Exhibit 4.6
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SECURITY AGREEMENT
By
GAMECO, INC.
as Issuer
and
THE GUARANTORS PARTY HERETO
and
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
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Dated as of February 8, 2002
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TABLE OF CONTENTS
Page
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PREAMBLE ................................................................ 1
RECITALS ................................................................ 1
AGREEMENT ............................................................... 2
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions ................................................. 2
SECTION 1.2 Interpretation .............................................. 11
SECTION 1.3 Resolution of Drafting Ambiguities .......................... 11
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1 Pledge ...................................................... 12
SECTION 2.2 Secured Obligations ......................................... 12
SECTION 2.3 Security Interest ........................................... 12
SECTION 2.4 No Release .................................................. 13
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES;
USE OF PLEDGED COLLATERAL
SECTION 3.1 Delivery of Certificated Securities Collateral .............. 13
SECTION 3.2 Perfection of Uncertificated Securities Collateral .......... 14
SECTION 3.3 Financing Statements and Other Filings ...................... 14
SECTION 3.4 Other Actions ............................................... 14
SECTION 3.5 Joinder of Additional Guarantors ............................ 18
SECTION 3.6 Motor Vehicles .............................................. 18
SECTION 3.7 Supplements; Further Assurances ............................. 18
SECTION 3.8 Use and Pledge of Pledged Collateral ........................ 18
ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
SECTION 4.1 Title and Authority ......................................... 19
SECTION 4.2 Validity of Security Interest ............................................ 19
SECTION 4.3 Limitation on Liens ...................................................... 19
SECTION 4.4 Other Financing Statements ............................................... 20
SECTION 4.5 Chief Executive Office; Change of Name; Jurisdiction of
Organization ............................................................. 20
SECTION 4.6 Location of Inventory and Equipment ...................................... 21
SECTION 4.7 Condition and Maintenance of Equipment ................................... 21
SECTION 4.8 Corporate Names; Prior Transactions ...................................... 21
SECTION 4.9 Due Authorization and Issuance ........................................... 21
SECTION 4.10 No Violations, etc. ...................................................... 22
SECTION 4.11 No Options, Warrants, etc ................................................ 22
SECTION 4.12 No Claims ................................................................ 22
SECTION 4.13 No Conflicts, Consents, etc. ............................................. 22
SECTION 4.14 Pledged Collateral ....................................................... 23
SECTION 4.15 Insurance ................................................................ 23
SECTION 4.16 Payment of Taxes; Compliance with Laws; Contesting Liens; Claims ......... 23
SECTION 4.17 Access to Pledged Collateral, Books and Records; Other Information ....... 24
SECTION 4.18 Acquisition Documents .................................................... 24
SECTION 4.19 Benefit to Guarantors .................................................... 25
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1 Pledge of Additional Securities Collateral ............................... 25
SECTION 5.2 Voting Rights; Distributions; etc ........................................ 25
SECTION 5.3 Operative Agreements ..................................................... 26
SECTION 5.4 Defaults, etc ............................................................ 27
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1 Grant of License ......................................................... 27
SECTION 6.2 Registrations ............................................................ 27
SECTION 6.3 No Violations or Proceedings ............................................. 27
SECTION 6.4 Protection of Trustee's Security ......................................... 28
SECTION 6.5 After-Acquired Property .................................................. 29
SECTION 6.6 Modifications ............................................................ 29
SECTION 6.7 Litigation ............................................................... 29
ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.01. Special Representations and Warranties ................................... 30
SECTION 7.02. Maintenance of Records .................................................. 30
SECTION 7.03. Legend .................................................................. 30
SECTION 7.04. Modification of Terms, etc .............................................. 30
SECTION 7.05. Collection .............................................................. 31
ARTICLE VIII
TRANSFERS AND OTHER LIENS
ARTICLE IX
REMEDIES
SECTION 9.1 Remedies ................................................................. 31
SECTION 9.2 Notice of Sale ........................................................... 34
SECTION 9.3 Waiver of Notice and Claims .............................................. 34
SECTION 9.4 Certain Sales of Pledged Collateral ...................................... 34
SECTION 9.5 No Waiver; Cumulative Remedies ........................................... 36
SECTION 9.6 Certain Additional Actions Regarding Intellectual Property ............... 36
ARTICLE X
APPLICATION OF PROCEEDS
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Concerning Trustee ...................................................... 37
SECTION 11.2 Trustee May Perform; Trustee Appointed Attorney-in-Fact ................. 38
SECTION 11.3 Expenses ................................................................ 38
SECTION 11.4 Indemnity ............................................................... 39
SECTION 11.5 Continuing Security Interest; Assignment ................................ 40
SECTION 11.6 Termination; Release .................................................... 40
SECTION 11.7 Modification in Writing ................................................. 40
SECTION 11.8 Notices ................................................................. 40
SECTION 11.9 GOVERNING LAW ........................................................... 41
SECTION 11.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS;
WAIVER OF JURY TRIAL ...... ........................................... 41
SECTION 11.11 Severability of Provisions .............................................. 41
SECTION 11.12 Execution in Counterparts ............................................... 41
SECTION 11.13 Business Days ........................................................... 42
SECTION 11.14 Waiver of Stay .......................................................... 42
SECTION 10.15 No Credit for Payment of Taxes or Imposition ............................ 42
SECTION 11.16 No Claims Against Trustee ............................................... 42
SECTION 11.17 Obligations Absolute .................................................... 42
SECTION 11.18 Senior Intercreditor Agreement .......................................... 43
SIGNATURES
SCHEDULE 1.1(a) Initial Pledged Interests
SCHEDULE 1.1(b) Initial Pledged Shares
SCHEDULE 1.1(c) Initial Intercompany Notes and Supporting Obligations
SCHEDULE 1.1(d) Prior Liens
SCHEDULE 1.1(e) Copyrights
SCHEDULE 1.1(f) Licenses
SCHEDULE 1.1(g) Patents
SCHEDULE 1.1(h) Trademarks
SCHEDULE 3.4(a) Instruments and Tangible Chattel Paper
SCHEDULE 3.4(b) Initial Deposit Accounts
SCHEDULE 3.4(c) Initial Securities Accounts and Commodity Accounts
SCHEDULE 3.4(f) Commercial Tort Claims
SCHEDULE 4.12 Required Consents
SCHEDULE 7.3 Violations or Proceedings
EXHIBIT 1 Form of Issuer Acknowledgment
EXHIBIT 2 Form of Securities Pledge Amendment
EXHIBIT 3 Form of Joinder Agreement
EXHIBIT 4 Form of Control Agreement
SECURITY AGREEMENT
SECURITY AGREEMENT (the "Agreement"), dated as of February 8, 2002, made by
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GAMECO, INC., a Delaware corporation having an office at 1001 North U.S. Highway
One, #710, Jupiter, Florida 33477 (the "Issuer"), and EACH OF THE GUARANTORS
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LISTED ON THE SIGNATURE PAGES HERETO OR FROM TIME TO TIME PARTY HERETO BY
EXECUTION OF A JOIN-DER AGREEMENT (collectively, the "Guarantors"), as pledgors,
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assignors and debtors (the Issuer, together with the Guarantors, in such
capacities and together with any successors in such capacities, the "Pledgors,"
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and each, a "Pledgor"), in favor of WELLS FARGO BANK MINNESOTA, NATIONAL
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ASSOCIATION, a national banking association having an office at 213 Court
Street, Suite 902, Middletown, CT 06457, in its capacity as trustee pursuant to
the Indenture (as hereinafter defined), as pledgee, assignee and secured party
(in such capacities and together with any successors in such capacities, the
"Trustee").
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R E C I T A L S :
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A. The Pledgors and the Trustee have, in connection with the
execution and delivery of this Agreement, entered into that certain indenture,
dated as of February 8, 2002 (as amended, amended and restated, supplemented or
otherwise modified from time to time, the "Indenture"), pursuant to which the
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Issuer has issued its 117/8% senior secured notes due 2009 (the "Senior Secured
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Notes") in the aggregate principal amount of $125,000,000. It is contemplated
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that the Issuer may, after the date hereof, issue Additional Notes (as defined
in the Indenture) and Exchange Notes (as defined in the Indenture; the Exchange
Notes, together with the Additional Notes and the Senior Secured Notes, the
"Notes"), in each case, pursuant to the provisions of the Indenture.
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B. Each Guarantor has, pursuant to the Indenture, among other
things, unconditionally guaranteed (the "Guarantee") the obligations of the
Issuer under the Indenture and the Notes.
C. Each Guarantor will receive substantial benefits from the
execution, delivery and performance of the obligations under the Indenture and
the Notes and is, therefore, willing to enter into this Agreement.
D. Each Pledgor is or will be the legal and/or beneficial owner
of the Pledged Collateral (as hereinafter defined) to be pledged by it
hereunder.
E. This Agreement is given by each Pledgor in favor of the
Trustee for its benefit and the benefit of the Holders of the Notes
(collectively, the "Secured Parties") to secure the payment and performance of
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all of the Secured Obligations (as hereinafter defined).
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A G R E E M E N T :
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NOW THEREFORE, in consideration of the foregoing premises and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, each Pledgor and the Trustee hereby agree as follows:
ARTICLE I
DEFINITIONS AND INTERPRETATION
SECTION 1.1 Definitions.
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(a) Unless otherwise defined herein, terms used herein that are
defined in the UCC shall have the meanings assigned to them in the UCC,
including the following which are capitalized herein:
"Accounts"; "Bank"; "Certificates of Title"; "Chattel Paper";
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"Commercial Tort Claim"; "Commodity Account"; "Commodity Contract"; "Commodity
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Intermediary"; "Credit Agreement"; "Credit Agreement Collateral"; "Documents";
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"Electronic Chattel Paper"; "Entitlement Holder"; "Entitlement Order";
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"Equipment"; "Financial Asset"; "Fixtures"; "Goods"; "Instruments" (as defined
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in Article 9 rather than Article 3); "Inventory"; "Investment Property";
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"Letter-of-Credit Rights"; "Letters of Credit"; "Securities Account"; "Security
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Entitlement"; "Securities Intermediary"; "Supporting Obligations"; and "Tangible
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Chattel Paper".
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(b) Capitalized terms used but not otherwise defined herein that
are defined in the Indenture shall have the meanings given to them in the
Indenture, including the following:
"Business Day"; "Capital Lease Obligations"; "Cash Equivalents";
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"Collateral Account"; "Collateral Documents"; "Event of Default"; "GAAP";
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"Holders"; "Lien"; "Mortgage"; "Net Loss Proceeds"; "Permitted Liens"; "Person";
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"Purchase Money Obligations"; "Senior Intercreditor Agreement"; "Subsidiary";
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and "Trust Monies".
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(c) The following terms shall have the following meanings:
"Acquisition Document Rights" shall mean, with respect to each
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Pledgor, collectively, all of such Pledgor's rights, title and interest in, to
and under the Acquisition Documents including, without limitation, (i) all
rights and remedies relating to monetary damages, including indemnification
rights and remedies, and claims for damages or other relief pursuant to or in
respect of the Acquisition Documents, (ii) all rights and remedies relating to
monetary damages, including indemnification rights and remedies, and claims for
monetary damages under or in respect of the agreements, documents and
instruments referred to in the Acquisition Documents or related thereto and
(iii) all proceeds, colle c-tions, recoveries and rights of subrogation with
respect to the foregoing.
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"Acquisition Documents" shall mean, collectively, (i) that certain
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Agreement and Plan of Merger dated April 25, 2001, as amended on November 12,
2001, among Black Hawk Gaming & Development Company, Inc., a Colorado
corporation, BH Acquisition, Inc., a Colorado corporation, and the Issuer; (ii)
that certain Agreement and Plan of Merger dated June 11, 2001, as amended on
No-vember 16, 2001, among Colonial Holdings, Inc., a Virginia corporation,
Gameco Acquisition, Inc., a Virginia corporation, and the Issuer; and (iii) that
certain Exchange Agreement, dated the date hereof, among Jeffrey P. Jacobs, The
Richard E. Jacobs Revocable Trust, and the Issuer; in each case, together with
any and all documents, agreements and other instruments then or at any time
thereafter executed and/or delivered in connection therewith or related thereto
in each case as amended, amended and restated, supplemented, extended, renewed,
replaced or otherwise modified from time to time.
"Additional Pledged Interests" shall mean, collectively, with respect
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to each Pledgor, (i) all options, warrants, rights, agreements, additional
membership or partnership interests or other interests of whatever class of any
issuer of Initial Pledged Interests or any interest in any such issuer,
including, without limitation, all rights, privileges, authority and powers of
such Pledgor relating to the equity or membership or partnership interests in
any such issuer or under the Operative Agreement of any such issuer, from time
to time acquired by such Pledgor in any manner and (ii) all the membership,
partnership or other interests, as applicable, of each limited liability
company, partnership or other entity (other than a corporation) hereafter
acquired or formed by such Pledgor and all options, warrants, rights,
agreements, additional membership or partnership interests or other interests of
whatever class of such limited liability company, partnership or other entity
including, without limitation, all rights, privileges, authority and powers of
such Pledgor relating to such equity or membership or partnership interests or
under the Operative Agreement of such limited liability company, partnership or
other entity, from time to time acquired by such Pledgor in any manner, in each
case, including the certificates, instruments and agreements representing such
additional interests and any and all interest of such Pledgor in the entries on
the books of any financial intermediary pertaining to such additional interests.
"Additional Pledged Shares" shall mean, collectively, with respect to
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each Pledgor, all (i) options, warrants, rights, agreements, additional shares
of capital stock of whatever class of any issuer of the Initial Pledged Shares
or any interest in any such issuer, including, without limitation, all rights,
privileges, authority and powers of such Pledgor relating to such additional
shares issued by any such issuer under the Operative Agreement of any such
issuer, from time to time acquired by such Pledgor in any manner and (ii) all
the issued and outstanding shares of capital stock of each corporation hereafter
acquired or formed by such Pledgor and all options, warrants, rights, agreements
or additional shares of capital stock of whatever class of such corporation
including, without limitation, all rights, privileges, authority and powers of
such Pledgor relating to such shares or under the Operative Agreement of such
corporation, from time to time acquired by such Pledgor in any manner, in each
case, including the certificates representing such additional shares and any and
all interest of such Pledgor in the entries on the books of any Securities
Intermediary pertaining to such additional shares.
"Agreement" shall mean this Agreement, as amended, amended and
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restated, supplemented or otherwise modified from time to time in accordance
with the provisions hereof.
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"Charges" shall mean any and all property and other taxes,
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assessments and special assessments, levies, fees and all governmental charges
imposed upon or assessed against, and all claims (including, without limitation,
landlords', carriers', mechanics', workmen's, repairmen's, laborers',
materialmen's, suppliers' and warehousemen's Liens and other claims arising by
operation of law) against, all or any portion of the Pledged Collateral.
"Collateral Account Funds" shall mean, collectively, the following
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from time to time on deposit in the Collateral Account: all funds (including,
without limitation, all Trust Monies), investments (including, without
limitation, Cash Equivalents) and all certificates and instruments from time to
time representing or evidencing such investments; all notes, certificates of
deposit, checks and other instruments from time to time hereafter delivered to
or otherwise possessed by the Trustee for or on behalf of any Pledgor in
substitution for, or in addition to, any or all of the Pledged Collateral or
Mortgaged Property; and all interest, dividends, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the items constituting Pledged
Collateral or Mortgaged Property.
"Collateral Material Adverse Effect" shall mean, as of any date of
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determination and whether individually or in the aggregate (a) any event,
circumstance, occurrence or condition which has caused or resulted in (or would
reasonably be expected to cause or result in) a material adverse effect on the
business or operations as presently conducted in connection with the Pledged
Collateral; (b) any event, circumstance, occurrence or condition which has
caused or resulted in (or would reasonably be expected to cause or result in) a
material adverse effect on the value or utility of the Pledged Colla t-eral; or
(c) any event, circumstance, occurrence or condition which has caused or
resulted in (or would reasonably expect to cause or result in) a material
adverse effect on the legality, priority or enforceability of the Lien created
by this Agreement or the rights and remedies of the Trustee hereunder.
"Contested Liens" shall mean, collectively, any Liens incurred in
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respect of any Charges to the extent that the amounts owing in respect thereof
are not yet delinquent or are being contested and otherwise comply with the
provisions of Section 4.16 hereof.
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"Contracts" shall mean, collectively, with respect to each Pledgor,
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all sale, service, performance, equipment or property lease contracts,
agreements and grants and all other contracts, agreements or grants (in each
case, whether written or oral, or third party or intercompany), between such
Pledgor and third parties, and all assignments, amendments, restatements,
supplements, extensions, renewals, replacements or modifications thereof.
