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Exhibit 10.90
SECURITY AGREEMENT
(LAKES CONSULTING - TRADING POST)
This Security Agreement is made and entered into on January 12,
2005,
by and between Pawnee Trading Post Gaming
Corporation (hereinafter referred to
as "Pawnee" or "Debtor"), a wholly-owned
subsidiary of the Pawnee Tribal
Development Corporation ("Pawnee TDC"),
each created under the Constitution of
and a governmental subdivision of the
Pawnee Nation of Oklahoma ("Pawnee
Nation"), a federally recognized Indian
tribe, whose business office is located
at 871 Little D. Drive, Building 68, P.O.
Box 280, Pawnee, OK 74058, and Lakes
Pawnee Consulting, LLC, a Minnesota limited
liability company (hereinafter
referred to as "Lakes" or "Secured Party"),
whose business office is located at
130 Cheshire Lane, Minnetonka, Minnesota
55305.
RECITALS
WHEREAS, the
Debtor is created under the Constitution of and a governmental
subdivision of the Pawnee Nation, a
federally recognized Indian tribe eligible
for the special programs and services
provided by the United States to Indians
because of their status as Indians and is
recognized as possessing powers of
self-government.
WHEREAS, the
United States government holds lands in the State of Oklahoma
in trust for the benefit of the Pawnee
Nation over which the Pawnee Nation
possesses sovereign governmental powers and
the Pawnee Nation holds or intends
to acquire interests in lands which
constitute "Indian lands" upon which the
Pawnee Nation may legally conduct gaming
under applicable federal law.
WHEREAS, Secured
Party has entered into a Gaming Development Consulting
Agreement with Debtor dated January 12,
2005 (as heretofore and hereafter
amended, the "Consulting Contract"),
pursuant to which Lakes is to provide
certain development financing and
consulting services to Debtor as more
specifically described therein.
WHEREAS,
pursuant to the Consulting Contract, Secured Party will, among
other things, advance funds to Debtor.
WHEREAS, as a
material inducement to Secured Party to enter into the
Consulting Contract, the Debtor has agreed
to execute this Security Agreement in
favor of Secured Party and to grant a
security interest to Secured Party in all
of its right, title and interest in the
property described herein.
AGREEMENT
NOW THERFORE, in
consideration of the above recitals and the mutual
covenants hereinafter set forth, the
parties hereto agree as follows:
1. CREATION OF
SECURITY INTEREST. The Debtor hereby assigns, pledges and
grants to Secured Party, for and on behalf
of Secured Party itself and its
Affiliates, a security interest in the
Debtor's right, title and interest in and
to the collateral described in Section 2
hereinbelow in each case whether now
owned or hereafter acquired by Debtor in
order to secure the payment and
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performance of the obligations of Debtor to
Secured Party described in Section 3
herein below. On the date of execution of
this Agreement, Debtor shall cause to
be delivered to Secured Party: (a) such
financing statements and similar
documents necessary to perfect the security
interest granted to Secured Party
pursuant to this Agreement (the "Financing
Statements"), and (b) a legal opinion
in form and substance reasonably acceptable
to Secured Party, opining as to the
due authorization, execution, delivery and
enforceability of this Agreement and
the Financing Statements by Debtor,
together with opinions as to Debtor's
sovereign immunity waiver and
non-contravention with laws and agreements.
2. COLLATERAL.
The Collateral under this Security Agreement includes all of
the following assets of the Debtor which
are or are to be installed, attached,
and/or used upon or in connection with,
relate to or arise from (including
without limitation the ownership and/or
operation of) each Project, Gaming
Facility Site and/or Project Facilities,
each whether now owned or hereafter
acquired (collectively all of the following
property and similar or
after-acquired property under this Section
2 being hereinafter referred to as
the "Collateral"):
(a) any Furnishings and Equipment (as defined in the Consulting
Contract); and
each of the foregoing whether now owned or
hereafter at any time acquired by
Debtor and wherever located, and includes
all replacements, additions, parts,
appurtenances, accessions, substitutions,
repairs, proceeds, products,
offspring, rents and profits, license
rights and software attached or relating
thereto or therefrom, and all documents,
records, ledger sheets and files of
Debtor relating thereto; together further
with all proceeds of any such
Collateral, including, without limitation
(i) whatever is now or hereafter
receivable or received by Debtor upon the
sale, exchange, collection or other
disposition of any item of Collateral,
whether voluntary or involuntary, whether
such proceeds constitute equipment,
intangibles, or other assets; (ii) any such
items which are now or hereafter acquired
by Debtor with any proceeds of
Collateral hereunder; (iii) all warehouse
receipts, bills of lading and other
documents of title now or hereafter
covering such goods; and (iii) any insurance
proceeds or any payments under any
indemnity, warranty or guaranty now or
hereafter payable by reason of loss or
damage or otherwise with respect to any
item of Collateral or any proceeds
thereof.
