SECURITY AGREEMENT
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THIS SECURITY AGREEMENT, dated as of October 24, 1997 (herein, as the same
from time to time may be amended, modified, restated or supplemented and in
effect, called this "AGREEMENT"), is by and among MIKOHN GAMING CORPORATION, a
Nevada corporation ("BORROWER"), MIKOHN NEVADA, a Nevada corporation ("MIKOHN
NEVADA"), MGC, INC., a Nevada corporation ("MGC"), CASINO EXCITEMENT, INC., a
Nevada corporation ("CEI"), (Mikohn Nevada, MGC and CEI sometimes hereinafter
are referred to individually as each "Guarantor" and collectively as
"Guarantors" and Borrower and Guarantors sometimes hereinafter are referred to
individually as each "Debtor" and collectively as "Debtors"), and FIRST SOURCE
FINANCIAL LLP, an Illinois registered limited liability partnership ("FSFP"), as
"AGENT" for all "LENDERS" (as such terms are defined in Section 1 below).
BACKGROUND:
1. Borrower and FSFP, for itself, as a Lender, and as Agent for all
Lenders, and the financial institutions parties thereto have entered into a
certain Credit Agreement of even date herewith (herein, as the same from time to
time may be amended, modified, supplemented or restated and in effect, called
the "CREDIT AGREEMENT"), pursuant to which Lenders have agreed to make certain
Loans to Borrower.
2. Guarantors have guaranteed the payment and performance of the
Obligations pursuant to a certain Guaranty of even date herewith (herein, as
the same from time to time may be amended, modified, supplemented or restated
and in effect, called the "GUARANTY") made by Guarantors in favor of Agent.
3. It is a condition precedent to the making of the initial Loans under
the Credit Agreement that this Agreement be executed and delivered.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, the parties hereto agree as follows:
SECTION 1. Definitions. (a) When used herein, the following terms
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shall have the following meanings:
ACCOUNT shall mean all "Accounts" (as such term is defined in the Uniform
Commercial Code), including, without limitation, any right of any Debtor to
payment for goods sold or leased or for services rendered which is not evidenced
by an Instrument or Chattel Paper, whether or not it has been earned by
performance.
ACCOUNT DEBTOR shall mean the Person who is obligated on or under any
Account, Chattel Paper or, if appropriate, any of the General Intangibles of any
Debtor.
AGENT BANK shall mean any bank or financial institution acting as agent or
pledgee-in-possession for Agent with respect to any Collateral (including,
without limitation, pursuant to a Bank Agency Agreement entered into among such
bank or financial institution, Agent and Debtor).
BENEFITS shall have the meaning assigned to such term in SECTION 16.
CERTIFICATED SECURITY shall have the meaning assigned to such term in the
Uniform Commercial Code.
CHATTEL PAPER shall have the meaning assigned to such term in the Uniform
Commercial Code.
COLLATERAL shall mean all property or rights in which a Security Interest
is granted hereunder.
COMMITMENTS shall mean, collectively, Lenders' commitments to Borrower
pursuant to the Credit Agreement.
COMPUTER HARDWARE AND SOFTWARE COLLATERAL shall mean (i) all computer and
other electronic data processing hardware, integrated computer systems, central
processing units, memory units, display terminals, printers, features, computer
elements, card readers, tape drives, hard and soft disk drives, cables,
electrical supply hardware, generators, power equalizers, accessories and all
peripheral devices and other related computer hardware, whether now owned,
licensed or leased or hereafter acquired by any Debtor; (ii) all software
programs (including source code and object code and all related applications and
data files), whether now owned, licensed or leased or hereafter acquired by any
Debtor, designed for use on the computers and electronic data processing
hardware described in clause (i) above; (iii) all firmware associated therewith,
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whether now owned, licensed or leased or hereafter acquired by any Debtor; (iv)
all documentation (including flow charts, logic diagrams, manuals, guides and
specifications) for such hardware, software and firmware described in the
preceding clauses (i), (ii) and (iii), whether now owned, licensed or leased or
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hereafter acquired by any Debtor; and (v) all rights with respect to all of the
foregoing, including, without limitation, any and all copyrights, licenses,
options, warranties, service contracts, program services, test rights,
maintenance rights, support rights, improvement rights, renewal rights and
indemnifications and any substitutions, replacements, additions or model
conversions of any of the foregoing.
COPYRIGHT COLLATERAL shall mean all copyrights and all semiconductor chip
product mask works of any Debtor, whether statutory or common law, registered or
unregistered, now or hereafter in force throughout the world, including, without
limitation, all of any Debtor's right, title and interest in and to all
copyrights and mask works registered in the United States Copyright Office or
anywhere else in the world and also including, without limitation, the
copyrights and mask works referred to in ITEM A of SCHEDULE III attached hereto,
and all applications for registration thereof, whether pending or in
preparation, all copyright and mask work licenses, including each copyright and
mask work license referred to in ITEM B of SCHEDULE III attached hereto, the
right to xxx for past, present and future infringements of any thereof, all
rights corresponding thereto throughout the world, all extensions and renewals
of any
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thereof and all proceeds of the foregoing, including, without limitation,
licenses, royalties, income, payments, claims, damages and proceeds of suit.
DEFAULT shall mean any Unmatured Event of Default or any Event of Default.
DEPOSIT ACCOUNTS shall have the meaning assigned to such terms in the
Uniform Commercial Code.
DOCUMENT shall have the meaning assigned to such term in the Uniform
Commercial Code.
EQUIPMENT shall have the meaning assigned to such term in the Uniform
Commercial Code.
EXCLUDED PROPERTY shall mean (i) all slot route participation agreements
and space lease agreements to which any Debtor is a party pertaining to
Proprietary Gaming Equipment and all inter-casino linked system agreements to
which any Debtor is a party, (ii) any property of any Debtor in which a Security
Interest may not be granted under Applicable Gaming Laws without the prior
consent of applicable Gaming Authorities including, without limitation, the
capital stock or other equity securities of any Subsidiary of any Debtor that is
registered or licensed under Applicable Gaming Laws, unless and until such
consent is obtained, (iii) General Intangibles arising under the contracts and
agreements described on Schedule VIII attached hereto, to the extent a Security
Interest may not be granted therein without the prior consent of all parties
thereto other than the applicable Debtor, unless and until such consent is
obtained and (iv) the capital stock of (or other ownership interest in) any of
Borrower's Subsidiaries. Notwithstanding the foregoing, Excluded Property shall
not be deemed to include the right to receive all proceeds derived or arising
from or in connection with the sale or assignment of any property of Debtor
described in clauses (i), (ii) or (iv) above or from any contracts or agreements
described in clause (iii) above.
FIXTURE shall have the meaning assigned to such term in the Uniform
Commercial Code.
GENERAL INTANGIBLES shall have the meaning assigned to such term in the
Uniform Commercial Code and shall include, without limitation, goodwill.
GOODS shall have the meaning assigned to such term in the Uniform
Commercial Code.
INSTRUMENT shall have the meaning assigned to such term in the Uniform
Commercial Code.
INTANGIBLE COLLATERAL shall mean all Collateral other than Goods.
INTELLECTUAL PROPERTY COLLATERAL shall mean, collectively, the Computer
Hardware and Software Collateral, the Copyright Collateral, the Patent
Collateral, the Trademark Collateral and the Trade Secrets Collateral.
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INVENTORY shall mean all "Inventory" (as such term is defined in the
Uniform Commercial Code), including, without limitation, all goods, merchandise
and other personal property furnished under any contract of service or intended
for sale or lease, including, without limitation, all raw materials, work in
process, finished goods and materials and supplies, of any kind, nature or
description, that are used or consumed by any Debtor's business, or are or might
be used in connection with the manufacture, packing, shipping, advertising,
selling or finishing of such goods, merchandise and other personal property, and
all returned or repossessed goods now or at any time or times hereafter in the
possession or under the control of any Debtor or Agent.
INVESTMENT PROPERTY shall have the meaning assigned to such term in the
Uniform Commercial Code.
LANDLORD'S CONSENT shall mean a declaration and agreement substantially in
the form of Exhibit A hereto (and in form and substance satisfactory to Agent)
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executed and delivered by the appropriate Persons pursuant to Section 4(d).
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LIABILITIES shall mean, as to Borrower, the Obligations, and, as to each
Guarantor, all obligations of such Guarantor arising under the Guaranty.
NOTES shall mean any and all promissory notes of Borrower evidencing any
loan or advance made by any Lender to Borrower, and any promissory notes taken
in extension or renewal of any thereof or in replacement therefor.
PATENT COLLATERAL shall mean:
(a) all letters patent and applications for letters patent throughout
the world, including all patent applications in preparation for filing
anywhere in the world and including each patent and patent application
referred to in ITEM A of SCHEDULE II attached hereto;
(b) all patent licenses, including each patent license referred to in
ITEM B of SCHEDULE II attached hereto;
(c) all reissues, divisions, continuations, continuations-in-part,
extensions, renewals and reexaminations of any of the items described in
CLAUSES (A) and (B); and
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the right
to xxx third parties for past, present or future infringements of any
patent or patent application, including any patent or patent application
referred to in ITEM A of SCHEDULE II attached hereto, and for breach or
enforcement of any patent license, including any patent license referred to
in ITEM B of SCHEDULE II attached hereto, and all rights corresponding
thereto throughout the world.
SECURITY shall have the meaning assigned to such term in the Uniform
Commercial Code.
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SECURITY INTEREST shall mean any mortgage, lien, pledge, encumbrance,
charge or other security interest of any kind, whether arising under a security
agreement, mortgage, deed of trust, chattel mortgage, assignment, pledge,
financing or similar statement or notice or as a matter of law, judicial process
or otherwise. As used herein with respect to the rights granted to Agent
hereunder in the Collateral, "SECURITY INTEREST" means a security interest under
the Uniform Commercial Code.
TRADEMARK COLLATERAL shall mean:
(a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade dress, service marks,
certification marks, collective marks, logos, other sources of business
identifiers, prints and labels on which any of the foregoing have appeared
or appear, designs and general intangibles of a like nature (each of the
foregoing items in this CLAUSE (A) being called a "TRADEMARK"), now
existing anywhere in the world or hereafter adopted or acquired, whether
currently in use or not, all registrations and recordings thereof and all
applications in connection therewith, whether pending or in preparation for
filing, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any office or agency of the United
States of America or any State thereof or any foreign country, including
those referred to in ITEM A of SCHEDULE I attached hereto;
(b) all Trademark licenses, including each Trademark license referred
to in ITEM B of SCHEDULE I attached hereto;
(c) all reissues, extensions or renewals of any of the items described
in clauses (a) and (b);
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(d) all of the goodwill of the business connected with the use of, and
symbolized by the items described in, clauses (a) and (b); and
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(e) all proceeds of, and rights associated with, the foregoing,
including any claim by any Debtor against third parties for past, present
or future infringement or dilution of any Trademark, Trademark registration
or Trademark license, including any Trademark, Trademark registration or
Trademark license referred to in ITEM A and ITEM B of SCHEDULE I attached
hereto, or for any injury to the goodwill associated with the use of any
such Trademark or for breach or enforcement of any Trademark license.
TRADE SECRETS COLLATERAL shall mean common law and statutory trade secrets
and all other confidential and proprietary information and all know-how obtained
by or used in or contemplated at any time for use in the business of any Debtor
(each of the foregoing being called a "TRADE SECRET"), whether or not such Trade
Secret has been reduced to a writing or other tangible form, including all
documents and things embodying, incorporating or referring in any way to such
Trade Secret, all Trade Secret licenses, including each Trade Secret license
referred to in SCHEDULE IV attached hereto, and including the right to xxx for
and to enjoin and to collect damages for the actual or threatened
misappropriation of any Trade Secret and for the breach or enforcement of any
such Trade secret license.
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UNCERTIFICATED SECURITY shall have the meaning assigned to such term in the
Uniform Commercial Code.
UNIFORM COMMERCIAL CODE shall mean the Uniform Commercial Code as in effect
in the State of Illinois on the date of this Agreement.
UNMATURED EVENT OF DEFAULT shall mean any event or condition which if it
continues uncured will, with the passage of time or giving of notice, or both,
become an Event of Default.
UNMATURED INSOLVENCY DEFAULT shall mean an Unmatured Event of Default
arising under Section 9.1(f) of the Credit Agreement.
(b) Unless otherwise defined herein, capitalized terms used herein and
defined in the Credit Agreement shall have the same meanings when used herein.
Terms not otherwise defined herein or in the Credit Agreement shall have the
meanings, if any, ascribed to them under the Uniform Commercial Code, as it may
be in effect in the State of Illinois.
SECTION 2. Grant of Security Interest. Subject to Section 17 hereof and
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to the last sentence of this Section 2, as collateral security for the prompt
and complete payment, performance and observance of its Liabilities, each Debtor
hereby mortgages, pledges and grants to Agent a continuing Security Interest
under the Uniform Commercial Code and all other applicable laws in, all of the
following property of such Debtor wherever located, whether now or hereafter
existing, owned, licensed, leased, consigned, arising or acquired:
(i) Accounts;
(ii) Goods (including, without limitation, all of such Debtor's
Equipment, Fixtures and Inventory);
(iii) General Intangibles, including, without limitation,
(A) all tax refunds,
(B) all Intellectual Property Collateral, and
(C) rights arising out of leases, licenses and contracts which are
not Accounts, but excluding, however, any licenses issued by any
Governmental Authority to the extent, and only to the extent, it
is unlawful to grant a Security Interest in such licenses, but
including, without limitation, the right to receive all proceeds
derived or arising from or in connection with the sale or
assignment of such licenses;
(iv) Chattel Paper, Documents, Instruments, Investment Property,
Certificated Securities and Uncertificated Securities;
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(v) money and property now or at any time in the possession or under
the control of, or in transit to, any Lender, Agent or any Agent
Bank, any Debtor or any bailee, agent or custodian of Lenders,
Agent, Agent Bank or any Debtor;
(vi) right, title and interest (if any) in and to all accounts of any
Debtor maintained at any Agent Bank, and any other accounts
maintained by any Debtor, all funds on deposit therein, all
investments arising out of such funds, all claims thereunder or
in connection therewith, and all cash, securities, rights and
other property at any time and from time to time received,
receivable or otherwise distributed in respect of such accounts,
such funds or such investments;
(vii) insurance policies, including claims or rights to payment
thereunder; and
(viii) Liens, guaranties and other rights and privileges pertaining to
any of the Collateral;
together with: (ix) all books, ledgers, books of account, records, writings,
data bases, information and other property relating to, used or useful in
connection with, evidencing, embodying, incorporating or referring to, any of
the foregoing; and (x) all proceeds, products, rents, issues, profits and
returns of and from any of the foregoing. Notwithstanding anything to the
contrary set forth above or elsewhere, the Collateral shall expressly exclude
the Excluded Property.
SECTION 3. Each Debtor to Remain Liable. Each Debtor hereby expressly
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agrees that, anything herein to the contrary notwithstanding, such Debtor shall
remain liable under each contract, agreement, interest or obligation assigned to
Agent hereunder to observe and perform all of the conditions and obligations to
be observed and performed by such Debtor thereunder, all in accordance with and
pursuant to the terms and provisions thereof. The exercise by Agent of any of
the rights assigned hereunder shall not release any Debtor from any of its
duties or obligations under any such contract, agreement, interest or
obligation. Neither Agent nor any Lender shall have any duty, responsibility,
obligation or liability under any such contract, agreement, interest or
obligation by reason of or arising out of the assignment thereof to Agent for
the benefit of Lenders or the granting to Agent for the benefit of Lenders of a
Security Interest therein or the receipt by Agent for the benefit of Lenders of
any payment relating to any such contract, agreement, interest or obligation
pursuant hereto, nor shall Agent be required or obligated in any manner to
perform or fulfill any of the obligations of any Debtor thereunder or pursuant
thereto, or to make any payment, or to make any inquiry as to the nature or
sufficiency of any payment received by Agent or the sufficiency of any
performance of any party under any such contract, agreement, interest or
obligation, or to present or file any claim, or to take any action to collect or
enforce any performance or the payment of any amounts which may have been
assigned to Agent and Lenders, in which Agent may have been granted a Security
Interest or to which Lenders may be entitled at any time or times.
SECTION 4. Representations and Warranties and Agreements. Each Debtor
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represents and warrants to, and covenants and agrees with, Agent and Lenders
that:
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(a) No Uniform Commercial Code financing statement (other than any which may
have been filed on behalf of Agent for the benefit of Lenders or in connection
with a Permitted Lien or which has been, or in connection with execution and
delivery hereof is being, terminated) covering any of the Collateral is on file
in any public office.
(b) Such Debtor has and will have a valid leasehold interest in all
Collateral such Debtor leases which is material to the operation of such
Debtor's business, and good and marketable title to all its other Collateral,
real and personal, of any nature whatsoever (which, with respect to licenses,
means that such Debtor is the lawful owner of its rights under licenses, except
as otherwise noted in the Credit Agreement), free of all Security Interests
whatsoever, other than the Security Interest created hereby and the Permitted
Liens, with full power and authority to execute this Agreement, to perform such
Debtor's obligations hereunder, and to subject the Collateral to the assignment
and Security Interest created hereby.