"Copyrights" shall mean, collectively, with respect to each Pledgor,
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all copyrights (whether statutory or common law and whether established or
registered in the United States or any other country) and all copyright
registrations and applications made by such Pledgor, in each case, whether now
owned or hereafter created or acquired by or assigned to such Pledgor, whether
published or unpublished, including, without limitation, the copyrights,
registrations and applications listed in Schedule 1.1(e) annexed hereto,
together with any and all (i) rights and privileges arising under applicable law
with respect to such Pledgor's use of such copyrights, (ii) reissues, renewals,
continuations and extensions thereof, (iii) income, fees, royalties, damages,
claims and payments now or hereafter due
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and/or payable with respect thereto, including, without limitation, damages and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to sue for past,
present or future infringements thereof.
"Deposit Accounts" shall mean, collectively, with respect to
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each Pledgor, (i) all "deposit accounts" as such term is defined in the UCC and
(ii) all cash, funds, checks, notes and instruments from time to time on deposit
in any of the accounts described in clause (i) of this definition.
"Destruction" shall mean any and all damage to, or loss or
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destruction of, all or any portion of the Pledged Collateral or Mortgaged
Property.
"Distributions" shall mean, collectively, with respect to each
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Pledgor, all dividends, cash, options, warrants, rights, instruments,
distributions, returns of capital or principal, income, interest, profits and
other property, interests (debt or equity) or proceeds, including as a result of
a split, revision, reclassification or other like change of the Pledged
Securities, from time to time received, receivable or otherwise distributed to
such Pledgor in respect of or in exchange for any or all of the Pledged
Securities or Intercompany Notes.
"Excluded Property" shall mean Special Property other than the
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following:
(a) the right to receive any payment of money (including,
without limitation, Accounts, General Intangibles and Payment
Intangibles) or any other rights referred to in Sections 9-406(f),
9-407(a) or 9-408(a) of the UCC; and
(b) any Proceeds, substitutions or replacements of any
Special Property (unless such Proceeds, substitutions or replacements
would constitute Special Property).
"Gaming Authorities" shall have the meaning assigned to such
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term in the Indenture.
"Gaming Law" shall have the meaning assigned to such term in
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the Indenture.
"General Collateral" shall mean the Pledged Collateral other
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than the Securities Collateral, the Investment Property and the Intellectual
Property Collateral.
"General Intangibles" shall mean, collectively, with respect
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to each Pledgor, all "general intangibles," as such term is defined in the UCC,
of such Pledgor and, in any event, shall include, without limitation, (i) all of
such Pledgor's rights, title and interest in, to and under all Insurance
Policies and Contracts, (ii) all know-how and warranties relating to any of the
Pledged Collateral or the Mortgaged Property, (iii) any and all other rights,
claims, choses-in-action and causes of action of such Pledgor against any other
Person and the benefits of any and all collateral or other security given by any
other Person in connection therewith, (iv) all guarantees, endorsements and
indemnifications on, or of, any of the Pledged Collateral or any of the
Mortgaged Property, (v) all lists, books, records, correspondence, ledgers,
print-outs, files (whether in printed form or stored electronically), tapes and
other papers or materials containing information relating to any of the Pledged
Collateral or any of the Mort-
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gaged Property, including, without limitation, all customer or tenant lists,
identification of suppliers, data, plans, blueprints, specifications, designs,
drawings, appraisals, recorded knowledge, surveys, studies, engineering reports,
test reports, manuals, standards, processing standards, performance standards,
catalogs, research data, computer and automatic machinery software and programs
and the like, field repair data, accounting information pertaining to such
Pledgor's operations or any of the Pledged Collateral or any of the Mortgaged
Property and all media in which or on which any of the information or knowledge
or data or records may be recorded or stored and all computer programs used for
the compilation or printout of such information, knowledge, records or data,
(vi) all licenses, consents, permits, variances, certifications, authorizations
and approvals, however characterized, of any Governmental Authority (or any
Person acting on behalf of a Governmental Authority) now or hereafter acquired
or held by such Pledgor pertaining to operations now or hereafter conducted by
such Pledgor or any of the Pledged Collateral or any of the Mortgaged Property
including, without limitation, building permits, certificates of occupancy,
environmental certificates, industrial permits or licenses and certificates of
operation, and (vii) all rights to reserves, deferred payments, deposits,
refunds, indemnification of claims to the extent the foregoing relate to any
Pledged Collateral or Mortgaged Property and claims for tax or other refunds
against any Governmental Authority relating to any Pledged Collateral or any of
the Mortgaged Property.
"Goodwill" shall mean, collectively, with respect to each
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Pledgor, the goodwill connected with such Pledgor's business including, without
limitation, (i) all goodwill connected with the use of and symbolized by any of
the Intellectual Property Collateral in which such Pledgor has any interest and
(ii) all know-how, trade secrets, customer and supplier lists, proprietary
information, inventions, methods, procedures, formulae, descriptions,
compositions, technical data, drawings, specifications, name plates, catalogs,
confidential information and the right to limit the use or disclosure thereof by
any Person, pricing and cost information, business and marketing plans and
proposals, consulting agreements, engineering contracts and such other assets
which relate to such goodwill.
"Governmental Authority" shall mean any Federal, state, local,
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foreign or other governmental, quasi-governmental or administrative (including
self-regulatory) body, instrumentality, department, agency, authority, board,
bureau, commission, office of any nature whatsoever or other subdivision
thereof, or any court, tribunal, administrative hearing body, arbitration panel
or other similar dispute-resolving body, whether now or hereafter in existence,
or any officer or official thereof, having jurisdiction over any Pledgor or the
Pledged Collateral or any portion thereof.
"Guarantee" shall have the meaning assigned to such term in
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Recital B hereof.
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"Guarantors" shall have the meaning assigned to such term in
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the Preamble hereof.
"Indemnified Liabilities" shall have the meaning assigned to
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such term in Section 11.4(i) hereof.
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"Indemnitees" shall have the meaning assigned to such term in
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Section 11.4(i) hereof.
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"Indenture" shall have the meaning assigned to such term in
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Recital A hereof.
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"Initial Pledged Interests" shall mean, with respect to each
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Pledgor, all membership, partnership or other equity interests (other than in a
corporation), as applicable, of each issuer described in Schedule1.1(a) annexed
hereto, together with all rights, privileges, authority and powers of such
Pledgor in and to each such issuer or under the Operative Agreement of each such
issuer, and the certificates, instruments and agreements representing such
membership, partnership or other interests and any and all interest of such
Pledgor in the entries on the books of any financial intermediary pertaining to
such membership, partnership or other interests.
"Initial Pledged Shares" shall mean, collectively, with
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respect to each Pledgor, the issued and outstanding shares of capital stock of
each Person described in Schedule 1.1(b) annexed hereto together with all
rights, privileges, authority and powers of such Pledgor in and to each such
issuer or under the Operative Agreement of each such issuer, and the
certificates, instruments and agreements representing the Initial Pledged Shares
and any and all interest of such Pledgor in the entries on the books of any
Securities Intermediary pertaining to the Initial Pledged Shares.
"Insurance Policies" shall mean the insurance policies and
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coverages required to be maintained by the Pledgors with respect to the Pledged
Collateral and the Mortgaged Property pursuant to Section 4.19 of the Indenture
and all renewals and extensions thereof.
"Insurance Requirements" means, collectively, with respect to
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each Pledgor, all provisions of the Insurance Policies, all requirements of the
issuer of any of the Insurance Policies and all orders, rules, regulations and
any other requirements of the National Board of Fire Underwriters (or any other
body exercising similar functions) binding upon such Pledgor and applicable to
the Pledged Collateral or the Mortgaged Property or any use or condition
thereof.
"Intellectual Property Collateral" shall mean, collectively,
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the Patents, Trademarks, Copyrights, Licenses and Goodwill.
"Intercompany Notes" shall mean, with respect to each Pledgor,
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(i) all intercompany notes described in Schedule 1.1(c) annexed hereto (and each
other intercompany note hereafter acquired by such Pledgor) and all
certificates, instruments or agreements evidencing such intercompany notes, (ii)
all Supporting Obligations described in Schedule 1.1(c) annexed hereto with
respect to the intercompany notes described in clause (i) of this definition
(and each other Supporting Obligation hereafter acquired by such Pledgor) and
all certificates, instruments or agreements evidencing such Supporting
Obligations, and (iii) all assignments, amendments, restatements, supplements,
extensions, renewals, replacements or modifications of the items described in
clauses (i) and (ii) of this definition to the extent permitted pursuant to the
terms hereof.
"Issuer" shall have the meaning assigned to such term in the
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Preamble hereof.
"Joinder Agreement" shall mean the form of joinder agreement
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attached hereto as Exhibit 3.
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"Licenses" shall mean, collectively, with respect to each
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Pledgor, all license and distribution agreements and covenants not to sue with
any other party with respect to any Patent, Trademark or Copyright or any other
patent, trademark or copyright, whether such Pledgor is a licensor or licensee,
distributor or distributee under any such license or distribution agreement,
including, without limitation, the license and distribution agreements listed in
Schedule 1.1(f) annexed hereto, together with any and all (i) renewals,
extensions, supplements and continuations thereof, (ii) income, fees, royalties,
damages, claims and payments now and hereafter due and/or payable thereunder and
with respect thereto including, without limitation, damages and payments for
past, present or future infringements or violations thereof, (iii) rights to sue
for past, present and future infringements or violations thereof and (iv) any
other rights to use, exploit or practice any or all of the Patents, Trademarks
or Copyrights or any other patent, trademark or copyright.
"Mortgaged Property" shall have the meaning assigned to such
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term in the Mortgages.
"Nevada Board" means the Nevada Gaming Control Board.
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"Notes" shall have the meaning assigned to such term in
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Recital A of this Agreement.
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"Officers' Certificate" shall have the meaning assigned to
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such term in the Indenture.
"Operative Agreement" shall mean (i) in the case of any
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limited liability company or partnership or other non-corporate entity, any
membership or partnership agreement or other organizational agreement or
document thereof and (ii) in the case of any corporation, any charter or
certificate of incorporation and by-laws thereof.
"Patents" shall mean, collectively, with respect to each
-------
Pledgor, all patents issued or assigned to and all patent applications and
registrations made by such Pledgor (whether established or registered or
recorded in the United States or any other country), including, without
limitation, the patents, patent applications, registrations and recordings
listed in Schedule 1.1(g) annexed hereto, together with any and all (i) rights
and privileges arising under applicable law with respect to such Pledgor's use
of any patents, (ii) inventions and improvements described and claimed therein,
(iii) reissues, divisions, continuations, renewals, extensions and
continuations-in-part thereof, (iv) income, fees, royalties, damages, claims and
payments now or hereafter due and/or payable thereunder and with respect thereto
including, without limitation, damages and payments for past, present or future
infringements thereof, (v) rights corresponding thereto throughout the world and
(vi) rights to sue for past, present or future infringements thereof.
"Perfection Certificate" shall mean that certain perfection
----------------------
certificate dated February 8, 2001, executed and delivered by the Issuer in
favor of the Trustee for the benefit of the Secured Parties, and each other
perfection certificate (which shall be in form and substance reasonably
acceptable to the Trustee) executed and delivered by the applicable Guarantor in
favor of the Trustee for the benefit of the Secured Parties contemporaneously
with the execution and delivery of each Joinder Agreement executed in accordance
with Section 3.5 hereof.
-----------
-9-
"Permitted Collateral Liens" shall have the meaning assigned to
--------------------------
such term in Section 4.3 hereof.
-----------
"Pledge Amendment" shall have the meaning assigned to such term
----------------
in Section 5.1 hereof.
-----------
"Pledged Collateral" shall have the meaning assigned to such term
-----------------
in Section 2.1 hereof.
-----------
"Pledged Interests" shall mean, collectively, the Initial Pledged
-----------------
Interests and the Additional Pledged Interests.
"Pledged Securities" shall mean, collectively, the Pledged
------------------
Interests, the Pledged Shares and the Successor Interests.
"Pledged Shares" shall mean, collectively, the Initial Pledged
--------------
Shares and the Additional Pledged Shares.
"Pledgor" shall have the meaning assigned to such term in the
-------
Preamble hereof.
"Prior Liens" shall mean, collectively, the Liens identified in
-----------
Schedule 1.1(d) annexed hereto relating to the items of Pledged Collateral
identified in such Schedule.
"Proceeds" shall mean, collectively, all "proceeds," as such term
--------
is defined in Section 9-102 of the UCC or under other relevant law.
"Prudent Operator" shall mean the standard of care taken by a
----------------
prudent operator of property and assets similar in use and configuration to the
Pledged Collateral or Mortgaged Property, as the case may be, and located in the
locality where the Pledged Collateral or Mortgaged Property, as the case may be,
is located.
"Requirements of Law" shall mean, collectively, any and all
-------------------
requirements of any Governmental Authority including, without limitation, any
and all laws, ordinances, rules, regulations or similar statutes or case law.
"Secured Obligations" shall mean all obligations (whether or not
-------------------
constituting future advances, obligatory or otherwise) of the Issuer and any and
all of the Guarantors from time to time arising under or in respect of this
Agreement, the Indenture, the Notes and the other Collateral Documents
(including, without limitation, the obligations to pay principal, interest and
all other charges, fees, expenses, commissions, reimbursements, premiums,
indemnities and other payments related to or in respect of the obligations
contained in this Agreement, the Indenture, the Notes and the other Collateral
Documents), in each case whether (i) such obligations are direct or indirect,
secured or unsecured, joint or several, absolute or contingent, due or to become
due whether at stated maturity, by acceleration or otherwise, (ii) arising in
the regular course of business or otherwise, (iii) for payment or performance
-10-
and/or (iv) now existing or hereafter arising (including, without limitation,
interest and other obligations arising or accruing after the commencement of any
bankruptcy, insolvency, reorganization or similar proceeding with respect to any
Pledgor or any other Person, or which would have arisen or accrued but for the
commencement of such proceeding, even if such obligation or the claim therefor
is not enforceable or allowable in such proceeding).
"Secured Parties" shall have the meaning assigned to such term in
---------------
Recital E hereof.
- ---------
"Securities Act" shall have the meaning assigned to such term in
--------------
Section 8.4(ii) hereof.
- --------------
"Securities Collateral" shall mean, collectively, the Pledged
---------------------
Securities, the Intercom-pany Notes and the Distributions.
"Special Property" shall mean:
----------------
(a) any permit, lease or license held by any Pledgor that validly
prohibits the creation by such Pledgor of a security interest therein;
(b) any permit, lease or license held by any Pledgor to the
extent that any Requirement of Law applicable thereto prohibits the
creation of a security interest therein; and
(c) Equipment owned by any Pledgor on the date hereof or
hereafter acquired that is subject to a Lien securing a Purchase Money
Obligation or Capital Lease Obligation permitted to be incurred
pursuant to the provisions of the Indenture if the contract or other
agreement in which such Lien is granted (or the documentation providing
for such Purchase Money Obligation or Capital Lease Obligation) validly
prohibits the creation of any other Lien in such Equipment;
provided, however, that in each case described in clauses (a), (b) and (c) of
- -------- -------
this definition, such property shall constitute "Special Property" only to the
extent and for so long as such permit, lease, license, contract or other
agreement or Requirement of Law applicable thereto, validly prohibits the
creation of a Lien in such property in favor of the Trustee and, upon the
termination of such prohibition (howsoever occurring), such property shall cease
to constitute "Special Property".
"Successor Interests" shall mean, collectively, with respect to
-------------------
each Pledgor, all shares of each class of the capital stock of the successor
corporation or interests or certificates of the successor limited liability
company, partnership or other entity owned by such Pledgor (unless such
successor is such Pledgor itself) formed by or resulting from any consolidation
or merger in which any Person listed in Schedule 1.1(a) or Schedule 1.1(b)
annexed hereto is not the surviving entity; provided, however, that the pledge
-------- -------
of the Successor Interests affected hereby shall in no event affect the
obligations of such Pledgor under any provision prohibiting such action
hereunder or under the Indenture.
"Taking" shall mean any taking of the Pledged Collateral or the
------
Mortgaged Property or any portion thereof, in or by condemnation or other
eminent domain proceedings pursuant to any law,
-11-
general or special, or by reason of the temporary requisition of the use of the
Pledged Collateral or Mortgaged Property or any portion thereof, by any
Governmental Authority, civil or military.
"Tax Code" shall mean the Internal Revenue Code of 1986, as
--------
amended from time to time.
"Trademarks" shall mean, collectively, with respect to each
----------
Pledgor, all trademarks (including service marks), logos, slogans, logos,
certification marks, trade dress, uniform resource locations (URL's), domain
names, corporate names and trade names, whether registered or unregistered,
owned by or assigned to such Pledgor and all registrations and applications for
the foregoing (whether statutory or common law and whether established or
registered in the United States or any other Country), including, without
limitation, the registrations and applications listed in Schedule 1.1(h) annexed
hereto, together with any and all (i) rights and privileges arising under
applicable law with respect to such Pledgor's use of any trademarks, (ii)
reissues, continuations, extensions and renewals thereof, (iii) income, fees,
royalties, damages and payments now and hereafter due and/or payable thereunder
and with respect thereto, including, without limitation, damages, claims and
payments for past, present or future infringements thereof, (iv) rights
corresponding thereto throughout the world and (v) rights to sue for past,
present and future infringements thereof.
