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Exhibit 10.2
HORSESHOE NOTE PLEDGE AND SECURITY AGREEMENT
HORSESHOE GAMING HOLDING CORP., a Delaware corporation (the
"Pledgor"), HORSESHOE GAMING, L.L.C., a Delaware limited liability company (the
"Obligor"), and U.S. TRUST COMPANY, NATIONAL ASSOCIATION (formerly known as U.S.
Trust Company of California, N.A.), as trustee (the "Trustee") for the
registered holders from time to time (the "Holders") of the Notes (as defined
herein) issued by the Pledgor under the Indenture referred to below, hereby
enter into this HORSESHOE NOTE PLEDGE AGREEMENT (this "Pledge Agreement"), as of
and on May 11, 1999.
Capitalized terms not otherwise defined herein have the meanings
given to them in the Indenture referred to below.
RECITALS
A. The Pledgor and the Trustee have entered into that certain
Indenture, dated as of the date hereof (as amended, restated, supplemented or
otherwise modified from time to time, the "Indenture"), under which the Pledgor
is issuing on the date hereof $600,000,000 in aggregate principal amount of
85/8% Senior Subordinated Notes due 2009 (together with any notes that may from
time to time be issued in substitution therefor, the "Notes").
B. The Obligor has executed a promissory note in the original
principal amount of $240,349,125.00, dated as of the date hereof (the "Horseshoe
Note"), in favor of the Pledgor.
C. Horseshoe Entertainment, L.P., a Louisiana limited partnership,
and Xxxxxxxx Property Group, Limited Partnership, a Mississippi limited
partnership (each, a "Guarantor"), have each executed a written guarantee, dated
as of the date hereof (the "Guarantees") of the Obligor's payment of all amounts
due, and its performance of all its other obligations under, the Horseshoe Note.
D. The Pledgor has entered into a Security and Control Agreement,
dated as of the date hereof (the "Security Agreement"), with the Trustee, as
trustee and as securities intermediary (as such, the "Securities Intermediary")
thereunder, under which the Trustee will have a security interest in a
securities account main-
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tained by the Securities Intermediary and funded by a portion of the proceeds of
the Notes, and in certain other collateral specified therein, to secure the
Pledgor's performance of the Obligations (as defined below).
E. It is a condition to the issuance of the Notes that the Pledgor
and the Obligor enter into this Pledge Agreement with the Trustee and that the
Pledgor (i) pledge the Horseshoe Note to the Trustee (for the benefit of the
Holders of the Notes), and (ii) grant a security interest in the Guarantees to
the Trustee (for the benefit of the Holders of the Notes), all in accordance
with the provisions hereof, to secure further the Pledgor's performance of the
Obligations (as defined below).
NOW, THEREFORE, in view of the foregoing, and in consideration of
the mutual promises herein and the benefits to be received therefrom, the
Pledgor, the Obligor, and the Trustee hereby agree as follows:
SECTION 1. Pledge. The Pledgor hereby pledges to the Trustee, for
its benefit and the ratable benefit of the Holders of the Notes, and grants to
the Trustee, for its benefit and the ratable benefit of the Holders of the
Notes, a security interest in, the following (the "Pledged Collateral"):
(i) the Horseshoe Note, the Pledgor's right to receive the
Obligor's performance under the Horseshoe Note, and all interest, cash,
instruments, and other property from time to time received, receivable or
otherwise distributed on account of or in exchange for the Horseshoe Note;
(ii) each Guarantee;
(iii) the Pledgor's right to receive each Guarantor's
performance of its obligations under its respective Guarantee, and all
interest, cash, instruments, and other property from time to time
received, receivable or otherwise distributed on account of or in exchange
for either or both Guarantees; and
(iv) all proceeds of any and all of the foregoing (including,
without limitation, proceeds that constitute property of the types
described above).
SECTION 2. Security for Obligations. This Pledge Agreement and the
security interest granted hereby secure (i) the Pledgor's prompt and complete
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payment of all amounts due, either at maturity or upon acceleration, under the
Notes and, (ii) the Pledgor's timely and full payment and performance of all its
other obligations under the Notes, the Indenture, the Registration Rights
Agreement, the Security Agreement, and this Pledge Agreement (collectively, the
"Obligations").