(c) All of such Debtor's books and records are now located at the premises
shown on SCHEDULE V hereto as the location of such Debtor's chief executive
office, and all of such Debtor's Equipment, Inventory and other Goods (other
than Goods in transit) are located at the location of such Debtor's chief
executive office or at one or more of the other premises shown on SCHEDULE V
hereto or at one or more of the premises shown on SCHEDULE VI hereto;
(d) Such Debtor shall provide Agent with a Landlord's Consent executed by
the landlord under all leases covering the premises designated with an asterisk
on SCHEDULE V hereto.
(e) All information with respect to the Collateral and the Account Debtors
set forth in any schedule, certificate or other writing at any time heretofore
or hereafter furnished by or on behalf of such Debtor to Agent, and all other
information heretofore or hereafter furnished by or on behalf of such Debtor to
Agent, is and will be true, correct and complete in all material respects as of
the date furnished and does not and will not omit any material fact necessary to
make the statements not misleading.
(f) Such Debtor will at all times maintain its chief executive office as
identified in SCHEDULE V hereto (or as relocated by such Debtor with notice to
Agent as provided in the Credit Agreement) in the contiguous continental United
States and such Debtor shall take such action from time to time as is required
so that a creditor of such Debtor would reasonably expect the chief executive
office, as identified on SCHEDULE V or as relocated by such Debtor with notice
to Agent as provided in the Credit Agreement, to be its chief executive office
for purposes of Article 9 of the Uniform Commercial Code.
(g) With respect to any Intellectual Property Collateral the loss,
impairment or infringement of which might have a Material Adverse Effect:
(i) such Intellectual Property Collateral owned by such Debtor is, and
to the knowledge of such Debtor such Intellectual Property Collateral
licensed by such Debtor is, subsisting and has not been adjudged invalid or
unenforceable, in whole or in part,
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(ii) such Intellectual Property Collateral owned by such Debtor is,
and to the knowledge of such Debtor such Intellectual Property Collateral
licensed by such Debtor is, valid and enforceable,
(iii) such Debtor has made all filings and recordations necessary in
the exercise of reasonable and prudent business judgment to protect its
interest in such Intellectual Property Collateral, including, without
limitation, recordations of all of its interest in the Patent Collateral and
Trademark Collateral in the United States Patent and Trademark Office and
its claims to the Copyright Collateral in the United States Copyright
Office,
(iv) for Intellectual Property Collateral owned by such Debtor, such
Debtor is, and for such Intellectual Property Collateral licensed by such
Debtor, to the knowledge of such Debtor such Debtor is, the owner of the
entire and unencumbered right, title and interest in and to such
Intellectual Property Collateral and, except as disclosed in writing from
time to time to Agent, no claim has been made that the use of such
Intellectual Property Collateral does or may violate the asserted rights of
any third party, and
(v) such Debtor has performed and will continue to perform all acts
and has paid and will continue to pay all required fees and taxes to
maintain each and every item of Intellectual Property Collateral in full
force and effect throughout such parts of the world where the failure to do
so could be reasonably considered to have a Material Adverse Effect, as
applicable.
Such Debtor owns directly, or is entitled to use by license or otherwise, all
Intellectual Property Collateral used in, necessary for or material to the
conduct of such Debtor's business. As of the date hereof and except as
disclosed in any Schedule to the Credit Documents or as otherwise disclosed by
any Debtor in writing from time to time to Agent, no litigation is pending or,
to the best knowledge of such Debtor, threatened which contains allegations
respecting the validity, enforceability, infringement or ownership of any of the
Intellectual Property Collateral, which if adversely determined reasonably could
be expected to have a Material Adverse Effect.
(h) None of the Collateral (other than Intangible Collateral) has, within
the four (4) months preceding the date of this Agreement, been located at any
place other than such Debtor's own premises at the address shown on the
signature page hereto or at one or more of the premises listed on SCHEDULES V
and VI hereto.
(i) SCHEDULE VII hereto lists all trade names by which such Debtor is now
known or was previously known.
SECTION 5. Processing, Sale, Collections, Etc.
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(a) Until notice from Agent to the contrary, given at any time after the
occurrence and during continuance of any Event of Default or Unmatured
Insolvency Default, any Debtor (i) may, in the ordinary course of its business,
at its own expense, sell, lease or furnish under contracts of service any of the
Inventory normally held by such Debtor for such purpose, and use and consume, in
the ordinary course of its business, any raw materials, work in process or
materials normally held by such Debtor for such purpose (but no such sale or use
shall limit or
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impair Agent's Security Interest in any proceeds thereof, including, without
limitation, any Account), (ii) will, at its own expense, endeavor to collect, as
and when due, all amounts due with respect to any of the Intangible Collateral,
including the taking of such action with respect to such collection as Agent may
reasonably request or, in the absence of such request, as such Debtor may deem
advisable, and (iii) may grant, subject to the next sentence hereof, to any
Person obligated on any of the Intangible Collateral, any rebate, refund or
allowance to which such Person may be lawfully entitled, and may accept, in
connection therewith, the return of goods, the sale or lease of which shall have
given rise to such Intangible Collateral. Agent, however, may at any time after
the occurrence and during the continuance of any Event of Default, (1) notify
any Person obligated on any of the Intangible Collateral to make payment to
Agent of any amounts due or to become due thereunder; (2) enforce collection of
any of the Intangible Collateral by suit or otherwise; (3) surrender, release or
exchange all or any part thereof, or compromise or extend or renew for any
period (whether or not longer than the original period) any indebtedness
thereunder or evidenced thereby; and (4) notify such Debtor (and upon receipt of
such notice such Debtor agrees to notify, at its sole expense, any parties
obligated on any of the Collateral) to make payment to Agent of any amount due
or to become due under the Collateral.
(b) Subject to the terms of the Credit Agreement, each Debtor will,
forthwith upon receipt, transmit and deliver to Agent or an Agent Bank, in the
form received, all cash, checks, drafts and other instruments or writings for
the payment of money (properly endorsed, where required, so that such items may
be collected by Agent or such Agent Bank) which may be received by such Debtor
at any time in full or partial payment, or other proceeds of any Collateral.
Except as Agent may otherwise consent in writing, any such items which may be so
received by such Debtor will not be commingled by such Debtor with any of its
other funds or property, but, until delivery to Agent or an Agent Bank, will be
held separate and apart from such other funds and property and in trust for
Agent or such Agent Bank.
(c) Lenders, Agent and each Agent Bank each is authorized to endorse, in the
name of any Debtor, any item, howsoever received by Lenders, Agent or Agent Bank
representing any payment on or other proceeds of any of the Collateral provided
the proceeds thereof (so long as no Event of Default has occurred or is
continuing) are deposited into a bank account of a Debtor.
SECTION 6. Agreements of Debtors. Each Debtor shall:
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(a) Keep all its Inventory and other Goods, unless Agent shall otherwise
consent in writing, at one or more of its own premises (as shown on SCHEDULE V
hereto) or at one or more of the premises listed on SCHEDULE VI hereto;
provided, however, that (i) so long as no Event of Default or Unmatured
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Insolvency Default shall have occurred and be continuing, and subject to Section
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6(j), such Debtor may designate additional or replacement premises (such
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premises shall be located in the contiguous continental United States or Canada)
for inclusion on SCHEDULE V hereto upon delivery to Agent of (A) 30 days' prior
written notice and (B) all documents, and completion of all action, required by
Agent to maintain the Security Interest in favor of Agent for the benefit
Lenders in the Collateral, free and clear of any other Security Interest
whatsoever except for Permitted Liens and (ii) in the case of any public
warehouse facility or distribution center listed on SCHEDULE VI hereto from time
to time (A) such Debtor's Inventory and other
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Goods shall be kept separate from the Inventory and other Goods of those Persons
(other than such Debtor) using such premises and shall be clearly and
conspicuously designated as being such Debtor's sole property (for example, by
posting signs or by affixing such Debtor's name on its Inventory and other
Goods) and (B) such Debtor shall cause the owner of such premises to (1) sign
and deliver to Agent a Bailee Waiver in the form of Exhibit B hereto and (2)
place the following language prominently on the face of any xxxx of lading,
warehouse receipt or other document of title issued relating to Inventory or
Goods of such Debtor: "THE PROPERTY DESCRIBED HEREIN IS SUBJECT TO THE SECURITY
INTEREST OF FIRST SOURCE FINANCIAL LLP, AS AGENT FOR ALL LENDERS."
(b) Immediately notify Agent of (i) the occurrence of any event causing loss
or depreciation in value of any of such Debtor's Goods in excess, in the
aggregate during any of such Debtor's fiscal years, of $50,000, and (ii) the
amount of such loss or depreciation.
(c) Furnish Agent such information concerning such Debtor, the Collateral
and the Account Debtors as Agent may from time to time reasonably request.
(d) Defend such Debtor's title to the Collateral against all Persons and
against all claims and demands whatsoever (subject to Permitted Liens).
(e) Do all acts reasonably necessary to maintain, preserve and protect all
Collateral, keep all Collateral in good condition and repair (ordinary wear and
tear excepted), and prevent any waste or unusual or unreasonable depreciation
thereof, other than in the case of any Collateral that has become obsolete.
(f) Upon request of Agent, stamp on its records concerning the Collateral
(and/or enter into its computer records concerning the Collateral) a notation,
in form satisfactory to Agent, of the Security Interest created hereby.
(g) Except for the sale or lease of Inventory in the ordinary course of its
business and except as otherwise permitted by the Credit Agreement, not sell,
lease, assign, license, sublicense, abandon or otherwise transfer, or create or
permit to exist, any Security Interest (other than Permitted Liens) on any
Collateral to or in favor of any Person other than Agent.
(h) At all times keep all Inventory and Equipment insured against loss,
damage, theft and other risks in the manner required by Section 7.6 of the
Credit Agreement (whether or not the Credit Agreement shall be in effect) and,
if Agent so requests, deposit with Agent certified copies of the relevant
policies and certificates of insurance.
(i) Furnish to Agent, in accordance with Section 7.3 of the Credit
Agreement, notice in writing as soon as possible and in any event no later than
30 days prior to the occurrence from time to time of (i) any change in the
location of such Debtor's chief executive office and (ii) any change in the name
of such Debtor or the name under or by which it conducts its business, and take
all action required by Agent to maintain and preserve the Security Interest in
favor of Agent in the Collateral, free and clear of any other Security Interest
whatsoever except for Permitted Liens.
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(j) Reimburse Agent for all expenses, including attorneys' fees and legal
expenses and expenses of any repairs to realty or other property to which any
Collateral may be affixed or be a part, incurred by Agent in seeking to collect
or enforce any rights under or with respect to the Collateral, in seeking to
collect the Notes and all other Liabilities, and in enforcing its rights
hereunder, together with interest thereon from the date incurred until
reimbursed by such Debtor at a rate per annum equal to the default rate
specified in Section 11(b) hereof.
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(k) Not sell, assign or license to any third party any of its right, title
or interest in any of the Intellectual Property Collateral and General
Intangibles other than in such Debtor's ordinary course of business or as
otherwise permitted by the Credit Agreement.
(l) Not, unless such Debtor shall either (i) reasonably and in good faith
determine (and notice of such determination shall have been delivered to Agent)
that any of the Patent Collateral is of negligible economic value to such
Debtor, or (ii) have a valid business purpose to do otherwise, do any act, or
omit to do any act, whereby any of the Patent Collateral may lapse or become
abandoned or dedicated to the public or unenforceable.
(m) Not, and shall not permit any of its licensees to, unless such Debtor
shall either (i) reasonably and in good faith determine (and notice of such
determination shall have been delivered to Agent) that any of the Trademark
Collateral is of negligible economic value to such Debtor or (ii) have a valid
business purpose to do otherwise,
(A) fail to continue to use any of the Trademark Collateral in order
to maintain all of the Trademark Collateral in full force free from any
claim of abandonment for non-use,
(B) fail to maintain as in the past the quality of products and
services offered under all of the Trademark Collateral,
(C) fail to employ all of the Trademark Collateral registered with any
Federal or State or foreign authority with an appropriate notice of such
registration,
(D) adopt or use any other Trademark which is confusingly similar or a
colorable imitation of any of the Trademark Collateral except in compliance
with applicable law,
(E) use any of the Trademark Collateral registered with any Federal or
State or foreign authority except for the uses for which registration or
application for registration of such Trademark Collateral has been made
except in compliance with applicable law, or
(F) do or permit any act or knowingly omit to do any act whereby any
of the Trademark Collateral may lapse or become invalid or unenforceable.
(n) Not, unless such Debtor shall either (i) reasonably and in good faith
determine (and notice of such determination shall have been delivered to Agent)
that any of the Copyright Collateral or any of the Trade Secrets Collateral is
of negligible economic value to such Debtor
-12-
or (ii) have a valid business purpose to do otherwise, do or permit any act or
knowingly omit to do any act whereby any of the Copyright Collateral or any of
the Trade Secrets Collateral may lapse or become invalid or unenforceable or
placed in the public domain except upon expiration of the end of an unrenewable
term of a registration thereof.
(o) Notify Agent immediately if it knows, or has reason to know, that any
application or registration relating to any material item of the Intellectual
Property Collateral may become abandoned or dedicated to the public or placed in
the public domain or invalid or unenforceable, or of any adverse determination
or development (including the institution of, or any such determination or
development in, any proceeding in the United States Patent and Trademark Office,
the United States Copyright Office or any foreign counterpart thereof or any
court) regarding such Debtor's ownership of any of the Intellectual Property
Collateral, its right to register the same or to keep and maintain and enforce
the same.
(p) Not, nor shall any of such Debtor's agents, employees, designees or
licensees, file an application for the registration of any Intellectual Property
Collateral with the United States Patent and Trademark Office, the United States
Copyright Office or any similar office or agency in any other country or any
political subdivision thereof, unless such Debtor promptly informs Agent, and,
upon request of Agent, executes and delivers any and all agreements,
instruments, documents and papers as Agent may reasonably request to evidence
Agent's Security Interest in such Intellectual Property Collateral and the
goodwill and general intangibles of such Debtor relating thereto or represented
thereby.
(q) Take all necessary steps, including in any proceeding before the United
States Patent and Trademark Office, the United States Copyright Office or any
similar office or agency in any other country or any political subdivision
thereof, to maintain and pursue any application (and to obtain the relevant
registration) filed with respect to, and to maintain any registration of, the
Intellectual Property Collateral, including the filing of applications for
renewal, affidavits of use, affidavits of incontestability and opposition,
interference and cancellation proceedings and the payment of fees and taxes
(except to the extent that dedication, abandonment or invalidation is permitted
under the foregoing clause (m), (n) or (o)).
---------- --- ---
(r) Contemporaneously herewith, execute and deliver to Agent an Agreement
(Patent), an Agreement (Trademark) and an Agreement (Copyright) in the forms of
Exhibits C, D and E hereto, respectively, and shall execute and deliver to Agent
---------- - -
any other document required to acknowledge or register or perfect Agent's
interest in any part of the Intellectual Property Collateral.
(s) At its sole expense, (i) subject to Article 12 of the Credit Agreement,
without any request by Agent, immediately deliver or cause to be delivered to
Agent, in due form for transfer (i.e., endorsed in blank or accompanied by duly
---
executed undated blank stock or bond powers), all Securities, Chattel Paper,
Instruments, Investment Property and Documents, if any, at any time representing
all or any of the Collateral, (ii) upon request of Agent cause the Security
Interest granted to Agent hereunder and under the other Collateral Documents to
be at all times duly noted on any certificate of title issuable with respect to
any of the Collateral and forthwith deliver or cause to be delivered to Agent
each such certificate of title to the extent not covered by a Permitted Lien,
and (iii) execute and deliver, or cause to be executed and
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delivered, to Agent, in due form for filing or recording (and pay the cost of
filing or recording the same in all public offices deemed necessary or advisable
by Agent) such assignments (including, without limitation, assignments of life
insurance, if such Debtor elects or is otherwise required to obtain such
insurance), security agreements, mortgages, deeds of trust, pledge agreements,
consents, waivers, financing statements, stock or bond powers and other
documents, and do such other acts and things, all as may from time to time be
necessary or desirable, to the satisfaction of Agent, to establish and maintain
in favor of Agent, a valid perfected lien on and Security Interest in all assets
of such Debtor now or hereafter existing or acquired (free of all other liens,
claims and rights of third parties whatsoever other than Permitted Liens) to
secure payment and performance of the Liabilities.
(t) At the request of Agent after the occurrence and during the continuance
of an Event of Default, transfer all or any part of the Collateral (including,
with respect to any Trademarks, the goodwill associated therewith) into the name
of Agent or its nominee for the benefit of Lenders, with or without disclosing
that such Collateral is subject to the Security Interest hereunder.
(u) At all times comply with the requirements of all applicable laws
(including, without limitation, the provisions of the Fair Labor Standards Act),
rules, regulations and orders of every governmental authority, the non-
compliance with which, as Agent determines, would, in its sole discretion,
materially and adversely affect the value of the Collateral or the worth of the
Collateral as collateral security, taken as a whole.
SECTION 7. Renewals, Amendments and Other Security; Partial Releases.
