EXHIBIT 10.13
SECURITY AGREEMENT
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This Security Agreement ("Agreement") dated as of October 29, 2003,
by and between CATSKILL DEVELOPMENT, LLC, a limited liability company
("Debtor"), with its chief executive office at x/x Xxxxxxxxxx Xxxxxxx, Xxxxx
00X, Xxxxxxxxxx, XX 00000, and THE BERKSHIRE BANK ("Secured Party").
BACKGROUND
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A. Secured Party, as lender, and Monticello Raceway Management,
Inc., as borrower (the "Borrower") are parties to that certain Loan and Security
Agreement dated as of even date herewith (as amended, modified, replaced or
restated from time to time, the "Loan Agreement"). In connection therewith,
Debtor has agreed under the terms of Amendment No. 1 to Management Agreement of
even date herewith between Debtor and Borrower to grant a security interest in
the Collateral (as defined below) to secure the Borrower's Obligations. The Loan
Agreement and all related agreements, instruments and documents are hereafter
referred to as the "Loan Documents". All capitalized terms used but not defined
in clauses (a) through (m) in Section 1.1 herein shall have the meanings
ascribed thereto in the UCC and all other capitalized terms used but not defined
herein shall have the meanings ascribed thereto in the Loan Agreement.
B. Debtor desires to grant to Secured Party security interests in
the property described herein to secure all of the Obligations of Borrower.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
SECTION 1 - SECURITY INTEREST
1.1 GRANT OF SECURITY INTEREST; COLLATERAL: As security for the
Obligations of Borrower, Debtor hereby assigns and grants to Secured Party a
continuing lien on and security interest in, upon and to the following property
relating to the business and operations of the Racetrack, all whether now owned
or hereafter created, acquired or arising (the "Collateral"):
(a) ACCOUNTS. - All Accounts;
(b) CHATTEL PAPER - All Chattel Paper;
(c) DOCUMENTS - All Documents;
(d) INSTRUMENTS - All Instruments;
(e) INVENTORY - All Inventory;
(f) GENERAL INTANGIBLES - All General Intangibles;
(g) DEPOSIT ACCOUNTS - All Deposit Accounts;
(h) GOODS - All Goods;
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(i) LETTER OF CREDIT RIGHTS - All Letter of Credit Rights;
(j) SUPPORTING OBLIGATIONS - All Supporting Obligations;
(k) COMMERCIAL TORT CLAIMS - All Commercial Tort Claims
identified and described on Schedule 1 hereto (as amended or supplemented from
time to time); and
(1) PROCEEDS - The Proceeds (including, without limitation,
insurance proceeds), whether cash or non-cash, of all of the foregoing property
described in clauses (a) through (k).
1.2 OTHER ACTIONS:
(a) Secured Party is hereby authorized to file financing
statements and amendments to financing statements without Debtor's signature in
accordance with the Uniform Commercial Code ("UCC"), as in effect in the State
of New York. Debtor hereby authorizes Secured Party to file all financing
statements and amendments to financing statements describing the Collateral in
any filing office as Secured Party, in its sole discretion may determine,
including financing statements listing "All Assets" in the collateral
description therein. Debtor agrees to comply with the requirements of all state
and federal laws and reasonable requests of Secured Party in order for Secured
Party to have and maintain a valid and perfected security interest in the
Collateral including, without limitation, executing or causing to be executed
such documents as Secured Party may require to obtain control (as defined in the
UCC) over all deposit accounts, letter of credit rights and investment property.
(b) In addition to the foregoing, Debtor shall, promptly after
request by Secured Party, do anything further that may be reasonably required by
Secured Party to effectuate the intentions and objects of this Agreement,
including, without limitation, the execution and delivery of any other
agreement, documents and instruments required to evidence, perfect or protect
Secured Party's lien and security interest in the Collateral. At Secured Party's
request, Debtor shall also promptly deliver (with execution by Debtor of all
necessary documents or forms to reflect, implement or enforce the security
interest of Secured Party described herein) to Secured Party all items of which
Secured Party must receive possession to obtain a perfected security interest,
including without limitation, all notes, stock powers, letters of credit,
certificates and documents of title, chattel paper, warehouse receipts,
instruments, and any other similar instruments constituting Collateral.
1.3 FILING SECURITY AGREEMENT: A carbon, photographic or other
reproduction or other copy of this Agreement or of a financing statement is
sufficient as and may be filed in lieu of a financing statement.