SECTION 3. Delivery of Pledged Collateral; No Amendment of Horseshoe
Note.
(a) On the Issue Date (as defined in the Indenture), the Pledgor
shall deliver to the Trustee an executed copy of this Pledge Agreement
together with the original Horseshoe Note and the original of all
certificates or other instruments representing or evidencing the Pledged
Collateral, all in form and substance satisfactory to the Trustee.
(b) The Pledgor agrees that, before the Termination Date (as defined
below) and so long as the Horseshoe Note is in the Trustee's possession,
the Pledgor shall not seek to amend or modify or waive any provision of
the Horseshoe Note or either Guarantee without the Trustee's prior written
consent.
(c) Concurrently with the execution and delivery of this Pledge
Agreement, the Pledgor shall deliver to the Trustee executed copies of
proper financing statements, which shall be duly filed in the office of
the Secretary of State of Nevada, covering the Pledged Collateral
described in this Pledge Agreement. A single financing statement, covering
both the collateral pledged under this Pledge Agreement and the collateral
pledged under the Security Agreement, may be delivered and filed.
SECTION 4. Pledgor's Instruction; Obligor's Consent.
(a) Before the Maturity Date (as defined in the Horseshoe Note), and
so long as no Event of Default (as defined in the Indenture) has occurred,
the Obligor may make all payments that become due under the Horseshoe Note
to the Pledgor. The Pledgor hereby irrevocably instructs the Obligor and
each Guarantor that, notwithstanding the foregoing, the terms of the
Horseshoe Note, or any other agreement or any instructions from the
Pledgor or any other entity to the contrary, the Obligor and each
Guarantor shall make all payments that become due under the Horseshoe Note
or either Guarantee, as the case may be, to the Trustee (1) if the Trustee
delivers written notice to
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the Obligor and each Guarantor that an Event of Default (as defined in the
Indenture) has occurred and is continuing and (2) on and after the
Maturity Date.
(b) The Obligor hereby consents to the Pledgor's pledge of the
Pledged Collateral, including the Horseshoe Note, to the Trustee and to
all other terms of this Pledge Agreement. Notwithstanding the terms of the
Horseshoe Note or any other agreement or any instructions from the Pledgor
or any other entity to the contrary, the Obligor agrees to make all
payments that become due under the Horseshoe Note, as the case may be, to
the Trustee (1) if the Trustee delivers written notice to the Obligor that
an Event of Default (as defined in the Indenture) has occurred and is
continuing and (2) on and after the Maturity Date. Once the Obligor
becomes obligated to make payments hereunder to the Trustee, it shall
remain so obligated until other wise instructed by the Trustee. The
Obligor shall not enter into any agreement with any other Person that is
inconsistent with its obligations under the Horseshoe Note and this Pledge
Agreement. The Pledgor and the Obligor acknowledge that no amendment,
modification, or waiver of any provision of the Horseshoe Note or either
Guarantee will be valid without the Trustee's prior written consent.
SECTION 5. The Pledgor's and Obligor's Representations and
Warranties. The Pledgor and the Obligor hereby represent and warrant that, as of
the date hereof:
(a) Its execution and delivery of, and its performance of its
obligations under, this Pledge Agreement and (with respect to the Obligor)
the Horseshoe Note will not (i) conflict with any provision of applicable
law or statute, its organizational documents, any material agreement or
other material instrument binding upon it or any of its affiliates, or any
judgment, order or decree of any governmental body, agency or court having
jurisdiction over it or any of its affiliates, or (ii) result in the
creation or imposition of any Lien on any of its assets, except for the
security interest granted to the Trustee herein. No consent, approval,
authorization or order of, qualification with, or other action by any
governmental or regulatory body or agency or any third party is required
for (i) the execution, delivery or performance of this Pledge Agreement
and (with respect to the Obligor) the Horseshoe Note, or (ii) the
Pledgor's grant of, or the perfection and maintenance of, the security
interest created hereby (including its first priority nature).
