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 (w) authorization from the
Illinois Gaming Authorities for the grant of security interest in part of the
Illinois Facilities, which authorization has been obtained prior to the date
hereof, (x) authorization from the Illinois Gaming Authorities for the exercise
by Secured Party of certain of its rights and remedies hereunder, (y) the filing
of a Uniform Commercial Code financing statement with the Secretary of State of
Illinois and the Illinois Mortgage with the Massac County, Illinois Recorder of
Deeds 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 describing the
Collateral with the Secretary of State of Illinois and the Illinois Mortgage
with the Massac County, Illinois Recorder of Deeds, 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.
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(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 item of
chattel paper included in the Accounts, each Related Contract and, at the
reasonable request of Secured Party, 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) if any Account shall be evidenced by a promissory note or other
instrument (excluding checks) or chattel paper, deliver and pledge to Secured
Party hereunder such note or instrument or the original counterpart of such
chattel paper, duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance satisfactory to Secured Party,
(iii) 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, (iv)
promptly after the acquisition by Grantor of any item of Equipment which is
covered by a certificate of title under a statute of any jurisdiction under the
law of which indication of a security interest on such certificate is required
as a condition of perfection thereof, execute and file with the registrar of
motor vehicles or other appropriate authority in such jurisdiction an
application or other document requesting the notation or other indication of the
security interest created hereunder on such certificate of title, (v) at any
reasonable time, upon reasonable request by Secured Party, exhibit the
Collateral to and allow inspection of the Collateral by Secured Party, or
persons designated by Secured Party, and (vi) 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.
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(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 use or permit any Collateral to be used unlawfully or
in violation of any provision of this Agreement or any applicable statute,
regulation or ordinance or any policy of insurance covering the Collateral;
(b) notify Secured Party of any change in Grantor's name,
identity or corporate structure within 15 days of such change;
(c) 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 Accounts and all
originals of all chattel paper that evidence Accounts;
(d) if Secured Party gives value to enable Grantor to acquire
rights in or the use of any Collateral, use such value for such purposes; and
(e) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including claims for labor, materials and supplies) against, the Collateral,
except to the extent the validity thereof is being contested in good faith and
for which adequate reserves have been established; 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. Special Covenants With Respect to Equipment and
Inventory. Grantor shall:
(a) keep the Equipment and Inventory at the places therefor
specified on Schedule III annexed hereto or, upon 30 days' prior written notice
to Secured Party, at such other places in jurisdictions where all 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 such Equipment and Inventory shall have
been taken;
(b) cause the Equipment to be maintained and preserved in the
same condition, repair and working order as when new, ordinary wear and tear
excepted, and in
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accordance with Grantor's past practices, and shall forthwith, or, in the case
of any loss or damage to any of the Equipment when subsection (c) or (d) of
Section 8 is not applicable, as quickly as practicable after the occurrence
thereof, make or cause to be made all repairs, replacements and other
improvements in connection therewith that are necessary or desirable to such
end. Grantor shall promptly furnish to Secured Party a statement respecting any
material loss or damage to any of the Equipment (the requirements under this
subsection 7(b) being supplemental to and not exclusive of the requirements of
Company under Section 6.4 of the Credit Agreement relating to maintenance of
property);
(c) provide prompt written notice to Secured Party of any
breach or default by any party to any Assigned Agreement;
(d) notify Secured Party of the establishment of any deposit
accounts after the date hereof and take such steps as may be reasonably
requested by Secured Party to perfect Secured Party's lien therein;
(e) perform all acts that are necessary or desirable to cause
all licenses, permits, variances, special permits, franchises, certificates,
rulings, certifications, validations, exemptions, filings, registrations,
authorizations, consents, approvals, waivers, orders, rights, and agreements in
which a security interest has been conveyed to Secured Party pursuant to
subsection 1(j) to remain in full force and effect;
(f) keep correct and accurate records of the Inventory,
itemizing and describing the kind, type and quantity of Inventory, Grantor's
cost therefor and (where applicable) the current list prices for the Inventory
substantially consistent with the practice of other gaming institutions in
connection with their gaming operations in the State of Illinois;
(g) upon the occurrence of an Event of Default, if any
Inventory is in possession or control of any of Grantor's agents or processors,
instruct such agent or processor to hold all such Inventory for the account of
Secured Party and subject to the instructions of Secured Party; and
(h) promptly upon the issuance and delivery to Grantor of any
Negotiable Document of Title (other than any one or more Negotiable Documents of
Title covering Inventory which, in the ordinary course of business, is in
transit either (i) from a supplier to Grantor or (ii) to customers of Grantor),
deliver such Negotiable Document of Title to Secured Party.