---------------------------------------------------------
(a) Agent may from time to time, whether before or after any of the
Liabilities shall become due and payable, without notice to all such Debtors,
take any or all of the following actions (provided that actions taken under
clause (v) only may be taken after the occurrence and during the continuance of
an Event of Default): (i) retain or obtain a Security Interest in any property
to secure payment and performance of any of the Liabilities, (ii) retain or
obtain the primary or secondary liability of any Person, in addition to any
Debtor, with respect to any of the Liabilities, (iii) create, extend or renew
for any period (whether or not longer than the original period) or alter or
exchange any of the Liabilities or release or compromise any obligation of any
nature of any Person with respect thereto, (iv) release or fail to perfect its
Security Interest in, or surrender, release or permit any substitution or
exchange for, all or any part of any property securing any of the Liabilities,
or create, extend or renew for any period (whether or not longer than the
original period) or release, compromise, alter or exchange any obligations of
any nature of any Person with respect to any such property, and (v) resort to
the Collateral for payment of any of the Liabilities whether or not Agent (1)
shall have resorted to any other property securing payment and performance of
the Liabilities or (2) shall have proceeded against any Person primarily or
secondarily liable on any of the Liabilities (all of the actions referred to in
preceding clauses (1) and (2) hereby being expressly waived by each Debtor).
------- --- ---
(b) No release from the Security Interest created by this Agreement of any
part of the Collateral by Agent shall in any way alter, vary or diminish the
force or effect of or Security Interest created by this Agreement against the
balance or remainder of the Collateral.
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SECTION 8. Grant of License to Use Intangibles. In addition to Section
----------------------------------- -------
6(u) and solely for the purpose of enabling Agent to exercise rights and
----
remedies hereunder, each Debtor hereby grants to Agent, after the occurrence and
during the continuance of an Event of Default, an irrevocable, nonexclusive
license (exercisable without payment of royalty or other compensation to such
Debtor) to use, assign, license or sublicense any of such Debtor's General
Intangibles, now owned or hereafter acquired by such Debtor, and wherever the
same may be located, including in such license reasonable access as to all media
in which any of the licensed items may be recorded or stored and to all computer
programs used for the compilation or printout thereof.
SECTION 9. Information. Agent and any of the officers, employees, agents or
-----------
auditors of Agent shall have the right at reasonable intervals after the date
hereof to make reasonable inquiries by mail, telephone, telegraph or otherwise
to any Person with respect to validity and amount or any other matter
(including, without limitation, the assertion by Account Debtors of claims,
offsets and counterclaims) concerning any of the Collateral.
SECTION 10. Event of Default.
----------------
(a) (i) Whenever an Event of Default or Unmatured Insolvency Default
shall exist or be occurring, Agent may exercise from time to time any rights and
remedies available to Agent hereunder, under the Credit Agreement, the Guaranty
and the Uniform Commercial Code as in effect from time to time in Illinois or
otherwise available to Agent under applicable law. Each Debtor hereby expressly
waives, to the fullest extent permitted by applicable law, any and all notices,
advertisements, hearings, or process of law in connection with the exercise by
Agent of any of its rights and remedies after an Event of Default or Unmatured
Insolvency Default occurs.
(ii) Each Debtor agrees, upon the occurrence of an Event of Default or
Unmatured Insolvency Default and upon the request of Agent, to assemble, at such
Debtor's expense, all Collateral at any location requested by Agent.
(iii) To the fullest extent permitted by applicable law, each Debtor hereby
waives the right to object to the manner or sufficiency of advertising,
refurbishing of the Collateral, or solicitation of bids in connection with any
sales or other disposition of the Collateral. Any sale by Agent may be made at
any broker's board or public or private sale, with or without notice or
advertisement, for cash or credit, and for present or future delivery. At any
such public or private sale or other disposition of Collateral, Agent may, to
the fullest extent permissible under applicable law, purchase the whole or any
part of any Collateral sold, or may sell or dispose of the Collateral to any
other Person, free from any and all claims of such Debtor or of any other Person
claiming by, through, or under any Debtor. Each Debtor hereby expressly waives
and releases, to the fullest extent permitted by applicable law, any right of
redemption on the part of such Debtor. If any notification of intended
disposition of any of the Collateral is required by law, such notification, if
mailed, shall be deemed reasonably and properly given if mailed at least five
(5) days before such disposition, postage prepaid, addressed to the respective
Debtors either at the address shown below, or at any other address of such
Debtor appearing on the records of Agent. Any proceeds of any Collateral, or of
the disposition by Agent of any of the Collateral (including, without
limitation, Benefits to the extent provided in Section 16
----------
-15-
hereof), may be applied by Agent to the payment of expenses in connection with
the Collateral, including attorneys' fees and legal expenses, and any balance of
such proceeds may be applied by Agent toward the payment of such of the
Liabilities, and in such order of application, as Agent may from time to time
elect.
(b) Without limiting any other provision of this Agreement, whenever an
Event of Default or Unmatured Insolvency Default shall be existing, Agent, with
or without process of law, may enter upon any premises where the Collateral or
any part thereof may be, and take possession of all or any part thereof; and
Agent may, without being responsible except as provided under applicable law for
loss or damage, hold, store, keep idle, lease, operate or otherwise use or
permit the use of the Collateral or any part thereof for such time and upon such
terms Agent may deem to be reasonable, and may demand, collect and retain all
earnings and all other sums due and to become due in respect of the Collateral
from any Person whomsoever, accounting only for net earnings, if any, arising
from use or from the sale thereof after charging against all receipts from use
or from the sale thereof all costs and expenses of, and damages or losses by
reason of, such use or sale.
(c) Each Debtor hereby agrees to pay any and all reasonable costs and
expenses incurred by Lenders in retaking, holding, preparing for sale, selling
and the like with regard to the Collateral, including, without limitation,
reasonable attorneys' fees incurred by Lenders in connection therewith.
(d) Each Debtor agrees that in any sale of any of the Collateral, Agent is
authorized to comply with any limitation or restriction in connection with such
sale as counsel may advise Agent is necessary in order to avoid any violation of
applicable law (including, without limitation, compliance with such procedures
as may restrict the number of prospective bidders or purchasers, require that
such prospective bidders and purchasers have certain qualifications, and
restrict such prospective bidders and purchasers to Persons who will represent
and agree that they are purchasing for their own account or investment and not
with a view to the distribution or resale of such Collateral), or in order to
obtain any required approval of the sale or of the purchaser by any governmental
or regulatory authority or official, and each Debtor further agrees that such
compliance shall not result in such sale being considered or deemed not to have
been made in a commercially reasonable manner, nor shall Agent be liable or
accountable to such Debtor for any discount allowed by reason of the fact that
such Collateral was sold in compliance with any such limitation or restriction.
(e) The proceeds of any sale of Collateral sold pursuant to the terms of
this Section 10 and any cash held as Collateral hereunder shall be applied by
----------
Agent in accordance with Section 4.2 of the Credit Agreement.
-----------
(f) If sufficient sums are not realized upon any disposition of the
Collateral to pay all Liabilities and any expenses of such disposition,
including, without limitation, attorneys' fees, each Debtor hereby promises to
pay immediately any resulting deficiency.
(g) No right or remedy herein conferred is intended to be exclusive of any
other right or remedy, but every such right or remedy shall be cumulative and
shall be in addition to every
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other right or remedy herein conferred, or conferred upon Agent by any other
agreement or instrument or security, or now or hereafter existing at law or in
equity or by statute.
SECTION 11. Authority of Agent. Subject to Applicable Gaming Laws, (a)
------------------
Agent shall have, and be entitled to exercise, all such powers hereunder as are
specifically delegated to Agent by the terms hereof, together with such powers
as are incidental thereto. Agent may execute any of their duties hereunder by
or through agents or employees and shall be entitled to retain counsel and to
act in reliance upon the advice of such counsel concerning all matters
pertaining to its duties hereunder. Neither Agent nor any director, officer or
employee of Agent shall be liable for any action taken or omitted to be taken by
Agent hereunder or in connection herewith. Each Debtor agrees to reimburse
Agent, on demand, for all reasonable costs and expenses incurred by Agent in
connection with the administration and enforcement of this Agreement (including
costs and expenses incurred by any agent employed by Agent) and agrees to
indemnify (which indemnification shall survive any termination of this
Agreement) and hold harmless Agent (and any such agent) from and against any and
all liability incurred by Agent (or such agent) hereunder or in connection
herewith except to the extent of any gross negligence or wilful misconduct on
the part of Agent.
(b) Agent may from time to time, without notice to Debtors, at its option,
perform any obligation to be performed by any Debtor hereunder, under the Credit
Agreement or the other Credit Documents which shall not have been performed and
take any other action which, in its reasonable discretion, Agent deems necessary
or desirable for the maintenance or preservation of any of the Collateral or
Agent's Security Interest in the Collateral. All moneys advanced by Agent in
connection with the foregoing shall, whether or not there are then outstanding
any Loans made under the Credit Agreement, bear interest at the Default Rate (or
such lower maximum rate as shall be legal under applicable law), and shall be
repaid together with such interest by such Debtor to Agent, upon the demand of
Agent, and shall be secured hereby prior to any other indebtedness or obligation
secured hereby, but the making of any such advance by Agent shall not relieve
such Debtor of any default hereunder or thereunder.
SECTION 12. Termination. Subject to Section 15(n) hereof, this Agreement
-----------
shall terminate when the Commitments shall be terminated and all the Liabilities
have been fully paid and performed, at which time Agent shall reassign and
redeliver (or cause to be reassigned and redelivered) to each Debtor, or to such
person as any such Debtor shall designate, against receipt, such of the
Collateral (if any) as shall not have been sold or otherwise applied by Agent
pursuant to the terms hereof and still shall be held by it hereunder, together
with appropriate instruments of termination, reassignment and release.
SECTION 13. Protection of Intellectual Property Collateral. (a) Each
----------------------------------------------
Debtor shall have the duty to protect, preserve and maintain all of such
Debtor's rights in each of the items of Intellectual Property Collateral,
including, without limitation, the duty to prosecute and/or defend against any
and all suits concerning validity, infringement, enforceability, ownership or
dilution or other aspects of the Intellectual Property Collateral, as well as
the duty to register material Copyrights with the United States Copyright Office
and to make publications of all copyrighted materials with an appropriate
copyright notice. Any expenses incurred in protecting, preserving and
maintaining the Intellectual Property Collateral shall be borne by such Debtor.
To the maximum extent permitted by law, after the occurrence of and during the
-17-
continuance of an Event of Default, Agent shall have the right, without taking
title to any of the Intellectual Property Collateral, to bring suit, in Agent's
name or in the respective Debtor's name or in both such names, as determined by
Agent, to enforce any or all of the Intellectual Property Collateral or Agent's
Security Interest therein, in which event such Debtor shall, at the request of
Agent, do any and all lawful acts and execute any and all proper documents
required by Agent in aid of such enforcement. All costs, expenses and other
moneys advanced by Agent in connection with the foregoing shall be treated as an
advance under Section 11(b) hereof, but the making of any such advance by Agent
-------------
shall not relieve such Debtor of any default hereunder. In addition, each
Debtor shall indemnify (which indemnification shall survive any termination of
this Agreement) and hold harmless Agent from any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements (including attorneys' fees and legal expenses) of any
kind whatsoever which may be imposed on, incurred by or asserted against Agent
in connection with or in any way arising out of such suits, proceedings or other
actions. Notwithstanding the foregoing, Agent shall have no obligations or
liabilities regarding any or all of the Intellectual Property Collateral by
reason of, or arising out of, this Agreement.
(b) If any Event of Default or Unmatured Insolvency Event shall have
occurred and be continuing, upon the written demand of Agent, each Debtor shall
execute and deliver to Agent an assignment or assignments of the Intellectual
Property Collateral and such other documents as are necessary or appropriate to
carry out the intent and purposes of this Agreement along with, in the case of
any Trademark, goodwill and assets relating to the products sold under such
Trademark. Each Debtor agrees that such an assignment shall be applied to
reduce the Liabilities then due only to the extent that Agent receives cash
proceeds in respect of the sale of, or other realization upon, the Intellectual
Property Collateral or licenses; such cash proceeds to be applied to the payment
of expenses incurred in connection with the Intellectual Property Collateral or
licenses, including attorneys' fees and legal expenses, and any balance of such
proceeds shall be applied by Agent as provided in Section 10(a)(iii). Without
------------------
limiting any other rights and remedies of Agent, each Debtor shall within five
(5) Business Days of written notice from Agent to make available, to Agent such
personnel in such Debtor's employ on the date of the Event of Default or
Unmatured Insolvency Event as Agent may reasonably designate, by name, title or
job responsibility, to permit Agent to continue, directly or indirectly, to
advertise and operate the business of any such Debtor under any of such Debtor's
General Intangibles.
SECTION 14. SUBMISSION TO JURISDICTION. AGENT MAY ENFORCE ANY CLAIM
--------------------------
ARISING OUT OF THIS AGREEMENT, ANY CREDIT DOCUMENT, ANY COLLATERAL OR ANY
AMENDMENT, INSTRUMENT, DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE
FUTURE BE DELIVERED IN CONNECTION HEREWITH, OR ARISING FROM OR RELATED TO ANY
CREDIT RELATIONSHIP EXISTING IN CONNECTION WITH THIS AGREEMENT IN ANY STATE OR
FEDERAL COURT HAVING SUBJECT MATTER JURISDICTION AND LOCATED IN CHICAGO,
ILLINOIS. FOR THE PURPOSE OF ANY ACTION OR PROCEEDING INSTITUTED WITH RESPECT
TO ANY SUCH CLAIM, EACH DEBTOR HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF
SUCH COURTS AND ALSO HAS IRREVOCABLY DESIGNATED THE PERSON WHOSE NAME AND
ADDRESS ARE SET FORTH IN THE CREDIT AGREEMENT TO RECEIVE FOR AND ON BEHALF OF
EACH DEBTOR SERVICE OF PROCESS IN
-18-
ILLINOIS. EACH DEBTOR FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF SAID COURTS BY MAILING A COPY THEREOF, BY REGISTERED MAIL, POSTAGE
PREPAID, TO EACH DEBTOR AND AGREES THAT SUCH SERVICE, TO THE FULLEST EXTENT
PERMITTED BY LAW, (I) SHALL BE DEEMED IN EVERY RESPECT EFFECTIVE SERVICE OF
PROCESS UPON IT IN ANY SUCH SUIT, ACTION OR PROCEEDING AND (II) SHALL BE TAKEN
AND HELD TO BE VALID PERSONAL SERVICE UPON AND PERSONAL DELIVERY TO IT. NOTHING
HEREIN CONTAINED SHALL AFFECT THE RIGHT OF AGENT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR PRECLUDE AGENT FROM BRINGING AN ACTION OR PROCEEDING
IN RESPECT HEREOF IN ANY OTHER COUNTRY, STATE OR PLACE HAVING JURISDICTION OVER
SUCH ACTION. EACH DEBTOR IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER HAVE TO THE LAYING OF THE
VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT LOCATED
IN CHICAGO, ILLINOIS AND ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
SECTION 15. Miscellaneous Provisions.
------------------------
(a) Agent and Agent Bank shall be deemed to have exercised reasonable care
in the custody and preservation of any of the Collateral if they take such
action for that purpose as any Debtor requests in writing, but failure of Agent
or Agent Bank to comply with any such request shall not of itself be deemed a
failure to exercise reasonable care, and no failure of Agent or Agent Bank to
preserve or protect any rights with respect to the Collateral against prior or
other parties, or to do any act with respect to the preservation of the
Collateral not so requested by any Debtor, shall be deemed a failure to exercise
reasonable care in the custody or preservation of such Collateral.
(b) Each Debtor hereby appoints Agent, with full power of substitution after
the occurrence and during the continuance of an Event of Default, as such
Debtor's attorney-in-fact for the purpose of carrying out the provisions of this
Agreement and taking any action and executing any instrument which Agent may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, each Debtor agrees that Agent shall have the right and authority:
(i) while any Event of Default or Unmatured Insolvency Default shall exist, to
assign, sell, license, sublicense or otherwise dispose of all right, title and
interest of such Debtor in and to the Intellectual Property Collateral any other
General Intangible including, without limitation, assignments, recordings,
registrations and applications therefor in the United States Patent and
Trademark Office, the United States Copyright Office or any similar office or
agency of the United States, any State thereof or any other country or political
subdivision thereof, and for the purpose of the recording, registering and
filing of, or accomplishing any other formality with respect to, the foregoing,
to execute and deliver any and all agreements, documents, instruments of
assignment or other papers necessary or advisable to effect such purpose; and
(ii) to make claim for, and receive and give acquittance for payment on account
of, loss under any insurance policy covering the Collateral, or any part
thereof, and to receive, endorse and collect all
-19-
checks, drafts and other orders for the payment of money representing the
proceeds of such insurance.
(c) All notices or other communications hereunder shall be given in the
manner specified under Section 11.7 of the Credit Agreement, whether or not then
in effect.
(d) No delay on the part of Agent in the exercise of any right or remedy
shall operate as a waiver thereof, and no single or partial exercise by Agent of
any right or remedy shall preclude other or further exercise thereof or the
exercise of any other right or remedy.
(e) No amendment to, modification or waiver of, or consent with respect to,
any provision of this Agreement shall in any event be effective unless the same
shall be in writing and signed and delivered by Agent, and then any such
amendment, modification, waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
(F) THIS AGREEMENT SHALL BE DEEMED TO HAVE BEEN DELIVERED AT CHICAGO,
ILLINOIS, AND SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE INTERNAL
LAWS OF THE STATE OF ILLINOIS WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICTS OF
LAW, AND APPLICABLE GAMING LAWS.
