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EXHIBIT 10(w)
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COMMERCIAL SECURITY AGREEMENT
Grantor: Fair Grounds Corporation Lender: First National
0000 Xxxxxxxx Xxxx. Bank Of Commerce
Xxx Xxxxxxx, XX 00000 X.X. Xxx 00000
XXX: 00-0000000 Xxx Xxxxxxx, XX 00000
TIN: 00-0000000
THIS COMMERCIAL SECURITY AGREEMENT is entered into between the Fair Grounds
Corporation, a Louisiana corporation (referred to below as "Grantor"); and
First National Bank of Commerce (referred to below as "Lender"). For valuable
consideration, Grantor hereby pledges to Lender, and grants to Lender a
continuing security interest in, the Collateral to secure Grantor's present and
future Indebtedness and agrees that Lender shall have the rights stated in this
Agreement with respect to the Collateral, in addition to all other rights which
Lender may have by law or otherwise.
DEFINITIONS. The following words shall have the following meanings when used
in this Agreement:
Accounts. The word "Accounts" shall mean all accounts as defined in
Section 9-106 of the UCC, now owned or hereafter acquired by Grantor.
The word "Accounts" shall also mean and include all other receivables,
contract rights, instruments, documents, notes and all other similar
obligations and indebtedness that may now and in the future be owed to
or held by Grantor from whatever source arising, and all monies and
proceeds payable thereunder, and all of Grantor's rights and remedies
to collect and enforce payment and performance thereof.
Agreement. The word "Agreement" means this Commercial Security
Agreement, as this Commercial Security Agreement may be amended or
modified from time to time.
Collateral. The word "Collateral" means individually, collectively
and interchangeably any and all of Grantor's present and future
rights, title and interest in and to the following described property,
together with any and all present and future additions thereto,
substitutions therefor, and replacements thereof:
(a) the Accounts;
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(b) the Inventory;
(c) the Equipment;
(d) the Fire Insurance Proceeds;
(e) the General Intangibles;
(f) the Tax Relief;
(g) the Construction Property;
(h) the Jazz Fest Contract;
(i) the VSI Contract;
(j) the Management Agreement;
(k) all deposit accounts of Grantor maintained by Grantor
with Lender, all cash deposited therein from time to
time, and other monies and properties of any kind of
Grantor in the possession or under the control of
Lender;
(l) all books and records, including without limitation
computer lists, credit files, computer programs,
tapes, disks, punch cards, data processing software,
transaction files, master files, printouts (and other
computer materials and records) of Grantor pertaining
to any of the foregoing Collateral; and
(m) all Proceeds and products of any or all of the
Collateral described in clauses (a) through (l)
hereof.
Construction Property. The words "Construction Property" mean
individually, collectively and interchangeably any and all existing or
future contracts or agreements of Grantor of any kind or nature
dealing with the reconstruction of the New Orleans Fair Grounds Race
Course in New Orleans, Louisiana, or with the related construction
and/or modification of any new or existing facilities in any way
related to racing or wagering activities or the administration
thereof, any and all rights of Grantor in and to all goods, materials,
equipment, machinery and/or inventory used and/or to be used in such
construction activities provided for therein, whether located at the
Fair Grounds Race Course at 0000 Xxxxxxxx Xxxxxxxxx, New Orleans,
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Louisiana, or elsewhere, all documents of title, warehouse receipts,
bills of lading and all attachments and accessions related thereto,
whether added now or later, all plans and specifications, blueprints,
drawings, models, and other renderings of the work related thereto,
all building permits and other permits required for such activities,
all agreements of Grantor with any contractors, architects or
engineers related thereto, all rights of Grantor in and to any payment
or performance bonds provided to Grantor in connection with such work,
all products and proceeds derived from or to be derived therefrom,
including without limitation, . . . [CONFIDENTIAL INFORMATION OMITTED
AND FILED SEPARATELY WITH THE COMMISSION]. . . and all rights of
Grantor to collect or enforce payment and performance thereof, as well
as to enforce any guarantees of any of the foregoing, including
without limitation, Grantor's books, records, files, computer disks
and software, and all other rights that Grantor may have with regard
thereto.
Encumbrances. The word "Encumbrances" means individually,
collectively and interchangeably any and all presently existing and/or
future mortgages, liens, privileges and other contractual and/or
statutory security interests and rights of every nature and kind that,
now and/or in the future may affect the Collateral or any part or
parts thereof.
Equipment. The word "Equipment" means all goods classified as
equipment as such term is defined in Section 9-109(2) of the UCC, now
owned or hereafter acquired by Grantor or held on consignment,
wherever located.
Event of Default. The words "Event of Default" mean individually,
collectively, and interchangeably any of the Events of Default set
forth below in the section titled "Events of Default."
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.
General Intangibles. The words "General Intangibles" mean all general
intangibles as defined in Section 9-106 of the UCC, including without
limitation (i) all contractual rights and obligations or indebtedness
owing to Grantor (other than Accounts) from whatever source arising;
(ii) all things and actions, rights represented by judgments and
claims arising out of tort and other claims related to the Collateral,
including the right to assert and otherwise be the proper party of
interest to commence and prosecute actions; (iii) all goodwill,
patents, patent licenses, trademarks, trademark licenses, trade names,
service marks, trade secrets, rights and intellectual property,
copyrights,
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permits and other licenses of any kind or nature whatsoever (including
all of Grantor's racing, off-track betting and video poker licenses,
to the fullest extent allowed by applicable law); (iv) and all rights
or claims in respect of refunds for taxes paid or to the Tax Relief.
Grantor. The word "Grantor" means Fair Grounds Corporation, a
Louisiana corporation, its successors and assigns.
Guarantor. The word "Guarantor" means and includes individually,
collectively, interchangeably and without limitation, each and all of
the guarantors and/or sureties in connection with the Indebtedness.
Indebtedness. The word "Indebtedness" means the Indebtedness of
Grantor arising under or pursuant to the Note, in principal, interest,
costs, expenses and attorneys' fees and all other fees and charges,
together with all other indebtedness and costs and expenses for which
Grantor is responsible under this Agreement or under any of the
Related Documents. In addition, the word "Indebtedness" also includes
any and all other loans, extensions of credit, obligations, debts and
liabilities, plus interest thereon, of Grantor, or any one or more of
them, that may now and in the future be owed to or incurred in favor
of Lender, as well as all claims by Lender against Grantor, or any one
or more of them, whether existing now or later; whether they are
voluntary or involuntary, due or to become due, direct or indirect or
by way of assignment, determined or undetermined, absolute or
contingent, liquidated or unliquidated; whether Grantor may be liable
individually or jointly with others, of every nature and kind
whatsoever, in principal, interest, costs, expenses and attorneys'
fees and all other fees and charges; and whether Grantor may be
obligated as guarantor, surety, accommodation party or otherwise.
Inventory. The word "Inventory" means all goods classified as
inventory as such term is defined in Section 9-109(4) of the UCC, now
owned or hereafter acquired by Grantor or held on consignment,
wherever located.
Jazz Fest Contract. The words "Jazz Fest Contract" mean that certain
Agreement dated as of October 1, 1992, by and between Grantor and The
New Orleans Jazz & Heritage Foundation, Inc.
Lender. The word "Lender" means First National Bank of Commerce, its
successors and assigns, and any subsequent holder or holders of
Grantor's Note, or any interest therein.
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Management Agreement. The words "Management Agreement" mean that
certain Management Agreement dated October 7, 1992, by and between
Grantor and Finish Line Management Corp.
Note. The word "Note" means that certain promissory note dated of
even date herewith made by Grantor payable to the order of Lender in
the principal sum of $2,150,000.00, together with all extensions,
renewals, or modifications thereof, and any and all promissory note or
notes given in connection with the refinancing of any part of the
indebtedness evidenced thereby.