SECTION 8. Insurance.
(a) Grantor shall, at its own expense, maintain insurance with
respect to the Equipment and Inventory in accordance with the terms imposed on
Company by the Credit Agreement, this Section 8 and the Illinois Mortgage. Such
insurance shall include, without limitation, property damage insurance and
liability insurance. Each policy for
XVII-A-11
property damage insurance shall provide for all losses (except for losses of
less than $2,500,000 per occurrence) to be paid directly to Secured Party as
provided in clauses (c) and (d) below. Each policy shall in addition name
Grantor and Secured Party as insured parties thereunder (without any
representation or warranty by or obligation upon Secured Party) as their
interests may appear and have attached thereto a loss payable clause acceptable
to Secured Party that shall (i) contain an agreement by the insurer that any
loss thereunder shall be payable to Secured Party notwithstanding any action,
inaction or breach of representation or warranty by Grantor, (ii) provide that
there shall be no recourse against Secured Party for payment of premiums or
other amounts with respect thereto, and (iii) provide that at least 30 days'
prior written notice of cancellation, material amendment, reduction in scope or
limits of coverage or of lapse shall be given to Secured Party by the insurer.
Grantor shall, if reasonably requested by Secured Party, deliver to Secured
Party original or duplicate policies of such insurance and, as often as Secured
Party may reasonably request, a report of a reputable insurance broker with
respect to such insurance. Further, Grantor shall, at the reasonable request of
Secured Party, duly execute and deliver instruments of assignment of such
insurance policies to comply with the requirements of subsection 5(a) and cause
the respective insurers to acknowledge notice of such assignment. The
requirements under this subsection 8(a) shall be supplemental to and not
exclusive of the requirements imposed on Company under Section 6.4 of the Credit
Agreement relating to insurance.
(b) Reimbursement under any liability insurance maintained by
Grantor pursuant to this Section 8 may be paid directly to the Person who shall
have incurred liability covered by such insurance. In case of any loss involving
damage to Equipment or Inventory when subsection (c) or (d) of this Section 8 is
not applicable, Grantor shall make or cause to be made the necessary repairs to
or replacements of such Equipment or Inventory, and any proceeds of insurance
maintained by Grantor pursuant to this Section 8 shall be paid to Grantor as
reimbursement for the costs of such repairs or replacements.
(c) Upon the occurrence of any Event of Loss involving
Equipment or Inventory and pursuant to which Grantor receives Net Cash Proceeds
equal to or in excess of $2,500,000, all insurance payments in respect of such
Equipment or Inventory shall be paid to and applied by Secured Party as
specified in subsection 2.4A(ii)(b) of the Credit Agreement.
(d) Notwithstanding the provisions of Section 8(c), upon the
occurrence and during the continuation of any Event of Default, all insurance
payments in respect of any Equipment or Inventory shall be paid to and applied
by Secured Party as specified in Section 18.
SECTION 9. Special Covenants with respect to Accounts and Related
Contracts.
(a) Grantor shall keep its chief place of business and chief
executive office and the office where it keeps its records concerning the
Accounts and Related
XVII-A-12
Contracts at the location therefor specified in Section 4 or, upon 30 days'
prior written notice to Secured Party, at such other location in a jurisdiction
where all 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 such
Accounts and Related Contracts shall have been taken. Grantor will hold and
preserve such records and will permit representatives of Secured Party at any
time during normal business hours to inspect and make abstracts from such
records, and Grantor agrees to render to Secured Party, at Grantor's cost and
expense, such clerical and other assistance as may be reasonably requested with
regard thereto. Promptly upon the request of Secured Party, Grantor shall
deliver to Secured Party complete and correct copies of each Related Contract.
(b) Grantor shall, for not less than 5 years from the date on
which such Account arose, maintain (i) complete records of each Account,
including records of all payments received, credits granted and merchandise
returned, and (ii) all documentation relating thereto.