WHENEVER POSSIBLE, EACH PROVISION OF THIS AGREEMENT SHALL BE INTERPRETED IN SUCH
MANNER AS TO BE EFFECTIVE AND VALID UNDER APPLICABLE LAW, BUT IF ANY PROVISION
OF THIS AGREEMENT SHALL BE PROHIBITED BY OR INVALID UNDER SUCH LAW, SUCH
PROVISION SHALL BE INEFFECTIVE TO THE EXTENT OF SUCH PROHIBITION OR INVALIDITY,
WITHOUT INVALIDATING THE REMAINDER OF SUCH PROVISION OR THE REMAINING PROVISIONS
OF THIS AGREEMENT. ALL OBLIGATIONS OF ANY DEBTOR, ANY OF ITS SUBSIDIARIES OR
ANY RELATED PERSON AND RIGHTS OF AGENT, LENDERS AND ANY OTHER HOLDER OF A NOTE
OR LIABILITY EXPRESSED IN THIS AGREEMENT SHALL BE IN ADDITION TO AND NOT IN
LIMITATION OF THOSE PROVIDED UNDER APPLICABLE LAW OR IN ANY OTHER WRITTEN
INSTRUMENT OR AGREEMENT RELATING TO ANY OF THE LIABILITIES.
(g) The rights and privileges of Agent hereunder shall inure to the benefit
of its successors and assigns. This Agreement shall be binding upon each Debtor
and its successors and assigns.
(h) At the option of Agent, this Agreement, or a carbon, photographic or
other reproduction of this Agreement or of any Uniform Commercial Code financing
statement covering the Collateral or any portion thereof, shall be sufficient as
a Uniform Commercial Code financing statement and may be filed as such.
(i) The section headings in this Agreement are inserted for convenience of
reference and shall not be considered a part of this Agreement or used in its
interpretation.
-20-
(j) This Agreement may be executed in any number of counterparts and by the
different parties on separate counterparts and each such counterpart shall for
all purposes be deemed an original, but all such counterparts shall together
constitute but one and the same Agreement. Each Debtor hereby acknowledges
receipt of a true, correct and complete counterpart of this Agreement.
(K) EACH PARTY HERETO HEREBY EXPRESSLY WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER OR RELATED TO
THIS AGREEMENT, ANY COLLATERAL OR ANY AMENDMENT, INSTRUMENT, DOCUMENT OR
AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN CONNECTION WITH
THE FOREGOING OR ARISING FROM ANY CREDIT RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT, AND AGREES THAT ANY SUCH ACTION OR PROCEEDING SHALL BE
TRIED BEFORE A COURT AND NOT BEFORE A JURY.
(l) Each Debtor hereby expressly waives to the fullest extent permitted by
law: (i) notice of the acceptance by Agent of this Agreement, (ii) notice of
the existence or creation or non-payment of all or any of the Liabilities, (iii)
presentment, demand, notice of dishonor, protest, and all other notices
whatsoever, and (iv) all diligence in collection or protection of or realization
upon the Liabilities or any thereof, any obligation hereunder, or any security
for or guaranty of any of the foregoing.
(m) Subject to the provisions of the Credit Agreement, any Lender may, from
time to time, without notice to any Debtor, assign or transfer any or all of the
Liabilities or any interest therein; and, notwithstanding any such assignment or
transfer or any subsequent assignment or transfer thereof, such Liabilities
shall be and remain Liabilities for the purposes of this Agreement, and each and
every immediate and successive assignee or transferee of any portion of the
Liabilities or of any interest therein shall, to the extent of the interest of
such assignee or transferee in the Liabilities, be entitled to the benefits of
this Agreement to the same extent as if such assignee or transferee were an
original Lender; provided, however, that each Lender shall have an unimpaired
-------- -------
right, prior and superior to that of any such assignee or transferee, to enforce
this Agreement, as to those of the Liabilities which such Lender has not
assigned or transferred.
(n) Each Debtor agrees that, if at any time all or any part of any payment
theretofore applied by Agent to any of the Liabilities is or must be rescinded
or returned by Agent or any Lender for any reason whatsoever (including, without
limitation, the insolvency, bankruptcy or reorganization of any Debtor or any of
its Affiliates), such Liabilities shall, for the purposes of this Agreement, to
the extent that such payment is or must be rescinded or returned, be deemed to
have continued in existence, notwithstanding such application by Agent, and the
Security Interest granted hereunder shall continue to be effective or be
reinstated, as the case may be, as to such Liabilities, all as though such
application by Agent had not been made.
(o) Agent is the current holder of all Liabilities, but, subject to the
Credit Agreement, may in the future transfer, assign or sell certain
Liabilities.
-21-
(p) Each Debtor hereby acknowledges that there are no conditions to the
effectiveness of this Agreement.
(q) If any item of Collateral hereunder also constitutes collateral granted
to Agent under any other mortgage, agreement or instrument, in the event of any
conflict between the provisions under this Agreement and those under such other
mortgage, agreement or instrument relating to such Collateral, the provision or
provisions selected by Agent shall control with respect to such Collateral.
(r) In case of conflict between any provision of this Agreement and any
provision of the Credit Agreement, the provisions of the Credit Agreement shall
control.
SECTION 16. Application of Insurance Proceeds. Any loss benefits
---------------------------------
("BENEFITS") under any of the insurance policies maintained by each Debtor
pursuant to Section 6(i) hereof shall be applied as follows:
------------
(a) If no Event of Default has occurred and is continuing, and the amount of
such Benefits, together with all other Benefits previously or contemporaneously
paid to Agent hereunder, is less than $25,000, then such Benefits may be paid
directly to Borrower.
(b) If no Event of Default has occurred and is continuing and the amount of
such Benefits, together with all other Benefits previously or contemporaneously
paid to Agent hereunder, is $25,000 or greater, then such Benefits, together
with any interest thereon, shall be held by Agent as additional Collateral
hereunder, but, so long as no Event of Default has occurred and is continuing,
such Benefits may, at any Debtor's discretion, be either:
(i) applied by Agent to the Loan Account, or
(ii) at any time, but subject to the following paragraph (c),
-------------
used by any Debtor to repair or replace the damaged or destroyed
Collateral giving rise to such Benefits.
(c) Agent shall have no obligation to release any Benefits to any Debtor
for such Debtor's use in repairing or replacing damaged or destroyed Collateral
unless such Debtor satisfies such conditions as Agent reasonably may impose upon
the release of Benefits and as are customary in the financing of repairs or
purchases of the type proposed by such Debtor, including without limitation, the
condition that the available amount of such Benefits shall be sufficient to
complete such repairs or replacements, or Agent shall have received from such
Debtor a cash deposit (or such Debtor shall maintain borrowing availability)
equal to the excess of the estimated cost of such repair or replacement over the
available amount of such Benefits.
(d) If any Event of Default or an Unmatured Insolvency Default has occurred
or is continuing, Agent may apply any Benefits to the repayment of the Loans in
the order of application set forth in Section 4.2 of the Credit Agreement,
subject to all of the terms and conditions of the Credit Agreement, and to the
extent such repayment reduces the principal balance of the Loans, the
Commitments shall be correspondingly reduced.
-22-
SECTION 17. Governmental Approval. Notwithstanding anything to the
---------------------
contrary contained herein, no party hereto shall take any action, including, but
not limited to, the operation of the business of any Debtor, that would
constitute or result in the transfer or assignment of any license issued to or
held by such Debtor, or a transfer of control over any such Licenses, whether de
--
facto or de jure, if such assignment or transfer would require under then
----- -------
existing law, including, without limitation, Applicable Gaming Laws, the prior
approval of and/or any notice to any governmental agency, including, without
limitation, any Gaming Authorities, without such party first having notified
such governmental agency of any such assignment or transfer and, if required
under then existing law, obtaining the approval of such governmental agency
therefor, notifying such governmental agency of the consummation thereof and
complying with all other requirements of such governmental agency. The parties
hereto intend that the powers of Secured Party hereunder, in all relevant
aspects, shall be governed by such statutory requirements, rules and regulations
as administered by any governmental agency under the jurisdiction of which any
transfer or assignment as contemplated by this Section 17 may fall.
[Remainder of this page intentionally left blank.]
-23-
IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and
year first above written.
MIKOHN GAMING CORPORATION, a Nevada corporation,
By: /s/ Xxxxx X. Xxxxxxxx
_____________________
Name: Xxxxx X. Xxxxxxxx
_________________
Title: Chairman of the Board & CEO
___________________________
MIKOHN NEVADA, a Nevada corporation
By: /s/ Xxxxx X. Xxxxxxxx
_____________________
Name: Xxxxx X. Xxxxxxxx
_________________
Title: Chairman of the Board & CEO
___________________________
MGC, INC., a Nevada corporation
By: /s/ Xxxxx X. Xxxxxxxx
_____________________
Name: Xxxxx X. Xxxxxxxx
_________________
Title: Chairman of the Board & CEO
___________________________
CASINO EXCITEMENT, INC., a Nevada corporation
By: /s/ Xxxxx X. Xxxxxxxx
_____________________
Name: Xxxxx X. Xxxxxxxx
_________________
Title: Chairman of the Board & CEO
___________________________
FIRST SOURCE FINANCIAL LLP, individually and in
its capacity as Agent
By: First Source Financial, Inc.,
its Agent/Manager
By: /s/ Xxxxxx X. Xxxxxxxxxx
------------------------
Xxxxxx X. Xxxxxxxxxx
Vice President
STATE OF NEVADA )
) SS.
COUNTY OF XXXXX )
I, XXXXX X. XXXXXXXX, a notary public in and for said County, in the State
of aforesaid, DO HEREBY CERTIFY that XXXXX X. XXXXXXXX, personally known to me
to be the CHAIRMAN/CEO of MIKOHN GAMING CORPORATION, a Nevada corporation, and
personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person and acknowledged
that he/she signed and delivered the said instrument as such officer of said
corporation, pursuant to authority given by the Board of Directors of said
corporation as such person's free and voluntary act, and as the free and
voluntary act and deed of said corporation, for the uses and purposes therein
set forth.
GIVEN under my hand and notarial seal this 23rd day of October, 1997.
/s/ Xxxxx X. Xxxxxxxx
[SEAL] ---------------------
Notary Public
My Commission Expires:
____________________________________
STATE OF NEVADA )
) SS.
COUNTY OF XXXXX )
I, XXXXX X. XXXXXXXX, a notary public in and for said County, in the
State of aforesaid, DO HEREBY CERTIFY that XXXXX X. XXXXXXXX, personally known
to me to be the CHAIRMAN/CEO of MIKOHN NEVADA, a Nevada corporation, and
personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person and acknowledged
that he/she signed and delivered the said instrument as such officer of said
corporation, pursuant to authority given by the Board of Directors of said
corporation as such person's free and voluntary act, and as the free and
voluntary act and deed of said corporation, for the uses and purposes therein
set forth.
GIVEN under my hand and notarial seal this 23rd day of October, 1997.
/s/ Xxxxx X. Xxxxxxxx
[SEAL] ---------------------
Notary Public
My Commission Expires:
____________________________________
STATE OF NEVADA )
) SS.
COUNTY OF XXXXX )
I, XXXXX X. XXXXXXXX, a notary public in and for said County, in the
State of aforesaid, DO HEREBY CERTIFY that XXXXX X. XXXXXXXX, personally known
to me to be the CHAIRMAN/CEO of MGC, INC., a Nevada corporation, and personally
known to me to be the same person whose name is subscribed to the foregoing
instrument, appeared before me this day in person and acknowledged that he/she
signed and delivered the said instrument as such officer of said corporation,
pursuant to authority given by the Board of Directors of said corporation as
such person's free and voluntary act, and as the free and voluntary act and deed
of said corporation, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this 23rd day of October, 1997.
/s/ Xxxxx X. Xxxxxxxx
[SEAL] ---------------------
Notary Public
My Commission Expires:
____________________________________
STATE OF NEVADA )
) SS.
COUNTY OF XXXXX )
I, XXXXX X. XXXXXXXX, a notary public in and for said County, in the
State of aforesaid, DO HEREBY CERTIFY that XXXXX X. XXXXXXXX, personally known
to me to be the CHAIRMAN/CEO of CASINO EXCITEMENT, INC., a Nevada corporation,
and personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person and acknowledged
that he/she signed and delivered the said instrument as such officer of said
corporation, pursuant to authority given by the Board of Directors of said
corporation as such person's free and voluntary act, and as the free and
voluntary act and deed of said corporation, for the uses and purposes therein
set forth.
GIVEN under my hand and notarial seal this 23rd day of October, 1997.
/s/ Xxxxx X. Xxxxxxxx
---------------------
Notary Public
My Commission Expires:
____________________________________
STATE OF Illionois )
) SS.
COUNTY OF Xxxx )
I, O. Xxxx Xxxxxxxx, a notary public in and for said County, in the State
of aforesaid, DO HEREBY CERTIFY that Xxxxxx Xxxxxxxxxx, personally known to me
to be a VP of FIRST SOURCE FINANCIAL, INC., a Delaware corporation, the
Agent/Manager of First Source Financial LLP, an Illinois registered limited
liability partnership, and personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before me this day in
person and acknowledged that he/she signed and delivered the said instrument as
such officer of said corporation, pursuant to authority, given by the Board of
Directors of said corporation as such person's free and voluntary act, and as
the free and voluntary act and deed of said corporation, for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal this 29 day of October, 1997.
/s/ O. Xxxx Xxxxxxxx
_____________________________
Notary Public
My Commission Expires:
[SEAL]
____________________________________
SCHEDULE I
to
Security Agreement
ITEM A. TRADEMARKS
REGISTERED TRADEMARKS
---------------------
Country/State Trademark Reg. No. Reg. Date
------------- --------- -------- ---------
USA Mini Keno 1,466,437 11/24/87
USA Hold and Draw 1,465,650 11/17/87
USA Hold and Draw Bingo 1,466,436 11/24/87
USA Games of Nevada 2,000,899 09/17/96
USA MVP and design 2,043,083 03/11/97
USA MIKOHNVISION 2,043,081 03/11/97
USA MIKOHN 2,043,082 03/11/97
USA MIKOHN 1,824,259 03/01/94
NEVADA MoneyTime 09/04/97
NEVADA CasinoLink 09/04/97
NEVADA Safe Xxxx 09/04/97
NEVADA Slottrak 09/04/97
NEVADA SuperLink 07/14/97
NEVADA PlayerTrak 09/04/97
NEVADA TableTrak 09/04/98
USA Casino Products 1,769,789
PENDING TRADEMARK APPLICATIONS
------------------------------
Country/State Trademark Reg. No. Reg. Date
------------- --------- -------- ---------
USA MoneyTime 73/306/162 06/10/97
USA Mystery 75/346/800 08/06/97
SCHEDULE I
to
Security Agreement
ITEM A. (CON'T.) TRADEMARKS
TRADEMARK APPLICATIONS IN PREPARATION
-------------------------------------
Expected Products
Country/State Trademark Filing Date Services
------------- --------- ----------- --------
USA CasinoLink 11/10/97 Computer software and
hardware for use in providing
Accounting, security, and
player information and
Rating for gaming and
amusement machines and
casino games
USA SlotTrak 11/10/97 Computer software and
hardware for use in providing
accounting, security, and
player information and
Rating for gaming and
Amusement machines
USA Safe Xxxx 11/10/97 Computer software and
hardware for use in providing
accounting, security, and
player information and rating
For card games
USA Safebac 11/10/97 Computer software and
hardware for use in providing
accounting, security and
player information and rating
For card games
USA SuperLink 11/10/97 Computer software and
hardware for use in
controlling jackpots in
gaming and amusement
machines
SCHEDULE I
to
Security Agreement
ITEM A. (CON'T.) TRADEMARKS
USA PlayerTrak 11/14/97 Computer software and
hardware for use in obtaining
information about and rating
players of casino table games,
gaming machines and
amusement machines
USA TableTrak 11/14/97 Computer software and
hardware for use in obtaining
Information about and rating
Players of casino table
games, gaming machines and
Amusement machines
USA InstaTrak 11/14/97 Optical character recognition
apparatus with dot-matrix
printer
USA Quickplay 11/14/97 Computer software and
hardware for enabling players
to access gaming and
amusement machines through
preestablished credit accounts
USA CaddTrak 11/14/97 Computer software for
controlling graphic interface
used in providing
accounting, security and
player information and rating
for gaming and amusement
machines and casino games
SCHEDULE I
to
Security Agreement
ITEM B. TRADEMARK LICENSES
------------------
EFFECTIVE EXPIRATION
TERRITORY TRADEMARK LICENSOR LICENSEE DATE DATE
--------- --------- -------- -------- ---- ----
None.