Notwithstanding the
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foregoing, a breach of any of the representations and warranties in this
Section 5 will not constitute a default under this Pledge Agreement unless
that breach causes a material adverse effect on (i) the validity or
enforceability of this Pledge Agreement or any other material agreement
executed in connection with the transactions contemplated herein or in the
Indenture, (ii) the Pledgor's ability to perform its material obligations
under the Notes and the Indenture, or (iii) the Trustees ability to enjoy
the benefits of this Pledge Agreement as contemplated herein.
(b) The Pledgor and the Obligor have duly and validly authorized,
executed, and delivered this Pledge Agreement. This Pledge Agreement
constitutes the valid and binding agreement of the Pledgor and the
Obligor, enforceable against each of them in accordance with its terms,
except as (i) may be limited by bankruptcy, insolvency, fraudulent
transfer, preference, reorganization, moratorium, or similar laws now or
hereafter in effect relating to or affecting creditors' rights or remedies
generally, (ii) the availability of equitable remedies may be limited by
equitable principles of general applicability and the discretion of the
court considering the matter, and (iii) the exculpation provisions and
rights to indemnification hereunder may be limited by federal and state
securities laws and public policy considerations.
(c) The Pledgor is the legal and beneficial owner of the Horseshoe
Note, free and clear of any Lien or claim of any person or entity (except
for the security interest granted to the Trustee herein). No financing
statement or other instrument similar in effect covering the Pledgor's
interest in the Horseshoe Note is on file in any public office, other than
any financing statement filed under this Pledge Agreement.
(d) The Horseshoe Note evidences the legal and binding obligation of
the Obligor. The Obligor has not agreed to make the payments due under the
Horseshoe Note to any entity other than the Pledgor or (in accordance with
this Pledge Agreement) the Trustee.
(e) The security interest granted to the Trustee herein will
constitute a first priority security interest in the Pledged Collateral
(except, with respect to proceeds, only to the extent permitted by UCC ss.
9-306), enforceable as such against all creditors of the Pledgor and
against any Person purporting to purchase the Pledged Collateral from the
Pledgor, except insofar as enforce-
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ment may be affected by general equitable principles (whether in a
proceeding in equity or at law).
(f) There are no legal or governmental proceedings pending or, to
the best of the Pledgor's knowledge, threatened to which the Pledgor or
any of its affiliates is a party or relating to any property of the
Pledgor or any affiliate that would materially adversely affect the
Pledgor's or the Obligor's power or ability to perform its obligations
under this Pledge Agreement.
(g) The Pledgor's chief executive offices are located at 0000 Xxxxx
Xxxxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx 00000. The Pledgor will not change the
location of its chief executive offices before the Termination Date (as
defined below) without giving at least 30 days' prior written notice to
the Trustee.
(h) No Event of Default (as defined below) exists.
SECTION 6. Further Assurances. The Pledgor shall, at any time and
from time to time and at its expense, promptly execute and deliver all further
instruments and documents, and take all further action, that may be necessary or
desirable, or that the Trustee may reasonably request, in order to perfect and
protect the security interest granted hereby or to enable the Trustee to
exercise and enforce its rights and remedies with respect thereto.
SECTION 7. Transfers and Other Liens. The Pledgor agrees that it
will not (i) sell, assign (by operation of law or otherwise) or otherwise
dispose of, or grant any option with respect to, any of the Pledged Collateral,
or (ii) create or permit to exist any Lien, security interest, option or other
charge or encumbrance upon any of the Pledged Collateral, except for the
security interest under this Agreement.
SECTION 8. Agent Appointed Attorney-in-Fact. The Pledgor hereby
appoints the Trustee as the Pledgor's attorney-in-fact, with full authority in
the place of the Pledgor and in the name of the Pledgor or otherwise, from time
to time in the Trustee's discretion to take any action and to execute any
instrument which the Trustee may deem necessary or advisable to accomplish the
purposes of this Pledge Agreement, including, without limitation, to receive and
indorse any instrument issued in exchange for or on account of the Note and to
collect all amounts due under the Note or any such substituted instrument. If
the Pledgor fails to perform any of its obligations herein, the Trustee may
perform, or cause perfor-
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xxxxx of, that obligation and shall be entitled to reimbursement of its
reasonable expenses, incurred in connection therewith, under Section 10 hereof.