"Trustee" shall have the meaning assigned to such term in the
------
Preamble of this Agreement.
"UCC" shall mean the Uniform Commercial Code as in effect on the
---
date hereof in the State of New York; provided, however, that if by reason of
-------- -------
mandatory provisions of law, the perfection or the effect of perfection or
non-perfection of the security interest in any item or portion of the Pledged
Collateral is governed by the Uniform Commercial Code as in effect in a
jurisdiction other than the State of New York, "UCC" shall mean the Uniform
Commercial Code as in effect in such other jurisdiction for purposes of the
provisions hereof relating to such perfection or effect of perfection or
non-perfection.
SECTION 1.2 Interpretation. The rules of construction set forth
--------------
in Section 1.04 of the Indenture shall be applicable to this Agreement.
------------
SECTION 1.3 Resolution of Drafting Ambiguities. Each Pledgor
----------------------------------
acknowledges and agrees that it was represented by counsel in connection with
the execution and delivery hereof, that it and its counsel reviewed and
participated in the preparation and negotiation hereof and that any rule of
construction to the effect that ambiguities are to be resolved against the
drafting party (i.e., the Trustee) shall not be employed in the interpretation
hereof.
-12-
ARTICLE II
GRANT OF SECURITY AND SECURED OBLIGATIONS
SECTION 2.1 Pledge. As collateral security for the payment and
------
performance in full of all the Secured Obligations, each Pledgor hereby pledges,
assigns, transfers and grants to the Trustee for its benefit and for the benefit
of the Secured Parties, a first priority security interest in and to and pledge
of all of the right, title and interest of such Pledgor in, to and under the
following property, wherever located, whether now existing or hereafter arising
or acquired from time to time (collectively, the "Pledged Collateral"): (i)
------------------
Goods; (ii) Equipment; (iii) Documents; (iv) Instruments; (v) Chattel Paper;
(vi) Letter-of-Credit Rights; (vii) Pledged Securities; (viii) Intercompany
Notes; (ix) Distributions; (x) Accounts; (xi) Inventory; (xii) Investment
Property and Financial Assets; (xiii) Intellectual Property Collateral; (xiv)
Commercial Tort Claims; (xv) General Intangibles; (xvi) Deposit Accounts; (xvii)
the Collateral Account and all Collateral Account Funds; (xviii) Fixtures; (xix)
Supporting Obligations; (xx) Acquisition Documents and Acquisition Document
Rights; (xxi) all books and records relating to the Pledged Collateral; and
(xxii) to the extent not covered by clauses (i) through (xxi) of this sentence,
all other personal property and all Proceeds of any and all of the foregoing;
provided, however, that Pledged Collateral shall not include any Excluded
- -------- -------
Property.
SECTION 2.2 Secured Obligations. This Agreement secures, and the
-------------------
Pledged Collateral is collateral security for, the payment and performance in
full when due of the Secured Obligations.
SECTION 2.3 Security Interest. (a) Each Pledgor hereby
-----------------
irrevocably authorizes the Trustee at any time and from time to time to file in
any relevant jurisdiction any initial financing statements (including fixture
filings) and amendments thereto that contain the information required by Article
9 of the Uniform Commercial Code of each applicable jurisdiction for the filing
of any financing statement or amendment relating to the Pledged Collateral,
including, without limitation, (i) whether the Pledgor is an organization, the
type of organization and any organizational identification number issued to the
Pledgor and (ii) in the case of a financing statement filed as a fixture filing
or covering Pledged Collateral constituting minerals or the like to be extracted
or timber to be cut, a sufficient description of the real property to which such
Pledged Collateral relates. The Pledgor agrees to provide such information to
the Trustee promptly upon request.
(b) Each Pledgor hereby ratifies its authorization for the
Trustee to file in any relevant jurisdiction any initial financing statements or
amendments thereto relating to the Pledged Collateral if filed prior to the date
hereof.
(c) The Trustee is further authorized to file filings with the
United States Patent and Trademark Office or United States Copyright Office (or
any successor office or any similar office in any other country) or other
documents for the purpose of perfecting, confirming, continuing, enforcing or
protecting the security interest granted by each Pledgor hereunder, without the
signature of any Pledgor, and naming any Pledgor or the Pledgors, as debtors,
and the Trustee, as secured party.
-13-
SECTION 2.4 No Release. Nothing set forth in this Agreement shall
----------
relieve the Pledgor from the performance of any term, covenant, condition or
agreement on the Pledgor's part to be performed or observed under or in respect
of any of the Pledged Collateral or from any liability to any Person under or in
respect of any of the Pledged Collateral or shall impose any obligation on the
Trustee or any other Secured Party to perform or observe any such term,
covenant, condition or agreement on the Pledgor's part to be so performed or
observed or shall impose any liability on the Trustee or any other Secured Party
for any act or omission on the part of the Pledgor relating thereto or for any
breach of any representation or warranty on the part of the Pledgor contained in
this Agreement, the Indenture, the Notes or the other Collateral Documents, or
under or in respect of the Pledged Collateral or made in connection herewith or
therewith. The obligations of the Pledgor contained in this Section 2.4 shall
-----------
survive the termination hereof and the discharge of the Pledgor's other
obligations under this Agreement and the Indenture, the Notes and the other
Collateral Documents.
ARTICLE III
PERFECTION; SUPPLEMENTS; FURTHER ASSURANCES; USE OF PLEDGED COLLATERAL
SECTION 3.1 Delivery of Certificated Securities Collateral. All
----------------------------------------------
certificates, agreements or instruments representing or evidencing the
Securities Collateral, to the extent not previously delivered to the Trustee,
shall immediately upon receipt thereof by any Pledgor be delivered to and held
by or on behalf of the Trustee pursuant hereto. All certificated Securities
Collateral shall be in suitable form for transfer by delivery or shall be
accompanied by duly executed instruments of transfer or assignment in blank, all
in form and substance satisfactory to the Trustee. The Trustee shall maintain
the certificates evidencing the Pledged Securities issued by Gold Dust West
Casino, Inc. at all times at a location in Nevada designated to the Nevada
Gaming Control Board (the "Nevada Board"), and shall make the certificate(s) or
instrument(s) representing or evidencing such Pledged Securities available for
inspection by agents or employees of the Nevada Board promptly upon the prior
request of the Ne-vada Board during normal business hours. The Trustee shall
have the right, at any time upon the occurrence and during the continuance of
any Event of Default, to endorse, assign or otherwise transfer to or to register
in the name of the Trustee or any of its nominees or endorse for negotiation any
or all of the Securities Collateral, without any indication that such Securities
Collateral is subject to the security interest hereunder. In addition, the
Trustee shall have the right at any time to exchange certificates representing
or evidencing Securities Collateral for certificates of smaller or larger
denominations.
SECTION 3.2 Perfection of Uncertificated Securities Collateral.
--------------------------------------------------
If any issuer of Pledged Securities is organized in a jurisdiction which does
not permit the use of certificates to evidence equity ownership, or if any of
the Pledged Securities are at any time not evidenced by certificates of
ownership, then each applicable Pledgor shall, to the extent permitted by
applicable law, record such pledge on the equityholder register or the books of
the issuer, cause the issuer to execute and deliver to the Trustee an
acknowledgment of the pledge of such Pledged Securities substantially in the
form of Exhibit 1 annexed hereto, execute any customary pledge forms or other
---------
documents necessary
-14-
or appropriate to complete the pledge and give the Trustee the right to transfer
such Pledged Securities under the terms hereof and provide to the Trustee an
opinion of counsel, in form and substance satisfactory to the Trustee,
confirming such pledge and perfection thereof.
SECTION 3.3 Financing Statements and Other Filings. The only
--------------------------------------
filings, registrations and recordings necessary and appropriate to create,
preserve, protect, publish notice of and perfect the security interest granted
by each Pledgor to the Trustee (for the benefit of the Secured Parties) pursuant
to this Agreement in respect of the Pledged Collateral are listed in Schedule 7
of the Perfection Certificate. All such filings, registrations and recordings
have been duly executed and delivered to the Trustee for filing in each
governmental, municipal or other office specified in Schedule 7 of the
Perfection Certificate and shall be filed, registered and recorded immediately
after the date thereof. Each Pledgor agrees that at any time and from time to
time, at the sole cost and expense of the Pledgors, it will execute and file and
refile, or permit the Trustee to file and refile, such financing statements,
continuation statements and other documents (including, without limitation, this
Agreement), in form reasonably acceptable to the Trustee, in such offices
(including, without limitation, the United States Patent and Trademark Office
and the United States Copyright Office) as the Trustee may in its reasonable
judgment deem necessary or appropriate, wherever required or permitted by law in
order to perfect, continue and maintain a valid, enforceable, first priority
security interest in the Pledged Collateral as provided herein and to preserve
the other rights and interests granted to the Trustee hereunder, as against
third parties, with respect to any Pledged Collateral. Each Pledgor hereby
authorizes the Trustee to file any such financing or continuation statement or
other document without the signature of such Pledgor where permitted by law,
including, without limitation, the filing of a financing statement describing
the Pledged Collateral as "all assets in which the debtor now owns or hereafter
acquires rights."
SECTION 3.4 Other Actions. In order to further insure the
-------------
attachment, perfection and priority of, and the ability of the Trustee to
enforce, the Trustee's security interest in the Pledged Collateral, each Pledgor
agrees, in each case at such Pledgor's own expense, to take the following
actions with respect to the following Pledged Colla teral:
(a) Instruments and Tangible Chattel Paper. As of the date
--------------------------------------
hereof, each Pledgor hereby represents and warrants that no amount
individually or in the aggregate in excess of $100,000 payable under or
in connection with any of the Pledged Collateral is evidenced by any
Instrument or Tangible Chattel Paper other than such Instruments and
Tangible Chattel Paper as are listed in Schedule 3.4(a) annexed hereto
and have been delivered to the Trustee. If any amount individually or
in the aggregate in excess of $100,000 payable under or in connection
with any of the Pledged Collateral shall be evidenced by any Instrument
or Tangible Chattel Paper, the Pledgor acquiring such Instrument or
Tangible Chattel Paper shall forthwith endorse, assign and deliver the
same to the Trustee, accompanied by such instruments of transfer or
assignment duly executed in blank as the Trustee may from time to time
specify; provided, however, that so long as no Event of Default shall
-------- -------
have occurred and be continuing, the Trustee shall return such
Instrument or Tangible Chattel Paper to such Pledgor from time to time,
at such time for collection in the ordinary course of such Pledgor's
business.
-15-
(b) Deposit Accounts. As of the date hereof, each Pledgor hereby
----------------
represents and warrants that it has neither opened nor maintains any Deposit
Account other than the Colla t-eral Account established and maintained pursuant
to the Indenture and the accounts listed in Schedule 3.4(b) annexed hereto. For
each Deposit Account that any Pledgor at any time opens or maintains, such
Pledgor shall promptly notify the Trustee thereof and, pursuant to an agreement
in form and substance satisfactory to the Trustee, either (a) cause the
depositary bank to agree to comply at any time with instructions from the
Trustee to such depositary bank directing the disposition of funds from time to
time credited to such Deposit Account, without further consent of such Pledgor
or (b) arrange for the Trustee to become the customer of the depositary bank
with respect to the Deposit Account, with the Pledgor being permitted, only with
the consent of the Trustee, to exercise rights to withdraw funds from such
Deposit Account. The Trustee agrees with each Pledgor that the Trustee shall not
give any such instructions or withhold any withdrawal rights from any Pledgor,
unless an Event of Default has occurred and is continuing, or, after giving
effect to any withdrawal that would occur. The provisions of this Section 3.4(b)
--------------
shall not apply to Deposit Accounts for which the Trustee is the depositary.
(c) Investment Property. (i) As of the date hereof each Pledgor
-------------------
hereby represents and warrants that it has neither opened nor maintains any
Securities Account or Commodity Account other than those listed in Schedule 3.4
(c) annexed hereto.
(ii) If any Pledgor shall at any time hold or acquire any certificated
securities constituting Investment Property, such Pledgor shall immediately
endorse, assign and deliver the same to the Trustee, accompanied by such
instruments of transfer or assignment duly executed in blank, all in form and
substance reasonably satisfactory to the Trustee. If any securities now or
hereafter acquired by any Pledgor constituting Investment Property are
uncertificated and are issued to such Pledgor or its nominee directly by the
Issuer thereof, such Pledgor shall immediately notify the Trustee thereof and
pursuant to an agreement in form and substance satisfactory to the Trustee,
either (a) cause the issuer to agree to comply with instructions from the
Trustee as to such securities, without further consent of any Pledgor or such
nominee, or (b) arrange for the Trustee to become the registered owner of the
securities. If any securities constituting Investment Property, whether
certificated or uncertificated, or other Investment Property now or hereafter
acquired by any Pledgor are held by such Pledgor or its nominee through a
Securities Intermediary or Commodity Intermediary, such Pledgor shall
immediately notify the Trustee thereof and, pursuant to an agreement in form and
substance satisfactory to the Trustee, either (i) cause such Securities
Intermediary or Commodity Intermediary, as the case may be, to agree to comply
with Entitlement Orders or other instructions from the Trustee to such
Securities Intermediary as to such securities or other Investment Property, or
to apply any value distributed on account of any Commodity Contract as directed
by the Trustee to such Commodity Intermediary, as the case may be, in each case
without further consent of any Pledgor or such nominee, or (ii) in the case of
Financial Assets constituting Investment Property or other Investment Property
held through a Securities Intermediary, arrange for the Trustee to become the
Entitlement Holder with respect to such Investment Property, with the
-16-
Pledgor being permitted, only with the consent of the Trustee, to exercise
rights to withdraw or otherwise deal with such Investment Property. The Trustee
agrees with each of the Pledgors that the Trustee shall not give any such
Entitlement Orders or instructions or directions to any such issuer, Securities
Intermediary or Commodity Intermediary, and shall not withhold its consent to
the exercise of any withdrawal or dealing rights by any Pledgor, unless an Event
of Default has occurred and is continuing, or, after giving effect to any such
investment and withdrawal rights would occur. The provisions of this Section
-------
3.4(c) shall not apply to any Financial Assets credited to a Securities Account
- -----
for which the Trustee is the Securities Intermediary.
(iii) As between the Trustee and the Pledgors, the Pledgors shall bear
the investment risk with respect to the Investment Property, and the risk of
loss of, damage to, or the destruction of the Investment Property, whether in
the possession of, or maintained as a security entitlement by, or subject to the
control of, the Trustee, a Securities Intermediary, Commody Intermediary the
Pledgor or any other Person; provided, however, that nothing contained in this
-----------------
Section 3.4(c) shall release or relieve any Securities Intermediary or Commodity
- -------------
Intermediary of its duties and obligations to the Pledgors or any other Person
under any control agreement or under applicable law. Each Pledgor shall promptly
pay all Charges and fees of whatever kind or nature with respect to the
Investment Property pledged by it under this Agreement. In the event any Pledgor
shall fail to make such payment contemplated in the immediately preceding
sentence, the Trustee may do so for the account of such Pledgor and the Pledgors
shall promptly reimburse and indemnify the Trustee from all costs and expenses
incurred by the Trustee under this Section 3.4(c) in accordance with Section
------------- -------
11.3 hereof.
- ----
(d) Electronic Chattel Paper and Transferable Records. If any amount
-------------------------------------------------
individually or in the aggregate in excess of $100,000 payable under or in
connection with any of the Pledged Collateral shall be evidenced by any
Electronic Chattel Paper or any "transferable record," as that term is defined
in Section 201 of the Federal Electronic Signatures in Global and National
Commerce Act, or in Section 16 of the Uniform Electronic Transactions Act as in
effect in any relevant jurisdiction, the Pledgor acquiring such Electronic
Chattel Paper or transferable record shall promptly notify the Trustee thereof
and shall take such action as the Trustee may reasonably request to vest in the
Trustee control under UCC Section 9-105 of such Electronic Chattel Paper or
control under Section 201 of the Federal Electronic Signatures in Global and
National Commerce Act or, as the case may be, Section 16 of the Uniform Ele
c-tronic Transactions Act, as so in effect in such jurisdiction, of such
transferable record. The Trustee agrees with such Pledgor that the Trustee will
arrange, pursuant to procedures satisfactory to the Trustee and so long as such
procedures will not result in the Trustee's loss of control, for the Pledgor to
make alterations to the Electronic Chattel Paper or transferable record
permitted under UCC Section 9-105 or, as the case may be, Section 201 of the
Federal Electronic Signatures in Global and National Commerce Act of Section 16
of the Uniform Electronic Transactions Act for a party in control to allow
without loss of control, unless an Event of Default has occurred and is
continuing or would occur after taking into account any action by such Pledgor
with respect to such Electronic Chattel Paper or transferable record.