SCHEDULE II
to
Security Agreement
ITEM A. PATENTS
PATENTS
-------
COUNTRY PATENT NO. ISSUE DATE INVENTOR(S) TITLE
------- ---------- ---------- --------- -----
USA 5,096, 196 03/17/92 Gutknechtt & Gaming Apparatus
Wichinsky
USA 4,496, 160 01/29/85 Wichinsky & Coin Projector and Target
Xxxxxxxxx Game Apparatus - Flip-It
USA Des 272,920 03/06/84 Wichinsky & Gaming Machine
Xxxxxxxxx
USA Des 278,069 03/19/85 Wichinsky Slotmachine
USA 5,103,081 04/07/92 Xxxxxx, Vedeen Apparatus and Method for
& Xxxxxxxxx Reading Data Encoded on
Circular Objects, such as
Gaming Chips
USA 5,342,049 08/30/94 Wichinsky, Gaming Machine with Skill
Xxxxxxxxx & Feature
Femandez
USA 5,482,289 01/09/96 Xxxxxxxxx Method of Playing a Bingo
Game with Progressive
Jackpot
USA 5,642,160 06/24/97 Xxxxxxx Digital Image Capture
System for Photo
Identification Cards
USA 5,550,359 08/27/96 Xxxxxxx Time and Attendance System
and Method Therefor
USA 5,536,016 07/16/96 Xxxxxxxx Progressive System for a
Match Number Game and
Method Therefor
1
SCHEDULE II
to
Security Agreement
ITEM A. (CON'T.) PATENTS
USA 5,586,936 12/24/96 Xxxxxxx, Xxxx Automated Gaming Table
& Xxxxxxxx Tracking System and Method
Therefor
USA 5,374.061 12/20/94 Xxxxxxxx Card Dispensing Shoe
Having a Counting Device
and Method of Using the
Same
USA 5,116,055 05/26/92 Tracy Progressive Jackpot Gaming
System Linking Gaming
Machines with Different Hit
Frequencies and
Denominations
USA 5,280,909 01/25/94 Tracy Gaming System with
Progressive Jackpot
USA 5,344,144 09/06/94 Canon Progressive Jackpot Gaming
System with Enhanced
Accumulator
USA 5,605,334 02/25/97 XxXxxx, Jr. Secure Multi-Site Progressive
Jackpot System for Live
Card Games
PENDING PATENT APPLICATIONS
---------------------------
COUNTRY SERIAL NO. FILING DATE INVENTOR(S) TITLE
------- ---------- ----------- ----------- -----
USA 08/602,074 02/15/96 XxXxxx, Jr. Jackpot Systems for
08/933,636 09/19/97 XxXxxx, Jr. Live Card Games
Based Upon Game
Play Wagering AND
Method Therefore
2
SCHEDULE II
to
Security Agreement
ITEM A.(CON'T.) PATENTS
USA 08/665,889 06/19/96 Xxxxxxxx Improved Lens
Design for Outdoor
Sign
USA 08/665,888 06/19/96 Xxxxxxxx Incandescent Visual
Display System
USA 07/577,436 09/04/90 Green, Xxxxx A Configurable LED
08/893,124 07/15/97 Green, Xxxxx Matrix Display
USA 08/516,882 08/18/95 Xxxxxx Large Incandescent
Live Image Display
System
USA 08/666,752 06/19/96 Xxxxxx Incandescent Visual
Display System
USA 08/699,151 08/16/96 Xxxxxx Visual Display
Lighting System
Having Front and
Rear Access
USA 60/056,692 08/28/97 Xxxxxx Multi-Player Gaming
Machines
PATENT APPLICATIONS IN PREPARATION
----------------------------------
COUNTRY DOCKET NO. FILING DATE INVENTOR(S) TITLE
------- ---------- ----------- ----------- -----
USA 1482/132 10/07/97 Xxxxxx Intelligent Casino
Chip System
USA 1482/134 10/11/97 Xxxxxx Automated Wheel
Game
3
SCHEDULE II
to
Security Agreement
ITEM A. (CON'T.) PATENTS
USA 1482/135 10/11/97 Xxxxxx Stepper Dice Bonus
Game
USA 1482/136 10/11/97 Xxxxxx Wheel with Lighted
Player Table and
Multimedia Effects
USA 1482/137 10/11/97 Xxxxxx Modular Giant
Gaming System
USA 1482/112 10/13/97 Xxxxxxxx Xxxx-Mutuel Gaming
Invention
USA 1505/5 12/09/94 Xxxxxxx Universal Gaming
Engine
USA 1482/106 06/24/97 Xxxxxxxx Cashless Method for
a Gaming System
USA 1482/86 06/24/97 Xxxxxxxx & Cashless Device for
Xxxxxxxx a Gaming System
4
SCHEDULE II
to
Security Agreement
ITEM B. PATENT LICENSES
---------------
EFFECTIVE EXPIRATION SUBJECT
COUNTRY INVENTOR LICENSEE DATE DATE MATTER
------- -------- -------- ---- ---- ------
USA Xxxxxxxxx Xxxxxxxxx 01/09/96 Method of Playing a
Bingo Game with
Progressive Jackpot
USA XxXxxx, Jr. Mikohn 02/25/97 Secure Multi-Site
Progressive Jackpot
System for Live Card
Games
USA XxXxxx, Jr. Mikohn 07/03/97 Jackpot System for
Live Card Games
Based Upon Game
Play Wagering and
Method Therefore
5
SCHEDULE III
to
Security Agreement
ITEM A. COPYRIGHTS/MASK WORKS
REGISTERED COPYRIGHTS/MASK WORKS
--------------------------------
COUNTRY REGISTRATION NO. REG. DATE TITLE
------- ---------------- --------- -----
XXX XX00000 10/27/81 Slot machine board
USA Txu 203 866 6/24/85 Single card...super bingo
USA TX2 022 668 3/2/87 Hold & Draw Bingo
USA TX1 570 830 4/29/85 Video pokers
USA TX1 160 172 5/31/83 Xxx, Xxxxx & Xxxx
XXX XX0 806 365 4/21/86 Mini Keno
USA VAu 356-094 1/24/97 9X Xxxxxx Xxxxxx X00000
XXX VAu 356-093 1/24/97 9X Xxxxxx Xxxxxx X00000
XXX VAu 356-095 1/23/97 9X Xxxxxx Xxxxxx
X00000 & X00000
XXX VAu 391-962 3/3/97 Buffalo Saloon Design
USA VAu 392-897 3/3/97 Design R60181
USA VAu 392-898 3/3/97 Design R60543
USA VAu 392-896 3/3/97 Design R61066
USA VAu 392-213 3/3/97 Design 161832
USA VAu 392-899 3/3/97 Design L61734
USA VAu 392-903 3/3/97 Design L62043
USA VAu 392-781 3/3/97 Design L61626
USA VAu 392-901 3/3/97 Design L61537
USA VAu 392-902 3/3/97 Design L62806
USA VAu 392-900 3/3/97 Design L62460
USA VAu 392-633 3/3/97 Design L61402
COPYRIGHTS/MASK WORKS PENDING APPLICATIONS
------------------------------------------
COUNTRY SERIAL NO. FILING DATE TITLE
------- ---------- ----------- -----
NONE
SCHEDULE III
to
Security Agreement
ITEM A.(CON'T.) COPYRIGHTS/MASK WORKS
COPYRIGHTS/MASK WORKS APPLICATIONS IN PREPARATION
-------------------------------------------------
EXPECTED
COUNTRY DOCKET NO. FILING DATE TITLE
------- ---------- ----------- -----
NONE
ITEM B. COPYRIGHTS/MASK WORKS LICENSES
------------------------------
EFFECTIVE EXPIRATION SUBJECT
TERRITORY LICENSOR LICENSEE DATE DATE MATTER
--------- -------- -------- ---- ---- ------
NONE
2
SCHEDULE IV
To
Security Agreement
TRADE SECRET OR KNOW-HOW LICENSES
------------------------------------------------------------------------------------------------------------------------------------
County or Licensor Licensee Effective Expiration Subject
Territory -------- -------- Date Date Matter
--------- ---- ---- ------
------------------------------------------------------------------------------------------------------------------------------------
U.S. (Exclusive) Bourgogne et Mikohn 3/20/95 Indefinitely: Either party B&G Chip System and related
World, except U.S. Grasset* may cancel on 3 months future improvements
(non-exclusive) written notice
------------------------------------------------------------------------------------------------------------------------------------
Worldwide (Exclusive) Holland Mikohn 3/16/95 Indefinite: Each party has Patent rights and pending
Casinos* amend. cancellation right based patent applications
8/16/95 on non-performance by (Intellectual property covering
the other an automatic card shuffler
------------------------------------------------------------------------------------------------------------------------------------
Worldwide (Exclusive) IGT* Mikohn 12/19/94 12/19/99: Automatic year Right to manufacture, sell,
to year thereafter w/5 year etc. worldwide, "Colossus"
firm renewal upon extra and "Big Xxxxxx" proprietary
payment games
------------------------------------------------------------------------------------------------------------------------------------
Worldwide (non- IGT Mikohn 4/20/95 & 4/10/96: Continuing year To display via manufacture of
exclusive, non- 4/27/95 to year; Mikohn may after market products,
transferable, non- amend. terminate by ceasing to including glass, for IGT
assignable, limited 5/15, 7/3, make products; IGT may manufactured gaming
license) 8/14, 8/31, terminate upon 60 days machines only, i.e. Double
10/2, written notice or upon Diamond, Wild Cherry, etc.
10/6/95 certain reasons (SLOT GLASS)
------------------------------------------------------------------------------------------------------------------------------------
Worldwide (non- IGT Mikohn 5/11/95 5/31/96: Continuing year To display via manufacture of
exclusive, non- amend. to year; Mikohn may signs for IGT produced slot
transferable, non- 10/2, terminate by ceasing to machines (SIGNS)
assignable, limited 10/6/95 make products; IGT may
license) terminate upon 60 days
written notice or upon
certain reasons
------------------------------------------------------------------------------------------------------------------------------------
Worldwide (non- Batty X. Xxxx Mikohn- 10/1/95 5 years; up to 5 automatic Xxxx, as consultant, provides
exclusive basis) (Consultant) Consultant renewals; Expires advice and proprietary
Agreement automatically upon death technology to Mikohn
of Consultant; Mikohn
may terminate w/ or w/o
cause with proper notice
(30 days)
------------------------------------------------------------------------------------------------------------------------------------
Worldwide (exclusive) Xxxxx Xxxxx Mikohn 10/9/95 8/1/98 For acquisition of rights to
CADDTRAK
------------------------------------------------------------------------------------------------------------------------------------
Worldwide (exclusive) Nevada Mikohn 7/25/97 Irrevocable Use, reproduce, display, sell,
Video, Inc. lease, etc. the video slot
d.b.n. P&M machine know as "Players
Coin Choice"
------------------------------------------------------------------------------------------------------------------------------------
------------------------------------------------------------------------------------------------------------------------------------
Worldwide** Progressive Mikohn 9/21/93; Indeterminate, but Trademarks, copyrights, trade
(exclusive) Games, Inc. amend. cancelable upon default or secrets, etc. relating to
(PGI) 3/31/95 by Mikohn, at will by Caribbean Stud Game and 21
new written notice Superbucks Game
termination
agree. -
9/27/97***
------------------------------------------------------------------------------------------------------------------------------------
Worldwide (exclusive) Safe Games, Mikohn 2/16/95 Indeterminate, but Pending German patent
Ltd. amend. cancelable upon default or application and certain
8/16/95 by Mikohn upon written trademarks and copyrights of
notice for certain reasons computerized system known
as "Safe Xxxx"
------------------------------------------------------------------------------------------------------------------------------------
Worldwide (exclusive) Safe Games, Smart 7/20/95 Indeterminate, but either Cooperation agreement
Ltd. Games, party may terminate upon between Safe Games, Ltd. and
(cooperation Inc. (co-op material default (60 days Smart Games, Inc. for the
agreement) agree.) written notice) supply of ideas, plans and
documentation of intellectual
property, including "Safe
Xxxx"
------------------------------------------------------------------------------------------------------------------------------------
Worldwide, except for Xpertx, Inc.+ Mikohn 11/29/93 Indeterminate, but Manufacture, sales,
Nevada (exclusive) amend. cancelable by Xpertx installation, etc. of Software,
7/1/95 upon Mikohn default or Hardware, Control Stations
by Mikohn upon material and Writer Stations for "Keno
breach System"
------------------------------------------------------------------------------------------------------------------------------------
*Assignable with written consent of other party.
**U.S. excluding Colorado, Florida, Illinois, Indiana, Louisiana, Mississippi,
Indian reservations in Michigan, Conn., Florida, Nevada (as to Caribbean Stud),
Riverboats and cruise ships in Louisiana and Miss. and cruise ships in
international waters. Worldwide excluding Australia, United Kingdom, Spain,
Portugal, France, Netherlands, Belgium and Luxembourg.
***New termination agreement subject to approval by the Nevada Gaming Control
Board and Nevada Gaming Commission.
+Assignable by Mikohn with consent of Xpertx.
--------------------
List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in
alphabetical order by country name.
SCHEDULE V
to
Security Agreement
LOCATIONS OF COLLATERAL
Please see Summary of Leased Facilities attached hereto
----------------------------
and Locations Owned By Borrower.
---------------------------
CHIEF EXECUTIVE OFFICES
-----------------------
The chief executive office of each Debtor is the office of:
Mikohn Gaming Corporation
1045 Palms Airport Drive
X.X. Xxx 00000
Xxx Xxxxx, XX 00000-0000
MIKOHN GAMING CORPORATION
SUMMARY OF LEASED FACILITIES (DOMESTIC) AS OF OCTOBER 15, 1997
--------------------------------------------------------------
---------------------------------------------------------------------------------------------------------------------
FILE NO. ADDRESS OF PREMISES LANDLORD MONTHLY BEGINNING ENDING
REFERENCE RENT DATE DATE
---------------------------------------------------------------------------------------------------------------------
1 0000 Xxxx Xxxxxxx Xxxx Xxxxxxx Partners $3,851 7/2/1992 Month to
Xxxxx 00 0000 X. Xxxxxxxx Xxxx Month
Las Vegas, NV Xxx Xxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------
2 * 0000 Xxxxxxxx Xxxx The Xxxxxx Xxxxxx $14,351 5/28/1993 8/31/2000
Suite E Properties, LP plus annual
Las Vegas, NV 0000 Xxxx Xxxxxx Xxxxx XXXX
Xxx Xxxxx. XX 00000
---------------------------------------------------------------------------------------------------------------------
3 * 0000 X. Xxxxxxxx Xxxx The Xxxxxx Xxxxxx $7,377 plus 11/9/1993 8/31/2000
Suite D Properties, LP annual
Las Vegas, NV 0000 Xxxx Xxxxxx Xxxxx XXXX
Xxx Xxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------
4 000 Xxxxxxxxx Xxxxxx MIE Denver Associates $1,918 5/15/1994 Month to
Suite G 00000 X. Xxxxx Xxxxx, #000 Xxxxx
Xxxxxx, XX Xxxxxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------
5 * 0000 Xxxxx Xxxxxxx Xxxxx MEDIQ/PRN Life Support $27,322 6/1/1994 8/31/2000
Las Vegas, NV Services, Inc. plus annual
Xxx Xxxxx Xxxxx XXXX
Xxxxxxxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------
6 * 0000 Xxxxx Xxxxxxx Xxxxxx JEMCO Properties $7,830 plus 6/29/1994 6/30/2002
Suite C 9061 Santa Xxxxxx Blvd. annual
Las Vegas, NV Xxx Xxxxxxx, XX 00000 COLA
---------------------------------------------------------------------------------------------------------------------
* Subject to Collateral Assignment
SUMMARY OF LEASED FACILITIES, Page 1
---------------------------------------------------------------------------------------------------------------------
FILE NO. ADDRESS OF PREMISES LANDLORD MONTHLY BEGINNING ENDING
REFERENCE RENT DATE DATE
---------------------------------------------------------------------------------------------------------------------
7 000 Xxxxxxx Xxxx Xxxxxx Xxxxxx $525 7/7/1994 Month to
Bullhead City, AZ 000 Xxxxxxx Xxxx Xxxxx
Xxxxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------
8 0000 Xxxxxxx Xxxx Xxxx & Xxxxxx Ioconelli $3,800 11/1/1994 11/1/1997
Pleasantville, NJ 0000 Xxxxxx Xxxxxx
Xxxxxxx, XX
---------------------------------------------------------------------------------------------------------------------
9 * 0000 Xxxx Xxxxxx Xxxxx The Young Group $1 plus 1/12 11/15/94 11/15/97
Las Vegas, NV 3665 West Diablo Drive of all annual
Xxx Xxxxx, XX 00000 carrying
costs
---------------------------------------------------------------------------------------------------------------------
10 5455 Desert Point Drive X.X. Xxxxxxxx Electric $4,298 12/7/1994 11/30/1999
Las Vegas, NV Construction Co.