SECTION 9. The Trustee's Duties. The Trustee undertakes to perform
only those duties expressly and specifically set forth herein. This Pledge
Agreement does not, and may not be interpreted to, impose any implied duties or
obligations on the Trustee, including, without limitation, any obligation to
monitor the Pledgor's performance of its obligations hereunder. Except as
provided by applicable law or by the Indenture, the Trustee shall be deemed to
have exercised reasonable care in the custody and preservation of the Pledged
Collateral if the Trustee accords the Pledged Collateral treatment substantially
similar to that which the Trustee accords similar property held by the Trustee
in a similar capacity.
SECTION 10. Indemnity.
(a) The Pledgor hereby indemnifies, holds harmless, and agrees to
defend the Trustee and each of its directors, officers, employees,
attorneys, and agents (each, an "Indemnified Person") from and against any
and all claims, actions, obligations, liabilities and expenses, including
reasonable defense costs, reasonable investigative fees and costs,
reasonable legal fees and expenses, and damages, arising from the
performance by the Trustee of its obligations under this Pledge Agreement.
The Pledgor shall, upon demand by any Indemnified Person, promptly pay or
reimburse that Indemnified Person for all amounts indemnified hereunder.
Notwithstanding the foregoing, the Pledgor (i) shall not be obligated to
indemnify any Indemnified Person from any claim, action, obligation,
liability or expense against or incurred by that Indemnified Person that
is judicially determined (the determination having become final) to be
directly attributable to the gross negligence or willful misconduct of
that Indemnified Person, and (ii) shall, upon that final judicial
determination, be entitled to recover from that Indemnified Person all
amounts therefore paid hereunder, provided that before any such judicial
determination becomes final, the Pledgor must promptly pay all amounts
demanded hereunder by any Indemnified Person.
(b) In addition, and without limiting the provisions of the
foregoing Section 10(a), if the Trustee is required to take any action
hereunder to enforce its rights with respect to the Pledged Collateral,
the Trustee's rights and duties shall be as set forth in Article VII of
the Indenture, and the Trustee
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shall be entitled to the benefit of the indemnity and compensation
provisions and all other protections and exculpatory provisions therein.
SECTION 11. Remedies upon Default. As used herein, "Event of
Default" means (i) any Event of Default as that term is defined in the
Indenture, (ii) any breach by the Pledgor or Obligor of their representations,
warranties, covenants, or agreements under the Notes or herein, or (iii) any
breach by the Obligor of its representations, warranties, covenants, or
agreements under the Horseshoe Note. If an Event of Default occurs before the
Termination Date and is continuing:
(a) The Trustee may (for the benefit of the Holders of the Notes)
enforce all of the Pledgor's rights against the Obligor under the
Horseshoe Note and against each Guarantor under its respective Guarantee,
including without limitation the right to xxx the Obligor and the
Guarantors to collect all amounts due under the Horseshoe Note or the
Guarantees, respectively, and may apply all amounts collected to the
payment of amounts due under the Notes.
(b) The Trustee (for the benefit of the Holders of the Notes) shall
have, in addition to all other rights given by law, by this Pledge
Agreement, or by the Indenture, all of the rights and remedies with
respect to the Pledged Collateral of a secured party under the UCC. With
respect to any Pledged Collateral that shall then be in or shall
thereafter come into the possession or custody or under the control of the
Trustee, the Trustee may, upon the direction of a majority in aggregate
principal amount of the Holders of the Notes, sell or cause the same to be
sold at any broker's board or at public or private sale, in one or more
sales or lots, for cash or on credit or for future delivery, without
assumption of any credit risk. The purchaser of any Pledged Collateral so
sold shall thereafter hold the same absolutely, free from any claim,
encumbrance or right of any kind whatsoever of, or created by or through,
the Pledgor. The Trustee shall give the Pledgor such notice of the time
and place of any public sale of the Pledged Collateral as is feasible and
reasonable under the circumstances, except no notice of sale shall be
required if the Trustee determines, in its reasonable judgment, that (i)
an immediate sale is necessary because the Pledged Collateral threatens to
decline speedily in value or (ii) the Pledged Collateral is or becomes of
a type regularly sold on a recognized market. To the extent permitted by
applicable law, the Pledgor agrees that any sale of the Pledged Collateral
conducted in conformity with reasonable commercial practices of banks,
insurance companies,
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commercial finance companies, or other financial institutions disposing of
property similar to the Pledged Collateral shall be deemed to be
commercially reasonable. Subject to the other provisions of this Section
11(b), notice mailed to the Pledgor as provided herein at least 10 days
before the time of the sale or disposition shall constitute reasonable
notice. The Trustee or any Holder of Notes may, in its own name or in the
name of a designee or nominee, buy any of the Pledged Collateral at any
public sale and, if permitted by applicable law, at any private sale. All
expenses (including court costs and reasonable attorneys' fees, expenses
and disbursements) of, or incident to, the enforcement of any of the
provisions hereof shall be recoverable from the proceeds of the sale or
other disposition of the Pledged Collateral.