Permitted Liens shall mean (i) Encumbrances securing Indebtedness,
(ii) Encumbrances for taxes, assessments or governmental charges which
are not yet due and payable or which are being contested in good faith
so long as adequate reserves for such taxes, assessments or charges
have been established or are being maintained, provided Lender's lien
is not jeopardized, and (iii) Encumbrances relating to workers'
compensation laws, unemployment insurance laws, social security or
pension laws or similar legislation which are not yet due and payable
or which are being contested in good faith so long as adequate
reserves for such taxes, assessments or charges have been established
or are being maintained, provided Lender's lien is not jeopardized.
Pledgor. The word "Pledgor" means and includes (i) Xxxxx X. Xxxxxx,
(ii) Xxxxx X. Xxxxxx, (iii) Xxxxxx Xxxxxx, (iv) Xxxxxxxxx Xxxxx
Corporation, a Louisiana corporation, (v) Xxxxxxx Xxxxxxx, in his
capacity as trustee of that certain trust (the "Trust") established
pursuant to that certain Third Restatement of Xxxx X. Xxxxxx Trust
Agreement dated as of April 19, 1991, by and between Xxxx X. Xxxxxx
and Xxxx X. Xxxxxx, Trustee, as heretofore amended by that certain
Modification of Third Restatement of Xxxx X. Xxxxxx Trust Agreement
dated October 24, 1992 (the "Trust Agreement"), and (vi) the Trust.
Proceeds. The word "Proceeds" means all proceeds as defined in
Section 9-306(1) of the UCC, and includes all cash and non-cash
proceeds, and includes proceeds of such proceeds, in each case whether
now existing or hereafter arising.
Related Documents. The words "Related Documents" mean and include
individually, collectively, interchangeably and without limitation all
promissory notes, credit or loan agreements, guaranties, security
agreements, mortgages, collateral mortgages, deeds of trust, and all
other instruments and documents, whether now or hereafter existing,
executed in connection with Grantor's Indebtedness to Lender.
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Security Interest. The words "Security Interest" mean the security
interest in the Collateral granted hereunder.
Tax Relief. The words "Tax Relief" mean all of Grantor's rights to
those certain benefits arising pursuant to the video poker franchise
fee exemption authorized by La. R.S. 33:4862.21, for which Grantor has
been qualified by letter dated September 30, 1994, from Xxxxxxx
Xxxxxxxxx, Lieutenant Governor of the State of Louisiana and
Chairperson of the Interim Emergency Board of the State of Louisiana,
addressed to Senator X.X. Xxxxxxx, Chairman of the Joint Legislative
Committee on the Budget, and by resolution of the Joint Legislative
Committee on the Budget dated March 2, 1995.
UCC. The word "UCC" means the Uniform Commercial Code, Commercial
Laws-Secured Transactions (La. R.S. 10:9-101 et seq.) in effect in the
State of Louisiana, as amended from time to time, provided that if by
reason of mandatory provisions of law, the perfection or effect of
perfection or non-perfection of the Security Interest in the
Collateral is governed by the Uniform Commercial Code as in effect in
a jurisdiction other than the State of Louisiana, "UCC" means the
Uniform Commercial Code as in effect in such other jurisdiction for
purpose of the provisions hereof related to such perfection or effect
of perfection or non-perfection.
VSI Contract. The words "VSI Contract" mean that certain Agreement
dated March 9, 1992, by and among Grantor, Video Services, Inc.,
Xxxxxxxxx Xxxxx Corporation, and Finish Line Management Corp.
CONTINUING SECURITY INTEREST TO SECURE PRESENT AND FUTURE INDEBTEDNESS.
Grantor does hereby grant a continuing security interest in the Collateral in
favor of Lender to secure any and all present and future Indebtedness of
Grantor in favor of Lender, as may be outstanding from time to time, with the
continuing preferences and priorities provided under applicable Louisiana law.
NO LIABILITY. The Security Interests are granted as security only and shall
not subject Lender to, or transfer in any way affect or modify, any obligation
or liability of Grantor with respect to any of the Collateral or any
transaction in connection therewith.
DURATION OF THIS AGREEMENT. This Agreement shall remain in full force and
effect until such time as this Agreement and the Security Interests created
hereby are terminated and cancelled by Lender under a written cancellation
instrument in favor of Grantor.
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OBLIGATIONS OF GRANTOR. Grantor represents, warrants and covenants to Lender
as follows:
Organization. Grantor is a corporation which is duly organized,
validly existing, and in good standing under the laws of the State of
Louisiana.
Authorization. Grantor's execution, delivery and performance of this
Agreement have been duly authorized, and do not conflict with, and
will not result in a violation of, or constitute or give rise to an
event of default under Grantor's articles of incorporation or by-laws,
or any agreement or other instrument which may be binding upon
Grantor, or under any law or governmental regulation or court decree
or order applicable to Grantor and/or its properties.
Perfection of Security Interest. Grantor agrees to execute such
financing statements and to take whatever other actions are requested
by Lender to perfect and continue Lender's Security Interest in the
Collateral. Upon request of Lender, Grantor will deliver to Lender
any and all of the documents evidencing or constituting the
Collateral, and Grantor will note Lender's Security Interest upon any
and all chattel paper if not delivered to Lender for possession by
Lender. Grantor hereby appoints Lender as its irrevocable
attorney-in-fact for the purpose of executing any documents necessary
to perfect or to continue the Security Interest granted in this
Agreement. Lender may at any time, and without further authorization
from Grantor, file a carbon, photographic, facsimile, or other
reproduction of any financing statement or of this Agreement for use
as a financing statement. Grantor will reimburse Lender for all
expenses for the perfection, termination, and the continuation of the
perfection of Lender's Security Interest in the Collateral. Grantor
promptly will notify Lender of any change in Grantor's name including
any change to the assumed business names of Grantor. Grantor also
promptly will notify Lender of any change in Grantor's tax
identification number. Grantor further agrees to notify Lender in
writing prior to any change in address or location of Grantor's
principal governance office. Grantor represents and warrants to
Lender that Grantor has provided Lender with Grantor's correct IRS tax
identification number and that Grantor has no other tax identification
numbers. Grantor promptly shall notify Lender should Grantor apply
for or obtain a new tax identification number.
No Violation. The execution and delivery of this Agreement will not
violate any law or agreement governing Grantor or to which Grantor is
a party, and its articles of
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incorporation and by-laws do not prohibit any term or condition of this
Agreement.
Enforceability of Collateral. To the extent the Collateral consists
of Accounts, chattel paper, or General Intangibles, the Collateral is
enforceable in accordance with its terms, is genuine, and fully
complies with applicable state and federal laws and regulations
concerning form, content and manner of preparation and execution, and
all persons appearing to be obligated on the Collateral have authority
and capacity to contract and are in fact obligated as they appear to
be on the Collateral, free of any offset, compensation, deduction or
counterclaim. At the time any Account becomes subject to a Security
Interest in favor of Lender, the Account shall be a good and valid
account representing an undisputed, bona fide indebtedness incurred by
the account debtor, for merchandise held subject to delivery
instructions or theretofore shipped or delivered pursuant to a
contract of sale, or for services theretofore performed by Grantor
with or for the account debtor; there shall be no setoffs or
counterclaims against any such Account; and no agreement under which
any deductions or discounts may be claimed shall have been made with
the account debtor except those disclosed to Lender in writing.. .
[CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION]. . . .
Removal of Collateral. To the extent the Collateral consists of
Accounts or General Intangibles, the records concerning the Collateral
shall be kept and maintained at Grantor's main business address at
0000 Xxxxxxxx Xxxxxxxxx, Xxx Xxxxxxx, XX 00000, and also at Grantor's
place of business at 0000 Xxxxxx Xxxx., Xxxxxx, XX 00000, or at such
other locations as are acceptable to Lender. Except for sales of
Inventory in the ordinary course of business, Grantor shall not remove
the Collateral from its existing locations without the prior written
consent of Lender.