-17-
(e) Letter-of-Credit Rights. If any Pledgor is at any time a
-----------------------
beneficiary under a Letter of Credit now or hereafter issued in favor
of such Pledgor in an amount individually or in the aggregate in excess
of $100,000, such Pledgor shall promptly notify the Trustee thereof and
such Pledgor shall, pursuant to an agreement in form and substance
satisfactory to the Trustee, either (i) arrange for the issuer and any
confirmer of such Letter of Credit to consent to an assignment to the
Trustee of the proceeds of any drawing under the Letter of Credit or
(ii) arrange for the Trustee to become the transferee beneficiary of
the Letter of Credit, with the Trustee agreeing, in each case, that the
proceeds of any drawing under the Letter of Credit are to be applied as
provided in the Indenture.
(f) Commercial Tort Claims. As of the date hereof each Pledgor
----------------------
hereby represents and warrants that it holds no Commercial Tort Claims
other than those listed in Schedule 3.4(f) annexed hereto. If any
Pledgor shall at any time hold or acquire a Commercial Tort Claim, the
Pledgor shall immediately notify the Trustee in writing signed by such
Pledgor of the brief details thereof and grant to the Trustee in
such writing a security interest therein and in the Proceeds
thereof, all upon the terms of this Agreement, with such writing to be
in form and substance satisfactory to the Trustee.
(g) Excluded Property. After the Trustee's request therefor,
-----------------
the Pledgors shall deliver to the Trustee an Officer's Certificate
setting forth all permits, leases or licenses constituting Special
Property` that are material to the operation of each Pledgor's
business. At the Trustee's request, each Pledgor shall use commercially
reasonable efforts to obtain as soon as practicable the consent (which
shall be in form and substance reasonably satisfactory to the Trustee)
of the other parties to each permit, lease or license listed in such
Officer's Certificate to permit the assignment, transfer or grant of
security interest in such permit, lease or license pursuant to the
terms hereof. No Pledgor shall permit to become effective in any
document creating, governing or providing for any permit, lease or
license, a provision that would prohibit the creation of a Lien on such
permit, lease or license in favor of the Trustee unless such Pledgor
believes, in its reasonable judgment, that such prohibition is usual
and customary in transactions of such type.
SECTION 3.5 Joinder of Additional Guarantors. The Pledgors
--------------------------------
shall cause each Restricted Subsidiary of the Issuer which, from time to time,
after the date hereof shall be required to pledge any assets to the Trustee for
the benefit of the Secured Parties pursuant to the provisions of the Indenture,
to execute and deliver to the Trustee (i) a joinder agreement substantially in
the form of Exhibit 3 annexed hereto and (ii) a Perfection Certificate, in each
---------
case, within ten (10) Business Days of the date on which it was acquired or
created and, upon such execution and delivery, such Restricted Subsidiary shall
constitute a "Guarantor" and a "Pledgor" for all purposes hereunder with the
same force and effect as if originally named as a Guarantor and Pledgor herein.
The execution and delivery of such joinder agreement shall not require the
consent of any Pledgor hereunder. The rights and obligations of each Pledgor
hereunder shall remain in full force and effect notwithstanding the addition of
any new Guarantor and Pledgor as a party to this Agreement.
-18-
SECTION 3.6 Motor Vehicles. At any time after the occurrence
--------------
and during the continuance of an Event of Default, each Pledgor shall, upon the
request of the Trustee, promptly (but in no event later than 30 days following
such request) deliver to the Trustee originals of the certificates of title or
ownership for all motor vehicles (and any other Equipment covered by
Certificates of Title or ownership) owned by it with the Trustee listed as
lienholder therein unless such vehicles or Equipment constitutes Excluded
Property.
SECTION 3.7 Supplements; Further Assurances. Each Pledgor agrees
-------------------------------
to take such further actions, and to execute and deliver to the Trustee such
additional assignments, agreements, supplements, powers and instruments, as the
Trustee may in its reasonable judgment deem necessary or appropriate, wherever
required or permitted by law, in order to perfect, preserve and protect the
security interest in the Pledged Collateral as provided herein and the rights
and interests granted to the Trustee hereunder, to carry into effect the
purposes hereof or better to assure and confirm unto the Trustee or permit the
Trustee to exercise and enforce its respective rights, powers and remedies
hereunder with respect to any Pledged Collateral. Without limiting the
generality of the foregoing, each Pledgor shall make, execute, endorse,
acknowledge, file or refile and/or deliver to the Trustee from time to time upon
request such lists, descriptions and designations of the Pledged Collateral,
copies of warehouse receipts, receipts in the nature of warehouse receipts,
bills of lading, documents of title, vouchers, invoices, schedules, confirmatory
assignments, supplements, additional security agreements, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports and
other assurances or instruments. The Trustee may institute and maintain, in its
own name or in the name of any Pledgor, such suits and proceedings as the
Trustee may be advised by counsel shall be necessary or expedient to prevent any
impairment of the security interest in or the perfection thereof in the Pledged
Collateral. All of the foregoing shall be at the sole cost and expense of the
Pledgors.
SECTION 3.8 Use and Pledge of Pledged Collateral. Unless an Event
------------------------------------
of Default shall have occurred and be continuing, the Trustee shall from time to
time execute and deliver, upon written request of any Pledgor and at the sole
cost and expense of the Pledgors, any and all instruments, certificates or other
documents, in a form reasonably requested by such Pledgor, necessary or
appropriate in the reasonable judgment of such Pledgor to enable such Pledgor to
continue to exploit, license, use, enjoy and protect the Pledged Collateral in
accordance with the terms hereof and of the Indenture. The Pledgors and the
Trustee acknowledge that this Agreement is intended to grant to the Trustee for
the benefit of the Secured Parties a security interest in and Lien upon the
Pledged Colla t-eral and shall not constitute or create a present assignment of
any of the Pledged Collateral.
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ARTICLE IV
REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Pledgor represents, warrants and covenants as follows:
SECTION 4.1 Title and Authority. Such Pledgor has good and valid
-------------------
rights in and title to the Pledged Collateral with respect to which it has
purported to grant a security interest and Lien hereunder and has full power and
authority to grant to the Trustee the security interest in and Liens on such
Pledged Collateral pursuant hereto and to execute, deliver and perform its
obligations in accordance with the terms of this Agreement, without the consent
or approval of any other Person other than any consent or approval that has been
obtained.
SECTION 4.2 Validity of Security Interest. The security interest in
-----------------------------
and Lien on the Pledged Collateral granted to the Trustee (for the benefit of
the Secured Parties) hereunder constitutes (a) a legal and valid security
interest in all the Pledged Collateral securing the payment and performance of
the Secured Obligations, and (b) subject to the filings described in Schedule 7
of the Perfection Certificate, a perfected security interest in all Pledged
Collateral. The security interest and Lien granted to the Trustee for the
benefit of the Secured Parties pursuant to this Agreement in and on the Pledged
Collateral will constitute a perfected, continuing first priority security
interest therein, superior and prior to the rights of all other Persons therein
other than in the case of any Pledged Collateral (other than Securities
Collateral) with respect to the holders of Permitted Collateral Liens.
SECTION 4.3 Limitation on Liens. Such Pledgor is as of the date
-------------------
hereof, and, as to Pledged Collateral acquired by it from time to time after the
date hereof, such Pledgor will be, the sole direct and beneficial owner of all
Pledged Collateral pledged by it hereunder free from any Lien or other right,
title or interest of any Person other than (except in the case of any Securities
Collateral) (i) Prior Liens, (ii) the Lien and security interest created by this
Agreement, (iii) Contested Liens and (iv) the Liens described in clauses (1),
(2), (3), (4), (5), (6), (7), (8), (9), (10), (11), (13), (14), (15), (16),
(17), and (18) of the definition of Permitted Liens (the Liens described in
clauses (i) through (iv) of this sentence, collectively, "Permitted Collateral
--------------------
Liens"). Such Pledgor shall, at its own cost and expense, defend title to the
- -----
Pledged Collateral pledged by it hereunder and the security interest therein and
Lien thereon granted to the Trustee and the priority thereof against all claims
and demands of all Persons, at its own cost and expense, at any time claiming
any interest therein adverse to the Trustee or any other Secured Party. There is
no agreement, and no Pledgor shall enter into any agreement or take any other
action, that would result in the imposition of any other Lien, restrict the
transferability of any of the Pledged Collateral or otherwise impair or conflict
with such Pledgors' obligations or the rights of the Trustee hereunder.
SECTION 4.4 Other Financing Statements. There is no (nor will there
--------------------------
be any) valid or effective financing statement (or similar statement or
instrument of registration under the law of any jurisdiction) covering or
purporting to cover any interest of any kind in the Pledged Collateral other
than in the case of Pledged Collateral (other than the Securities Collateral)
financing statements relating to
-20-
Permitted Collateral Liens. So long as any of the Secured Obligations remain
unpaid, no Pledgor shall execute, authorize or permit to be filed in any public
office any financing statement (or similar statement or instrument of
registration under the law of any jurisdiction) or statements relating to any
Pledged Collateral, except, in the case of any Pledged Collateral (other than
the Securities Collateral), financing statements filed or to be filed in respect
of and covering the security interests granted by such Pledgor to the holder of
the Permitted Collateral Liens.
SECTION 4.5 Chief Executive Office; Change of Name; Jurisdiction of
-------------------------------------------------------
Organization. (a) The exact legal name, type of organization, jurisdiction of
- ------------
organization, Federal Taxpayer Identification Number, organizational
identification number and chief executive office of such Pledgor is indicated
next to its name in Schedules 1(a) and 2(a) of the Perfection Certificate. Such
Pledgor shall not change (i) its corporate name, (ii) the location of its chief
executive office, its principal place of business, any office in which it
maintains books or records relating to Pledged Collateral owned by it or any
office or facility at which Pledged Collateral owned by it is located (including
the establishment of any such new office or facility), (iii) its identity or
type of organization or corporate structure, (iv) its Federal Taxpayer
Identification Number or organizational identification number or (v) its
jurisdiction of organization (in each case, including, without limitation, by
merging with or into any other entity, reorganizing, dissolving, liquidating,
reincorporating or incorporating in any other jurisdiction) until (A) it shall
have given the Trustee not less than 30 days' prior written notice (in the form
of an Officers' Certificate) of its intention so to do, clearly describing such
change and providing such other information in connection therewith as the
Trustee may request and (B) with respect to such change, such Pledgor shall have
taken all action reasonably satisfactory to the Trustee to maintain the
perfection and priority of the security interest of the Trustee for the benefit
of the Secured Parties in the Pledged Collateral intended to be granted hereby,
including, without limitation, using commercially reasonable efforts to obtain
waivers of landlord's or warehousemen's liens with respect to such new location,
if applicable. Each Pledgor agrees to promptly provide the Trustee with
certified organizational documents reflecting any of the changes described in
the preceding sentence.
(b) The Trustee may rely on opinions of counsel as to whether any or
all UCC financing statements of the Pledgors need to be amended as a result of
any of the changes described in Section 4.5(a). If any Pledgor fails to provide
information to the Trustee about such changes on a timely basis, the Trustee
shall not be liable or responsible to any party for any failure to maintain a
perfected security interest in such Pledgor's property constituting Pledged
Collateral, for which the Trustee needed to have information relating to such
changes. The Trustee shall have no duty to inquire about such changes if any
Pledgor does not inform the Trustee of such changes, the parties acknowledging
and agreeing that it would not be feasible or practical for the Trustee to
search for information on such changes if such information is not provided by
any Pledgor.
SECTION 4.6 Location of Inventory and Equipment. All Inventory and
-----------------------------------
Equipment of such Pledgor is located at the chief executive office or such other
location listed in Schedules 2(a), 2(b), 2(c), 2(d) or 2(e) of the Perfection
Certificate. Such Pledgor shall not move any Inventory and Equipment to any
location other than one within the Continental United States that is listed in
such Schedules of the Perfection Certificate with respect to such Pledgor until
(i) it shall have given the
-21-
Trustee not less than 30 days' prior written notice (in the form of an Officers'
Certificate) of its intention so to do, clearly describing such new location
within the Continental United States and providing such other information in
connection therewith as the Trustee may request and (ii) with respect to such
new location, such Pledgor shall have taken all action reasonably satisfactory
to the Trustee to maintain the perfection and priority of the security interest
of the Trustee for the benefit of the Secured Parties in the Pledged Collateral
intended to be granted hereby, including, without limitation, using commercially
reasonable efforts to obtain waivers of landlord's or warehouseman's liens with
respect to such new location, if applicable.
SECTION 4.7 Condition and Maintenance of Equipment. The Equipment of
--------------------------------------
such Pledgor is in good repair, working order and condition, reasonable wear and
tear excepted. Each Pledgor shall cause the Equipment to be maintained and
preserved in good repair, working order and condition, reasonable wear and tear
excepted, and shall as quickly as commercially practicable make or cause to be
made all repairs, replacements and other improvements which are necessary or
appropriate in the conduct of such Pledgor's business.
SECTION 4.8 Corporate Names; Prior Transactions. Such Pledgor has
-----------------------------------
not, during the past five years, been known by or used any other corporate or
fictitious name or been a party to any merger or consolidation, or acquired all
or substantially all of the assets of any Person, or acquired any of its
property or assets out of the ordinary course of business, except as set forth
in Schedules 1(b), 1(c), and 4 of the Perfection Certificate.
SECTION 4.9 Due Authorization and Issuance. All of the Initial
------------------------------
Pledged Shares have been, and to the extent any Pledged Shares are hereafter
issued, such shares will be, upon such issuance, duly authorized, validly issued
and fully paid and non-assessable. All of the Initial Pledged Interests have
been fully paid for, and there is no amount or other obligation owing by any
Pledgor to any issuer of the Initial Pledged Interests in exchange for or in
connection with the issuance of the Initial Pledged Interests or any Pledgor's
status as a partner or a member of any issuer of the Initial Pledged Interests.
SECTION 4.10 No Violations, etc. The pledge of the Pledged Securities
------------------
pursuant to this Agreement does not violate Regulation T, U or X of the Federal
Reserve Board.
SECTION 4.11 No Options, Warrants, etc. There are no options,
-------------------------
warrants, calls, rights, commitments or agreements of any character to which
such Pledgor is a party or by which it is bound obligating such Pledgor to
issue, deliver or sell or cause to be issued, delivered or sold additional
Pledged Securities or obligating such Pledgor to grant, extend or enter into any
such option, warrant, call, right, commitment or agreement. There are no voting
trusts or other agreements or understandings to which such Pledgor is a party
with respect to the transfer, voting or exercise of any other right of the
equity interests of any issuer of the Pledged Securities.
SECTION 4.12 No Claims. Such Pledgor owns or has rights to use all of
---------
the Pledged Collateral pledged by it hereunder and all rights with respect to
any of the foregoing used in, necessary for or material to such Pledgor's
business as currently conducted. The use by such Pledgor of such
-22-
Pledged Collateral and all such rights with respect to the foregoing do not
infringe on the rights of any Person other than such infringement which would
not, individually or in the aggregate, result in a Colla t-eral Material Adverse
Effect. No claim has been made and remains outstanding that such Pledgor's use
of any Pledged Collateral does or may violate the rights of any third Person
that would individually, or in the aggregate, have a Collateral Material Adverse
Effect.
SECTION 4.13 No Conflicts, Consents, etc. Neither the execution and
---------------------------
delivery hereof by each Pledgor nor the consummation of the transactions herein
contemplated nor the fulfillment of the terms hereof (i) violates any Operative
Agreement of such Pledgor or any issuer of Pledged Securities, (ii) violates the
terms of any agreement, indenture, mortgage, deed of trust, equipment lease,
instrument or other document to which such Pledgor is a party, or by which it
may be bound or to which any of its properties or assets may be subject, which
violation would, individually or in the aggregate, have a Collateral Material
Adverse Effect, (iii) conflicts with any Requirement of Law applicable to any
such Pledgor or its property, which conflict would, individually or in the
aggregate, have a Collateral Material Adverse Effect, or (iv) results in or
requires the creation or imposition of any Lien (other than the Lien
contemplated hereby) upon or with respect to any of the property now owned or
hereafter acquired by such Pledgor. No consent of any party (including, without
limitation, equityholders or creditors of such Pledgor) and no consent,
authorization, approval, license or other action by, and no notice to or filing
with, any Governmental Authority or regulatory body or other Person is required
(A) for the pledge by such Pledgor of the Pledged Collateral pledged by it
pursuant to this Agreement or for the execution, delivery or performance hereof
by such Pledgor, except as set forth in Schedule 4.13 annexed hereto, (B) except
for the prior approval of the applicable Gaming Authorities with respect to any
Securities Collateral, for the exercise by the Trustee of the voting or other
rights provided for in this Agreement or (C) except for the prior approval of
the applicable Gaming Authorities with respect to the Securities Collateral, for
the exercise by the Trustee of the remedies in respect of the Pledged Collateral
pursuant to this Agreement. In the event that the Trustee desires to exercise
any remedies, voting or consensual rights or attorney-in-fact powers set forth
in this Agreement and determines it necessary to obtain any approvals or
consents of any Governmental Authority or any other Person therefor, then, upon
the reasonable request of the Trustee, such Pledgor agrees to use its best
efforts to assist and aid the Trustee to obtain as soon as practicable any
necessary approvals or consents for the exercise of any such remedies, rights
and powers.