SECTION 12. Expenses. Except as provided in any fee agreement to the
contrary, the Pledgor shall, promptly upon demand, pay to the Trustee any and
all reasonable expenses, including, without limitation, the reasonable fees,
expenses and disbursements of counsel, experts and agents, that the Trustee may
incur in connection with (a) the review, negotiation and administration of this
Pledge Agreement, (b) the custody, preservation, or sale of, collection from, or
other realization upon, any of the Pledged Collateral, (c) the exercise or
enforcement of any of the rights of the Trustee and the Holders of the Notes
hereunder, (d) the Pledgor's failure to perform or observe any of the provisions
hereof, or (e) any claim covered by Section 10 hereof.
SECTION 13. Security Interest Absolute. The rights of the Trustee
and the Holders of the Notes and the security interest granted to the Trustee
hereunder, and the Pledgor's obligations hereunder, shall be absolute and
unconditional under all circumstances, including but not limited to:
(a) any lack of validity or enforceability of the Indenture or any
other agreement or instrument relating thereto;
(b) any change in the time, manner or place of payment or
performance of, or in any other term of, any of the Obligations, or any
other amendment or waiver of or any consent to any departure from the
Indenture;
(c) any taking, exchange, surrender, release or non-perfection of
any other collateral or any taking, release, amendment, or waiver of any
provision of any guaranty for all or any of the Obligations;
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(d) any change, restructuring or termination of the corporate
structure or existence of the Pledgor or any of its affiliates; or
(e) to the extent permitted by applicable law, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Pledgor in respect of the Obligations or of this Pledge
Agreement.
SECTION 14. Miscellaneous Provisions.
Section 14.1 Notices. Any notice or communication given hereunder
shall be sufficiently given if in writing and delivered in person or mailed by
first class mail, commercial courier service or telecopier communication,
addressed as follows:
if to the Pledgor or Obligor:
Horseshoe Gaming Holding Corp.
(or Horseshoe Gaming, L.L.C.,
in care of Horseshoe Gaming Holding Corp., as appropriate)
0000 Xxxxx Xxxxxxxxxx Xxxx
Xxx Xxxxx, Xxxxxx 00000
Attention: Chief Financial Officer
Telecopier: (000) 000-0000
with a copy to:
Xxxxxxx Berlin Shereff Xxxxxxxx, LLP
000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxx, Esq.
Telecopier: (000) 000-0000
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if to the Trustee:
U.S. Trust Company, National Association
000 Xxxxx Xxxxxx Xxxxxx
Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attention: Xxxxx Xxxxxxxx
Assistant Vice President
Corporate Trust Department
Telecopier: (000) 000-0000
Section 14.2 Severability. The provisions of this Pledge Agreement
are severable. If a court in any jurisdiction holds that a clause or provision
is invalid, illegal or unenforceable, in whole or in part, that holding shall
affect the validity or enforceability of that clause or provision in that
jurisdiction only, without effect in any other jurisdiction or with respect to
any other clause or provision hereof.
Section 14.3 Headings. The headings in this Pledge Agreement are
included for convenience of reference only, are not to be considered a part
hereof, and do not modify or restrict any of the terms or provisions hereof.
Section 14.4 Counterpart Originals. This Pledge Agreement may be
signed in counterparts, each of which shall be deemed an original, but all of
which shall together constitute one and the same agreement.