P.O. Box 750457
Subtenant: Xxxx X. Xxxx Company Xxxxxxxx, XX 00000-0000
---------------------------------------------------------------------------------------------------------------------
11 0000 Xxxxxxx Xxxxxx Xxxxxx & Xxxxxxxxx Xxxxxx $4,641 plus 4/1/1995 4/1/1998
Las Vegas, NV 0000 Xxxxxxx Xxxxxx xxxxxx
Xxx Xxxxx, XX 00000 COLA
---------------------------------------------------------------------------------------------------------------------
12 0000 Xxxxx Xxxx Xxxxxx Xxx. Mackenzie Limited Partnership $550 7/1/1995 Month to
Bay 202 No. 1, Ltd. Month
Ft. Lauderdale, FL X.X. Xxx 00000
Xx. Xxxxxxxxxx, XX 00000
---------------------------------------------------------------------------------------------------------------------
* Subject to Collateral Assignment
SUMMARY OF LEASED FACILITIES, Page 2
-----------------------------------------------------------------------------------------------------------------------
FILE NO. ADDRESS OF PREMISES LANDLORD MONTHLY BEGINNING ENDING
REFERENCE RENT DATE DATE
-----------------------------------------------------------------------------------------------------------------------
13 6375 Delilah Road and Xxxxx X. Xxxxxx $3,025 12/15/1995 12/15/1998
0000 Xxxxxxx Xxxx, Xxx. 0 0000 Xxxxxxx Xxxxxx $1,193 plus
Egg Harbor Township, NJ Suite 306 annual
Xxxxxxx, XX 00000 COLA
-----------------------------------------------------------------------------------------------------------------------
14 * 0000 Xxxxxxx Xxxx Xxxxxxx Properties $10,572 1/15/1996 4/5/2001
Reno, NV 1200 Financial Blvd. plus annual
X.X. Xxx 0000 XXXX
Xxxx, XX 00000
-----------------------------------------------------------------------------------------------------------------------
15 0000 Xxxxxx Xxxx Industrial Properties of NV $4,532 7/15/1996 7/14/2001
Reno, NV 000 Xxxxxxx Xxx., Xxx. 0
Xxxx, XX 00000
Subtenant: Doctors Corporation
of America
-----------------------------------------------------------------------------------------------------------------------
16 11088 Millpark Drive Centerline Investment Co. $1,200 plus 1/1/1997 12/31/1999
Xxxxx 000 X.X. Xxx 00000 annual
Xxxxxxxx Xxxxxxx, XX Xx. Xxxxx, XX 00000 COLA
-----------------------------------------------------------------------------------------------------------------------
17 0000 Xxxxxxxx Xxxxx Xxxxx/Xxxxxxxxx Construction $2,063 1/1/1997 12/31/1999
St. Xxxxxxx, MO X.X. Xxx 000
Xx. Xxxxxx, XX
-----------------------------------------------------------------------------------------------------------------------
18 0000 X.X. 00xx Xxxxxxx Xxxx-Xxxxxxx Partners $875 1/1/1997 12/31/1999
Suite 8-E 000 Xxxxx Xxxxxx Xxxx
Xxxxxx Xxxx, XX Liberty, MO
-----------------------------------------------------------------------------------------------------------------------
* Subject to Collateral Assignment
SUMMARY OF LEASED FACILITIES, Page 3
-----------------------------------------------------------------------------------------------------------------------
FILE NO. ADDRESS OF PREMISES LANDLORD MONTHLY BEGINNING ENDING
REFERENCE RENT DATE DATE
-----------------------------------------------------------------------------------------------------------------------
19 0000 Xxxxxxx Xxxx Xxx Xxxxxxxxxxxx $900 - 1997 1/28/1997 2/28/1999
Horn Lake, MS 0000 Xxxxxxx Xxxxx $950 - 0000
Xxxx Xxxx, XX
-----------------------------------------------------------------------------------------------------------------------
20 * 000 Xxxxx Xxxx Pilot Company $41,176 8/1/1997 7/31/2004
Las Vegas, NV X.X. Xxx 00000 plus annual
Xxxxxxx, XX 00000 COLA
-----------------------------------------------------------------------------------------------------------------------
21 3860 Xxxxxxx NE Sun Belt Business Centers $2,156 10/1/1997 9/30/1999
Xxxxxxxxxxx, XX 00000 Partnership IV
c/o Good Management
0000 Xxxxxxx XX
Xxxxxxxxxxx, XX 00000
=====================================================================================================================
SUMMARY OF LEASED FACILITIES, Page 4
MIKOHN GAMING CORPORATION
SUMMARY OF LEASED FACILITIES (FOREIGN) AS OF SEPTEMBER 15, 1997
---------------------------------------------------------------
===========================================================================================================================
FILE NO. ADDRESS OF PREMISES LANDLORD MONTHLY BEGINNING ENDING
REFERENCE RENT DATE DATE
---------------------------------------------------------------------------------------------------------------------------
0 Xxxxxx Xxxxx Xxxxxxx, XX Corporacion E Inversiones $2,478 7/4/1997 0/0/0000
Xx. Xxxxxxxxx xx Xxxxxx 0000-0000 Gremcco X.X.
Xxxxx "A", Ofic. 504 Xx. Xxxxxxxxx Xx. 0000
Xxx Xxxxxx (Xxxx), Xxxx San Xxxxxx, Peru
---------------------------------------------------------------------------------------------------------------------------
2 Mikohn South America, SA Inmobiliaria Santa Xxxxxx y $3,038 1/10/1996 1/9/2001
Calle Sucre 195 Xxxxx S.A.
Urb. Vulcano Calle Uno N degrees 108 Urb.
Ate (Lima), Peru Santa Lucia
Ate Vitarte, Peru
---------------------------------------------------------------------------------------------------------------------------
3 Mikohn Gaming Corporation Angeles Xxxxxxx and $450 12/1/1996 11/30/1998
Juramento 2801 Xxxxxx Xxxxxxxx Xxxxxx
Piso 14 "E" Xx. Xxx Xxxxx 0000
Xxxxxxx Xxxxxxx (Buenos Aires) Piso 9 "D"
Argentina Capital Federal (Buenos Aires)
Argentina
---------------------------------------------------------------------------------------------------------------------------
4 Mikohn Europe B.V. MBB Project 31 B.V. $11,933 4/1/1995 3/31/2000
Leidse Xxxx 0-00 Xxxxxxx 0000
0000 XX Xx Meern (Amsterdam) 3600 BK Maarken
The Netherlands The Netherlands
---------------------------------------------------------------------------------------------------------------------------
SUMMARY OF LEASED FACILITIES, Page 5
===========================================================================================================================
FILE NO. ADDRESS OF PREMISES LANDLORD MONTHLY BEGINNING ENDING
REFERENCE RENT DATE DATE
---------------------------------------------------------------------------------------------------------------------------
5 Mikohn Gaming Australasia Menora Nominees Pty Ltd $(AUS)13,450 9/15/1996 9/14/2001
000 XxXxxx Xxxxxx (ACN 001 146 498) & Xxxxxx
Alexandria (Sydney), Australia Stux and Xxxx Xxxx
C/- Xxxxxxx & Co. Pty Ltd
Xxxxx 00
000 Xxx Xxxxx Xxxx Xxxx
Xxxxxxxxx (Xxxxxx), Xxxxxxxxx
=====================================================================================================================
SUMMARY OF LEASED FACILITIES, Page 6
LOCATIONS OWNED BY BORROWER
0000 Xxxx Xxxxxxx Xxxx, Xxx Xxxxx, XX 00000
000 00xx Xxxxxx, Xxxxx Xxxx, XX 00000
0000 Xxxxx Xxxxxx, Xxxxxxxx, XX 00000
SCHEDULE VI
to
Security Agreement
THIRD PARTY LOCATIONS OF DEBTORS' GOODS
None.
SCHEDULE VII
to
Security Agreement
TRADE NAMES OF EACH DEBTOR
1 Mikohn Gaming Corporation:
A) Current Trade Names
1) Mikohn Worldwide
2) Corporate Headquarters
3) Engineering, Service
4) Interior Signs - Rapid City Region
5) Mikohn Sculptures
6) Interior Signs - Las Vegas Region
7) Mikohn Service Division - Reno Region
8) Trans Sierra North
9) Trans Sierra South
10)Sculptures
11)Visual Products
12)Mikohn Gaming Corporation - Colorado (Sales)
13)Mikohn Gaming Corporation - Florida (Sales)
14)Mikohn Gaming Corporation - Minnesota (Sales)
15)Mikohn Gaming Corporation - Missouri (Sales)
16)Mikohn Gaming Corporation - Missouri Service
17)Mikohn Gaming Corporation - New Jersey (Sales)
18)Mikohn Gaming Corporation - New Mexico (Sales)
19)Slot Glass
B) Former Trade Names
1) Mikohn, Inc.
2) Engineering, Production, N.P.D.
3) Mikohn Gaming Corporation - Rapid City Region
4) South Dakota (Signs Division)
5) Acton Sculptures
6) Acton & Associates
7) Casino Signs a Division of Mikohn Gaming Corporation
8) Mikohn Gaming Corporation - Casino Signs
9) MGC - Casino Signs Div.
10)Casino Signs South
11)Casino Signs, Inc.
12)Mikohn Gaming Corporation - Reno Region
13)Casino Signs North
14)Trans Sierra Communications North Division of Mikohn Gaming Corporation
15)Trans Sierra Communications South Division of Mikohn Gaming Corporation
16)Mikohn Visual Products
17)Mikohn Sign Lab
18)Casino Signs North
19)Casino Signs Division
20)Mikohn Elko
21)Current Technology
22)Mikohn Gaming Corporation - Arizona
1
SCHEDULE VII
to
Security Agreement
23)Mikohn Gaming Corporation - Louisiana
24)Mikohn Gaming Corporation - Japan
25)Casino Signs - Gulfport
2 Casino Excitement, Inc.
A) Current Trade Names
1) Casino Excitement, Inc. (dba Mikohn Lighting and Sign)
B) Former Trade Names
1) Casino Excitement, Inc. (dba JRY Lighting and Sign)
2) JRY Lighting and Sign
3) Xxxx Xxxxxx Xxxxx
3 MGC, Inc.
A) Current Trade Names
1) Interior Signs - Gulfport Region - current
B) Former Trade Names
1) Mikohn Gaming Corporation - Gulfport Region
2) Mississippi (Signs Division)
3) Casino Signs - Gulfport
4 Mikohn Nevada - current
A) Current Trade Names
1) Gaming Operations - current
2) Games Division - current
B) Former Trade Names
1) MGC, Inc. dba Games of Nevada
2) Games of Nevada
3) MGC Games Division
2
Schedule VIII
to
Security Agreement
MIKOHN GAMING CORPORATION*
NON ASSIGNABLE CONTRACTS/
CONTRACTS WITH RESTRICTIONS ON ASSIGNABLITY
-----------------------------------------------------------------------------------------------------------------------------------
CONTRACTING EFFECTIVE DATE TERMS OF NON-ASSINABILITY OR
PARTY OR PARTIES OF CONTRACT RESTRICTIONS ON ASSIGNABILITY
---------------- ----------- -----------------------------
-----------------------------------------------------------------------------------------------------------------------------------
Bourgogne et Grasset 3/20/95 Section 16 of the Contract prohibits either party
from assigning the agreement of any licenses
granted thereunder without the prior consent of the
other.
-----------------------------------------------------------------------------------------------------------------------------------
Budget Signs, Xxxxxxx Xxxxx 10/28/96 Neither party may assign without the written
and Xxxxx Xxxxxxxxx consent of the other "which consent shall not be
unreasonably withheld".
-----------------------------------------------------------------------------------------------------------------------------------
Comdata Network, Inc. d.b.a. 7/3/96 Neither party may assign without written consent of
Comdata Corporation the other, such consent not to be unreasonably
withheld.
-----------------------------------------------------------------------------------------------------------------------------------
Holland Casinos 3/16/95, amended No assignment without written consent of other
8/16/95 party, which shall not be unreasonably withheld.
-----------------------------------------------------------------------------------------------------------------------------------
International Game 12/19/94 Not assignable "by either party without the written
Technology (IGT) (Colossus and Big consent of the other".
Xxxxxx)
-----------------------------------------------------------------------------------------------------------------------------------
International Game 4/20/95 and 4/27/95, Non-assignable.
Technology (IGT) amended 5/15, 7/3,
8/14, 8/31, 10/2,
10/6/95 (Slot glass)
-----------------------------------------------------------------------------------------------------------------------------------
International Game 5/11/95, amended Non-assignable.
Technology (IGT) 10/2, 10/6/95 (Signs)
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxx X. Xxxx 10/1/95 (Consulting No assignment without consent of other, "not to be
agreement) unreasonably withheld".
-----------------------------------------------------------------------------------------------------------------------------------
Xxxx Sculpture Company, Inc. 10/1/95 Neither party may assign without written consent of
other, such consent not to be unreasonably withheld.
-----------------------------------------------------------------------------------------------------------------------------------
Lemex Enterprises, Inc. 3/6/95 Assignment only by written consent of parties, not
to be unreasonably withheld.
-----------------------------------------------------------------------------------------------------------------------------------
Mikohn S.A. 8/5/95 Assignable only with written consent of both
parties.
-----------------------------------------------------------------------------------------------------------------------------------
PDS Financial Corporation 3/22/96 No assignment except by mutual written consent.
-----------------------------------------------------------------------------------------------------------------------------------
Schedule VIII
to
Security Agreement
Page 2 of 2
-----------------------------------------------------------------------------------------------------------------------------------
Xxxxx Xxxxxxx and Photo 1/1/97 Assignment only by mutual written consent, not to
Finish be unreasonably withheld.
-----------------------------------------------------------------------------------------------------------------------------------
Progressive Games, Inc. (PGI) 9/21/93, amended and No assignment without prior written consent of PGI.
clarified 3/31/95; new
termination agreement
dated 9/27/97
-----------------------------------------------------------------------------------------------------------------------------------
Safe Games, Ltd. 2/16/95, amended Mikohn may assign only with the written consent of
8/16/95 Licensor.
-----------------------------------------------------------------------------------------------------------------------------------
Xpertx, Inc. 11/29/93, amended Mikohn may assign with consent of Xpertx, not to
7/1/95 be unreasonably withheld.
-----------------------------------------------------------------------------------------------------------------------------------
Xxxx Xxxxxx Xxxxx, Xxxx 11/7/94, amended The agreement is not assignable by any party
Renton Young, Ltd. d.b.a. 9/8/95 as of 3/31/95 without the written consent of all of the parties,
Xxxx Xxxxxx Lighting & Sign, which consent shall not be unreasonably withheld,
Xxxx Xxxxxx Young of New
Jersey, Inc. d.b.a. Xxxx Xxxxxx
Xxxxx Lighting & Sign N.J.,
Xxxx Xxxxxx Young Lighting
of Mississippi, Casino
Excitement, Inc.
-----------------------------------------------------------------------------------------------------------------------------------
* Mikohn Gaming Corporation is the only credit party to The Agreements listed on
this schedule.
NON-ASSIGNABLE CONTRACTS/CONTRACTS WITH
RESTRICTIONS ON ASSIGNABILITY OF MIKOHN GAMING
CORPORATION WITH A ASSOCIATED REVENUE IMPACT
1) International Game Technology (IGT): Agreement to License "Colossus" and
"Big Xxxxxx" to Mikohn Gaming: 1997 Year to date revenue of $4,400,000.
2) Progressive Games Incorporated (PGI): Agreement to License games to Mikohn
Gaming: 1997 Year to date revenue of $1,507,000 (net of royalties).
EXHIBIT A
to
Security Agreement
LANDLORD'S CONSENT
1. The undersigned ("Lessor") is the lessor under a lease. under which
Mikoln Gaming Corporation a Nevada corporation, is the lessee ("Lessee") of the
premises covered thereby (the "Premises"). A copy of such lease (including all
amendments thereto) is attached as Exhibit A (the "Existing Lease"). The
----------
Existing Lease and all extensions, amendments and renewals thereof now or
hereafter in effect, hereinafter are referred to as the "Lease."
2. In connection with certain financing arrangements (the "Financing
Arrangements") from time to time entered into between Lessee and First Source
Financial LLP ("FSFP"), for itself, as a lender. and as agent for all lenders
under the Financing Arrangements, Lessee will (i) collaterally assign or grant a
leasehold interest in its interest under the Lease (the "Assignment") to FSFP
and (ii) grant FSFP a security interest in, among other things, all existing and
after-acquired furniture, fixtures, equipment, machinery, inventory and tangible
property owned by Lessee (the "Property").
3. Lessor consents to the Assignment and agrees that if FSFP exercises its
rights under the Assignment. Lessor shall recognize FSFP (or any purchaser at a
foreclosure sale or any other successor or assignee of FSFP) as the lessee under
the Lease entitled to all of the benefits thereof.
4. Lessor disclaims and releases any interest in or to the Property
(including rights of levy or distraint for rent). Lessor agrees that none of the
Property shall be considered fixtures or a part of the Premises.
5. If FSFP notifies Lessor that Lessee has defaulted on its obligations to
FSFP under the Financing Arrangements, Lessor shall permit FSFP to enter the
Premises and take possession of, use, remove, sell (including auction sales),
transfer or otherwise dispose of all or any part of the Property.
6. Lessor acknowledges that on the date hereof the Existing Lease is in
full force and effect and no default exists thereunder.
7. Lessor agrees to provide written notice to FSFP of any default by
Lessee under the Lease. Such notice shall describe the claimed default in
reasonable detail, including, without limitation, the provisions of the Lease
which have been violated. Lessor further agrees that: (a) FSFP, at its option
without any obligation to do so, shall have the right to cure (i) any payment
default under the Lease within 10 days after receipt by FSFP of notice of such
default or (ii) any other default under the Lease within 30 days after receipt
by FSFP of notice of such default; (b) Lessor shall not exercise any rights or
remedies it might have under the Lease as a result of any such default unless
FSFP does not cure such default within the applicable time
period set forth above: and (c) if FSFP cures such default. Lessor shall accept
such cure thereby eliminating such default.
8. The address of FSFP is:
First Source Financial LLP
c/o First Source Financial, Inc. 0000 Xxxx Xxxx Xxxx - 0xx Xxxxx
Xxxxxxx Xxxxxxx, Xxxxxxxx 00000
Attention: Contract Administration
9. This Agreement shall be binding upon Lessor and its successors and
assigns and shall inure to the benefit of FSFP, other lenders under the
Financing Arrangements, and their respective successors and assigns.