SECTION 4.14 Pledged Collateral. All information set forth herein,
------------------
including the schedules annexed hereto, and all information contained in any
documents, schedules and lists heretofore delivered to any Secured Party in
connection with this Agreement, in each case, relating to the Pledged
Collateral, is accurate and complete in all material respects. The Pledged
Collateral described on the schedules annexed hereto constitutes all of the
property of such type of Pledged Collateral owned or held by the Pledgors.
SECTION 4.15 Insurance. (a) The Pledgors, at their own expense, shall
---------
maintain or cause to be maintained the insurance policies and coverages required
under Section 4.19 of the Indenture with respect to the Pledged Collateral.
------------
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(b) If there shall occur any Destruction, individually or in the
aggregate, in excess of $100,000, the applicable Pledgor shall promptly send to
the Trustee a written notice setting forth the nature and extent of such
Destruction. If there shall occur any Taking, the applicable Pledgor shall
immediately notify the Trustee upon receiving notice of such Taking or
commencement of proceedings therefor. The Net Loss Proceeds are hereby assigned
and shall be paid to the Trustee. Each Pledgor shall take all steps necessary to
notify the condemning authority of such assignment. All Net Loss Proceeds shall
be applied in accordance with the provisions of Section 4.16 of the Indenture.
------------
(c) In the event that the proceeds of any insurance claim are
paid after the Trustee has exercised its right to foreclose after an Event of
Default such proceeds shall be paid to the Trustee to satisfy any deficiency
remaining after such foreclosure. The Trustee shall retain its interest in the
Insurance Policies required to be maintained pursuant to this Agreement during
any redemption period.
SECTION 4.16 Payment of Taxes; Compliance with Laws; Contesting
--------------------------------------------------
Liens; Claims. Each Pledgor represents and warrants that all Charges imposed
- -------------
upon or assessed against the Pledged Collateral have been paid and discharged
except to the extent such Charges constitute a Lien not yet due and payable or a
Permitted Lien. Each Pledgor shall comply with all Requirements of Law
applicable to the Pledged Collateral the failure to comply with which would,
individually or in the aggregate, have a Collateral Material Adverse Effect.
Each Pledgor may at its own expense contest the validity, amount or
applicability of any Charges so long as the contest thereof shall be conducted
in accordance with, and permitted pursuant to the provisions of, the Indenture.
Notwithstanding the foregoing provisions of this Section 4.16, (i) no contest of
------------
any such obligation may be pursued by such Pledgor if such contest would expose
the Trustee or any other Secured Party to (A) any possible criminal liability or
(B) unless such Pledgor shall have furnished a bond or other security therefor
satisfactory to the Trustee, or such Secured Party, as the case may be, any
additional civil liability for failure to comply with such obligations and (ii)
if at any time payment or performance of any obligation contested by such
Pledgor pursuant to this Section 4.16 shall become necessary to prevent the
------------
imposition of remedies because of non-payment, such Pledgor shall pay or perform
the same, in sufficient time to prevent the imposition of remedies in respect of
such default or prospective default.
SECTION 4.17 Access to Pledged Collateral, Books and Records; Other
------------------------------------------------------
Information. Upon reasonable request to each Pledgor, the Trustee, its agents,
- ------------
accountants and attorneys shall have full and free access to visit and inspect,
as applicable, during normal business hours and such other reasonable times as
may be requested by the Trustee all of the Pledged Collateral and Mortgaged
Property including, without limitation, all of the books, correspondence and
records of such Pledgor relating thereto. The Trustee and its representatives
may examine the same, take extracts therefrom and make photocopies thereof, and
such Pledgor agrees to render to the Trustee, at such Pledgor's cost and
expense, such clerical and other assistance as may be reasonably requested by
the Trustee with regard thereto. Such Pledgor shall, at any and all times,
within a reasonable time after written request by the Trustee, furnish or cause
to be furnished to the Trustee, in such manner and in such detail as may be
reasonably requested by the Trustee, additional information with respect to the
Pledged Collateral.
-24-
SECTION 4.18 Acquisition Documents. Each Pledgor shall perform and
---------------------
comply with the terms and conditions in all material respects of all Acquisition
Documents. Each Pledgor shall not without the consent of the Trustee (i) cancel
or terminate any of the Acquisition Documents or consent to or accept any
cancellation or termination thereof, (ii) amend, supplement or otherwise modify
any of the Acquisition Documents (in each case as in effect on the date hereof),
(iii) waive any default under or breach of any of the Acquisition Documents or
waive, fail to enforce, forgive or release any right, interest, or entitlement
of any kind, howsoever arising, under or in respect of such Acquisition
Documents or, vary or agree to the variation of any of the provisions of any of
such Acquisition Documents or of the performance of any other Person under any
of such Acquisition Documents, or (iv) petition, request or take any other legal
or administrative action which seeks, or may be expected, to rescind, terminate
or suspend, any of the Acquisition Documents or amend or modify any thereof.
Each Pledgor shall notify the Trustee in the event it receives any notice or
communication with respect to the Acquisition Documents including, without
limitation, notices of default, and shall forward promptly copies of any such
notices or communications to the Trustee. In the event of any Pledgor's default
under any of the Acquisition Documents, the parties thereto shall permit the
Trustee to cure such default and thereafter perform any of such Pledgor's
obligations thereunder and such performance by the Trustee will not constitute a
default under any such Acquisition Document.
SECTION 4.19 Benefit to Guarantors. Each Guarantor will receive
---------------------
substantial benefit as a result of the execution, delivery and performance of
the Indenture and other documents evidencing the Secured Obligations.
ARTICLE V
CERTAIN PROVISIONS CONCERNING SECURITIES COLLATERAL
SECTION 5.1 Pledge of Additional Securities Collateral. Each Pledgor
------------------------------------------
shall, upon obtaining any Pledged Securities or Intercompany Notes of any
Person, accept the same in trust for the benefit of the Trustee and forthwith
deliver to the Trustee a pledge amendment, duly executed by such Pledgor, in
substantially the form of Exhibit 2 annexed hereto (each, a "Pledge Amendment"),
--------- ----------------
and the certificates and other documents required under Section 3.1 and Section
----------- -------
3.2 in respect of the additional Pledged Securities or Intercompany Notes which
- ---
are to be pledged pursuant to this Agreement, and confirming the attachment of
the Lien hereby created on and in respect of such additional Pledged Securities
or Intercompany Notes. Each Pledgor hereby authorizes the Trustee to attach each
Pledge Amendment to this Agreement and agrees that all Pledged Interests or
Intercompany Notes listed on any Pledge Amendment delivered to the Trustee shall
for all purposes hereunder be considered Pledged Colla teral.
SECTION 5.2 Voting Rights; Distributions; etc.
---------------------------------
(i) So long as no Event of Default shall have occurred and be
continuing:
-25-
(A) Each Pledgor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Securities Collateral or any part
thereof for any purpose not inconsistent with the terms or purposes hereof, the
Indenture or any other document evidencing the Secured Obligations; provided,
--------
however, that no Pledgor shall in any event exercise such rights in any manner
- -------
which may have an adverse effect on the value of the Pledged Collateral or the
Lien and security interest intended to be granted to the Trustee hereunder.
(B) Each Pledgor shall be entitled to receive and retain, and to
utilize free and clear of the Lien hereof, any and all Distributions, but only
if and to the extent made in accordance with the provisions of the Indenture;
provided, however, that any and all such Distributions consisting of rights or
- -------- -------
interests in the form of securities shall be forthwith delivered to the Trustee
to hold as Pledged Collateral and shall, if received by any Pledgor, be received
in trust for the benefit of the Trustee, be segregated from the other property
or funds of such Pledgor and be forthwith delivered to the Trustee as Pledged
Collateral in the same form as so received (with any necessary endorsement).
(C) The Trustee shall be deemed without further action or formality to
have granted to each Pledgor all necessary consents relating to voting rights
and shall, if necessary, upon written request of any Pledgor and at the sole
cost and expense of the Pledgors, from time to time execute and deliver (or
cause to be executed and delivered) to such Pledgor all such instruments as such
Pledgor may reasonably request in order to permit such Pledgor to exercise the
voting and other rights which it is entitled to exercise pursuant to Section
-------
5.2(i)(A) hereof and to receive the Distributions which it is authorized to
- ---------
receive and retain pursuant to Section 52(i)(B) hereof.
----------------
(ii) Upon the occurrence and during the continuance of any Event of
Default:
(A) All rights of each Pledgor to exercise the voting and other
consensual rights it would otherwise be entitled to exercise pursuant to Section
-------
5.2(i)(A) hereof without any action, other than, in the case of any Securities
- --------
Collateral, any applicable approval required pursuant to applicable Gaming Law,
or the giving of any notice shall cease, and all such rights shall thereupon
become vested in the Trustee, which shall thereupon have the sole right to
exercise such voting and other consensual rights.
(B) All rights of each Pledgor to receive Distributions which it would
otherwise be authorized to receive and retain pursuant to Section 5.2(i)(B)
-----------------
hereof shall cease and all such rights shall thereupon become vested in the
Trustee, which shall thereupon have the sole right to receive and hold as
Pledged Collateral such Distributions.
(iii) Each Pledgor shall, at its sole cost and expense, from time to
time execute and deliver to the Trustee appropriate instruments as the Trustee
may request in order to permit the Trustee to exercise the voting and other
rights which it may be entitled to exercise pursuant to Section 5.2(ii)(A)
------------------
hereof and to receive all Distributions which it may be entitled to receive
under Section 5.2(ii)(B) hereof.
------------------
-26-
(iv) All Distributions which are received by any Pledgor
contrary to the provisions of Section 5.2(ii)(B) hereof shall be
------------------
received in trust for the benefit of the Trustee, shall be segregated
from other funds of such Pledgor and shall immediately be paid over to
the Trustee as Pledged Collateral in the same form as so received (with
any necessary endorsement).
SECTION 5.3 Operative Agreements. Each Pledgor has delivered
--------------------
to the Trustee true, correct and complete copies of the Operative Agreements.
The Operative Agreements are in full force and effect, have not as of the date
hereof been amended or modified except as disclosed to the Trustee, and there is
no existing default by any party thereunder or any event which, with the giving
of notice of passage of time or both, would constitute a default by any party
thereunder. Each Pledgor shall deliver to the Trustee a copy of any notice of
default given or received by it under any Operative Agreement within ten days
after such Pledgor gives or receives such notice. No Pledgor will terminate or
agree to terminate any Operative Agreement or make any amendment or modification
to any Operative Agreement which may have a material adverse effect on the value
of the Pledged Interests and Distributions relating thereto or the Lien and
security intended to be granted to the Trustee hereunder.
SECTION 5.4 Defaults, etc. Such Pledgor is not in default in
-------------
the payment of any portion of any mandatory capital contribution, if any,
required to be made under any agreement to which such Pledgor is a party
relating to the Pledged Securities pledged by it, and such Pledgor is not in
violation of any other provisions of any such agreement to which such Pledgor is
a party, or otherwise in default or violation thereunder. No Securities
Collateral pledged by such Pledgor is subject to any defense, offset or
counterclaim, nor have any of the foregoing been asserted or alleged against
such Pledgor by any Person with respect thereto, and as of the date hereof,
there are no certificates, instruments, documents or other writings (other than
the Operative Agreements and certificates, if any, delivered to the Trustee)
which evidence any Pledged Securities of such Pledgor.
ARTICLE VI
CERTAIN PROVISIONS CONCERNING INTELLECTUAL
PROPERTY COLLATERAL
SECTION 6.1 Grant of License. For the purpose of enabling the
----------------
Trustee, during the continuance of an Event of Default, to exercise rights and
remedies under Article VIII hereof at such time as the Trustee shall be lawfully
------------
entitled to exercise such rights and remedies, and for no other purpose, each
Pledgor hereby grants to the Trustee, to the extent assignable, an irrevocable,
non-exclusive license (exercisable without payment of royalty or other
compensation to such Pledgor) to use, assign, license or sublicense any of the
Intellectual Property Collateral now owned or hereafter acquired by such
Pledgor, wherever the same may be located, including in such license access 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 hereof.
-27-
SECTION 6.2 Registrations. Except pursuant to licenses and
-------------
other user agreements entered into by any Pledgor in the ordinary course of
business that are listed in Schedule 1.1(f) annexed hereto, on and as of the
date hereof (i) each Pledgor owns and possesses the right to use, and has done
nothing to authorize or enable any other Person to use, any Copyright, Patent or
Trademark listed in Schedules 1.1(e), 1.1(g) and 1.1(h) annexed hereto, and (ii)
all registrations listed in Schedules 1.1(e), 1.1(g) and 1.1(h) annexed hereto
are valid and in full force and effect.
SECTION 6.3 No Violations or Proceedings. To each Pledgor's
----------------------------
knowledge, on and as of the date hereof, (i) except as set forth in Schedule 6.3
annexed hereto, there is no material violation by others of any right of such
Pledgor with respect to any Copyright, Patent or Trademark listed in Schedules
1.1(e), 1.1(g) and 1.1(h) annexed hereto, respectively, pledged by it under the
name of such Pledgor, (ii) such Pledgor is not infringing upon any Copyright,
Patent or Trademark of any other Person other than such infringement that,
individually or in the aggregate, would not (or would not reasonably be expected
to) result in a material adverse effect on the value or utility of the
Intellectual Property Collateral or any portion thereof material to the use and
operation of the Pledged Collateral or Mortgaged Property and (iii) no
proceedings have been instituted or are pending against such Pledgor or, to such
Pledgor's knowledge, threatened, and no claim against such Pledgor has been
received by such Pledgor, alleging any such violation, except as may be set
forth in Schedule 6.3.
SECTION 6.4 Protection of Trustee's Security. On a continuing
--------------------------------
basis, each Pledgor shall, at its sole cost and expense, (i) promptly following
its becoming aware thereof, notify the Trustee of (A) any materially adverse
determination in any proceeding in the United States Patent and Trademark Office
or the United States Copyright Office with respect to any material Patent,
Trademark or Copyright or (B) the institution of any proceeding or any adverse
determination in any Federal, state or local court or administrative body
regarding such Pledgor's claim of ownership in or right to use any of the
Intellectual Property Collateral material to the use and operation of the
Pledged Collateral or Mortgaged Property, its right to register such
Intellectual Property Collateral or its right to keep and maintain such
registration in full force and effect, (ii) maintain and protect the
Intellectual Property Collateral material to the use and operation of the
Pledged Collateral or Mortgaged Property as presently used and operated and as
contemplated by the Indenture, (iii) not permit to lapse or become abandoned any
Intellectual Property Collateral material to the use and operation of the
Pledged Collateral or Mortgaged Property as presently used and operated and as
contemplated by the Indenture, and not settle or compromise any pending or
future litigation or administrative proceeding with respect to such Intelle
c-tual Property Collateral, in each case except as shall be consistent with
commercially reasonable business judgment, (iv) upon such Pledgor obtaining
knowledge thereof, promptly notify the Trustee in writing of any event which may
be reasonably expected to materially and adversely affect the value or utility
of the Intellectual Property Collateral or any portion thereof material to the
use and operation of the Pledged Collateral or Mortgaged Property, the ability
of such Pledgor or the Trustee to dispose of the Intellectual Property
Collateral or any portion thereof or the rights and remedies of the Trustee in
relation thereto including, without limitation, a levy or threat of levy or any
legal process against the Intellectual Property Collateral or any portion
thereof, (v) not license the Intellectual Property Collateral other than
licenses entered into by such Pledgor in, or incidental to, the ordinary course
of business, or amend or permit the amendment of any of the licenses in a manner
that materially and adversely af-
-28-
fects the right to receive payments thereunder, or in any manner that would
materially impair the value of the Intellectual Property Collateral or the Lien
on and security interest in the Intellectual Property Collateral intended to be
granted to the Trustee for the benefit of the Secured Parties, without the
consent of the Trustee, (vi) until the Trustee exercises its rights to make
collection, diligently keep adequate records respecting the Intellectual
Property Collateral and (vii) furnish to the Trustee from time to time upon the
Trustee's reasonable request therefor detailed statements and amended schedules
further identifying and describing the Intellectual Property Collateral and such
other materials evidencing or reports pertaining to the Intellectual Property
Collateral as the Trustee may from time to time request.
SECTION 6.5 After-Acquired Property. If any Pledgor shall, at
-----------------------
any time before the Secured Obligations have been paid in full (other than
contingent indemnification obligations which, pursuant to the provisions of the
Indenture or the Collateral Documents, survive the termination thereof), (i)
obtain any rights to any additional Intellectual Property Collateral or (ii)
become entitled to the benefit of any additional Intellectual Property
Collateral or any renewal or extension thereof, including any reissue, division,
continuation, or continuation-in-part of any Intellectual Property Collateral,
or any improvement on any Intellectual Property Collateral, the provisions
hereof shall automatically apply thereto and any such item enumerated in clause
(i) or (ii) of this Section 6.5 with respect to such Pledgor shall automatically
-----------
constitute Intellectual Property Collateral if such would have constituted
Intellectual Property Collateral at the time of execution hereof and be subject
to the Lien and security interest created by this Agreement without further
action by any party. Each Pledgor shall promptly (i) provide to the Trustee
written notice of any of the foregoing and (ii) confirm the attachment of the
Lien and security interest created by this Agreement to any rights described in
clauses (i) and (ii) of the immediately preceding sentence of this Section 6.5
-----------
by execution of an instrument in form reasonably acceptable to the Trustee.