Transactions Involving Collateral. Except for Inventory sold or
Accounts collected in the ordinary course of Grantor's business,
Grantor shall not sell, offer to sell, or otherwise transfer or
dispose of the Collateral except for sales of Inventory during the
normal course of Grantor's business and dispositions of Equipment
which has become obsolete or which is being replaced in the normal
course of Grantor's business (collectively, "Permitted Dispositions").
. . [CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY WITH THE
COMMISSION]. . . . This includes security interests even if junior in
right to the Security Interests granted under this Agreement. Unless
waived by Lender, all proceeds from any disposition (other than
Permitted Dispositions) of the Collateral (for whatever reason) shall
be held in trust
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for Lender and shall not be commingled with any other funds; provided
however, this requirement shall not constitute consent by Lender to
any sale or other disposition (other than Permitted Dispositions).
Upon receipt, Grantor shall immediately deliver any such proceeds to
Lender.
Title, Authority, Binding Effect. Grantor represents and warrants to
Lender that it holds good and marketable title to the Collateral, free
and clear of all Encumbrances except for Permitted Liens and the
Lender's Security Interest. No financing statement covering any of
the Collateral is on file in any public office other than those which
reflect the Security Interest created by this Agreement or to which
Lender has specifically consented. Grantor further represents and
warrants that it has requisite authority to enter into this Agreement
in favor of Lender and to grant to Lender the Security Interest in the
Collateral as provided herein. Grantor additionally represents and
warrants that this Agreement is binding upon Grantor as well as
Grantor's successors and assigns, and is legally enforceable in
accordance with its terms. The foregoing representations and
warranties and all other representations and warranties of Grantor
under this Agreement shall be continuing and shall survive the
termination of this Agreement.
Collateral Schedules and Locations. As often as Lender shall
reasonably require, and insofar as the Collateral consists of
Accounts, Grantor shall deliver to Lender schedules of such
Collateral, including such information as Lender may require,
including without limitation names and addresses of account debtors
and agings of accounts.
Repairs and Maintenance. Grantor shall keep and maintain and shall
cause others to keep and maintain the Collateral in good order, repair
and merchantable condition. Grantor shall further make and/or cause
all necessary repairs to be made to the Collateral, including the
repair and restoration of any portion of the Collateral that may be
damaged, lost or destroyed. In addition, Grantor shall not, without
the prior written consent of Lender, make or permit to be made any
alterations to any of the Collateral that may reduce or impair the
Collateral's use, value or marketability. Furthermore, Grantor shall
not, nor shall Grantor permit others to abandon, commit waste, or
destroy the Collateral or any part or parts thereof.
Taxes. Grantor shall promptly pay or cause to be paid when due, all
taxes, local and special assessments, and governmental and other
charges of every type and description, that may from time to time be
imposed, assessed and levied against the Collateral or against
Grantor. Grantor further agrees to furnish Lender with evidence that
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such taxes, assessments, and governmental and other charges have been
paid in full and in a timely manner. Grantor may withhold any such
payment or elect to contest any lien if Grantor is in good faith
conducting an appropriate proceeding to contest the obligation to pay
and so long as Lender's interest in the Collateral is not jeopardized.
Compliance With Governmental Requirements. Grantor shall comply
promptly with all laws, ordinances and regulations of all governmental
authorities applicable to the production, disposition, or use of the
Collateral. Grantor may contest in good faith any such law, ordinance
or regulation and withhold compliance during any proceeding, including
appropriate appeals, so long as Lender's interest in the Collateral,
in Lender's reasonable opinion, is not jeopardized. Grantor shall not
use the Collateral, in any manner that would damage, depreciate or
diminish its value (other than for damage, depreciation and
diminishment in value to the Collateral caused by Grantor's normal
business operations) or that may result in cancellation or termination
of insurance coverage. Grantor additionally agrees not to do or
suffer to be done anything that may increase the risk of fire or other
hazards to the Collateral.
Hazardous Substances. Grantor represents and warrants that the
Collateral never has been, and never will be so long as this Agreement
remains a lien on the Collateral, used for the generation,
manufacture, storage, treatment, disposal, release or threatened
release of any hazardous waste or substance, as those terms are
defined in the Comprehensive Environmental Response, Compensation, and
Liability Act of 1980, as amended, 42 U.S.C. Section 9601, et seq.
("CERCLA"), the Superfund Amendments and Reauthorization Act of 1986,
Pub. L. No. 99-499 ("XXXX"), the Hazardous Materials Transportation
Act, 49 U.S.C. Section 1801, et seq., the Resource Conservation and
Recovery Act, 49 U.S.C. Section 6901, et seq., or other applicable
state or Federal laws, rules, or regulations adopted pursuant to any
of the foregoing, except in compliance with such laws and regulations.
The representations and warranties contained herein are based on
Grantor's due diligence in investigating the Collateral for hazardous
waste. Grantor hereby (a) releases and waives any future claims
against Lender for indemnity or contribution in the event Grantor
becomes liable for cleanup or other costs under any such laws, and (b)
agrees to indemnify and hold harmless Lender from and against any and
all claims and losses resulting from a breach of this provision of
this Agreement. This obligation to indemnify shall survive the
payment of the Indebtedness and the satisfaction of this Agreement.
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Required Insurance. So long as this Agreement remains in effect,
Grantor shall, at its sole cost, keep and/or cause others, at their
expense, to keep the portions of the Collateral consisting of tangible
property constantly insured against loss by fire, by hazards included
within the term "extended coverage," and by such other hazards
(including flood insurance to the extent any of the Collateral is
located in flood zones "A" or "B") as may be required by Lender. Such
insurance shall be in an amount not less than the full replacement
value of such Collateral, or such other amount or amounts as Lender
may require or approve in writing. Grantor shall further provide and
maintain, at its sole cost and expense, comprehensive general
liability insurance, naming both Grantor and Lender as parties
insured, protecting against claims for bodily injury, death and/or
property damage arising out of the use, ownership, possession,
operation and condition of the Collateral, and further containing a
broad form contractual liability endorsement covering Grantor's
obligations to indemnify Lender as provided hereunder. During the
course of any construction activities involving the Collateral,
Grantor shall further provide and maintain, at its sole cost and
expense, builder's all risk insurance coverage against "all risks of
physical loss," including loss by fire, theft, vandalism, malicious
mischief, explosion, windstorm, collapse, sprinkler leakage, and
extended coverage in an amount not less than the full replacement
value of the Collateral. Grantor shall also maintain, or cause to be
maintained, workers' compensation insurance for all contractors,
subcontractors and for Grantor to the fullest extent required by law.
Grantor may purchase such insurance from any insurance company or
broker that is acceptable to Lender, provided that such approval may
not be unreasonably withheld. All such insurance policies, including
renewals and replacements, must also be in form and substance
acceptable to Lender, and must additionally contain a Lender's loss
payable or other endorsement in favor of Lender, providing in part
that (a) all proceeds and returned premiums under such policies of
insurance will be paid directly to Lender, and (b) no act or omission
on the part of Grantor, or any of its officers, agents, employees or
representatives, nor breach of any warranty contained in such
policies, shall affect the obligations of the insurer to pay the full
amount of any loss to Lender. Such policies of insurance must also
contain a provision prohibiting cancellation or the alteration of such
insurance without at least thirty (30) days' prior written notice to
Lender of such intended cancellation or alteration.
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Grantor agrees to provide Lender with originals or certified copies of
such policies of insurance. Grantor further agrees to promptly
furnish Lender with copies of all renewal notices and, if requested by
Lender, with copies of receipts for paid premiums. Grantor shall
provide Lender with originals or certified copies of all renewal or
replacement policies of insurance no later than fifteen (15) days
before any such existing policy or policies should expire. If
Grantor's insurance policies and renewals are held by another person,
Grantor agrees to supply original or certified copies of the same to
Lender within the time periods required above.