DATED: ____________, 199_ LESSOR:
-------
------------------------------
By:___________________________
Title:________________________
Address of Lessor:
---------------------------
---------------------------
---------------------------
---------------------------
-2-
ANNEX A Copy of Lease
Please see attached.
[TO BE PROVIDED BY LESSOR]
Exhibit B
to
Security Agreement
BAILEE WAIVER
------------- ----
First Source Financial LLP
c/o First Source Financial, Inc.
0000 Xxxx Xxxx Xxxx
0xx Xxxxx
Xxxxxxx Xxxxxxx, XX 00000
Attention: Contract Administration
Re: Mikohn Gaming Corporation ("Company")
-------------------------------------
Ladies and Gentlemen:
Company, from time to time, delivers certain merchandise ("Merchandise") to
the undersigned for storage at the undersigned's public warehouse facility
located at ________________________________________________________________.
Company intends to enter into certain financing arrangements with First
Source Financial LLP ("FSFP"), for itself, as a lender, and as agent for all
lenders under such financing arrangements, and, as a condition precedent to the
extension of credit and other financial accommodations to Company, FSFP
requires, among other things, that Company grant liens in favor of FSFP in all
of the tangible and intangible personal property of Company, including, without
limitation, the Merchandise.
To induce FSFP (together with its successors and assigns) to make such
financing arrangements, and for other good and valuable consideration, the
undersigned hereby agrees that:
(i) FSFP's security interest in the Merchandise will be senior to
all liens, claims and interests other than the undersigned's warehouseman's
or processor's liens for any accrued and unpaid processing or warehousing
fees charged by the undersigned for the actual processing or storage of the
Merchandise.
(ii) If Company defaults on its obligations to FSFP and, as a
result, FSFP: undertakes to enforce its security interest in the
Merchandise, the undersigned will (a) cooperate with FSFP in its effort to
assemble all of the Merchandise located in its facility and will not hinder
FSFP's actions in enforcing its liens on the Merchandise and (b) store any
or all of the Merchandise upon the request of and at the direction of FSFP;
provided, however, that FSFP will pay the undersigned any and all fees
arising from such storage, which fees will be equal to those which would
otherwise be charged to Company for such storage.
(iii) Company hereby agrees that the undersigned will have no
liability to Company if the undersigned complies with FSFP's oral or
written direction(s) as described above. Company further agrees that it
will continue to pay all warehousing fees and other expenses related to the
storage of the ,Merchandise and will reimburse the undersigned for all
reasonable costs or expenses incurred as a direct result of the
undersigned's compliance with the terms and provisions of this letter.
(iv) The undersigned will notify all successor owners, transferees,
purchasers and mortgagees of the existence of this agreement.
Notwithstanding the provisions of the preceding sentence and regardless of
whether the undersigned complies with the provisions of the preceding
sentence, the agreements contained herein shall be binding upon the
undersigned's successors, assigns and personal representatives, upon any
successor owner or transferee of the facility, and upon any purchasers,
including any mortgagee from the undersigned.
(v) The undersigned will act as FSFP's bailee for purposes of
perfecting FSFP's security interest in any portion of the Merchandise
consisting of invoices, bills of lading, warehouse receipts or other
documents of title relating to the merchandise in which a security interest
may be perfected by possession. and the undersigned will place the
following language prominently on the face of any such document: "THE
PROPERTY DESCRIBED HEREIN IS SUBJECT TO THE SECURITY INTEREST OF FIRST
SOURCE FINANCIAL LLP, AS AGENT."
The agreements contained herein shall continue in force until all of
Company's obligations and liabilities to FSFP are paid and satisfied in full and
all financing arrangements between FSFP and Company have been terminated. FSFP,
without affecting the validity of this Agreement, may extend, amend or in any
way modify the terms of payment or performance of any of Company's obligations
to FSFP, without the consent of the undersigned and without giving notice
thereof to the undersigned.
The instructions contained herein may only be amended or rescinded by FSFP.
Such instructions may not be amended or rescinded by Company.
Executed and delivered this __ day of __________, ___
[BAILEE]
By:_____________________________________
Name:________________________________
Title:_______________________________
AGREED AND ACKNOWLEDGED:
[COMPANY]
By:_____________________________________
Name:________________________________
Title:_______________________________
EXHIBIT C
to
Security Agreement
AGREEMENT
(Patent)
THIS AGREEMENT (PATENT), dated as of October , 1997 (herein, as the same from
time to time may be amended. modified, restated or supplemented and in effect,
called this "Agreement"). is by and among MIKOHN GAMING CORPORATION, a Nevada
corporation ("Borrower"), MIKOHN NEVADA, a Nevada corporation "Mikohn Nevada"),
MGC, INC., a Nevada corporation ("MGC"), CASINO EXCITEMENT, INC., a Nevada
corporation ("CEI"), (Mikohn Nevada, MGC and CEI sometimes hereinafter are
referred to individually as each "Guarantor" and collectively as "Guarantors,"
and Borrower and Guarantors sometimes hereinafter are referred to individually
as each "Debtor" and collectively as "Debtor"), and FIRST SOURCE FINANCIAL LLP,
an Illinois registered limited liability partnership ("FSFP"), as "Agent" for
all "Lenders."
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, pursuant to a Credit Agreement dated as of October __, 1997
(together with all amendments and other modifications, if any, from time to time
thereafter made thereto, the "CREDIT AGREEMENT"), among Borrower, FSFP, for
itself, as a Lender, and as Agent for all Lenders, and the financial
institutions parties thereto, Lenders have extended Commitments to make Loans to
Borrower; and
WHEREAS, Guarantors have guaranteed the payment and performance of the
Obligations pursuant to a certain Guaranty of even date herewith (herein, as the
same from time to time may be amended, modified, supplemented or restated and in
effect, called the "Guaranty") made by Guarantors in favor of Agent; and
WHEREAS, in connection with the Credit Agreement and the Guaranty, Debtors
have executed and delivered to Lenders a Security Agreement, dated as of October
__, 1997 (together with all amendments and other modifications, if any, from
time to time thereafter made thereto, the "SECURITY AGREEMENT"); and
WHEREAS, as a condition precedent to the making of the initial Loans under
the Credit Agreement, Debtors are required to execute and deliver this Agreement
and to grant to Agent a continuing security interest in all of the Patent
Collateral (as defined below) to secure all Liabilities; and
WHEREAS, Debtors have duly authorized the execution, delivery and performance
of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, and in order to induce Lenders to make Loans (including the
initial Loans) to
Borrower pursuant to the Credit Agreement. Debtors agree, for the benefit of
Lenders, as follows:
SECTION I. Definitions. Unless otherwise defined herein or the context
-----------
otherwise requires. terms used in this Agreement. including its preamble and
recitals, have the meanings provided or provided by reference in the Security
Agreement.
SECTION 2. Grant of Security Interest. For good and valuable consideration,
--------------------------
the receipt and sufficiency of which are hereby acknowledged, to secure all of
the Obligations of Borrower and all of the obligations of each Guarantor arising
under the Guaranty (collectively, the "LIABILITIES"). Debtors hereby mortgage,
pledge and grant to Agent for the benefit of Lenders a continuing security
interest in, all of the following property (the "PATENT COLLATERAL"), whether
now or hereafter owned, acquired or existing:
(a) all letters patent and applications for letters patent throughout
the world, including all patent applications in preparation for filing
anywhere in the world and including each patent and patent application
referred to in Item A of Attachment 1 hereto;
------ ------------
(b) all patent licenses, including each patent license referred to in
Item B of Attachment 1 hereto;
------- ------------
(c) all reissues, divisions, continuations,-continuations-in-part,
extensions, renewals and reexaminations of any of the items described in
the foregoing clauses (a) and b; and
-----------
(d) all proceeds of, and rights associated with, the foregoing
(including license royalties and proceeds of infringement suits), the right
to xxx third parties for past, present or future infringements of any
patent or patent application, including any patent or patent application
referred to in Item A of Attachment 1 hereto, and for breach or enforcement
------ ------------
of any patent license, including any patent license referred to in Item B
------
of Attachment 1 hereto, and all rights corresponding thereto throughout the
------------
world.
SECTION 3. Security Agreement. This Agreement has been executed and
------------------
delivered by Debtors for the purpose of registering the security interest of
Agent in the Patent Collateral with the United States Patent and Trademark
Office and corresponding offices in other countries of the world. The security
interest granted hereby has been granted as a supplement to, and not in
limitation of, the security interest granted to Agent under the Security
Agreement. The Security Agreement (and all rights and remedies of Agent
thereunder) shall remain in full force and effect in accordance with its terms.
SECTION 4. Release of Security Interest. Upon payment in full of all
----------------------------
Liabilities and the termination of all Commitments, Lenders shall, at Debtors'
expense, execute and deliver to Debtors all instruments and other documents as
may be necessary or proper to release the lien on and security interest in the
Patent Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. Each Debtor does hereby further
--------------
acknowledge and affirm that the rights and remedies of Lenders with respect to
the security interest in the Patent Collateral granted hereby are more fully set
forth in the Security Agreement, the terms and
provisions of which (including the remedies provided for therein are
incorporated by reference herein as if full) set forth herein.
SECTION 6. Credit Document, etc. This Agreement is a Credit Document
--------------------
executed pursuant to the Credit Agreement and shall (unless otherwise expressly
indicated herein) be construed. administered and applied in accordance with the
terms and provisions of the Credit Agreement.
SECTION 7. Counterparts. This Agreement may be executed by the parties
------------
hereto in several counterparts, each of which shall be deemed to be an original
and all of which shall constitute together but one and the same agreement.
[Remainder of this page intentionally left blank. ]
WITNESS WHEREOF. the parties hereto have caused this Agreement to be duly
executed by their respective officers thereunto duly authorized as of the day
and year first
MIKOHN GAMING CORPORATION, a Nevada
corporation
By: _____________________________
Name: _____________________________
Title: _____________________________
MIKOHN NEVADA, a Nevada corporation
By: _____________________________
Name: _____________________________
Title: _____________________________
MGC, INC., a Nevada corporation
By: _____________________________
Name: _____________________________
Title: _____________________________
CASINO EXCITEMENT, INC., a Nevada corporation
By: _____________________________
Name: _____________________________
Title: _____________________________
FIRST SOURCE FINANCIAL LLP, individually and in
its capacity as Agent
By: First Source Financial, Inc.,
its Agent/Manager
By: ________________________________
Xxxx X. Xxxxxxx
Senior Vice President
STATE OF______________ )
) SS.
COUNTY OF_____________ )
I, ________________________, a notary public in and for said County, in the
State of aforesaid. DO HEREBY CERTIFY that _________________, personally known
to me to be the ___________________ of MIKOHN GAMING CORPORATION. a Nevada
corporation, and personally known to me to be the same person whose name is
subscribed to the foregoing instrument. appeared before me this day in person
and acknowledged that he/she signed and delivered the said instrument as such
officer of said corporation, pursuant to authority given by the Board of
Directors of said corporation as such person's free and voluntary act. and as
the free and voluntary act and deed of said corporation, for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal this __ day of October, 1997.
----------------------------------
Notary Public
My Commission Expires:
------------------------------
STATE OF______________ )
) SS.
COUNTY OF_____________ )
I, ________________________, a notary public in and for said County, in the
State of aforesaid, DO HEREBY CERTIFY that _________________, personally known
to me to be the ____________________ of MIKOHN NEVADA, a Nevada corporation, and
personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person and acknowledged
that he/she signed and delivered the said instrument as such officer of said
corporation, pursuant to authority given by the Board of Directors of said
corporation as such person's free and voluntary act, and as the free and
voluntary act and deed of said corporation, for the uses and purposes therein
set forth.
GIVEN under my hand and notarial seal this __ day of October, 1997.
----------------------------------
Notary Public
My Commission Expires:
--------------------------------
STATE OF______________ )
) SS.
COUNTY OF_____________ )
I, _______________________, a notary public in and for said County, in the
State of aforesaid, DO HEREBY CERTIFY that _________________, personally
known to me to be "the __________________ of MGC, INC., a Nevada
corporation, and personally known to me to be the same person whose name is
subscribed to the foregoing instrument, appeared before me this day in
person and acknowledged that he/she signed and delivered the said
instrument as such officer of said corporation, pursuant to authority given
by the Board of Directors of said corporation as such person's free and
voluntary act, and as the free and voluntary act and deed of said
corporation, for the uses and purposes therein set forth.
GIVEN under my hand and notarial seal this __ day of October, 1997.
------------------------------
Notary Public
My Commission Expires:
------------------------------
STATE OF______________ )
) SS.
COUNTY OF_____________ )
I, _________________________, a notary public in and for said County, in
the State of aforesaid. DO HEREBY CERTIFY that _________________, personally
known to me to be "the ___________________ of CASINO EXCITEMENT, INC., a Nevada
corporation, and personally known to me to be the same person whose name is
subscribed to the foregoing instrument. appeared before me this day in person
and acknowledged that he/she signed and delivered the said instrument as such
officer of said corporation, pursuant to authority given by the Board of
Directors of said corporation as such person's free and voluntary act, and as
the free and voluntary act and deed of said corporation, for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal this __ day of October, 1997.
---------------------------
Notary Public
My Commission Expires:
---------------------------------
STATE OF______________ )
) SS.
COUNTY OF_____________ )
I, ________________________, a notary public in and for said County, in the
State of aforesaid. DO HEREBY CERTIFY that _________ personally known to me to
be a __________ of FIRST SOURCE FINANCIAL, INC., a Delaware corporation, the
Agent/Manager of First Source Financial LLP, an Illinois registered limited
liability partnership, and personally known to me to be the same person whose
name is subscribed to the foregoing instrument. appeared before me this day in
person and acknowledged that he/she signed and delivered the said instrument as
such officer of said corporation. pursuant to authority, given by the Board of
Directors of said corporation as such person's free and voluntary act, and as
the free and voluntary act and deed of said corporation, for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal this __ day of October, 1997.
-------------------------
Notary Public
My Commission Expires:
------------------------------------
ATTACHMENT 1
to
Agreement
(Patent)
ITEM A. PATENTS
Issued Patents
--------------
*Country Patent No. Issue Date Inventor(s) Title
-------- ---------- ---------- ----------- -----
Pending Patent Applications
---------------------------
*Country Serial No. Filing Date Inventor(s) Title
-------- ---------- ----------- ----------- -----
Patent Applications in Preparation
----------------------------------
Expected
*Country Docket No. Filing Date Inventor(s) Title
-------- ---------- ----------- ----------- -----
ITEM B. PATENT LICENSES
*Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- ---- ----------- -------
-------------------
* List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in
alphabetical order by country name.
EXHIBIT D
to
Security Agreement
AGREEMENT (Trademark)
THIS AGREEMENT (TRADEMARK), dated as of October __, 1997 (herein, as the
same from time to time may be amended, modified, restated or supplemented and in
effect. called this "Agreement"), is by and among MIKOHN GAMING CORPORATION, a
Nevada corporation ("Borrower"), MIKOHN NEVADA, a Nevada corporation ("Mikohn
Nevada"), MGC, INC., a Nevada corporation ("MGC"), CASINO EXCITEMENT, INC., a
Nevada corporation ("CEI"), (Mikohn Nevada, MGC and CEI sometimes hereinafter
are referred to individually as each "Guarantor" and collectively as
"Guarantors," and Borrower and Guarantors sometimes hereinafter are referred to
individually as each "Debtor" and collectively as "Debtor"), and FIRST SOURCE
FINANCIAL LLP, an Illinois registered limited liability partnership ("FSFP"), as
"Agent" for all "Lenders."
WITNESSETH:
WHEREAS, pursuant to a Credit Agreement dated as of October __, 1997
(together with all amendments and other modifications, if any, from time to time
thereafter made thereto, the "Credit Agreement"), among Borrower, FSFP, for
itself, as a Lender, and as Agent for all Lenders, and the financial
institutions parties thereto, Lenders have extended Commitments to make Loans to
Borrower; and
WHEREAS, Guarantors have guaranteed the payment and performance of the
Obligations pursuant to a certain Guaranty of even date herewith (herein, as the
same from time to time may be amended, modified, supplemented or restated and in
effect, called the "Guaranty") made by Guarantors in favor of Agent; and
WHEREAS, in connection with the Credit Agreement and the Guaranty, Debtors
have executed and delivered to Lenders a Security Agreement, dated as of October
__, 1997 (together with all amendments and other modifications, if any, from
time to time thereafter made thereto, the "Security Agreement"); and
WHEREAS, as a condition precedent to the making of the initial Loans under
the Credit Agreement, Debtors are required to execute and deliver this Agreement
and to grant to Agent a continuing security interest in all of the Patent
Collateral (as defined below) to secure all Liabilities; and
WHEREAS, Debtors have duly authorized the execution, delivery and
performance of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt of which
is hereby acknowledged, and in order to induce Lenders to make Loans (including
the initial Loans) to
Borrower pursuant to the Credit Agreement, Debtors agree, for the benefit of
Lenders, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
-----------
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided or provided by reference in the Security
Agreement.