1.4 POWER OF ATTORNEY: Each of the officers of Secured Party or its
representative is hereby irrevocably made, constituted and appointed the true
and lawful attorney for Debtor (without requiring it to act as such) with full
power of substitution to do the following: (a) execute in the name of Debtor
documents necessary to perfect (or continue to evidence the perfection) of
Secured Party's security interest; (b) endorse the name of Debtor upon any and
all checks, drafts, money orders and other instruments for the payment of monies
that are payable to Debtor and constitute collections on Debtor's accounts or
other Collateral relating to the Racetrack; and (c) during the continuance of
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any Event of Default, do such other and further acts and deeds in the name of
Debtor that Secured Party may reasonably deem necessary or desirable to enforce
any Account or other Collateral or otherwise enforce Secured Party's rights
hereunder.
SECTION 2 - REPRESENTATIONS AND WARRANTIES
2.1 Debtor represents and warrants to Secured Party that:
(a) CORPORATE ORGANIZATION - Debtor is duly organized, validly
existing and in good standing under the laws of the State of New York. Debtor's
proper legal name is as set forth in the preamble to this Agreement. Debtor's .
organization identification number is ____________________.
(b) NON-CONTRAVENTION - The making and performance of this
Agreement will not (immediately, with the passage of time or with the giving of
notice or both):
(i) violate the certificate of formation or operating
agreement of Debtor or result in a default under any contract, agreement or
instrument to which Debtor is a party or by which Debtor or its Property is or
may be bound, or
(ii) result in the creation or imposition of any security
interest in, or lien or encumbrance upon, any of the Property of Debtor, except
such as are in favor of Secured Party;
(c) POWER AND AUTHORITY - Debtor has the power and authority to
enter into and perform this Agreement and to incur the obligations herein and
therein provided for, and has taken all proper and necessary action, corporate
or otherwise, to authorize the execution, delivery and performance of this
Agreement;
(d) ENFORCEABLE - This Agreement is valid, binding and
enforceable against Debtor in accordance with its respective terms, except as
enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting the enforcement of
creditors' rights generally and by generally equitable principles;
(e) CONSENTS AND APPROVALS - All necessary consents, approvals
or authorizations of, or filing, registration or qualification with, any Person,
required to be obtained by Debtor in connection with the execution and delivery
of this Agreement or the undertaking or performance of any obligation hereunder
has been obtained;
(f) PERFECTION - This Agreement is effective to create in favor
of Secured Party legal, valid and enforceable security interest in all right,
title and interest of Debtor in the Collateral, and when financing statements
have been filed under Debtor's name in the appropriate filing offices, Secured
Party will have a perfected security interest in the Collateral in which a lien
may be perfected by the filing of a financing statement; and
(g) No security interest, lien or other encumbrance exists with
respect to any of the Collateral.
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SECTION 3 - COVENANTS
3.1 Debtor covenants that:
(a) FINANCIAL RECORDS - Debtor shall keep current and accurate
books of records and accounts in which full and correct entries will be made of
all of its business transactions, and will reflect in its financial statements
adequate accruals and appropriations to reserves, all in accordance with GAAP;
(b) EXISTENCE AND GOOD STANDING - Debtor shall do (or cause to
be done) all things necessary to preserve and keep in full force and effect its
existence and good standing. Debtor agrees not to change its name or
jurisdiction of origination without ten (10) days prior notice to Secured Party;
(c) MERGER, CONSOLIDATION, DISSOLUTION OR LIQUIDATION - Except
for the Consolidation Transaction, Debtor shall not merge or consolidate with
any other Person or commence a dissolution or liquidation;
(d) SALE OF PROPERTY - Debtor shall not engage in any sale or
other disposition of its Collateral, except with respect to the Consolidation
Transaction;
(e) LIENS AND ENCUMBRANCES - Debtor shall not: (i) execute a
negative pledge agreement with any person covering any of the Collateral, or
(ii) cause or permit or agree or consent to cause or permit in the future (upon
the happening of a contingency or otherwise) the Collateral, whether now owned
or hereafter acquired, to be subject to any claim or encumbrance (except to the
extent a claim or encumbrance arises as a result of the Consolidation
Transaction) or any lien or security interest; and
(f) OTHER AGREEMENTS - Debtor shall not become or be a party to
any contract or agreement which at the time of becoming a party to such contract
or agreement materially impairs Debtor's ability to perform under this
Agreement, except with respect to the Consolidation Transaction.
SECTION 4 - DEFAULT
4.1 EVENTS OF DEFAULT: Upon the occurrence of an Event of Default,
Secured Party shall have the option to declare all existing and future
liabilities, indebtedness and obligations of Debtor to Secured Party, whether
matured or contingent, related or unrelated, due or to become due, immediately
due and payable, all without demand, notice, presentment or protest or further
action of any kind.