SECTION 6.6 Modifications. Each Pledgor authorizes the Trustee
-------------
to modify this Agreement by amending Schedules 1.1(e), 1.1(f), 1.1(g) and 1.1(h)
annexed hereto to include any Intellectual Property Collateral acquired or
arising after the date hereof of such Pledgor including, without limitation, any
of the items listed in Section 6.5 hereof.
-----------
SECTION 6.7 Litigation. Unless there shall occur and be
----------
continuing any Event of Default, each Pledgor shall have the right to commence
and prosecute in its own name, as the party in interest, for its own benefit and
at the sole cost and expense of the Pledgors, such applications for protection
of the Intellectual Property Collateral and suits, proceedings or other actions
to prevent the infringement, counterfeiting, unfair competition, dilution,
diminution in value or other damage as are necessary to protect the Intellectual
Property Collateral. Upon the occurrence and during the continuance of any Event
of Default, the Trustee shall have the right but shall in no way be obligated to
file applic a-tions for protection of the Intellectual Property Collateral
and/or bring suit in the name of any Pledgor, the Trustee or the Secured Parties
to enforce the Intellectual Property Collateral and any license there-under. In
the event of such suit, each Pledgor shall, at the reasonable request of the
Trustee, do any and all lawful acts and execute any and all documents requested
by the Trustee in aid of such enforcement and the Pledgors shall promptly
reimburse and indemnify the Trustee, as the case may be, for all costs and
expenses incurred by the Trustee in the exercise of its rights under this
Section 6.7 in
- -----------
-29-
accordance with Section 11.3 hereof. In the event that the Trustee shall elect
------------
not to bring suit to enforce the Intellectual Property Collateral, each Pledgor
agrees, at the reasonable request of the Trustee, to take all commercially
reasonable actions necessary, whether by suit, proceeding or other action, to
prevent the infringement, counterfeiting, unfair competition, dilution,
diminution in value of or other damage to any of the Intellectual Property
Collateral by others and for that purpose agrees to diligently maintain any
suit, proceeding or other action against any Person so infringing necessary to
prevent such infringement.
ARTICLE VII
CERTAIN PROVISIONS CONCERNING ACCOUNTS
SECTION 7.01 Special Representations and Warranties. As of the
--------------------------------------
time when each of its Accounts arises, each Pledgor shall be deemed to have
represented and warranted that such Account and all records, papers and
documents relating thereto (i) are genuine and correct and in all material
respects what they purport to be, (ii) represent the legal, valid and binding
obligation of the account debtor, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable principles relating
to enforceability, evidencing indebtedness unpaid and owed by such account
debtor, arising out of the performance of labor or services or the sale, lease,
license, assignment or other disposition and delivery of the goods or other
property listed therein or out of an advance or a loan, (iii) will, in the case
of a Account, except for the original or duplicate original invoice sent to a
purchaser evidencing such purchaser's account, be the only original writings
evidencing and embodying such obligation of the account debtor named therein and
(iv) are in all material respects in compliance and conform with all applicable
Federal, state and local laws and applicable laws of any relevant foreign
jurisdiction.
SECTION 7.02 Maintenance of Records. Each Pledgor shall keep and
----------------------
maintain at its own cost and expense complete records of each Account, in a
manner consistent with prudent business practice, including, without limitation,
records of all payments received, all credits granted thereon, all merchandise
returned and all other documentation relating thereto. Each Pledgor shall, at
such Pledgor's sole cost and expense, upon the Trustee's demand made at any time
after the occurrence and during the continuance of any Event of Default, deliver
all tangible evidence of Accounts, including, without limitation, all documents
evidencing Accounts and any books and records relating thereto to the Trustee or
to its representatives (copies of which evidence and books and records may be
retained by such Pledgor). Upon the occurrence and during the continuance of any
Event of Default, the Trustee may transfer a full and complete copy of any
Pledgor's books, records, credit information, reports, memoranda and all other
writings relating to the Accounts to and for the use by any Person that has
acquired or is contemplating acquisition of an interest in the Accounts or the
Trustee's security interest therein without the consent of any Pledgor.
SECTION 7.03 Legend. Each Pledgor shall legend, at the request of
------
the Trustee made at any time after the occurrence of any Event of Default and in
form and manner satisfactory to
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the Trustee, the Accounts and the other books, records and documents of such
Pledgor evidencing or pertaining to the Accounts with an appropriate reference
to the fact that the Accounts have been assigned to the Trustee for the benefit
of the Secured Parties and that the Trustee has a security interest therein.
SECTION 7.04 Modification of Terms, etc. No Pledgor shall rescind
--------------------------
or cancel any indebtedness evidenced by any Account or modify any term thereof
or make any adjustment with respect thereto except in the ordinary course of
business consistent with prudent business practice, or extend or renew any such
indebtedness except in the ordinary course of business consistent with prudent
business practice or compromise or settle any dispute, claim, suit or legal
proceeding relating thereto or sell any Account or interest therein except in
the ordinary course of business consistent with prudent business practice
without the prior written consent of the Trustee. Each Pledgor shall timely
fulfill all obligations on its part to be fulfilled under or in connection with
the Accounts.
SECTION 7.05 Collection. Each Pledgor shall cause to be collected
----------
from the account debtor of each of the Accounts, as and when due in the ordinary
course of business consistent with prudent business practice (including, without
limitation, Accounts that are delinquent, such Accounts to be collected in
accordance with generally accepted commercial collection procedures), any and
all amounts owing under or on account of such Account, and apply forthwith upon
receipt thereof all such amounts as are so collected to the outstanding balance
of such Account, except that any Pledgor may, with respect to an Account, allow
in the ordinary course of business (i) a refund or credit due as a result of
returned or damaged or defective merchandise and (ii) such extensions of time to
pay amounts due in respect of Accounts and such other modifications of payment
terms or settlements in respect of Accounts as shall be commercially reasonable
in the circumstances, all in accordance with such Pledgor's ordinary course of
business consistent with its collection practices as in effect from time to
time. The costs and expenses (including, without limitation, attorneys' fees) of
collection, in any case, whether incurred by any Pledgor, the Trustee or any
Secured Party, shall be paid by the Pledgors.
ARTICLE VIII
TRANSFERS AND OTHER LIENS
No Pledgor shall (i) sell, convey, assign or otherwise dispose
of, or grant any option with respect to, any of the Pledged Collateral pledged
by it hereunder except as permitted by the Indenture or (ii) create or permit to
exist any Lien upon or with respect to any of the Pledged Collateral pledged by
it hereunder other than in the case of Pledged Collateral (other than Securities
Collateral) Permitted Collateral Liens.
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ARTICLE IX
REMEDIES
SECTION 9.1 Remedies. (a) Upon the occurrence and during the
--------
continuance of any Event of Default, and, in the case of any Securities
Collateral, subject to any applicable approval required pursuant to applicable
Gaming Law, the Trustee may from time to time exercise in respect of the Pledged
Collateral, in addition to the other rights and remedies provided for herein or
otherwise available to it:
(i) Personally, or by agents or attorneys, immediately take
possession of the Pledged Collateral or any part thereof, from any
Pledgor or any other Person who then has possession of any part thereof
with or without notice or process of law, and for that purpose may
enter upon any Pledgor's premises where any of the Pledged Collateral
is located, remove such Pledged Collateral, remain present at such
premises to receive copies of all communic a-tions and remittances
relating to the Pledged Collateral and use in connection with such
removal and possession any and all services, supplies, aids and other
facilities of any Pledgor;
(ii) Demand, sue for, collect or receive any money or property
at any time payable or receivable in respect of the Pledged Collateral
including, without limitation, instructing the obligor or obligors on
any agreement, instrument or other obligation constituting part of the
Pledged Collateral to make any payment required by the terms of such
agreement, instrument or other obligation directly to the Trustee, and
in connection with any of the foregoing, compromise, settle, extend the
time for payment and make other modifications with respect thereto;
provided, however, that in the event that any such payments are made
-------- -------
directly to any Pledgor, prior to receipt by any such obligor of such
instruction, such Pledgor shall segregate all amounts received pursuant
thereto in trust for the benefit of the Trustee and shall promptly (but
in no event later than one Business Day after receipt thereof) pay such
amounts to the Trustee;
(iii) Sell, assign, grant a license to use or otherwise
liquidate, or direct any Pledgor to sell, assign, grant a license to
use or otherwise liquidate, any and all investments made in whole or in
part with the Pledged Collateral or any part thereof, and take
possession of the proceeds of any such sale, assignment, license or
liquidation;
(iv) Take possession of the Pledged Collateral or any part
thereof, by directing any Pledgor in writing to deliver the same to the
Trustee at any place or places so designated by the Trustee, in which
event such Pledgor shall at its own expense: (A) forthwith cause the
same to be moved to the place or places designated by the Trustee and
there delivered to the Trustee, (B) store and keep any Pledged
Collateral so delivered to the Trustee at such place or places pending
further action by the Trustee and (C) while the Pledged Collateral
shall be so stored and kept, provide such security and maintenance
services as shall be necessary to protect the same and to preserve and
maintain them in good condition. Each Pledgor's obligation
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to deliver the Pledged Collateral as contemplated in this Section
-------
9.1(iv) is of the essence hereof. Upon application to a court of equity
------
having jurisdiction, the Trustee shall be entitled to a decree
requiring specific performance by any Pledgor of such obligation;
(v) Withdraw all moneys, instruments, securities and other
property in any bank, financial securities, deposit or other account of
any Pledgor constituting Pledged Collateral for application to the
Secured Obligations as provided in Article X hereof;
---------
(vi) Retain and apply the Distributions to the Secured
Obligations as provided in Article X hereof;
---------
(vii) Exercise any and all rights as beneficial and legal
owner of the Pledged Collateral, including, without limitation,
perfecting assignment of and exercising any and all voting, consensual
and other
rights and powers with respect to any Pledged Colla teral; and
(viii) All the rights and remedies of a secured party on
default under the UCC, and the Trustee may also in its sole discretion,
without notice except as specified in Section 9.2 hereof, sell, assign
-----------
or grant a license to use the Pledged Collateral or any part thereof in
one or more parcels at public or private sale, at any exchange,
broker's board or at any of the Trustee's offices or elsewhere, for
cash, on credit or for future delivery, and at such price or prices and
upon such other terms as the Trustee may deem commercially reasonable.
The Trustee or any other Secured Party or any of their respective
Affiliates may be the purchaser, licensee, assignee or recipient of any
or all of the Pledged Collateral at any such sale and shall be
entitled, for the purpose of bidding and making settlement or payment
of the purchase price for all or any portion of the Pledged Collateral
sold, assigned or licensed at such sale, to use and apply any of the
Secured Obligations owed to such Person as a credit on account of the
purchase price of any Pledged Collateral payable by such Person at such
sale. Each purchaser, assignee, licensee or recipient at any such sale
shall acquire the property sold, assigned or licensed absolutely free
from any claim or right on the part of any Pledgor, and each Pledgor
hereby waives, to the fullest extent permitted by law, all rights of
redemption, stay and/or appraisal which it now has or may at any time
in the future have under any rule of law or statute now existing or
hereafter enacted. The Trustee shall not be obligated to make any sale
of Pledged Collateral regardless of notice of sale having been given.
The Trustee may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was
so adjourned. Each Pledgor hereby waives, to the fullest extent
permitted by law, any claims against the Trustee arising by reason of
the fact that the price at which any Pledged Collateral may have been
sold, assigned or licensed at such a private sale was less than the
price which might have been obtained at a public sale, even if the
Trustee accepts the first offer received and does not offer such
Pledged Collateral to more than one offeree.
(b) In the event that, upon the occurrence and during the
continuance of an Event of Default, the Trustee intends to exercise any of the
voting and other rights afforded under Article V or this Section 9.1 with
respect to any Securities Collateral, including, but not limited to (i) re-
-33-
registration of any Securities Collateral, or (ii) foreclosure, transfer or
other enforcement of the security interests in any Securities Collateral,
pursuant to applicable Gaming Law, such exercise of remedies shall require the
prior approval of the applicable Gaming Authorities and/or licensing of the
Trustee or its nominee (unless such licensing requirement is waived by the
applicable Gaming Authorities upon the application of the Trustee or its
nominee), pursuant to applicable Gaming Law.
(c) The approval by the applicable Gaming Authorities of
this Agreement shall not act or be construed as the approval, either express or
implied, for the Trustee to take any action or steps provided for in this
Agreement for which prior approval of any applicable Gaming Authorities is
required, without first obtaining such prior approval of such applicable Gaming
Authorities to the extent then required by applicable Gaming Law.
SECTION 9.2 Notice of Sale. Each Pledgor acknowledges and
--------------
agrees that, to the extent notice of sale shall be required by law, ten days'
notice to such Pledgor of the time and place of any public sale or of the time
after which any private sale or other intended disposition is to take place
shall be commercially reasonable notification of such matters. No notification
need be given to any Pledgor if it has signed, after the occurrence of an Event
of Default, a statement renouncing or modifying any right to notification of
sale or other intended disposition.
SECTION 9.3 Waiver of Notice and Claims. Each Pledgor hereby
---------------------------
waives, to the fullest extent permitted by applicable law, notice or judicial
hearing in connection with the Trustee's taking possession or the Trustee's
disposition of any of the Pledged Collateral, including, without limitation, any
and all prior notice and hearing for any prejudgment remedy or remedies and any
such right which such Pledgor would otherwise have under law, and each Pledgor
hereby further waives, to the fullest extent permitted by applicable law: (i)
all damages occasioned by such taking of possession, (ii) all other requirements
as to the time, place and terms of sale or other requirements with respect to
the enforcement of the Trustee's rights hereunder and (iii) all rights of
redemption, appraisal, valuation, stay, extension or moratorium now or hereafter
in force under any applicable law. The Trustee shall not be liable for any
incorrect or improper payment made pursuant to this Article IX in the absence of
----------
gross negligence or willful misconduct. Any sale of, or the grant of options to
purchase, or any other realization upon, any Pledged Collateral shall operate to
divest all right, title, interest, claim and demand, either at law or in equity,
of the applicable Pledgor therein and thereto, and shall be a perpetual bar both
at law and in equity against such Pledgor and against any and all Persons
claiming or attempting to claim the Pledged Collateral so sold, optioned or
realized upon, or any part thereof, from, through or under such Pledgor.
SECTION 9.4 Certain Sales of Pledged Collateral.
-----------------------------------
(i) Each Pledgor recognizes that, by reason of certain
prohibitions contained in law, rules, regulations or orders of any Governmental
Authority, the Trustee may be compelled, with respect to any sale of all or any
part of the Pledged Collateral, to limit purchasers to those who meet the
requirements of such Governmental Authority. Each Pledgor acknowledges that any
such sales may be at prices and on terms less favorable to the Trustee than
those obtainable through a public sale without such restrictions, and,
notwithstanding such circumstances, agrees that any such restricted sale
-34-
shall be deemed to have been made in a commercially reasonable manner and that,
except as may be required by applicable law, the Trustee shall have no
obligation to engage in public sales.
(ii) Each Pledgor recognizes that, by reason of certain
prohibitions contained in the Securities Act of 1933, as amended (the
--------------
"Securities Act"), and applicable state securities laws, the Trustee may be
compelled, with respect to any sale of all or any part of the Securities
Collateral, to limit purchasers to Persons who will agree, among other things,
to acquire such Securities Collateral for their own account, for investment and
not with a view to the distribution or resale thereof. Each Pledgor acknowledges
that any such private sales may be at prices and on terms less favorable to the
Trustee than those obtainable through a public sale without such restrictions
(including, without limitation, a public offering made pursuant to a
registration statement under the Securities Act), and, notwithstanding such
circumstances, agrees that any such private sale shall be deemed to have been
made in a commercially reasonable manner and that the Trustee shall have no
obligation to engage in public sales and no obligation to delay the sale of any
Securities Collateral for the period of time necessary to permit the issuer
thereof to register it for a form of public sale requiring registration under
the Securities Act or under applicable state securities laws, even if such
issuer would agree to do so.