Grantor agrees to notify immediately Lender in writing of any material
casualty to or accident involving the Collateral, whether or not such
casualty or loss is covered by insurance. Grantor further agrees to
promptly notify Grantor's insurance company and to submit an
appropriate claim and proof of claim to the insurance company in the
event that any Collateral is lost, damaged, or destroyed as a result
of an insured hazard. Lender may submit such a claim and proof of
claim to the insurance company on Grantor's behalf, should Grantor
fail to do so promptly for any reason. Grantor hereby irrevocably
appoints Lender as its agent and attorney-in-fact, such agency being
coupled with an interest, to make, settle and adjust claims (other
than with respect to claims giving rise to Fire Insurance Proceeds)
under such policy or policies of insurance and to endorse the name of
Grantor on any check or other item of payment for the proceeds
thereof; it being understood, however, that unless one or more Events
of Default exist under this Agreement, Lender will not settle or
adjust any such claim without the prior approval of Grantor (which
approval shall not be unreasonably withheld).
CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.
Lender's receipt of such insurance proceeds and the application of
such proceeds as provided herein shall not, however, affect the lien
of this Agreement. Nothing under this section shall be deemed to
excuse Grantor from its obligations promptly to repair, replace or
restore any lost or damaged Collateral, whether or not the same may be
covered by insurance (unless Lender requires that such insurance
proceeds be applied to reduce the Indebtedness), and whether or not
such proceeds of insurance are available, and whether such proceeds
are sufficient in amounts to complete such repairs, replacement or
restoration to the satisfaction of the Lender. Furthermore, unless
otherwise confirmed by Lender in writing, the application or release
of any insurance proceeds by Lender shall not be deemed to
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cure or waive any Event of Default under this Agreement. Any
proceeds which have not been disbursed within six (6) months after
their receipt and which Grantor has not committed to the repair or
restoration of the Collateral shall be used to prepay the
Indebtedness.
Insurance Reports. Grantor, upon request of Lender, shall furnish to
Lender reports on each existing policy of insurance showing such
information as Lender may reasonably request including the following:
(a) the name of the insurer; (b) the risks insured; (c) the amount of
the policy; (d) the property insured; (e) the then current value on
the basis of which insurance has been obtained and the manner of
determining that value; and (f) the expiration date of the policy. In
addition, Grantor shall upon request by Lender (however not more often
than annually) have an independent appraiser satisfactory to Lender
determine, as applicable, the cash value or replacement cost of the
Collateral.
Prior Encumbrances. To the extent applicable, Grantor shall fully and
timely perform any and all of its obligations under any prior
Encumbrances affecting the Collateral. Without limiting the
foregoing, Grantor shall not commit or permit to exist any breach of
or default under any such prior Encumbrances. Grantor shall further
promptly notify Lender in writing upon the occurrence of any event or
circumstances that would, or that might, result in a breach of or
default under any such prior Encumbrance. Grantor shall further not
modify or extend any of the terms of any prior Encumbrance or any
Indebtedness secured thereby, or request or obtain any additional
loans or other extensions of credit from any third party creditor or
creditors whenever such additional loan advances or other extensions
of credit may be directly or indirectly secured, whether by cross-
collateralization or otherwise, by the Collateral, or any part or
parts thereof, with possible preference and priority over Lender's
Security Interest. Grantor additionally agrees to use its best
reasonable efforts to obtain, upon request by Lender, and in form and
substance as may then be satisfactory to Lender, appropriate waivers
and/or subordinations of any lessor's liens or privileges, vendor's
liens or privileges, purchase money security interests, and any other
Encumbrances that may affect the Collateral at any time; and if such
waivers or subordinations cannot be obtained by Grantor to cause to be
paid such claims giving rise to any prior Encumbrances affecting the
Collateral.
Future Encumbrances. Except for Permitted Liens, Grantor shall not,
without the prior written consent of Lender, grant any Encumbrance
that may affect the Collateral, or any
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part or parts thereof, nor shall Grantor permit or consent to any
Encumbrance attaching to or being filed against any of the Collateral
in favor of anyone other than Lender. Grantor shall further promptly
pay when due all statements and charges of mechanics, materialmen,
laborers and others incurred in connection with the alteration,
improvement, repair and maintenance of the Collateral, or otherwise
furnish appropriate security or bond, so that no future Encumbrance
may ever attach to or be filed against any Collateral. Grantor
additionally agrees to obtain, upon request by Lender, and in form and
substance as may then be satisfactory to Lender, appropriate waivers
and/or subordinations of any lessor's liens or privileges, vendor's
liens or privileges, purchase money Security Interests, and any other
Encumbrances that may affect the Collateral at any time.
Notice of Encumbrances. Grantor shall immediately notify Lender in
writing upon the filing of any attachment, lien, judicial process,
claim, or other Encumbrance. Grantor additionally agrees to notify
Lender immediately in writing upon the occurrence of any default, or
event that with the passage of time, failure to cure, or giving of
notice, might result in a default under any of Grantor's obligations
that may be secured by any presently existing or future Encumbrance,
or that might result in an Encumbrance affecting the Collateral, or
should any of the Collateral be seized or attached or levied upon, or
threatened by seizure or attachment or levy, by any person other than
Lender.
Books and Records. Grantor will keep proper books and records with
regard to Grantor's business activities and the Collateral in which a
security interest is granted hereunder, in accordance with generally
accepted accounting principles, applied on a consistent basis
throughout, which books and records shall at all reasonable times be
open to inspection and copying by Lender or its designated agents.
Lender shall also have the right to inspect Grantor's books and
records, and to discuss Grantor's affairs and finances with Grantor's
officers and representatives, at such reasonable times as Lender may
designate.
Construction Activities. The plans and specifications which comprise
part of the Construction Property are in final form and are
satisfactory to Grantor and its contractors (subject to possible
change orders, to the extent permitted hereby), and to the extent
required by applicable law, to all applicable governmental
authorities; such plans and specifications, to Borrower's knowledge,
do not violate any zoning ordinance or restrictive covenant applicable
to any of the Collateral or the real estate upon which such Collateral
is located; Grantor has obtained all applicable
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permits and approvals necessary to undertake the activities
contemplated by the construction contracts and plans and
specifications comprising part of the Construction Property; and no
default exists under any of the construction contracts comprising part
of the Construction Property.
Stock Pledges. Contemporaneously herewith, Pledgors have collectively
pledged to Lender stock certificates evidencing not less than 72% of
the currently outstanding shares of capital stock of Grantor.
GRANTOR'S RIGHT TO POSSESSION AND TO COLLECT ACCOUNTS. Until the occurrence of
an Event of Default, Grantor may have possession and beneficial use of all the
Collateral (other than proceeds of the Tax Relief and the Fire Insurance
Proceeds) and may use it in any lawful manner not inconsistent with this
Agreement or the Related Documents, provided that Grantor's right to possession
and beneficial use shall not apply to any Collateral where possession of the
Collateral by Lender is required by law to perfect Lender's security interest
in such Collateral. If an Event of Default exists, Lender may exercise its
rights to collect the Accounts and to notify account debtors to make payments
directly to Lender for application to the Indebtedness. Lender or Lender's
agents may also periodically contact individual obligors and debtors to verify
the amounts then owing under such obligations, to determine whether such
obligors and debtors have any offsets or counterclaims against the Accounts
and/or Grantor and to inquire about such other matters as Lender may deem
necessary or desirable. If Lender at any time has possession of any
Collateral, whether before or after an Event of Default, Lender shall be deemed
to have exercised reasonable care in the custody and preservation of the
Collateral if Lender takes such action for that purpose as Grantor shall
request or as Lender, in Lender's sole discretion, shall deem appropriate under
the circumstances, but failure to honor any request by Grantor shall not of
itself be deemed to be a failure to exercise reasonable care. Lender shall not
be required to take any steps necessary to preserve any rights in the
Collateral against prior parties, nor to protect, preserve or maintain any
security interest given to secure the Collateral.
ADDITIONAL COVENANTS. Grantor additionally agrees:
CONFIDENTIAL INFORMATION OMITTED AND FILED SEPARATELY
WITH THE COMMISSION.