4.2 RIGHTS AND REMEDIES ON DEFAULT: In addition to all other rights,
options and remedies granted to Secured Party under this Agreement (each of
which is also then exercisable by Secured Party), Secured Party may, upon the
occurrence of an Event of Default, exercise any other rights granted to it under
the UCC and any other applicable law, including, without limitation, the
following rights and remedies:
(a) the right to take possession of, send notices, and collect
directly the Collateral, with or without judicial process (including, without
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limitation the right to notify the United States postal authority to redirect
all mail addressed to Debtor to an address designated by Secured Party);
(b) by its own means or with judicial assistance, enter Debtor's
premises and take possession of the Collateral, or render it unusable, or
dispose of the Collateral on such premises without any liability for rent,
storage, utilities or other sums, and Debtor shall not resist or interfere with
such action;
(c) require Debtor at Debtor's expense to assemble all or any
part of the Collateral and make it available to Secured Party at any place
designated by Secured Party.
Debtor hereby agrees that a notice received by it at least ten (10)
days before the time of any intended public sale or of the time after which any
private sale or other disposition of the Collateral is to be made, shall be
deemed to be reasonable notice of such sale or other disposition. If permitted
by applicable law, any perishable inventory or Collateral which threatens to
speedily decline in value or which is sold on a recognized market may be sold
immediately by Secured Party without prior notice to Debtor. Debtor covenants
and agrees not to interfere with or impose any obstacle to Secured Party's
exercise of its rights and remedies with respect to the Collateral, after the
occurrence of an Event of Default.
4.3 NATURE OF REMEDIES: Secured Party shall have the right to
proceed against all or any portion of the Collateral in any order and may apply
such Collateral to the Obligations as well as any existing and future
obligations of Debtor to Secured Party hereunder in any order. All rights and
remedies granted Secured Party hereunder and under any agreement referred to
herein, or otherwise available at law or in equity, shall be deemed concurrent
and cumulative, and not alternative remedies, and Secured Party may proceed with
any number of remedies at the same time until all Obligations as well as any
existing and future obligations of Debtor to Secured Party hereunder are
satisfied in full. The exercise of any one right or remedy shall not be deemed a
waiver or release of any other right or remedy, and Secured Party, upon the
occurrence of an Event of Default, may proceed against Debtor, and/or the
Collateral, and/or Debtor at any time, under any agreement, with any available
remedy and in any order.
SECTION 5 - MISCELLANEOUS
5.1 GOVERNING LAW: This Agreement, and all related agreements and
documents shall be governed by and construed in accordance with the laws of the
State of New York, without regard to its otherwise applicable principles of
conflicts of laws. The provisions of this Agreement and other agreements and
documents referred to herein are to be deemed severable, and the invalidity or
unenforceability of any provision shall not affect or impair the remaining
provisions which shall continue in full force and effect.
5.2 WAIVER: No omission or delay by Secured Party in exercising any
right or power under this Agreement or any other document will impair such
right or power or be construed to be a waiver of any default, or Event of
Default or an acquiescence therein, and any single or partial exercise of any
such right or power will not preclude other or further exercise thereof or the
exercise of any other right, and no waiver of Secured Party's rights hereunder
will be valid unless in writing and signed by Secured Party, and then only to
the extent specified.
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5.3 MODIFICATION: No modification hereof or any agreement referred
to herein shall be binding or enforceable unless in writing and signed on behalf
of the party against whom enforcement is sought.
5.4 SIGNATORIES: Each individual signatory hereto represents and
warrants that he is duly authorized to execute this Agreement on behalf of his
principal and that he executes the Agreement in such capacity and not as a
party.
5.5 SUCCESSORS AND ASSIGNS: All provisions herein shall inure to,
become binding upon Debtor, Secured Party, and their respective successors and
assigns, except that Debtor may not assign its rights or obligations under this
Agreement without the prior written consent of Secured Party.
5.6 CONSENT TO JURISDICTION: Debtor irrevocably consents to the
jurisdiction of the Courts of the State of New York or any federal court located
in New York County, New York in any and all actions and proceedings whether
arising hereunder or under any other agreement or undertaking and irrevocably
agrees to service of process to the address of Debtor set forth herein by
certified mail, return receipt requested (deemed received three (3) Business
Days after deposited in the U.S. mail) or by nationally recognized overnight
courier (deemed received on the Business Day after delivery to such courier).
5.7 WAIVER OF JURY TRIAL: DEBTOR AND SECURED PARTY HEREBY WAIVE ANY
AND ALL RIGHTS ANY MAY HAVE TO A JURY TRIAL IN CONNECTION WITH ANY LITIGATION
COMMENCED BY OR AGAINST SECURED PARTY WITH RESPECT TO RIGHTS AND OBLIGATIONS OF
THE PARTIES HERETO.