Capitalized terms used and not otherwise defined herein shall have
the
meanings set forth in the Consulting
Contract and each category of Collateral
that is defined under the UCC shall have
the meanings set forth therein. As they
are used in this Agreement, the terms
listed below shall have the following
meanings:
"Project" means each business enterprise of the Debtor now or
hereafter created to engage in Class II
Gaming and III Gaming (as defined in the
Indian Gaming Regulatory Act of 1988,
Public Law 100-497 ("IGRA")) at the
Project's Gaming Facility, and to conduct
the operations of any Ancillary
Facilities of the Project, including, but
not limited to, operating and managing
office space, kids arcade, child care
facility, hotel with swimming pool and
golf course, restaurant, RV park, retail
stores, entertainment facilities, or
the sale of fuel, food, beverages, alcohol,
tobacco, gifts, and souvenirs.
"Project Facilities" means the buildings, structures and
improvements
to be constructed and used by the Project
for its gaming and ancillary
operations.
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"UCC" means the Uniform Commercial Code as the same may, from time
to
time, be in effect in the State of
Oklahoma.
3. SECURED
OBLIGATIONS OF DEBTOR. The Collateral secures and shall
hereafter secure the following, whether now
existing or hereafter incurred: (i)
all loans, compensation, fees, expenses and
other amounts owing by (a) Debtor to
Secured Party or its Affiliates under or
with respect to the Pawnee Notes, the
Consulting Contract, this Agreement, and
each dominion account agreement,
mortgage, or other document or instrument
in favor of Secured Party or its
Affiliates (as such term is defined in the
Consulting Contract) and related
thereto or hereto (collectively, the
"Transaction Documents"), and (b) the
Pawnee Nation and/or Pawnee TDC to Secured
Party or its Affiliates under or with
respect to the Tribal Agreement or any
other document or agreement executed in
favor of Secured Party or its Affiliates by
Pawnee Nation or Pawnee TDC in
connection with the Project, each of the
foregoing, whether now existing or
hereafter incurred or arising, (ii) any and
all sums advanced by Secured Party
in order to preserve the Collateral or
preserve Secured Party's security
interest in the Collateral (or the priority
thereof) and (iii) the expenses of
retaking, holding, preparing for sale or
lease, selling or otherwise disposing
of or realizing on the Collateral, of any
proceeding for the collection or
enforcement of any indebtedness,
obligations or liabilities of Debtor referred
to above, or of any exercise by Secured
Party of its rights hereunder, together
with reasonable attorneys' fees and
disbursements and court costs (collectively,
the "Secured Obligations"); PROVIDED
HOWEVER, Secured Party agrees to terminate
this Security Agreement upon request if
Debtor has satisfied the following
conditions: (a) all Secured Obligations
have been repaid in full to Secured
Party and Secured Party has no further
obligation, if any, to make advances
under the Consulting Contract with respect
thereto, and (b) the Consulting
Contract has been terminated in accordance
with its terms.
All payments and performance by Debtor with respect to any
Secured
Obligations shall be in accordance with the
terms under which said indebtedness,
obligations and liabilities were or are
hereafter incurred or created.