Aging of Accounts. Grantor will periodically, at such intervals
requested by Lender, furnish Lender with an aging of that part of the
Collateral consisting of Accounts, together with a certificate
executed by an officer of Grantor, in such form and containing such
representations
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and warranties regarding the accounts as Lender may reasonably
require.
Notice to Obligors. Upon request by Lender after the occurrence of an
Event of Default, Grantor will immediately notify individual obligors
with regard to the Collateral, advising such obligors and/or debtors
of the fact that Lender has been granted a Security Interest in their
obligations. In the event that Grantor should fail to provide such
notices for any reason upon request by Lender, Grantor agrees that
Lender may forward appropriate notices to such obligors and debtors,
either in Lender's name or in the name of Grantor.
Additional Documents. Grantor shall at any time, from time to time,
one or more times, upon written request by Lender, execute and deliver
such further documents and do any and all such further acts and things
as Lender may reasonably request, within its sole discretion, to
effect the purposes of this Agreement.
Verifications. Grantor additionally agrees that Lender or Lender's
agents may periodically contact Account Debtors in order to verify the
amounts then owing under such obligations, to determine whether such
debtors have any offsets or counterclaims against Grantor, and such
other matters about which Lender may inquire. In addition, Lender
shall have the right to have its agent visit the construction site at
the Fair Grounds Race Course to monitor such construction activities,
to verify the amounts owed by Grantor under such construction
contracts, to determine whether the work is progressing on schedule,
to determine whether any default exist under any such construction
contracts, and such other matters about which Lender may inquire.
Grantor agrees to reimburse Lender on demand for the reasonable costs
it incurs in monitoring such construction activities.
Notification of Lender. Grantor will promptly deliver to Lender all
written notices, and will promptly give Lender written notice of any
other notices received by Grantor with respect to the Collateral, and
Lender will promptly give like notice to Grantor of any such notices
received by Lender or its nominee.
EXPENDITURES BY LENDER. Grantor recognizes and agrees that Lender may incur
certain expenses in connection with Lender's exercise of rights under this
Agreement. If not discharged or paid when due, Lender may (but shall not be
obligated to) discharge or pay any amounts required to be discharged or paid by
Grantor under this Agreement, including without limitation all taxes,
Encumbrances and other claims, at any time levied or placed on the Collateral.
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Lender also may (but shall not be obligated to) pay all costs for insuring,
maintaining and preserving the Collateral, including without limitation, the
purchase of insurance protecting only Lender's interest in the Collateral.
Lender may further take such other action or actions and incur such additional
expenditures as Lender may deem to be necessary and proper to cure or rectify
any actions or inactions on Grantor's part as may be required under this
Agreement. Nothing under this Agreement or otherwise shall obligate Lender to
take any such actions or to incur any such additional expenditures on Grantor's
behalf, or as making Lender in any way responsible or liable for any loss,
damage, or injury to the Collateral, to Grantor, or to any other person or
persons, resulting from Lender's election not to take such actions or to incur
such additional expenses. In addition, Lender's election to take any such
actions or to incur such additional expenditures shall not constitute a waiver
or forbearance by Lender of any Event of Default under this Agreement. All
such expenditures incurred or paid by Lender for such purposes will then bear
interest at the default rate charged under the Notes from the date incurred or
paid by Lender to the date of repayment. All such expenses shall become a part
of the Indebtedness and will be payable on demand. This Agreement also will
secure payment of these amounts. Such right shall be in addition to all other
rights and remedies to which Lender may be entitled upon the occurrence of an
Event of Default.
EVENTS OF DEFAULT. The following actions or inactions or both shall constitute
Events of Default under this Agreement:
Default under Indebtedness. Should Grantor fail to pay any portion of
the Indebtedness within ten (10) days of the date any such portion of
the Indebtedness is due and payable.
Default under this Agreement. Should Grantor violate, or fail to
comply fully with any of the terms and conditions of, or default under
this Agreement, and such default shall continue for thirty (30) days
after written notice of such default is given by Lender to Grantor
(provided, however, that no notice or cure period shall apply with
respect to Grantor's failure to maintain any insurance required by
this Agreement).
Default Under Other Agreements. Should any Event of Default occur or
exist under any Related Document, including without limitation, any
event of default specified in any loan or credit agreement now or
hereafter governing any portion of the Indebtedness, or should any
default occur under any of the Jazz Fest Contract, the VSI Contract,
the Management Agreement or any of the construction contracts
comprising part of the Construction Property, and such default shall
continue for thirty (30) days after written notice of such default is
given by Lender to Grantor.
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Other Defaults in Favor of Lender. Should Grantor default under any
other loan, extension of credit, security agreement, or obligation in
favor of Lender, and such default shall continue for thirty (30) days
after written notice of such default is given by Lender to Grantor.
Default in Favor of Third Parties. Should Grantor, any Pledgor, or
any Guarantor default under any loan, extension of credit, security
agreement, purchase or sales agreement, or any other agreement, in
favor of any other creditor or person that may materially affect any
of Grantor's or such Guarantor's property, or Grantor's or such
Guarantor's ability to perform their respective obligations under this
Agreement, or any Related Document, or pertaining to the Indebtedness,
and such default shall continue to exist after the passage of any
applicable cure period pertaining to same.
Insolvency. Should the suspensions, failure or insolvency, however
evidenced, of Grantor, any Pledgor, or any Guarantor of the Note occur
or exist.
Readjustment of Indebtedness. Should proceedings for readjustment of
Indebtedness, reorganization, composition or extension under any
insolvency law be brought by or against Grantor, any Pledgor, or any
Guarantor.
Assignment for Benefit of Creditors. Should Grantor, any Pledgor, or
any Guarantor file proceedings for a respite or make a general
assignment for benefit of creditors.
Receivership. Should a receiver of all or any part of Grantor's
property, or the property of any Pledgor or any Guarantor, be applied
for or appointed.
Dissolution Proceedings. Should proceedings for the dissolution or
appointment of a liquidator of Grantor, any Pledgor, or any Guarantor
be commenced.
False Statements. Should any representation or warranty of Grantor,
any Pledgor or any Guarantor made in connection with the Indebtedness
prove to be incorrect or misleading in any material respect.
Defective Collateralization. Should this Agreement or any of the
Related Documents cease to be in full force and effect (including
failure of any Collateral documents to create a valid and perfected
security interest or lien) at any time and for any reason, and Grantor
shall fail to cooperate with Lender in curing same within ten (10)
days of Lender's written request to Grantor for such cooperation.
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CONFIDENTIAL INFORMATION OMITTED AND FILED
SEPARATELY WITH THE COMMISSION.
Termination of Racing License, OTB Licenses or Video Poker Licenses.
Should any of the licenses required by Grantor for the conduct of
racing activities, pari-mutuel wagering activities, the operation of
off-track betting facilities presently operated by it or by Finish
Line Management Corp. on its behalf, or for video poker gaming at any
of its places of businesses be terminated, revoked, suspended, or not
renewed when required for the continuation of such activities, or
should any legislation allowing off-track betting or video poker
activities be ruled unconstitutional pursuant to a final judgment by a
court of proper jurisdiction.
Failure to Prepay Indebtedness with the Fire Insurance Proceeds.
Should Grantor fail to remit to Lender towards prepayment of the
Indebtedness any of the Fire Insurance Proceeds immediately upon
receipt of same (it being understood that such prepayments will be
applied to the installments due on the Indebtedness in an inverse
order of maturity).
RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a
secured party under the Louisiana Commercial Laws (La.R.S. 10:1-101 et seq.).
In addition and without limitation, Lender may exercise any one or more of the
following rights and remedies:
Accelerate Indebtedness. Lender may declare the entire Indebtedness,
including any prepayment penalty which Grantor would be required to
pay, immediately due and payable, without notice and further demand
for payment.