SECTION 2. Grant of Security Interest. For good and valuable consideration,
--------------------------
the receipt and sufficiency of which are hereby acknowledged, to secure all of
the Obligations of Borrower and all of the obligations of each Guarantor arising
under the Guaranty (collectively, the "Liabilities"), Debtors does hereby
mortgage, pledge and grant to Agent for the benefit of Lenders a continuing
security interest in, all of the following property (the "Trademark
Collateral"), whether now or hereafter owned, acquired or existing:
(a) all trademarks, trade names, corporate names, company names,
business names, fictitious business names, trade dress. service marks,
certification marks, collective marks, logos, other sources of business
identifiers, prints and labels on which any of the foregoing have appeared
or appear, designs and general intangibles of a like nature (each of the
foregoing items in this clause (a) being called a "Trademark"), now
---------
existing anywhere in the world or hereafter adopted or acquired, whether
currently in use or not, all registrations and recordings thereof and all
applications in connection therewith, whether pending or in preparation for
filing, including registrations, recordings and applications in the United
States Patent and Trademark Office or in any office or agency of the United
States of America or any State thereof or any foreign country, including
those referred to in Item A of Attachment 1 hereto;
------ ------------
(b) all Trademark licenses, including each Trademark license referred to
in Item B of Attachment 1 hereto;
------ ------------
(c) all reissues, extensions or renewals of any of the items described
in clauses (a) and (b);
------- --- ---
(d) all of the goodwill of the business connected with the use of, and
symbolized by the items described in clauses (a) and (b); and
----------- ---
(e) all proceeds of, and rights associated with, the foregoing,
including any claim by Debtors against third parties for past, present or
future infringement or dilution of any Trademark, Trademark registration,
or Trademark license, including any Trademark, Trademark registration or
Trademark license referred to in Item A and Item B of Attachment 1 hereto,
------ ------ ------------
or for any injury to the goodwill associated with the use of any Trademark
or for breach or enforcement of any Trademark license.
SECTION 3. Security Agreement. This Agreement has been executed and delivered
------------------
by Debtors for the purpose of registering the security interest of Agent in the
Trademark Collateral with the United States Patent and Trademark Office and
corresponding offices in other countries of the world. The security interest
granted hereby has been granted as a supplement to, and not in limitation of,
the security interest granted to Agent under the Security Agreement. The
Security Agreement (and all rights and remedies of Lenders thereunder) shall
remain in full force and effect in accordance with its terms.
SECTION 4. Release of Security Interest. Upon payment in full of all
----------------------------
Liabilities and the termination of all Commitments, Lenders shall, at Debtors'
expense, execute and deliver to Debtors all instruments and other documents as
may be necessary or proper to release the lien on and security interest in the
Trademark Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. Each Debtor does hereby further acknowledge and
--------------
affirm that the rights and remedies of Lenders with respect to the security
interest in the Trademark Collateral granted hereby are more fully set forth in
the Security Agreement, the terms and provisions of which (including the
remedies provided for therein) are incorporated by reference herein as if fully
set forth herein.
SECTION 6. Credit Document, etc. This Agreement is a Credit Document executed
--------------------
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be construed, administered and applied in accordance with the terms and
provisions of the Credit Agreement.
SECTION 7. Counterparts. This Agreement may be executed by the parties hereto
------------
in several counterparts, each of which shall be deemed to be an original and all
of which shall constitute together but one and the same agreement.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the day and year first above written.
MIKOHN GAMING CORPORATION, a Nevada
corporation
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
MIKOHN NEVADA, a Nevada corporation
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
MGC, INC., a Nevada corporation
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
CASINO EXCITEMENT, INC., a Nevada corporation
By:
-------------------------
Name:
-------------------------
Title:
-------------------------
FIRST SOURCE FINANCIAL LLP, individually
and in its capacity as Agent
By: First Source Financial, Inc.,
its Agent/Manager
By:
----------------------------
Xxxx X. Xxxxxxx
Senior Vice President
STATE OF________________ )
) SS.
COUNTY OF ______________ )
I,_________________, a notary public in and for said County, in the
State of aforesaid, DO HEREBY CERTIFY that _________________, personally known
to me to be the ___________________ of MIKOHN GAMING CORPORATION, a Nevada
corporation, and personally known to me to be the same person whose name is
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged that he/she signed and delivered the said instrument as such
officer of said corporation, pursuant to authority given by the Board of
Directors of said corporation as such person's free and voluntary act, and as
the free and voluntary act and deed of said corporation, for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal this ____ day of October, 1997.
--------------------------------
Notary Public
My Commission Expires:
-----------------------------
STATE OF________________ )
) SS.
COUNTY OF ______________ )
I, __________________________, a notary public in and for said County, in
the State of aforesaid, DO HEREBY CERTIFY that __________________, personally
known to me to be the ___________________ of MGC, INC., a Nevada corporation,
and personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person and acknowledged
that he/she signed and delivered the said instrument as such officer of said
corporation, pursuant to authority given by the Board of Directors of said
corporation as such person's free and voluntary act, and as the free and
voluntary act and deed of said corporation, for the uses and purposes therein
set forth.
GIVEN under my hand and notarial seal this __ day of October, 1997.
-----------------------------
Notary Public
My Commission Expires:
----------------------------
STATE OF________________ )
) SS.
COUNTY OF ______________ )
I, ________________________, a notary public in and for said County, in the
State of aforesaid, DO HEREBY CERTIFY that _________________, personally known
to me to be the ___________________ of CASINO EXCITEMENT, INC., a Nevada
corporation, and personally known to me to be the same person whose name is
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged that he/she signed and delivered the said instrument as such
officer of said corporation, pursuant to authority given by the Board of
Directors of said corporation as such person's free and voluntary act, and as
the free and voluntary act and deed of said corporation, for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal this __ day of October, 1997.
--------------------------------
Notary Public
My Commission Expires:
-------------------------------
STATE OF________________ )
) SS.
COUNTY OF ______________ )
I, __________________________, a notary public in and for said County, in
the State of aforesaid, DO HEREBY CERTIFY that ________________ personally known
to me to be a _____ of FIRST SOURCE FINANCIAL, INC., a Delaware corporation, the
Agent/Manager of First Source Financial LLP, an Illinois registered limited
liability partnership, and personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before me this day in
person and acknowledged that he/she signed and delivered the said instrument as
such officer of said corporation, pursuant to authority, given by the Board of
Directors of said corporation as such person's free and voluntary act, and as
the free and voluntary act and deed of said corporation, for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal this __ day of October, 1997.
----------------------------
Notary Public
My Commission Expires:
------------------------------------
ATTACHMENT 1 to
Agreement
(Trademark)
ITEM A. Trademarks
Registered Trademarks
---------------------
* Country Trademark Registration No. Registration Date
------- --------- ---------------- -----------------
Pending Trademark Applications
------------------------------
* Country Trademark Serial No. Filing Date
------- --------- ---------- -----------
Trademark Applications in Preparation
-------------------------------------
Expected Products/
* Country Trademark Docket No. Filing Date Service
------- --------- ---------- ----------- ---------
ITEM B. TRADEMARK LICENSES
* Country or Effective Expiration
Territory Trademark Licensor Licensee Date Date
---------- --------- -------- -------- ---------- ----
----------------------
* List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in alphabetical
order by country name.
EXHIBIT E
to
Security Agreement
AGREEMENT
(Copyright)
THIS AGREEMENT (COPYRIGHT), dated as of October __, 1997 (herein, as the same
from time to time may be amended, modified, restated or supplemented and in
effect, called this "Agreement"), is by and among MIKOHN GAMING CORPORATION, a
Nevada corporation ("Borrower"), MIKOHN NEVADA, a Nevada corporation ("Mikohn
Nevada"), MGC, INC., a Nevada corporation ("MGC"), CASINO EXCITEMENT, INC., a
Nevada corporation ("CEI"), (Mikohn Nevada, MGC and CEI sometimes hereinafter
are referred to individually as each "Guarantor" and collectively as
"Guarantors," and Borrower and Guarantors sometimes hereinafter are referred to
individually as each "Debtor" and collectively as "Debtor"), and FIRST SOURCE
FINANCIAL LLP, an Illinois registered limited liability partnership ("FSFP"),
as "Agent" for all "Lenders."
WITNESSETH:
WHEREAS, pursuant to a Credit Agreement dated as of October __, 1997
(together with all amendments and other modifications, if any, from time to time
thereafter made thereto, the "Credit Agreement"), among Borrower, FSFP, for
itself, as a Lender, and as Agent for all Lenders, and the financial
institutions parties thereto, Lenders have extended Commitments to make Loans to
Borrower; and
WHEREAS, Guarantors have guaranteed the payment and performance of the
Obligations pursuant to a certain Guaranty of even date herewith (herein, as the
same from time to time may be amended, modified, supplemented or restated and in
effect, called the "Guaranty") made by Guarantors in favor of Agent; and
WHEREAS, in connection with the Credit Agreement and the Guaranty, Debtors
have executed and delivered to Lenders a Security Agreement, dated as of October
__, 1997 (together with all amendments and other modifications, if any, from
time to time thereafter made thereto, the "Security Agreement"); and
WHEREAS, as a condition precedent to the making of the initial Loans under
the Credit Agreement, Debtors are required to execute and deliver this Agreement
and to grant to Agent a continuing security interest in all of the Patent
Collateral (as defined below) to secure all Liabilities; and
WHEREAS, Debtors have duly authorized the execution, delivery and performance
of this Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt of which is
hereby acknowledged, and in order to induce Lenders to make Loans (including the
initial Loans) to Borrower pursuant to the Credit Agreement, Debtors agree, for
the benefit of Lenders, as follows:
SECTION 1. Definitions. Unless otherwise defined herein or the context
-----------
otherwise requires, terms used in this Agreement, including its preamble and
recitals, have the meanings provided or provided by reference in the Security
Agreement.
SECTION 2. Grant of Security Interest. For good and valuable consideration,
--------------------------
the receipt and sufficiency of which are hereby acknowledged, to secure all of
the Obligations of Borrower and all of the obligations of each Guarantor arising
under the Guaranty (collectively, the "Liabilities"), Debtors hereby mortgage,
pledge and grant to Agent for the benefit of Lenders a continuing security
interest in, all of the following property (the "Copyright Collateral"), whether
now or hereafter owned, acquired or existing, being all copyrights and all
semiconductor chip product mask works of Debtors, whether statutory or common
law, registered or unregistered, now or hereafter in force throughout the world,
including, without limitation, all of Debtors' right, title and interest in and
to all copyrights and mask works registered in the United States Copyright
Office or anywhere else in the world and also including, without limitation, the
copyrights and mask works referred to in Item A of Attachment 1 hereto, and all
------ ------------
applications for registration thereof, whether pending or in preparation, all
copyright and mask work licenses, including each copyright and mask work license
referred to in Item B of Attachment 1 attached hereto, the right to xxx for
------ ------------
past, present and future infringements of any thereof, all rights corresponding
thereto throughout the world, all extensions and renewals of any thereof and all
proceeds of the foregoing, including, without limitation, licenses, royalties,
income, payments, claims, damages and proceeds of suit.
SECTION 3. Security Agreement. This Agreement has been executed and delivered
------------------
by Debtors for the purpose of registering the security interest of Agent in the
Copyright Collateral with the United States Copyright Office and corresponding
offices in other countries of the world. The security interest granted hereby
has been granted as a supplement to, and not in limitation of, the security
interest granted to Agent under the Security Agreement. The Security Agreement
(and all rights and remedies of Lenders thereunder) shall remain in full force
and effect in accordance with its terms.
SECTION 4. Release of Security Interest. Upon payment in full of all
----------------------------
Liabilities and the termination of all Commitments, Lenders shall, at Debtors'
expense, execute and deliver to Debtors all instruments and other documents as
may be necessary or proper to release the lien on and security interest in the
Copyright Collateral which has been granted hereunder.
SECTION 5. Acknowledgment. Each Debtor does hereby further acknowledge and
--------------
affirm that the rights and remedies of Lenders with respect to the security
interest in the Copyright Collateral granted hereby are more fully set forth in
the Security Agreement, the terms and provisions of which (including the
remedies provided for therein) are incorporated by reference herein as if fully
set forth herein.
SECTION 6. Credit Document, etc. This Agreement is a Credit Document executed
--------------------
pursuant to the Credit Agreement and shall (unless otherwise expressly indicated
herein) be
construed, administered and applied in accordance with the terms and provisions
of the Credit Agreement.
SECTION 7. Counterparts. This Agreement may be executed by the parties hereto
------------
in several counterparts, each of which shall be deemed to be an original and all
of which shall constitute together but one and the same agreement.
[Remainder of this page intentionally left blank. ]
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the day and year first above written.
MIKOHN GAMING CORPORATION, a Nevada
corporation
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
MIKOHN NEVADA, a Nevada corporation
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
MGC, INC., a Nevada corporation
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
CASINO EXCITEMENT, INC., a Nevada
corporation
By:
-----------------------------
Name:
-----------------------------
Title:
-----------------------------
FIRST SOURCE FINANCIAL LLP, individually
and in its capacity as Agent
By: First Source Financial, Inc.,
its Agent/Manager
By:
--------------------------
Xxxx X. Xxxxxxx
Senior Vice President
STATE OF ____________ )
) SS
COUNTY OF ___________ )
I, _______________________, a notary public in and for said County, in the
State of aforesaid, DO HEREBY CERTIFY that _________________, personally known
to me to be the ___________________ of MIKOHN GAMING CORPORATION, a Nevada
corporation, and personally known to me to be the same person whose name is
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged that he/she signed and delivered the said instrument as such
officer of said corporation, pursuant to authority given by the Board of
Directors of said corporation as such person's free and voluntary act, and as
the free and voluntary act and deed of said corporation, for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal this __ day of October, 1997.
-------------------------------
Notary Public
My Commission Expires:
--------------------------------
STATE OF ____________ )
) SS.
COUNTY OF ___________ )
I, ________________, a notary public in and for said County, in the State
of aforesaid. DO HEREBY CERTIFY that _________________, personally known to me
to be the ___________________ of MIKOHN NEVADA, a Nevada corporation, and
personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person and acknowledged
that he/she signed and delivered the said instrument as such officer of said
corporation, pursuant to authority given by the Board of Directors of said
corporation as such person's free and voluntary act, and as the free and
voluntary act and deed of said corporation, for the uses and purposes therein
set forth.
GIVEN under my hand and notarial seal this __ day of October, 1997.
_____________________________
Notary Public
My Commission Expires:
-----------------------------
STATE OF ____________ )
) SS.
COUNTY OF ___________ )
I, ________________________, a notary public in and for said County, in the
State of aforesaid. DO HEREBY CERTIFY that _________________, personally known
to me to be the __________________ of MGC, INC., a Nevada corporation, and
personally known to me to be the same person whose name is subscribed to the
foregoing instrument, appeared before me this day in person and acknowledged
that he/she signed and delivered the said instrument as such officer of said
corporation, pursuant to authority given by the Board of Directors of said
corporation as such person's free and voluntary act, and as the free and
voluntary act and deed of said corporation, for the uses and purposes therein
set forth.
GIVEN under my hand and notarial seal this __ day of October, 1997.
-------------------------------
Notary Public
My Commission Expires:
------------------------------
STATE OF ____________ )
) SS.
COUNTY OF ___________ )
I,________________________, a notary public in and for said County, in the
State of aforesaid, DO HEREBY CERTIFY that _________________, personally known
to me to be the ___________________ of CASINO EXCITEMENT, INC., a Nevada
corporation, and personally known to me to be the same person whose name is
subscribed to the foregoing instrument, appeared before me this day in person
and acknowledged that he/she signed and delivered the said instrument as such
officer of said corporation, pursuant to authority given by the Board of
Directors of said corporation as such person's free and voluntary act, and as
the free and voluntary act and deed of said corporation, for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal this __ day of October, 1997.
-------------------------------
Notary Public
My Commission Expires:
----------------------------
STATE OF ____________ )
) SS.
COUNTY OF ___________ )
I, _________________, a notary public in and for said County, in the State
of aforesaid, DO HEREBY CERTIFY that _________ personally known to me to be the
____________________ of FIRST SOURCE FINANCIAL, INC., a Delaware corporation,
the Agent/Manager of First Source Financial LLP, an Illinois registered limited
liability partnership, and personally known to me to be the same person whose
name is subscribed to the foregoing instrument, appeared before me this day in
person and acknowledged that he/she signed and delivered the said instrument as
such officer of said corporation, pursuant to authority, given by the Board of
Directors of said corporation as such person's free and voluntary act, and as
the free and voluntary act and deed of said corporation, for the uses and
purposes therein set forth.
GIVEN under my hand and notarial seal this __ day of October, 1997.
-----------------------------
Notary Public
My Commission Expires:
----------------------------
ATTACHMENT 1
to
Agreement
(Copyright)
ITEM A. COPYRIGHTS/MASK WORKS
Registered Copyrights/Mask Works
--------------------------------
* Country Registration No. Registration Date Author(s) Title
------- ---------------- ----------------- --------- -----
Copyright/Mask Work Pending Registration Applications
-----------------------------------------------------
* Country Serial No. Filing Date Author(s) Title
------- ---------- ----------- --------- -----
Copyright/Mask Work Registration Applications in Preparation
------------------------------------------------------------
Expected
* Country Docket No. Filing Date Author(s) Title
------- ---------- ----------- --------- -----
ITEM B. COPYRIGHT/MASK WORK LICENSES
* Country or Effective Expiration Subject
Territory Licensor Licensee Date Date Matter
--------- -------- -------- --------- ---------- -------
--------------------
* List items related to the United States first for ease of recordation. List
items related to other countries next, grouped by country and in
alphabetical order by country name.