Section 14.5 Benefits of Pledge Agreement. Nothing in this Pledge
Agreement, express or implied, shall give to any person, other than the parties
hereto, their successors hereunder, all Indemnified Persons, and (subject to the
provisions of the Indenture) the Holders of the Notes, any legal or equitable
right, remedy or claim. Other than the Persons identified in the foregoing
sentence, there are and shall be no third-party beneficiaries of this Pledge
Agreement. No Holder of Notes shall have any independent rights hereunder, other
than those rights granted to individual Holders of the Notes under the
Indenture.
Section 14.6 Amendments, Waivers and Consents. Any amendment or
waiver of a provision of this Pledge Agreement and any consent by the Pledgor to
departure from a provision of this Pledge Agreement shall be effective only if
made or duly given in compliance with the Indenture. Neither the Trustee nor
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any Holder of Notes shall be deemed, by any act, delay, indulgence, omission or
otherwise, to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default. A failure to exercise, a delay in exercising,
or a waiver of any right, power or privilege hereunder by the Trustee or any
Holder of Notes shall not preclude any subsequent exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies
provided herein are cumulative, may be exercised singly or concurrently, and are
not exclusive of any rights or remedies provided by law.
Section 14.7 Interpretation of Agreement. Acceptance of or
acquiescence in a course of performance rendered under this Pledge Agreement
shall not be relevant to determine the meaning of this Pledge Agreement, even if
the accepting or acquiescing party had knowledge of the nature of the
performance and an opportunity to object thereto.
Section 14.8 Continuing Security Interest; Termination.
(a) This Pledge Agreement shall remain in full force and effect
until the Termination Date. As used herein, "Termination Date" means the
date of consummation of the Internal Consolidation in accordance with the
provisions of the Indenture.
(b) Notwithstanding the foregoing, the Pledgor's obligations under
Sections 10 and 12 shall survive this Pledge Agreement's termination.
Section 14.9 Survival of Representations and Covenants. The
Pledgor's representations, warranties and covenants herein shall survive this
Pledge Agreement's execution and delivery and shall terminate only on the
Termination Date.
Section 14.10 Waivers. The Pledgor waives presentment and demand for
payment of any of the Obligations, protest and notice of dishonor or default
with respect to any of the Obligations, and all other notices to which the
Pledgor might otherwise be entitled, except as otherwise expressly provided
herein or in the Indenture.
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Section 14.11 The Trustee's Authority.
(a) The Trustee may exercise all rights and powers granted
hereunder, together with any powers reasonably incident hereto, may
perform any of its duties hereunder or in connection with the Pledged
Collateral by or through agents or employees, and shall be entitled to
retain counsel and to rely conclusively upon the advice of counsel
concerning those rights, powers and duties. The Trustee shall not be
responsible for the validity, effectiveness or sufficiency hereof or of
any document or security furnished in accordance herewith and shall be
entitled to indemnification hereunder from any claims related thereto. The
Trustee and its respective directors, officers, employees, attorneys and
agents may conclusively rely on any communication, instrument or document
reasonably believed by them to be genuine and correct and to have been
signed or sent by the proper person or persons.
(b) The Pledgor acknowledges that, as between the Pledgor and the
Trustee, with respect to any action or inaction by the Trustee in
connection with the performance of its duties hereunder, the Trustee shall
be conclusively presumed to be acting as agent for the Holders of the
Notes with full and valid authority so to act or refrain from acting, and
the Pledgor may not make any inquiry respecting such authority.
Section 14.12 Final Expression. This Pledge Agreement is the final
expression and a complete and exclusive statement of the terms and conditions
thereof, subject to any amendment duly made in accordance herewith.
Section 14.13 CHOICE OF LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL; WAIVER OF DAMAGES.
(a) THE LAW OF THE STATE OF NEW YORK INCLUDING, WITHOUT LIMITATION,
SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND NEW
YORK CIVIL PRACTICE AND RULES 327 SHALL GOVERN THIS PLEDGE AGREEMENT, THE
HORSESHOE NOTE, THE OTHER PLEDGED COLLATERAL, AND ANY DISPUTE ARISING
FROM, RELATED TO, OR IN CONNECTION WITH THE FOREGOING OR THE RELATIONSHIP
AMONG OR THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO.