Seizure and Sale of Collateral In Louisiana. In the event that Lender
elects to commence appropriate Louisiana foreclosure proceedings under
this Agreement, Lender may cause the Collateral, or any part or parts
thereof, to be immediately seized wherever found, and sold, whether in
term of court or in vacation, under ordinary or executory process, in
accordance with applicable Louisiana law, to the highest bidder for
cash, with or without appraisement, and without the necessity of
making additional demand upon or notifying Grantor or placing Grantor
in default, all of which are expressly waived.
Confession of Judgment. For purposes of foreclosure under Louisiana
executory process procedures, Grantor confesses judgment and
acknowledges to be indebted unto and in favor of Lender, up to the
full amount of the Indebtedness, in
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principal, interest, costs, expenses, attorneys' fees and other fees
and charges. Grantor further confesses judgment and acknowledges to
be indebted unto and in favor of Lender in the amount of all
additional advances that Lender may make on Grantor's behalf pursuant
to this Agreement, together with interest thereon, up to a maximum of
two (2) times the face amount of the aforesaid Note. To the extent
permitted under applicable Louisiana law, Grantor additionally waives:
(a) the benefit of appraisal as provided in Articles 2332, 2336, 2723
and 2724 of the Louisiana Code of Civil Procedure, and all other laws
with regard to appraisal upon judicial sale; (b) the demand and three
(3) days' delay as provided under Articles 2639 and 2721 of the
Louisiana Code of Civil Procedure; (c) the notice of seizure as
provided under Articles 2293 and 2721 of the Louisiana Code of Civil
Procedure; (d) the three (3) days' delay provided under Article 2331
and 2722 of the Louisiana Code of Civil Procedure; and (e) all other
benefits provided under Articles 2331, 2722 and 2723 of the Louisiana
Code of Civil Procedure and all other Articles not specifically
mentioned above.
Keeper. Should any or all of the Collateral be seized as an incident
to an action for the recognition or enforcement of this Agreement, by
executory process, sequestration, attachment, writ of fieri facias or
otherwise, Grantor hereby agrees that the court issuing any such order
shall, if requested by Lender, appoint Lender, or any agent designated
by Lender, or any person or entity named by Lender at the time such
seizure is requested, or any time thereafter, as Keeper of the
Collateral as provided under La. R.S. 9:5136, et seq. Such a Keeper
shall be entitled to reasonable compensation. Grantor agrees to pay
the reasonable fees of such Keeper, which are hereby fixed at $50.00
per hour, which compensation to the Keeper shall also be secured by
this Agreement.
Deliver Collateral. This provision applies, to the extent applicable,
if and when the Collateral for any reason is located outside the State
of Louisiana following the occurrence of any Event of Default, or
should there be a subsequent change in Louisiana law permitting such
remedies. Lender may require Grantor to deliver to Lender all or any
portion of the Collateral and any and all certificates of title and
other documents relating to the Collateral. Lender may require
Grantor to assemble the Collateral and make it available to Lender at
a place to be designated by Lender. Lender also shall have full power
to enter upon the property of Grantor to take possession of and remove
the Collateral. If the Collateral contains other goods not covered by
this Agreement at the time of repossession, Grantor agrees Lender may
take such other goods, provided
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that Lender makes reasonable efforts to return them to Grantor after
repossession.
Public or Private Sale of Collateral. To the extent that any of the
Collateral is then in Lender's possession, Lender shall have full
power to sell, lease, transfer, or otherwise deal with the Collateral
or proceeds thereof in its own name or that of Grantor. Lender may
sell the Collateral at public auction or private sale. Unless the
Collateral threatens to decline speedily in value or is of a type
customarily sold on a recognized market, Lender will give Grantor
reasonable notice of the time after which any private sale or any
other intended disposition of the Collateral is to be made. The
requirements of reasonable notice shall be met if such notice is given
at least ten (10) days before the time of the sale or disposition.
All expenses relating to the disposition of the Collateral, including
without limitation the expenses of retaking, holding, insuring,
preparing for sale and selling the Collateral, shall become a part of
the Indebtedness secured by this Agreement and shall be payable on
demand, with interest at the Note rate from date of expenditure until
repaid. Grantor agrees that any such sale shall be conclusively
deemed to be conducted in a commercially reasonable manner if it is
made consistent with the standard of similar sales of Collateral by
commercial banks in New Orleans, Louisiana.
Appoint Receiver. This provision applies if and when the Collateral
for any reason is located outside the State of Louisiana following the
occurrence of any Event of Default, or should Louisiana law change or
be interpreted to permit such a remedy. Lender shall have the
following rights and remedies regarding the appointment of a receiver:
(a) lender may have a receiver appointed as a matter of right, (b) the
receiver may be an employee of Lender and may serve without bond, and
(c) all fees of the receiver and his or her attorney shall become part
of the Indebtedness secured by this Agreement.
Collect Revenues, Apply Accounts. Lender shall have the right, at its
sole option and election, at any time, after an Event of Default has
occurred, to directly collect and receive all proceeds and/or payments
arising under or in any way accruing from the Collateral, as such
amounts become due and payable. In addition, Lender shall have the
right to apply the monies contained in any of Grantor's deposit
accounts with Lender to the Indebtedness then outstanding. In order
to permit the foregoing, Grantor unconditionally agrees to deliver to
Lender, immediately following demand, any and all of Grantor's
records, ledger sheets, and other documentation, in the form requested
by Lender, with regard
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to the Collateral and any and all proceeds and/or payments applicable
thereto.
Lender shall have the further right, if an Event of Default then
exists, where appropriate and within Lender's sole discretion, to file
suit, either in Lender's own name or in the name of Grantor, to
collect any and all proceeds and payments that may then and/or in the
future be due and owing under this Agreement and if as a result of
such it is necessary for Lender to attempt to collect any such
proceeds and/or payments from the obligors therefor, Lender may
compromise, settle, extend, or renew for any period (whether or not
longer than the original period) any obligation or Indebtedness
thereunder or evidenced thereby, or surrender, release, or exchange
all or any part of said obligation or Indebtedness, without affecting
the liability of Grantor under this Agreement or under the
Indebtedness. To that end, Grantor hereby irrevocably constitutes and
appoints Lender as its attorney-in-fact, coupled with an interest and
with full power of substitution, to take any and all such actions and
any and all other actions permitted hereby, either in the name of
Grantor or Lender.
Additional Expenses. In the event that it should become necessary for
Lender to conduct a search for any of the Collateral in connection
with any foreclosure action, or should it be necessary to remove the
Collateral, or any part or parts thereof, from the premises in which
or on which the Collateral is then located, and/or to store and/or
refurbish such Collateral, Grantor agrees to reimburse Lender for the
cost of conducting such a search and/or removing and/or storing and/or
refurbishing such Collateral, which additional expense shall also be
secured by the lien of this Agreement.
Specific Performance. Lender may, in addition to the foregoing
remedies, or in lieu thereof, in Lender's sole discretion, commence an
appropriate action against Grantor seeking specific performance of any
covenant contained herein, or in aid of the execution or enforcement
of any power herein granted.
Obtain Deficiency. Lender may obtain a judgment against Grantor for
any deficiency remaining on the Indebtedness due to Lender after
application of all amounts received from the exercise of the rights
provided in this Agreement and any Related Documents.
Other Rights and Remedies. In addition, Lender shall have and may
exercise any or all other rights and remedies it may have available at
law, in equity, or otherwise. To the extent that the perfection of
the security interest in the
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Collateral or the enforcement thereof is governed by the law of any
state other than Louisiana, then the Lender shall have all the rights
and remedies of a secured party under the Uniform Commercial Code as
passed and amended in that state and under any other applicable law.
Cumulative Remedies. All of Lender's rights and remedies, whether
evidenced by this Agreement or the Related Documents or by any other
writing, shall be cumulative and may be exercised singularly or
concurrently. Election by Lender to pursue any remedy shall not
exclude pursuit of any other remedy, and an election to make
expenditures or to take action to perform an obligation of Grantor
under this Agreement, after Grantor's failure to perform, shall not
affect Lender's right to declare a default and to exercise its
remedies.