5.8 DEBTOR ACKNOWLEDGEMENTS.
(a) Debtor hereby waives notice of (i) acceptance of this
Agreement, (ii) the existence or incurring from time to time of any Obligations
secured hereunder, (iii) the existence of any Event of Default, the making of
demand, nonpayment, or the taking of any action by Secured Party, under the Loan
Agreement, and (iv) default and demand hereunder.
(b) Debtor further acknowledges that Debtor (i) has examined or
had the opportunity to examine the Loan Agreement and related agreements and
(ii) waives any defense which may exist resulting from the Debtor's failure to
receive or examine at any time the Loan Documents or any amendments,
supplements, restatements or replacements therefor.
(c) Debtor acknowledges that in entering into this Agreement
Debtor is not relying upon any statement, representation, warranty or opinion of
any kind from Secured Party as to the present or future financial condition,
performance, assets, liabilities or prospects of Borrower or as to any other
matter.
5.9 SECURED PARTY ACTIONS. Debtor hereby consents and agrees that
Secured Party may at any time or from time to time in Secured Party's discretion
(a) extend or change the time of payment and/or change the manner, place or
terms of payment of any or all Obligations, (b) amend, supplement, restate or
replace the Loan Agreement or any related agreements, (c) renew or extend any
financing now or hereafter reflected by the Loan Agreement or the maturity
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thereof or increase (without limit of any kind and whether related or unrelated)
or decrease loans and extensions of credit to Borrower, (d) modify the terms and
conditions under which loans and extensions of credit may be made to Borrower,
(e) settle, compromise or grant releases for liabilities of Borrower, and/or any
other Person or Persons liable with Borrower for, any Obligations, (f) exchange,
compromise, release or surrender, or subordinate or release any lien on, any
property (including any collections therefrom or proceeds thereof) of Borrower
or any other Person or Persons now or hereafter securing any of the Obligations,
and (g) apply any and all payments and proceeds of any property of any Person
securing any or all of the Obligations received by Secured Party at any time
against the Obligations in any order as Secured Party may determine; all of the
foregoing in such manner and upon such terms as Secured Party may see fit, and
without notice to or further consent from Debtor, who hereby agrees to be and
shall remain bound upon this Agreement notwithstanding any such action on
Secured Party's part.
5.10 SCOPE OF LIABILITY. The liability of Debtor hereunder shall not
be reduced, impaired or affected in any way by reason of (a) any failure to
obtain, retain or preserve, or the lack of prior enforcement of, any rights
against any Person or Persons liable for the Obligations (including Borrower and
Debtor) or in any property, (b) the invalidity, unenforceability or voidability
of any Obligations or any liens or rights in any property pledged by any Person
or Persons, (c) any delay in making demand upon Borrower or any delay in
enforcing, or any failure to enforce, any rights against Borrower or any other
Person or Persons liable for any or all of the Obligations or in any property
pledged by any Person or Persons, even if such rights are thereby lost, (d) any
failure, neglect or omission on Secured Party's part to obtain, perfect or
continue any lien upon, protect, exercise rights against, or realize on, any
property of Borrower, Debtor or any other party securing the Obligations, (e)
the existence or nonexistence of any defenses which may be available to the
Borrower with respect to the Obligations, (f) the granting of any waiver or
forbearance at any time and for any period with respect to any performance by
Borrower or any Event(s) of Default under the Loan Agreement, (g) the
commencement of any bankruptcy, reorganization, liquidation, dissolution or
receivership proceeding or case filed by or against Borrower or Debtor or (h)
any other fact, event, condition or omission which may give rise to a defense
against Secured Party. Secured Party's right to receive payments and proceeds of
Collateral is free and clear of any deduction, offset, defense, claim or
counterclaim of any kind.
SIGNATURES ON THE FOLLOWING PAGE
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IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement the day and year first above written.
CATSKILL DEVELOPMENT, LLC
By: /s/ Xxxxxx Xxxxxxxxx
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Name: Xxxxxx Xxxxxxxxx
Title: Executive Vice President
AGREED:
THE BERKSHIRE BANK
By:___________________
Name:_________________
Title:________________
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IN WITNESS WHEREOF, the undersigned parties have executed this
Agreement the day and year first above written.
CATSKILL DEVELOPMENT, LLC
By:______________________________
Name:____________________________
Title:___________________________
AGREED:
THE BERKSHIRE BANK
By /s/ Xxxxx X. Xxx
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Name:_________________
Title:________________