(iii) Notwithstanding the foregoing, each Pledgor shall, upon
the occurrence and during the continuance of any Event of Default, at the
reasonable request of the Trustee, for the benefit of the Trustee, cause any
registration, qualification under or compliance with any Federal or state
securities law or laws to be effected with respect to all or any part of the
Securities Collateral as soon as practicable and at the sole cost and expense of
the Pledgors. Each Pledgor will use its best efforts to cause such registration
to be effected (and be kept effective) and will use its commercially reasonable
efforts to cause such qualification and compliance to be effected (and be kept
effective) as may be so requested and as would permit or facilitate the sale and
distribution of such Securities Collateral including, without limitation,
registration under the Securities Act (or any similar statute then in effect),
appropriate qualifications under applicable blue sky or other state securities
laws and appropriate compliance with all other requirements of any Governmental
Authority. Each Pledgor shall use its commercially reasonable efforts to cause
the Trustee to be kept advised in writing as to the progress of each such
registration, qualification or compliance and as to the completion thereof,
shall furnish to the Trustee such number of prospectuses, offering circulars or
other documents incident thereto as the Trustee from time to time may request,
and shall indemnify and shall cause the issuer of the Securities Collateral to
indemnify the Trustee and all others participating in the distribution of such
Securities Collateral against all claims, losses, damages and liabilities caused
by any untrue statement (or alleged untrue statement) of a material fact
contained therein (or in any related registration statement, notification or the
like) or by any omission (or alleged omission) to state therein (or in any
related registration statement, notification or the like) a material fact
required to be stated therein or necessary to make the statements therein not
misleading.
(iv) If the Trustee determines to exercise its right to sell
any or all of the Securities Collateral, upon written request, the applicable
Pledgor shall from time to time furnish to the Trustee all such information as
the Trustee may request in order to determine the number of securities included
in the Securities Collateral which may be sold by the Trustee as exempt
transactions under the Securities
-35-
Act and the rules of the Securities and Exchange Commission thereunder, as the
same are from time to time in effect.
(v) Each Pledgor further agrees that a breach of any of the
covenants contained in this Section 9.4 will cause irreparable injury to the
Trustee and other Secured Parties, that the Trustee and the other Secured
Parties have no adequate remedy at law in respect of such breach and, as a
consequence, that each and every covenant contained in this Section 9.4 shall be
specifically enforceable against such Pledgor, and such Pledgor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no Event of Default has occurred and
is continuing.
SECTION 9.5 No Waiver; Cumulative Remedies.
------------------------------
(i) No failure on the part of the Trustee to exercise, no
course of dealing with respect to, and no delay on the part of the Trustee in
exercising, any right, power or remedy hereunder shall operate as a waiver
thereof; nor shall any single or partial exercise of any such right, power or
remedy hereunder preclude any other or further exercise thereof or the exercise
of any other right, power or remedy; nor shall the Trustee be required to look
first to, enforce or exhaust any other security, collateral or guaranties. The
remedies herein provided are cumulative and are not exclusive of any remedies
provided by law.
(ii) In the event that the Trustee shall have instituted any
proceeding to enforce any right, power or remedy under this Agreement by
foreclosure, sale, entry or otherwise, and such proceeding shall have been
discontinued or abandoned for any reason or shall have been determined adversely
to the Trustee, then and in every such case, the Pledgors, the Trustee and each
other Secured Party shall be restored to their respective former positions and
rights hereunder with respect to the Pledged Collateral, and all rights,
remedies and powers of the Trustee and the other Secured Parties shall continue
as if no such proceeding had been instituted.
SECTION 9.6 Certain Additional Actions Regarding Intellectual
-------------------------------------------------
Property. If any Event of Default shall have occurred and be continuing, upon
- --------
the written demand of Trustee, each Pledgor shall execute and deliver to Trustee
an assignment or assignments of the registered Patents, Trademarks and/or
Copyrights and such other documents as are necessary or appropriate to carry out
the intent and purposes hereof. Within five Business Days of written notice
thereafter from Trustee, each Pledgor shall make available to Trustee, to the
extent within such Pledgor's power and authority, such personnel in such
Pledgor's employ on the date of the Event of Default as Trustee may reasonably
designate to permit such Pledgor to continue, directly or indirectly, to
produce, advertise and sell the products and services sold by such Pledgor under
the registered Patents, Trademarks and/or Copyrights, and such persons shall be
available to perform their prior functions on Trustee's behalf.
-36-
ARTICLE X
APPLICATION OF PROCEEDS
The proceeds received by the Trustee in respect of any sale
of, collection from or other realization upon all or any part of the Pledged
Collateral pursuant to the exercise by the Trustee of its remedies as a secured
creditor as provided in Article IX hereof shall be applied, together with any
----------
other sums then held by the Trustee in the manner set forth in the Indenture.
ARTICLE XI
MISCELLANEOUS
SECTION 11.1 Concerning Trustee.
------------------
(i) The Trustee has been appointed as trustee pursuant to
the Indenture. The actions of the Trustee hereunder are subject to the
provisions of the Indenture. The Trustee shall have the right hereunder to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking action (including, without limitation, the
release or substitution of the Pledged Collateral), in accordance with this
Agreement and the Indenture. The Trustee may employ agents and attorneys-in-fact
in connection herewith and shall not be liable for the negligence or misconduct
of any such agents or attorneys-in-fact selected by it in good faith. The
Trustee may resign and a successor Trustee may be appointed in the manner
provided in the Indenture. Upon the acceptance of any appointment as the Trustee
by a successor Trustee, that successor Trustee shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the retiring
Trustee under this Agreement, and the retiring Trustee shall thereupon be
discharged from its duties and obligations under this Agreement. After any
retiring Trustee's resignation, the provisions hereof shall inure to its benefit
as to any actions taken or omitted to be taken by it under this Agreement while
it was the Trustee.
(ii) The Trustee shall be deemed to have exercised reasonable
care in the custody and preservation of the Pledged Collateral in its possession
if such Pledged Collateral is accorded treatment substantially equivalent to
that which the Trustee, in its individual capacity, accords its own property
consisting of similar instruments or interests, it being understood that neither
the Trustee nor any of the Secured Parties shall have responsibility for (i)
ascertaining or taking action with respect to calls, conversions, exchanges,
maturities, tenders or other matters relating to any Securities Collateral,
whether or not the Trustee or any other Secured Party has or is deemed to have
knowledge of such matters, or (ii) taking any necessary steps to preserve rights
against any Person with respect to any Pledged Collateral.
-37-
(iii) The Trustee shall be entitled to rely upon any written
notice, statement, certificate, order or other document or any telephone message
believed by it to be genuine and correct and to have been signed, sent or made
by the proper person, and, with respect to all matters pertaining to this
Agreement and its duties hereunder, upon advice of counsel selected by it.
(iv) If any item of Pledged Collateral also constitutes
collateral granted to Trustee under any other deed of trust, mortgage, security
agreement, pledge or instrument of any type, in the event of any conflict
between the provisions hereof and the provisions of such other deed of trust,
mortgage, security agreement, pledge or instrument of any type in respect of
such collateral, Trustee, in its sole discretion, shall select which provision
or provisions shall control.
SECTION 11.2 Trustee May Perform; Trustee Appointed
--------------------------------------
Attorney-in-Fact. If any Pledgor shall fail to perform any covenants contained
- ----------------
in this Agreement (including, without limitation, such Pledgor's covenants to
(i) pay the premiums in respect of all required insurance policies hereunder,
(ii) pay Charges, (iii) make repairs, (iv) discharge Liens or (v) pay or perform
any obligations of such Pledgor under any Pledged Collateral) or if any warranty
on the part of any Pledgor contained herein shall be breached, the Trustee may
(but shall not be obligated to) do the same or cause it to be done or remedy any
such breach, and may expend funds for such purpose; provided, however, that
Trustee shall in no event be bound to inquire into the validity of any tax,
lien, imposition or other obligation which such Pledgor fails to pay or perform
as and when required hereby and which such Pledgor does not contest in
accordance in accordance with the provision of Section 4.16 hereof. Any and all
------------
amounts so expended by the Trustee shall be paid by the Pledgors in accordance
with the provisions of Section 11.3 hereof. Neither the provisions of this
------------
Section 11.2 nor any action taken by Trustee pursuant to the provisions of this
- ------------
Section 11.2 shall prevent any such failure to observe any covenant contained in
- ------------
this Agreement nor any breach of warranty form constituting an Event of Default.
Each Pledgor hereby appoints the Trustee its attorney-in fact, with full
authority in the place and stead of such Pledgor and in the name of such
Pledgor, or otherwise, from time to time in the Trustee's discretion to take any
action and to execute any instrument consistent with the terms of the Indenture
and the other Collateral Documents which the Trustee may deem necessary or
advisable to accomplish the purposes hereof. The foregoing grant of authority is
a power of attorney coupled with an interest and such appointment shall be
irrevocable for the term hereof. Each Pledgor hereby ratifies all that such
attorney shall lawfully do or cause to be done by virtue hereof.
SECTION 11.3 Expenses. Each Pledgor will upon demand pay to
--------
the Trustee the amount of any and all costs and expenses, including the fees and
expenses of its counsel and the fees and expenses of any experts and agents
which the Trustee may incur in connection with (i) any action, suit or other
proceeding affecting the Pledged Collateral or any part thereof commenced, in
which action, suit or proceeding the Trustee is made a party or participates or
in which the right to use the Pledged Collateral or any part thereof is
threatened, or in which it becomes necessary in the judgment of the Trustee to
defend or uphold the Lien hereof (including, without limitation, any action,
suit or proceeding to establish or uphold the compliance of the Pledged
Collateral with any requirements of any Governmental Authority or law), (ii) the
collection of the Secured Obligations, (iii) the enforcement and administration
hereof, (iv) the custody or preservation of, or the sale of, collection from, or
other reali-
-38-
zation upon, any of the Pledged Collateral, (v) the exercise or enforcement of
any of the rights of the Trustee or any Secured Party hereunder or (vi) the
failure by any Pledgor to perform or observe any of the provisions hereof. All
amounts expended by the Trustee and payable by any Pledgor under this Section
-------
11.3 shall be due upon demand therefor (together with interest thereon accruing
- ---
at the highest rate then in effect under the Indenture during the period from
and including the date on which such funds were so expended to the date of
repayment) and shall be part of the Secured Obligations. Each Pledgor's
obligations under this Section 11.3 shall survive the termination hereof and the
-----------
discharge of such Pledgor's other obligations under this Agreement, the
Indenture and the other Collateral Documents.
SECTION 11.4 Indemnity.
(i) Indemnity. Each Pledgor agrees to indemnify, pay and
---------
hold harmless the Trustee and each of the other Secured Parties and the
officers, directors, employees, agents and Affiliates of the Trustee and each of
the other Secured Parties (collectively, the "Indemnitees") from and against any
-----------
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs (including, without limitation, settlement
costs), expenses or disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, commenced or threatened, whether or not such Indemnitee shall be
designated a party thereto) which may be imposed on, incurred by, or asserted
against that Indemnitee, in any manner relating to or arising out of this
Agreement, the Indenture, the Notes, any other Collateral Document or any other
document evidencing the Secured Obligations (including, without limitation, any
misrepresentation by any Pledgor in this Agreement, the Indenture, the Notes,
other Collateral Document or any other document evidencing the Secured
Obligations) (the "Indemnified Liabilities"); provided, however, that no Pledgor
----------------------- -------- -------
shall have any obligation to an Indemnitee hereunder with respect to Indemnified
Liabilities if it has been determined by a final decision (after all appeals and
the expiration of time to appeal) of a court of competent jurisdiction that such
Indemnified Liabilities arose from the gross negligence or willful misconduct of
that Indemnitee. To the extent that the undertaking to indemnify, pay and hold
harmless set forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, each Pledgor shall contribute the maximum
portion which it is permitted to pay and satisfy under applicable law to the
payment and satisfaction of all Indemnified Liabilities incurred by the
Indemnitees or any of them.
(ii) Survival. The obligations of the Pledgors contained in
--------
this Section 10.4 shall survive the termination hereof and the discharge of the
------------
Pledgors' other obligations under this Agreement, the Indenture and under the
other Collateral Documents.
(iii) Reimbursement. Any amounts paid by any Indemnitee as to
-------------
which such In-demnitee has the right to reimbursement shall constitute Secured
Obligations secured by the Pledged Collateral.
SECTION 11.5 Continuing Security Interest; Assignment. This
----------------------------
Agreement shall create a continuing security interest in the Pledged Collateral
and shall (i) be binding upon the Pledgors,
-39-
their respective successors and assigns and (ii) inure, together with the rights
and remedies of the Trustee hereunder, to the benefit of the Trustee and the
other Secured Parties and each of their respective successors, transferees and
assigns. No other Persons (including, without limitation, any other creditor of
any Pledgor) shall have any interest herein or any right or benefit with respect
hereto. Without limiting the generality of the foregoing clause (ii), any
Secured Party may assign or otherwise transfer any indebtedness held by it
secured by this Agreement to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted to such
Secured Party, herein or otherwise, subject however, to the provisions of the
Indenture.
SECTION 11.6 Termination; Release. The Pledged Collateral
--------------------
shall be released from the Lien of this Agreement and the applicable Subsidiary
Guarantor shall be relieved of its obligations under this Agreement in
accordance with the provisions of the Indenture. Upon termination hereof or any
release of Pledged Collateral in accordance with the provisions of the
Indenture, the Trustee shall, upon the request and at the sole cost and expense
of the Pledgors, assign, transfer and deliver to Pledgor, against receipt and
without recourse to or warranty by the Trustee, such of the Pledged Collateral
to be released (in the case of a release) as may be in possession of the Trustee
and as shall not have been sold or otherwise applied pursuant to the terms
hereof, and, with respect to any other Pledged Collateral, proper documents and
instruments (including UCC-3 termination statements or releases) acknowledging
the termination hereof or the release of such Pledged Collateral, as the case
may be.
SECTION 11.7 Modification in Writing. No amendment,
-----------------------
modification, supplement, termination or waiver of or to any provision hereof,
nor consent to any departure by any Pledgor therefrom, shall be effective unless
the same shall be made in accordance with the terms of the Indenture and unless
in writing and signed by the Trustee. Any amendment, modification or supplement
of or to any provision hereof, any waiver of any provision hereof and any
consent to any departure by any Pledgor from the terms of any provision hereof
shall be effective only in the specific instance and for the specific purpose
for which made or given. Except where notice is specifically required by this
Agreement or any other document evidencing the Secured Obligations, no notice to
or demand on any Pledgor in any case shall entitle any Pledgor to any other or
further notice or demand in similar or other circumstances.
SECTION 11.8 Notices. Unless otherwise provided herein or in
-------
the Indenture, any notice or other communication herein required or permitted to
be given shall be given in the manner and become effective as set forth in the
Indenture, as to any Pledgor, addressed to it at the address of the Issuer set
forth in the Indenture and as to the Trustee, addressed to it at the address set
forth in the Indenture, or in each case at such other address as shall be
designated by such party in a written notice to the other party complying as to
delivery with the terms of this Section 11.8.
------------
SECTION 11.9 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED
-------------
BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF
THE STATE OF NEW YORK.
-40-
SECTION 11.10 CONSENT TO JURISDICTION AND SERVICE OF PROCESS;
----------------------------------------------
WAIVER OF JURY TRIAL. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY PLEDGOR WITH
- -------------------
RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE SUPREME COURT OF THE STATE OF
NEW YORK SITTING IN NEW YORK COUNTY, THE COURTS OF THE UNITED STATES OF AMERICA
FOR THE SOUTHERN DISTRICT OF NEW YORK AND APPELLATE COURTS OF ANY THEREOF, AND
BY EXECUTION AND DELIVERY HEREOF, EACH PLEDGOR ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT. EACH PLEDGOR AGREES
THAT SERVICE OF PROCESS IN ANY PROCEEDING MAY BE EFFECTED BY MAILING A COPY
THEREOF BY REGISTERED OR CERTIFIED MAIL (OR ANY SUBSTANTIALLY SIMILAR FORM OF
MAIL), POSTAGE PREPAID, TO THE ISSUER AT ITS ADDRESS SET FORTH IN THE INDENTURE
OR AT SUCH OTHER ADDRESS OF WHICH THE TRUSTEE SHALL HAVE BEEN NOTIFIED PURSUANT
THERETO. IF ANY AGENT APPOINTED BY ANY PLEDGOR REFUSES TO ACCEPT SERVICE, SUCH
PLEDGOR HEREBY AGREES THAT SERVICE UPON IT BY MAIL SHALL CONSTITUTE SUFFICIENT
NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF THE TRUSTEE TO BRING
PROCEEDINGS AGAINST ANY PLEDGOR IN THE COURTS OF ANY OTHER JURISDICTION. THE
PLEDGORS HEREBY IRREVOCABLY WAIVE ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
TRANSACTIONS CONTEMPLATED HEREBY.
SECTION 11.11 Severability of Provisions. Any provision
--------------------------
hereof which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.
SECTION 11.12 Execution in Counterparts. This Agreement and
-------------------------
any amendments, waivers, consents or supplements hereto may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
SECTION 11.13 Business Days. In the event any time period or
-------------
any date provided in this Agreement ends or falls on a day other than a Business
Day, then such time period shall be deemed to end and such date shall be deemed
to fall on the next succeeding Business Day, and performance herein may be made
on such Business Day, with the same force and effect as if made on such other
day.