REGISTRATION OF STOCK. Grantor acknowledges that Pledgors have
contemporaneously herewith pledged certain shares of the common stock of
Grantor as security for the Indebtedness, and that Pledgors have agreed that
upon the occurrence of an Event of Default, Lender shall have the right to sell
such shares of stock at public or private sales. If any consent, approval, or
authorization of any federal, state, municipal or other governmental
department, agency or authority should be necessary to effectuate any sale or
other disposition of such stock, or any partial sale or other disposition of
such stock, Grantor will execute all applications and other instruments as may
be required in connection with securing any such consent, approval or
authorization and will otherwise use its best efforts to secure same. If
Lender shall determine to exercise its right to sell all or any part of such
stock and if in the opinion of counsel to Lender it is advisable to have such
stock or the portion thereof to be sold registered under the provisions of the
Securities Act of 1933, as amended (the "Act"), Grantor hereby agrees, at its
own cost and expense (i) to execute and deliver, and to cause its directors and
officers to execute and deliver, all such instruments and documents, and to do
or cause to be done all other such acts and things, as may be necessary or, in
the opinion of the Lender, advisable to register such stock, or the portion
thereof to be sold, under the provisions of the Act and to cause the
registration statement relating thereto to become effective and to remain
effective for such period as prospectuses are required by law to be furnished,
and to make or cause to be made all amendments and supplements thereto and to
the related prospectus which, in the opinion of the Lender, are necessary or
advisable, all in conformity with the requirements of the Act and the rules and
regulations of the Securities and Exchange Commission applicable thereto, (ii)
to make available to its security holders as soon as practicable an earnings
statement (which need not be audited) covering a period of at least 12 months,
beginning with the first month after the effective date of
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any such registration statement, which earnings statement will satisfy the
provisions of Section 11(a) of the Act, (iii) to use its best efforts to
qualify such stock under state Blue Sky or securities laws and to obtain the
approval of any governmental authorities for the public sale of such stock,
including all necessary gaming authorities' approvals, as requested by the
Lender, and (iv) at the request of the Lender, to indemnify and hold harmless
the Lender, the holder or holders of the Indebtedness and any underwriters,
including any person controlling any of the foregoing, from and against any
loss, liability, claim, damage and expense, including reasonable attorneys'
fees incurred in connection therewith, under the Act or otherwise insofar as
such loss, liability, claim, damage or expense arises out of or is based upon
any actual or alleged untrue statement of a material fact contained in such
registration statement or supplement thereto, or arises out of or is based upon
any omission or alleged omission to state therein a material fact required to
be stated or necessary to make the statements therein not misleading, such
indemnification to remain operative regardless of any investigation made by or
on behalf of the Lender, the holder or holders of the Indebtedness or any
underwriters, including any person controlling any of the foregoing; provided,
however, that Grantor shall not be liable in any case to the extent that any
such loss, liability, claim, damage or expenses arises out of or is based on an
untrue statement or alleged untrue statement or an omission or an alleged
omission made in reliance upon and in conformity with written information
furnished specifically to Grantor by Lender, any holder or holder of the
Indebtedness or any underwriter.
Expenses payable by Grantor in connection with any disposition of the stock of
the Pledgors under the provisions above shall include, but shall not be limited
to, all costs of a registration under the Act of any such stock pursuant to any
applicable regulation under the Act, brokers' or underwriters' commissions,
fees or discounts, accounting and legal fees, costs of printing and other
expenses of transfer and sale. Grantor agrees to pay to Lender on demand
following any Event of Default and in advance of any such registration, sale or
other realization on such stock, such amount which, in the estimation of
counsel to the Lender, will cover all of such costs and expenses described
above, and all other costs and expenses of enforcing the Indebtedness and of
realizing on such stock, including reasonable attorneys' fees and legal
expenses.
ASSIGNMENT OF INDEBTEDNESS. Grantor hereby recognizes and agrees that Lender
may assign all or any portion of Grantor's Indebtedness to one or more third
party creditors. Such transfers may include, but are not limited to, sales of
participation interests in Grantor's Indebtedness. Grantor specifically agrees
and consents to all such transfers and assignments. Grantor additionally
agrees that any and all of Grantor's Indebtedness in
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favor of such a third party assignee, for the limited purposes set forth above,
will be secured by the Collateral.
PROTECTION OF LENDER'S SECURITY RIGHTS. Grantor will be fully responsible for
any losses that Lender may suffer as a result of anyone other than Lender
asserting any rights or interest in or to the Collateral. Grantor agrees to
appear in and to defend all actions or proceedings purporting to affect
Lender's security interests in any of the Collateral subject to this Agreement
and any of the rights and powers granted Lender hereunder. In the event that
Grantor fails to do what is required of it under this Agreement, or if any
action or proceeding is commenced naming Lender as a party or affecting
Lender's security interests or the rights and powers granted under this
Agreement, then Lender may, without releasing Grantor from any of its
obligations under this Agreement, do whatever Lender believes to be necessary
and proper within its sole discretion to protect the security of this
Agreement, including without limitation making additional advances on Grantor's
behalf as provided herein.
INDEMNIFICATION OF LENDER. Grantor agrees to indemnify, to defend and to save
and hold Lender harmless from any and all claims, suits, obligations, damages,
losses, costs, expenses (including without limitation Lender's attorneys'
fees), demands, liabilities, penalties, fines and forfeitures of any nature
whatsoever that may be asserted against or incurred by Lender arising out of or
in any manner occasioned by this Agreement and the exercise of the rights and
remedies granted Lender hereunder. The foregoing indemnity provisions shall
survive the cancellation of this Agreement as to all matters arising or
accruing prior to such cancellation, and the foregoing indemnity shall survive
in the event that Lender elects to exercise any of the remedies as provided
under this Agreement following default hereunder.
EXECUTION OF ADDITIONAL DOCUMENTS. Grantor agrees to execute all additional
documents, instruments and agreements that Lender may deem to be necessary and
proper, within its sole discretion, in form and substance satisfactory to
Lender, to keep this Agreement in effect, and to consummate fully all of the
transactions contemplated hereby and by any other agreement, instrument or
document heretofore, now or at any time or times hereafter executed by Grantor
and delivered to Lender.
INSPECTION; AUDITS. Lender and its agents may periodically enter upon
Grantor's premises at reasonable hours and inspect the Collateral. Lender and
its agents may also periodically conduct audits of the Collateral and may
further inspect and audit Grantor's books and records that in any way pertain
to the Collateral and any part or parts thereof.
APPLICATION OF PAYMENTS. Grantor agrees that all payments and other sums and
amounts received by Lender under the Indebtedness
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or under this Agreement, shall be applied: first, to reimburse Lender for its
costs of collecting the same (including but not limited to, reimbursement of
Lender's reasonable attorneys' fees); second, to the repayment of interest on
any Indebtedness; and finally, to the payment of principal on the Indebtedness
then outstanding, which may be applied in such order and priority as Lender may
determine within its sole discretion.
TAXATION. In the event that there should be any change in law with regard to
taxation of security agreements or the debts they secure, Grantor agrees to pay
any taxes, assessments or charges that may be imposed upon Lender as a result
of this Agreement.
EFFECT OF WAIVERS. Grantor has waived, and/or does by these presents waive,
presentment for payment, protest, notice of protest and notice of nonpayment
under all of the Indebtedness secured by this Agreement. Grantor has further
waived, and/or does by these presents waive, all pleas of division and
discussion, and all similar rights with regard to the Indebtedness, and agrees
that Grantor shall remain liable, together with any and all Guarantors of the
Indebtedness, on a "solidary" or "joint and several" basis. Grantor further
agrees that discharge or release of any party who is, may, or will be liable to
Lender under any of the Indebtedness, or the release of the Collateral or any
other Collateral directly or indirectly securing repayment of the same, shall
not have the effect of releasing or otherwise diminishing or reducing the
actual or potential liability of Grantor and/or any other party or parties
guaranteeing payment of the Indebtedness, who shall remain liable to Lender,
and/or of releasing any Collateral or other Collateral that is not expressly
released by Lender.