(c) Except as otherwise provided in this subsection (c),
Grantor shall continue to collect, at its own expense, all amounts due or to
become due to Grantor under the Accounts (but, other than with respect to
security deposits, in no event more than one month in advance) and Related
Contracts. In connection with such collections, Grantor may take (and, at
Secured Party's direction, shall take) such action as Grantor or Secured Party
may deem necessary or advisable to enforce collection of amounts due or to
become due under the Accounts; provided, however, that Secured Party shall have
the right at any time, upon the occurrence and during the continuation of an
Event of Default or a Potential Event of Default and upon written notice to
Grantor of its intention to do so, to notify the account debtors or obligors
under any Accounts of the assignment of such Accounts to Secured Party and to
direct such account debtors or obligors to make payment of all amounts due or to
become due to Grantor thereunder directly to Secured Party, to notify each
Person maintaining a lockbox or similar arrangement to which account debtors or
obligors under any Accounts have been directed to make payment to remit all
amounts representing collections on checks and other payment items from time to
time sent to or deposited in such lockbox or other arrangement directly to
Secured Party and, upon such notification and at the expense of Grantor, to
enforce collection of any such Accounts and to adjust, settle or compromise the
amount or payment thereof, in the same manner and to the same extent as Grantor
might have done. After receipt by Grantor of the notice from Secured Party
referred to in the proviso to the preceding sentence, (i) all amounts and
proceeds (including checks and other instruments) received by Grantor in respect
of the Accounts and the Related Contracts shall be received in trust for the
benefit of Secured Party hereunder, shall be segregated from other funds of
Grantor and shall be forthwith paid over or delivered to Secured Party in the
same form as so received (with any necessary endorsement) to be held as cash
Collateral and applied as provided by Section 18, and (ii) Grantor shall not
adjust, settle or compromise the amount or payment of any Account, or release
wholly or partly any account debtor or obligor thereof, or allow any credit or
discount thereon.
XVII-A-13
SECTION 10. Special Provisions With Respect to the Assigned
Agreements.
(a) Grantor shall at its expense:
(i) perform and observe all terms and provisions of
the Assigned Agreements to be performed or observed by it, maintain the
Assigned Agreements in full force and effect, enforce the Assigned
Agreements in accordance with their terms, and take all such action to
such end as may be from time to time reasonably requested by Secured
Party; and
(ii) furnish to Secured Party, promptly upon receipt
thereof, copies of all notices of default received by Grantor under or
pursuant to the Assigned Agreements, and from time to time (A) furnish
to Secured Party such information and reports regarding the Assigned
Agreements as Secured Party may reasonably request and (B) upon
reasonable request of Secured Party make to the appropriate
counterparty to an Assigned Agreement such demands and requests for
information and reports or for action as Grantor is entitled to make
under the Assigned Agreements.
(b) Grantor shall not, without the prior written consent of
Requisite Lenders, which consent shall not be unreasonably withheld:
(i) cancel or terminate any of the Assigned Agreements
or consent to or accept any cancellation or termination thereof if such
cancellation or termination, together with all other such cancellations
or terminations, would result in a Material Adverse Effect;
(ii) amend or otherwise modify the Assigned Agreements
or give any consent, waiver or approval thereunder if the effect of
such amendment or modification, together with all other amendments,
modifications, consents, waivers or approvals made or consents, waivers
or approvals given, is to increase materially the obligations of
Grantor thereunder or to confer any additional rights on the
counterparties to such Assigned Agreements that could reasonably be
expected to be materially adverse to Grantor or Lenders;
(iii) waive any default under or breach of the
Assigned Agreements;
(iv) consent to or permit or accept any prepayment of
amounts to become due under or in connection with the Assigned
Agreements, except as expressly provided therein; or
XVII-A-14
(v) take any other action in connection with the
Assigned Agreements that would impair the value of the interest or
rights of Grantor thereunder or that would impair the interest or
rights of Secured Party.
SECTION 11. Deposit Accounts. Upon the occurrence and during the
continuation of an Event of Default, Secured Party and each Lender may exercise
dominion and control over, and refuse to permit further withdrawals (whether of
money, securities, instruments or other property) from any deposit accounts
maintained with Secured Party or such Lender constituting part of the
Collateral.
SECTION 12. License of Patents, Trademarks, Copyrights, etc.