-41-
SECTION 11.14 Waiver of Stay. Each Pledgor agrees that in the event
--------------
that such Pledgor or any property or assets of such Pledgor shall hereafter
become the subject of a voluntary or involuntary proceeding under the Bankruptcy
Code or such Pledgor shall otherwise be a party to any Federal or state
bankruptcy, insolvency, moratorium or similar proceeding to which the provisions
relating to the automatic stay under Section 362 of the Bankruptcy Code or any
similar provision in any such law is applicable, then, in any such case, whether
or not the Trustee has commenced foreclosure proceedings under this Agreement,
the Trustee shall be entitled to relief from any such automatic stay as it
relates to the exercise of any of the rights and remedies (including, without
limitation, any foreclosure proceedings) available to the Trustee as provided in
this Agreement, in any other Collateral Document or any other document
evidencing the Secured Obligations.
SECTION 11.15 No Credit for Payment of Taxes or Imposition. Such
--------------------------------------------
Pledgor shall not be entitled to any credit against the principal, premium, if
any, or interest payable under the Indenture or the Notes, and such Pledgor
shall not be entitled to any credit against any other sums which may become
payable under the terms thereof or hereof, by reason of the payment of any Tax
on the Pledged Collateral or any part thereof.
SECTION 11.16 No Claims Against Trustee. Nothing contained in this
-------------------------
Agreement shall constitute any consent or request by the Trustee, express or
implied, for the performance of any labor or services or the furnishing of any
materials or other property in respect of the Pledged Collateral or any part
thereof, nor as giving any Pledgor any right, power or authority to contract for
or permit the performance of any labor or services or the furnishing of any
materials or other property in such fashion as would permit the making of any
claim against the Trustee in respect thereof or any claim that any Lien based on
the performance of such labor or services or the furnishing of any such
materials or other property is prior to the Lien hereof.
SECTION 11.17 Obligations Absolute. All obligations of each Pledgor
--------------------
hereunder shall be absolute and unconditional irrespective of:
(i) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of any Pledgor;
(ii) any lack of validity or enforceability of the Indenture,
the Notes or any other Collateral Document, or any other agreement or
instrument relating thereto;
(iii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Secured Obligations, or any
other amendment or waiver of or any consent to any departure from the
Indenture, the Notes or any other Collateral Document, or any other
agreement or instrument relating thereto;
(iv) any pledge, exchange, release or non-perfection of any
other collateral, or any release or amendment or waiver of or consent to
any departure from any guarantee, for all or any of the Secured
Obligations;
-42-
(v) any exercise, non-exercise or waiver of any right, remedy,
power or privilege under or in respect hereof, the Indenture, the Notes
or any other Collateral Document except as specifically set forth in a
waiver granted pursuant to the provisions of Section 11.7 hereof; or
------------
(vi) any other circumstances which might otherwise constitute a
defense available to, or a discharge of, any Pledgor.
SECTION 11.18 Senior Intercreditor Agreement. With respect to any
------------------------------
Credit Agreement Collateral securing the Pledgors' obligations under the Credit
Agreement, the rights and remedies of the Trustee with Respect to the Credit
Agreement Collateral shall be subject to the provisions of the Senior
Intercreditor Agreement until such time as the Senior Intercreditor Agreement
shall no longer be in effect.
[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]
IN WITNESS WHEREOF, the Pledgors and the Trustee have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the date first above written.
GAMECO, INC.,
as Pledgor
By: /s/ Jeffrey P. Jacobs
----------------------------------
Name: Jeffrey P. Jacobs
Title: President
BH ACQUISITION, INC.,
as a Guarantor and a Pledgor
By: /s/ Jeffrey P. Jacobs
----------------------------------
Name: Jeffrey P. Jacobs
Title: President
GAMECO ACQUISITION, INC.,
as a Guarantor and a Pledgor
By: /s/ Jeffrey P. Jacobs
----------------------------------
Name: Jeffrey P. Jacobs
Title: President
WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Trustee
By: __________________________________
Name:
Title:
IN WITNESS WHEREOF, the Pledgors and the Trustee have caused this
Agreement to be duly executed and delivered by their duly authorized officers as
of the date first above written.
GAMECO INC.,
as Pledgor
By: __________________________________
Name:
Title:
BH ACQUISTION, INC.,
as a Guarantor and a Pledgor
By: __________________________________
Name:
Title:
GAMECO ACQUISITION, INC.,
as a Guarantor and a Pledgor
By: __________________________________
Name:
Title:
WELLS FARGO BANK MINNESOTA, NATIONAL
ASSOCIATION,
as Trustee
By: /s/ Robert L. Reynolds
----------------------------------
Name: ROBERT L. REYNOLDS
Title: VICE PRESIDENT
SCHEDULE 1.1(a)
---------------
Initial Pledged Interests
-------------------------
Pledgor: Gameco, Inc.
PERCENTAGE OF
ALL ISSUED
NUMBER CAPITAL OR OTHER
TYPE OF CERTIFICATE OF EQUITY INTERESTS
ISSUER INTEREST NO(S). SHARES OF ISSUER
- ---------- ------------ --------------- ---------- ----------------------
[_____]%
NONE
Pledgor: BH Acquisition, Inc.
PERCENTAGE OF
ALL ISSUED
NUMBER CAPITAL OR OTHER
TYPE OF CERTIFICATE OF EQUITY INTERESTS
ISSUER INTEREST NO(S). SHARES OF ISSUER
- ---------- ------------ --------------- ---------- ----------------------
[_____]%
NONE
Pledgor: Gameco Acquisition, Inc.
PERCENTAGE OF
ALL ISSUED
NUMBER CAPITAL OR OTHER
TYPE OF CERTIFICATE OF EQUITY INTERESTS
ISSUER INTEREST NO(S). SHARES OF ISSUER
- ---------- ------------ --------------- ---------- ----------------------
[_____]%
NONE
Note: A separate sheet should be used for each Pledgor.
SCHEDULE 1.1(b)
Initial Pledged Shares
----------------------
Pledgor: Gameco, Inc.
PERCENTAGE OF
ALL ISSUED
NUMBER CAPITAL OR OTHER
CLASS OF CERTIFICATE OF EQUITY INTERESTS
ISSUER STOCK NO(S). SHARES OF ISSUER
- -------------------------- ------------ --------------- ---------- ----------------------
BH Acquisition, Inc. Common 1 1,000 100%
Gameco Acquisition, Inc. Common 1 1,000 100%
Pledgor: BH Acquisition, Inc.
NONE
Pledgor: Gameco Acquisition, Inc.
NONE
Note: A separate sheet should be used for each Pledgor.
SCHEDULE 1.1(c)
---------------
Initial Intercompany Notes
--------------------------
PRINCIPAL DATE OF MATURITY
ISSUER AMOUNT ISSUANCE INTEREST RATE DATE
- -------------- ------------- ------------ ----------------- ------------
Pledgor: Gameco, Inc.
NONE
Pledgor: BH Acquisition, Inc.
NONE
Pledgor: Gameco Acquisition, Inc.
NONE
Initial Supporting Obligations
------------------------------
Not applicable
SCHEDULE 1.1(d)
---------------
Prior Liens
-----------
FILE
DEBTOR JURISDICTION SECURED PARTY NUMBER/DATE COLLATERAL
- ------------ -------------- ----------------- --------------- --------------
Pledgor: Gameco, Inc.
NONE
Pledgor: BH Acquisition, Inc.
NONE
Pledgor: Gameco Acquisition, Inc.
NONE
SCHEDULE 1.1(e)
---------------
Copyrights
----------
REGISTRATION/
REGISTRATION/ APPLICATION
APPLICATION NO. DATE COPYRIGHTS COUNTRY DESCRIPTION
- ------------------- --------------- ------------ ----------- ---------------
Pledgor: Gameco, Inc.
NONE
Pledgor: BH Acquisition, Inc.
NONE
Pledgor: Gameco Acquisition, Inc.
NONE
Note: A separate sheet should be used for each Pledgor.
SCHEDULE 1.1(f)
Licenses
NAME OF AGREEMENT PARTIES DATE OF AGREEMENT
- ----------------------------- ----------------- ---------------------------
Pledgor: Gameco, Inc.
NONE
Pledgor: BH Acquisition, Inc.
NONE
Pledgor: Gameco Acquisition, Inc.
NONE
Note: A separate sheet should be used for each Pledgor.
SCHEDULE 1.1(g)
---------------
Patents
-------
Registrations:
REGISTRATION REGISTRATION
NUMBER DATE COUNTRY DESCRIPTION
- -------------------- -------------------- --------------- -------------------
Pledgor: Gameco, Inc.
NONE
Pledgor: BH Acquisition, Inc.
NONE
Pledgor: Gameco Acquisition, Inc.
NONE
Applications:
APPLICATION APPLICATION
NUMBER DATE COUNTRY DESCRIPTION
- -------------------- -------------------- --------------- -------------------
Pledgor: Gameco, Inc.
NONE
Pledgor: BH Acquisition, Inc.
NONE
Pledgor: Gameco Acquisition, Inc.
NONE
Note: A separate sheet should be used for each Pledgor.
SCHEDULE 1.1(h)
--------------
Trademarks
----------
Registrations:
REGISTRATION REGISTRATION
NUMBER DATE COUNTRY DESCRIPTION
- --------------------- ---------------- ------------ --------------
Pledgor: Gameco, Inc.
NONE
Pledgor: BH Acquisition, Inc.
NONE
Pledgor: Gameco Acquisition, Inc.
NONE
Applications:
APPLICATION APPLICATION
NUMBER DATE COUNTRY DESCRIPTION
- --------------------- ---------------- ------------ --------------
Pledgor: Gameco, Inc.
NONE
Pledgor: BH Acquisition, Inc.
NONE
Pledgor: Gameco Acquisition, Inc.
NONE
Note: A separate sheet should be used for each Pledgor.
SCHEDULE 3.4(a)
--------------
Instruments and Tangible Chattel Paper
--------------------------------------
Pledgor: Gameco, Inc.
Pledgor: BH Acquisition, Inc.
Pledgor: Gameco Acquisition, Inc.
Note: A separate sheet should be used for each Pledgor.
SCHEDULE 3.4(b)
--------------
Initial Deposit Accounts
------------------------
Pledgor: Gameco, Inc.
Pledgor: BH Acquisition, Inc.
Pledgor: Gameco Acquisition, Inc.
Note: A separate sheet should be used for each Pledgor.
SCHEDULE 3.4(c)
--------------
Initial Securities Accounts and Commodity Accounts
--------------------------------------------------
Pledgor: Gameco, Inc.
Pledgor: BH Acquisition, Inc.
Pledgor: Gameco Acquisition, Inc.
Note: A separate sheet should be used for each Pledgor.
SCHEDULE 3.4(f)
---------------
Commercial Tort Claims
----------------------
Pledgor: Gameco, Inc.
Pledgor: BH Acquisition, Inc.
Pledgor: Gameco Acquisition, Inc.
Note: A separate sheet should be used for each Pledgor.
SCHEDULE 4.13
-------------
Required Consents
-----------------
Pledgor: Gameco, Inc.
NONE
Pledgor: BH Acquisition, Inc.
NONE
Pledgor: Gameco Acquisition, Inc.
NONE
SCHEDULE 6.3
------------
Violations or Proceedings
-------------------------
Pledgor: Gameco, Inc.
NONE
Pledgor: BH Acquisition, Inc.
NONE
Pledgor: Gameco Acquisition, Inc.
NONE
EXHIBIT 1
ISSUER ACKNOWLEDGMENT
The undersigned hereby (i) acknowledges receipt of a copy of that certain
security agreement (as amended, amended and restated, supplemented or otherwise
modified from time to time, the "Security Agreement"; capitalized terms used but
------------------
not otherwise defined herein shall have the meanings assigned to such terms in
the Security Agreement), dated as of February 8, 2002, among Gameco, Inc. (the
"Issuer"), the Guarantors from time to time party thereto, and WELLS FARGO BANK
MINNE-SOTA, NATIONAL ASSOCIATION, as Trustee (in such capacity and together with
any successors in such capacity, the "Trustee"), (ii) agrees promptly to note on
-------
its books the security interests granted to the Trustee and confirmed under the
Security Agreement, (iii) agrees that it will comply with instructions of the
Trustee with respect to the applicable Securities Collateral without further
consent by the applicable Pledgor, (iv) agrees to notify the Trustee upon
obtaining knowledge of any interest in favor of any Person in the applicable
Securities Collateral that is adverse to the interest of the Trustee therein and
(v) waives any right or requirement at any time hereafter to receive a copy of
the Security Agreement in connection with the registration of any Securities
Collateral thereunder in the name of the Trustee or its nominee or the exercise
of voting rights by the Trustee or its nominee.
GAMECO, INC.
By: _____________________________________
Name:
Title:
EXHIBIT 2
SECURITY AGREEMENT AMENDMENT
This Security Pledge Amendment, dated as of February 8, 2002, is
delivered pursuant to Section 6.1 of that certain security agreement (as
-----------
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Security Agreement"; capitalized terms used but not otherwise defined
------------------
herein shall have the meanings assigned to such terms in the Security
Agreement), dated as of February 8, 2002, among Gameco, Inc. (the "Issuer"), the
undersigned, the other Guarantors from time to time party thereto and Wells
Fargo Bank Minnesota, National Association, as Trustee (in such capacity and
together with any successors in such capacity, the "Trustee"). The undersigned
-------
hereby agrees that this Pledge Amendment may be attached to the Security
Agreement and that the Pledged Securities and/or Intercompany Notes listed on
this Pledge Amendment shall be deemed to be and shall become part of the Pledged
Collateral and shall secure all Secured Obligations.
PLEDGED SECURITIES
CLASS NUMBER OF PERCENTAGE OF
OF STOCK SHARES ALL ISSUED CAPITAL
OR PAR CERTIFICATE OR OR OTHER EQUITY
ISSUER INTERESTS VALUE NO(S). INTERESTS INTERESTS OF ISSUER
- ---------- ----------- ------- ------------- ----------- ---------------------
INTERCOMPANY NOTES
PRINCIPAL DATE OF INTEREST MATURITY
ISSUER AMOUNT ISSUANCE RATE DATE
- ---------- ---------------- ---------- ---------- -----------------
[________________________________],
as Pledgor
By: _______________________________
Name:
Title:
-2-
AGREED TO AND ACCEPTED:
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION, as Trustee
By:________________________
Name:
Title:
EXHIBIT 3
[Name of New Pledgor]
[Address of New Pledgor]
[Date]
Wells Fargo Bank Minnesota, National Association
Corporate Trust Services
213 Court Street - Suite 902
Middletown, CT 06457
Ladies and Gentlemen:
Reference is made to that certain security agreement (as amended, amended and
restated, supplemented or otherwise modified from time to time, the "Security
--------
Agreement"; capitalized terms used but not otherwise defined herein shall have
- ---------
the meanings assigned to such terms in the Security Agreement), dated as of
February 8, 2002, among Gameco, Inc. (the "Issuer"), each of the Guarantors
------
listed on the signature pages thereto or from time to time party thereto by
execution of a joinder agreement, and Wells Fargo Bank Minnesota, National
Association, as Trustee (in such capacity and together with any successors in
such capacity, the "Trustee").
-------
This letter supplements the Security Agreement and is
delivered by the undersigned, ______________ (the "New Pledgor"), pursuant to
-----------
Section 3.5 of the Security Agreement. The New Pledgor hereby agrees to be bound
- -----------
as a Guarantor and as a Pledgor by all of the terms, covenants and conditions
set forth in the Security Agreement to the same extent that it would have been
bound if it had been a signatory to the Security Agreement on the execution date
of the Security Agreement and without limiting the generality of the foregoing,
hereby grants and pledges to the Administrative Agent, as collateral security
for the full, prompt and complete payment and performance when due (whether at
stated maturity, by acceleration or otherwise) of the Secured Obligations, a
Lien on and security interest in, all of its right, title and interest in, to
and under the Pledged Collateral and expressly assumes all obligations and
liabilities of a Guarantor and Pledgor thereunder. The New Pledgor hereby makes
each of the representations and warranties and agrees to each of the covenants
applicable to the Pledgors contained in the Security Agreement.
Attached hereto are supplements to each of the schedules to
the Security Agreement with respect to the New Pledgor. Such supplements shall
be deemed to be part of the Security Agreement.
This agreement and any amendments, waivers, consents or
supplements hereto may be executed in any number of counterparts and by
different parties hereto in separate counterparts,
-2-
each of which when so executed and delivered shall be deemed to be an original,
but all such counterparts together shall constitute one and the same agreement.
THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
-3-
IN WITNESS WHEREOF, the New Pledgor has caused this letter agreement to
be executed and delivered by its duly authorized officer as of the date first
above written.
[NEW PLEDGOR]
By: _______________________
Name:
Title:
AGREED TO AND ACCEPTED:
WELLS FARGO BANK MINNESOTA, NATIONAL ASSOCIATION,
as Trustee
By: ________________________
Name:
Title:
[Schedules to be attached]