Grantor additionally agrees that Lender's acceptance of payments other than in
accordance with the terms of any agreement or agreements governing repayment
of the Indebtedness, or Lender's subsequent agreement to extend or modify such
repayment terms, shall likewise not have the effect of releasing Grantor,
and/or any other party or parties guaranteeing payment of the Indebtedness,
from their respective obligations to Lender, and/or of releasing any of the
Collateral or other Collateral directly or indirectly securing repayment of the
Indebtedness. In addition, no course of dealing between Grantor and Lender,
nor any failure or delay on the part of Lender to exercise any of the rights
and remedies granted to Lender under this Agreement, or under any other
agreement or agreements by and between Grantor and Lender, shall have the
effect of waiving any of Lender's rights and remedies. Any partial exercise of
any rights and remedies granted to Lender shall furthermore not constitute a
waiver of any of Lender's other rights and remedies, it being Grantor's intent
and agreement that Lender's rights and remedies shall be cumulative in nature.
Grantor further agrees that, upon the occurrence of any Event of Default under
this Agreement, any waiver or forbearance
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on the part of Lender to pursue the rights and remedies available to Lender,
shall be binding upon Lender only to the extent that Lender specifically agrees
to any such waiver or forbearance in writing. A waiver or forbearance as to
one Event of Default shall not constitute a waiver of forbearance as to any
other Event of Default. None of the warranties, conditions, provisions and
terms contained in this Agreement or any other agreement, documents, or
instrument now or hereafter executed by Grantor and delivered to Lender, shall
be deemed to have been waived by any act or knowledge of Lender, its agents,
officers or employees; but only by an instrument in writing specifying such
waiver, signed by a duly authorized officer of Lender and delivered to Grantor.
MISCELLANEOUS PROVISIONS. The following miscellaneous provisions are a part of
this Agreement.
Amendments. This Agreement, together with any Related Documents,
constitutes the entire understanding and agreement of the parties as
to the matters set forth in this Agreement. No alteration of or
amendment to this Agreement shall be effective unless given in writing
and signed by the party or parties sought to be charged or bound by
the alteration or amendment.
Applicable Law. This Agreement has been delivered to Lender and
accepted by Lender in the State of Louisiana. This Agreement shall be
governed by and construed in accordance with the laws of the State of
Louisiana.
Attorneys' Fees; Expenses. Grantor agrees to pay upon demand all of Lender's
costs and expenses, including reasonable attorneys' fees and legal expenses,
incurred in connection with the enforcement of this Agreement. Lender may pay
someone else to help enforce this Agreement, and Grantor shall pay the costs
and expense of such enforcement. Costs and expenses include Lender's
reasonable attorneys' fees and legal expenses whether or not there is a
lawsuit, including attorneys' fees and legal expenses for bankruptcy
proceedings (and including efforts to modify or vacate any automatic stay or
injunction), appeals, and any anticipated post-judgment collection services.
Grantor also shall pay all court costs and such additional fees as may be
directed by the court.
Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions of
this Agreement.
Notices. Any notice or demand which, by any provision of this Agreement, is
required or permitted to be given or served by the Lender to or on the Grantor
shall be deemed to have been sufficiently given and served for all purposes (if
mailed) five calendar days after being deposited, postage prepaid, in the
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United States mail, registered or certified mail, or (if delivered by express
courier) one calendar day after being delivered to such courier, or (if
delivered in person) the same day as delivery or (if delivered by facsimile
transmission) on the day reception is confirmed, in each case addressed (until
another address or addresses are given in writing by the Grantor to the Lender)
to the Grantor as follows:
Fair Grounds Corporation
0000 Xxxxxxxx Xxxx.
Xxx Xxxxxxx, XX 00000
Telecopy No.: (000) 000-0000
Attn: Xxxxxx Xxxxxxxxx,
Vice President and
Chief Financial Officer
with copies to:
Chehardy, Sherman, Ellis, Xxxxxxx & Xxxxxx
Suite 0000
Xxx Xxxxxxxx Xxxx.
Xxxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
and
Xxxxxxx Xxxxxxx, Trustee
Four Commerce Park Square
00000 Xxxxxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxx, Xxxx 00000
Telecopy No.: (000) 000-0000
Any notice or demand which, by any provision of this Agreement, is
required or permitted to be given or served by the Grantor to or on the Lender
shall be deemed to have been sufficiently given and served for all purposes
(if mailed) five calendar days after being deposited, postage prepaid, in the
United States mail, registered or certified mail, or (if delivered by express
courier) one calendar day after being delivered to such courier, or (if
delivered in person) the same day as delivery or (if delivered by facsimile
transmission) on the day reception is confirmed, in each case addressed (until
another address or addresses are given in writing by the Lender to the Grantor)
to the Lender as follows:
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First National Bank of Commerce
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attn: Hospitality Lending Division,
Xxxxx Xxxxxxx, Senior Vice President
Telecopy No.: (000) 000-0000
with a copy to:
Liskow & Xxxxx
Xxx Xxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000-0000
Attn: Wm. Xxxxx Xxxxxxx, Esq.
Telecopy No.: (000) 000-0000
Power of Attorney. Grantor hereby appoints Lender as its true and lawful
attorney-in-fact, irrevocably, with full power of substitution to do the
following: (a) to demand, collect, receive, receipt for, xxx and recover all
sums of money or other property which may now or hereafter become due, owing or
payable from the Collateral; (b) to execute, sign and endorse any and all
claims, instruments, receipts, checks, drafts or warrants issued in payment for
the Collateral; (c) to settle or compromise any and all claims arising under
the Collateral (other than claims giving rise to Fire Insurance Proceeds and
the claims with respect to the ADT Lawsuit), and, in the place and stead of
Grantor, to execute and deliver its release and settlement for the claim; and
(d) to file any claim or claims or to take any action or institute or take part
in any proceedings, either in its own name or in the name of Grantor, or
otherwise, which in the discretion of Lender may seem to be necessary or
advisable. This power is given as security for the Indebtedness, and the
authority hereby conferred is and shall be irrevocable and shall remain in full
force and effect until renounced by Lender.
Severability. If a court of competent jurisdiction finds any provision of
this Agreement to be invalid or unenforceable as to any person or
circumstances, such finding shall not render that provision invalid or
unenforceable as to any other persons or circumstances. If feasible, any such
offending provision shall be deemed to be modified to be within the limits of
enforceability or validity; however, if the offending provision cannot be so
modified, it shall be stricken and all other provisions of this Agreement in
all other respects shall remain valid and enforceable.
Sole Discretion of Lender. Whenever Lender's consent or approval is required
under this Agreement, the decision as to whether or not to consent or approve
shall be in the sole and exclusive discretion of Lender and Lender's decision
shall be final and
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conclusive; provided, however, that Lender shall not arbitrarily or
capriciously withhold such consent.
Successors and Assigns Bound; Solidary Liability. Grantor's obligations and
agreements under the Agreement shall be binding upon Grantor's successors and
assigns. In the event that there is more than one Grantor under this
Agreement, all of the agreements and obligations made and/or incurred by
Grantors under this Agreement shall be on a "solidary" or "joint and several"
basis.
GRANTOR AND LENDER ACKNOWLEDGE HAVING READ ALL THE PROVISIONS OF THIS SECURITY
AGREEMENT, AND AGREE TO ITS TERMS. THIS AGREEMENT IS DATED JULY 17, 1995.
GRANTOR:
FAIR GROUNDS CORPORATION
By:_______________________________
Its:______________________________
LENDER:
FIRST NATIONAL BANK OF COMMERCE
By:_______________________________
Its:______________________________
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