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(b) THE PLEDGOR AGREES THAT THE TRUSTEE MAY, IN ITS CAPACITY AS
TRUSTEE OR IN THE NAME AND ON BEHALF OF ANY HOLDER OF NOTES, PROCEED
AGAINST THE PLEDGOR OR THE PLEDGED COLLATERAL IN ANY COURT HAVING PERSONAL
OR IN REM JURISDICTION OVER THE PLEDGOR OR THE PLEDGED COLLATERAL, AS THE
CASE MAY BE, TO ENABLE THE TRUSTEE TO ASSERT A CLAIM OR EXERCISE ITS
RIGHTS AND REMEDIES UNDER THIS PLEDGE AGREEMENT. THE PLEDGOR AGREES THAT
IT WILL NOT ASSERT ANY COUNTERCLAIM, SETOFF, OR CROSSCLAIM AGAINST THE
TRUSTEE IN ANY PROCEEDING BROUGHT BY THE TRUSTEE UNDER THIS PLEDGE
AGREEMENT, THE SECURITY AGREEMENT, OR THE INDENTURE OTHER THAN A
COUNTERCLAIM, SETOFF, OR CROSSCLAIM THAT, IF NOT ASSERTED IN THAT
PROCEEDING, COULD NOT OTHERWISE BE BROUGHT OR ASSERTED. THE PLEDGOR WAIVES
ANY OBJECTION BASED ON THE GROUNDS OF IMPROPER VENUE OR FORUM NON
CONVENIENS TO THE TRUSTEE'S COMMENCEMENT AND PROSECUTION OF SUCH A
PROCEEDING IN ANY COURT IN THE CITY OF NEW YORK.
(c) THE PLEDGOR AGREES THAT NEITHER ANY HOLDER OF NOTES, THE
TRUSTEE, THE SECURITIES INTERMEDIARY, NOR ANY OTHER INDEMNIFIED PERSON
SHALL BE LIABLE TO THE PLEDGOR FOR LOSSES ARISING FROM, RELATING TO, OR IN
CONNECTION WITH THIS PLEDGE AGREEMENT, THE TRANSACTIONS CONTEMPLATED
HEREBY OR IN THE INDENTURE, OR THE DUTIES IMPOSED HEREUNDER, UNLESS A
COURT DETERMINES (SUCH DETERMINATION HAVING BECOME FINAL) THAT THE LOSSES
RESULTED FROM THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE PERSON ON
WHOM THE PLEDGOR SEEKS TO IMPOSE LIABILITY.
(d) TO THE EXTENT PERMITTED BY LAW, THE PLEDGOR WAIVES THE POSTING
OF ANY BOND OTHERWISE REQUIRED OF THE TRUSTEE OR ANY HOLDER OF NOTES IN
CONNECTION WITH ANY JUDICIAL PROCEEDING TO ENFORCE ANY JUDGMENT OR OTHER
COURT ORDER, ENTERED AGAINST THE PLEDGOR, RELATING TO THIS PLEDGE
AGREEMENT OR ANY RELATED AGREEMENT OR DOCUMENT OR TO ENFORCE BY SPECIFIC
PERFOR-
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XXXXX, TEMPORARY RESTRAINING ORDER, OR PRELIMINARY OR PERMANENT INJUNCTION
THIS PLEDGE AGREEMENT OR ANY RELATED AGREEMENT OR DOCUMENT AGAINST THE
PLEDGOR.
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IN WITNESS WHEREOF, the Pledgor, the Obligor, and the Trustee have
each caused this Pledge Agreement to be duly executed and delivered as of the
date first above written.
Pledgor:
HORSESHOE GAMING HOLDING CORP.
By: /s/ Xxxx X. Xxxxxx
----------------------------
Xxxx X. Xxxxxx
Chief Financial Officer
Obligor:
HORSESHOE GAMING, L.L.C.
By: Horseshoe Gaming, Inc.,
its Manager
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: CFO/Treasurer
Trustee:
U.S. TRUST COMPANY, NATIONAL
ASSOCIATION, as Trustee
By: /s/ Xxxxxx X. Xxxxx
----------------------------
Name: Xxxxxx X. Xxxxx
Title: Senior Vice President