Grantor hereby assigns, transfers and conveys to Secured Party, effective upon
the occurrence of any Event of Default, the nonexclusive right and license to
use all trademarks, tradenames, service marks, copyrights, customers lists,
patents or technical processes owned or used by Grantor that relate to the
Collateral and any other collateral granted by Grantor as security for the
Secured Obligations, together with any goodwill associated therewith, all to the
extent necessary to enable Secured Party to use, possess and realize on the
Collateral and to enable any successor or assign to enjoy the benefits of the
Collateral. This right and license shall inure to the benefit of all successors,
assigns and transferees of Secured Party and its successors, assigns and
transferees, whether by voluntary conveyance, operation of law, assignment,
transfer, foreclosure, deed in lieu of foreclosure or otherwise. Such right and
license is granted free of charge, without requirement that any monetary payment
whatsoever be made to Grantor.
SECTION 13. Transfers and Other Liens. Grantor shall not:
(a) sell, assign (by operation of law or otherwise) or otherwise
dispose of any of the Collateral, except as permitted by the Credit Agreement;
or
(b) except for the security interest created by this Agreement
and the interests disclosed in Schedule V hereto which are permitted by the
Credit Agreement, 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.
SECTION 14. 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 obtain and adjust insurance required to be maintained by
Grantor or paid to Secured Party pursuant to Section 8;
XVII-A-15
(b) to ask for, 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;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses (a) and (b)
above;
(d) to file any claims or take any action or institute any
proceedings (including, without limitation, any proceeding before any Illinois
Gaming Authority) 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;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined by Secured Party in its
sole discretion, any such payments made by Secured Party to become obligations
of Grantor to Secured Party, due and payable immediately without demand;
(f) to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with Accounts and other
documents relating to the Collateral; and
(g) upon the occurrence and during the continuation of an Event
of Default, generally to sell, transfer, pledge, make any agreement with respect
to or otherwise deal with any of the Collateral as fully and completely as
though Secured Party were the absolute owner thereof for all purposes, and 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 15. 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 expenses of Secured Party incurred
in connection therewith shall be payable by Grantor under Section 20.
SECTION 16. 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 moneys actually received by it hereunder, Secured Party shall
have no duty as to any Collateral or as to the taking of 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
XVII-A-16
and preservation of Collateral in its possession if such Collateral is
accorded treatment substantially equal to that which Secured Party
accords its own property.
SECTION 17. Remedies.
(a) Notwithstanding any other provision hereof, if Secured
Party elects, upon any Event of Default, to sell real property and any
of the Collateral together under the Illinois Mortgage and applicable
law, then the terms of the Illinois Mortgage shall, with respect to
such sale and Collateral, control and supersede any terms in this
Agreement with respect to such sale and Collateral; provided that
Secured Party's election to exercise remedies under the Illinois
Mortgage shall have no effect on the terms contained in this Agreement
with respect to any Collateral as to which Secured Party has not so
elected.
(b) 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 (the "Code") (whether or not the Code applies to
the affected Collateral), and also may (a) require Grantor to, and
Grantor hereby agrees that it will at its expense and upon request of
Secured Party forthwith, assemble all or part of the Collateral as
directed by Secured Party and make it available to Secured Party at a
place to be designated by Secured Party that is reasonably convenient
to both parties, (b) enter onto the property where any Collateral is
located and take possession thereof with or without judicial process,
(c) prior to the disposition of the Collateral, store, process, repair
or recondition the Collateral or otherwise prepare the Collateral for
disposition in any manner to the extent Secured Party deems
appropriate, (d) to the extent permitted by applicable law, take
possession of Grantor's premises or place custodians in exclusive
control thereof, remain on such premises and use the same and any of
Grantor's equipment for the purpose of completing any work in process,
taking any actions described in the preceding clause (c) and collecting
any Secured Obligation, and (e) 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 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. Secured Party or any Lender may
be the purchaser of any or all of the Collateral at any such sale and
Secured Party, as administrative 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
XVII-A-17
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 deficiency and the fees of any
attorneys employed by Secured Party to collect such deficiency.
Notwithstanding anything to the contrary contained herein, if,
upon an Event of Default hereunder or under the Credit Agreement and
foreclosure upon any gaming permits pledged and assigned herein,
Secured Party is not qualified under the Illinois Riverboat Gambling
Act to hold such gaming permits, then Secured Party shall designate an
appropriately qualified third party to which an assignment of such
gaming permits can be made in compliance with the Illinois Riverboat
Gambling Act.
SECTION 18. 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 20;
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
XVII-A-18
THIRD: To the payment to or upon the order of Grantor, or to
whomsoever 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 19. 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 the Illinois
Riverboat Gambling Act.
(b) Without limiting the generality of the foregoing, all
required prior approvals under the Illinois Riverboat Gambling Act will be
obtained in connection with Secured Party's exercise of any of the rights set
forth in Section 15 or the remedies set forth in Section 17 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 Illinois 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 Illinois Gaming Authorities the transferor's portion of
any application or applications for consent to the transfer of control thereof
necessary or appropriate under the Illinois Riverboat Gambling Act for approval
of any sale or transfer of the Collateral pursuant to the exercise of Secured
Party's remedies under Section 17.
SECTION 20. 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.
(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, preservation, use or operation 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.
XVII-A-19
SECTION 21. Continuing Security Interest; Transfer of Loans or
Letters of Credit. 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 termination, 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 or
Administrative Agent may assign any Letters of Credit issued 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 termination, 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 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 22. Secured Party as Administrative Agent.
(a) 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.
(b) Secured Party shall at all times be the same Person that is
Administrative Agent under the Credit Agreement. Written notice of resignation
by Administrative Agent pursuant to subsection 9.5 of the Credit Agreement shall
also constitute notice of resignation as Secured Party under this Agreement;
removal of Administrative 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 Administrative 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
Administrative Agent under subsection 9.5 of the Credit Agreement by a successor
Administrative Agent, that successor Administrative 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 the 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
XVII-A-20
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 Administrative
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 23. Amendments; Etc. No amendment, modification,
termination or waiver of any provision of this Agreement, and no 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, in the case of any such
amendment or modification, by Grantor. Any such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
it was given.
SECTION 24. 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 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 25. 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 26. 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 27. 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 28. 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
XVII-A-21
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 29. 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 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 addresses as provided in Section 24, 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 30. 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.
XVII-A-22
SECTION 31. 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]
XVII-A-23
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.
SOUTHERN ILLINOIS RIVERBOAT/CASINO
CRUISES, 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 I
TO SECURITY AGREEMENT
Assigned Agreements
A. ILLINOIS PROJECT AGREEMENTS:
1. Purchase Agreement dated as of June 23, 1992 by and among Players
International, Inc. ("PII"), Southern Illinois Riverboat/Casino Cruises,
Inc. ("SIRCC") and The Xxxxxxx Group, Inc. ("TGG").
2. 1992 Series A Exchangeable Debenture of SIRCC issued to TGG on June 23,
1992 in the aggregate principal amount of $2,250,000.
3. 1992 Series A Warrant of PII to purchase 1,948,000 shares of common stock
issued to TGG on June 23, 1992.
4. Registration Rights Agreements dated June 23, 1992 between PII and TGG.
5. Joint Venture Agreement dated May 6, 1993 between SIRCC and Amerihost
Development, Inc.
6. Lease Agreement by and between Riverfront Realty Corporation ("RRC") and
Burlington Northern Railroad Company dated as of August 1, 1992.
7. Lease Agreement by and among Burlington Northern Railroad Company and SIRCC
dated May 27, 1992 and assigned to RRC by Assignment of Lease dated
September 16, 1992.
8. Purchase Agreement dated June 23, 1992 by and among SIRCC, PII and certain
Purchasers.
9. 1992 Series B Exchangeable Debenture of SIRCC.
10. 1992 Series B Warrant to Purchase Common Stock of PII.
11. Lease dated December 10, 1990 by and between PCI and the City of
Metropolis, Amendments to Lease dated May 26, 1992, Amendment and
Assignment of Lease dated August 25, 1995.
12. Agreement of Limited Partnership of Metropolis, IL 1292 Limited
Partnership.
XVI-I-1
SCHEDULE II
TO SECURITY AGREEMENT
Deposit Accounts
XVI-II-1
SCHEDULE III
TO SECURITY AGREEMENT
Locations of Equipment:
Locations of Inventory:
XVI-III-1
SCHEDULE IV
TO SECURITY AGREEMENT
Chief Executive Offices
XVI-III-2
SCHEDULE V
TO SECURITY AGREEMENT
Existing Permitted Liens
XVI-IV-1