4. DEBTOR'S
REPRESENTATIONS AND WARRANTIES. The Debtor represents and
warrants that:
(a) the Debtor is (or, to the extent that the Collateral is
acquired
after the date hereof, will be) the sole
legal and beneficial owner of its
respective Collateral and has exclusive
possession and control thereof; there
are no security interests in, liens,
charges or encumbrances on, or adverse
claims of title to, or any other interest
whatsoever in, such Collateral or any
portion thereof except such liens permitted
by and subject to the terms of
Section 9.2 of the Consulting Contract and
that are created by this Security
Agreement ("Permitted Liens"); and that no
financing statement, notice of lien,
mortgage, deed of trust or instrument
similar in effect covering the Collateral
or any portion thereof or any proceeds
thereof ("Lien Notice") exists or is on
file in any public office, except as
relates to Permitted Liens and except as
may have been filed in favor of Secured
Party relating to this Security
Agreement or related agreements, or for
which duly executed termination
statements have been delivered to Secured
Party for filing;
(b) the Debtor has full right, power and authority to execute,
deliver
and perform this Security Agreement. This
Security Agreement constitutes a
legally valid and binding
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obligation of the Debtor, enforceable
against the Debtor in accordance with its
terms subject to any limitations set forth
in the Resolution of Limited Waiver
dated December 30, 2004 of the Debtor
related to and approving the Transaction
Documents (the "Resolution of Limited
Waiver"). Subject to the completion of the
items identified in Section 4(c) below, the
provisions of this Security
Agreement are effective to create in favor
of Secured Party a valid and
enforceable first, prior and perfected
security interest in the Collateral;
(c) except for the filing or recording of the financing statements
and
fixture filings that are to be filed in
connection with this Security Agreement,
no authorization, approval or other action
by, no notice to or registration or
filing with, any person or entity,
including without limitation, any stockholder
or creditor of Debtor or any governmental
authority or regulatory body is
required, except as may be agreed to by
Debtor and Secured Party: (i) for the
grant by the Debtor of the security
interest in the Collateral pursuant to this
Security Agreement or for the execution,
delivery or performance of this
Security Agreement by the Debtor, (ii) for
the perfection or maintenance of such
security interest created hereby, including
the first priority nature of such
security interest, or the exercise by
Secured Party of the rights and remedies
provided for in this Security Agreement
(other than any required governmental
consent or filing with respect to any
patents, trademarks, copyrights,
governmental claims, tax refunds, licenses
or permits and the exercise of
remedies requiring prior court approval),
or (iii) for the enforceability of
such security interest against third
parties, including, without limitation,
judgment lien creditors;
(d) Debtor does not do business, and for the previous five years
has
not done business, under any fictitious
business names or trade names;
(e) the Collateral has not been and will not be used or bought
by
Debtor for personal, family or household
purposes;
(f) the Debtor's chief executive office is located at the
address
referenced as the first page of this
Agreement, Debtor has no places of business
other than such address and the locations
described on Exhibit A attached hereto
and the Collateral is now and will at all
times hereafter be located at such
premises or as Debtor may otherwise notify
Secured Party in writing;
(g) Intentionally omitted;
(h) Debtor has not
purchased any Collateral, other than for cash,
within twenty-one (21) days prior to the
date hereof;
(i) all originals of all promissory notes, other instruments or
chattel paper which evidence Collateral
(other than checks received by Debtor in
the ordinary course of business) have been
delivered to Secured Party (with all
necessary or appropriate endorsements);
and
(j) none of the execution, delivery and performance of this
Security
Agreement by Debtor, the consummation of
the transactions herein contemplated,
the fulfillment of the terms hereof or the
exercise by Secured Party of any
rights or remedies hereunder will
constitute or result in a breach of any of the
terms or provisions of, or constitute a
default under, or constitute an event
which with notice or lapse of time or both
will result in a breach of or
constitute a default
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under, any agreement, indenture, mortgage,
deed of trust, equipment lease,
instrument or other document to which
Debtor is a party, conflict with or
require approval, authorization, notice or
consent under any law, order, rule,
regulation, license or permit applicable to
Debtor of any court or any federal
or state government, regulatory body or
administrative agency, or any other
governmental body having jurisdiction over
Debtor or its properties, or require
notice, consent, approval or authorization
by or registration or filing with any
person or entity (including, without
limitation, any stockholder or creditor of
Debtor) other than any notices to Debtor
from Secured Party required hereunder
except as may be agreed to by Debtor and
Secured Party. Except for the Permitted
Liens, none of the Collateral is subject to
any agreement, indenture, mortgage,
deed of trust, equipment lease, instrument
or other document to which Debtor is
a party that may restrict or inhibit
Secured Party's rights or ability to sell
or dispose of the Collateral or any part
thereof after the occurrence of an
Event of Default (as defined herein).
5. COVENANTS OF
DEBTOR. The Debtor covenants and agrees that:
(a) Debtor will not move or permit to be moved the Collateral or
any
portion thereof to any location other than
that set forth in Section 4(f) hereof
or locations established in compliance with
Section 5(b) hereof without the
prior written consent of the Secured Party
and the prior filing of a financing
statement with the proper office and in the
proper form to perfect or continue
the perfection (without loss of priority)
of the security interests created
herein, which filing shall be satisfactory
in form, substance and location to
Secured Party prior to such filing;
(b) Debtor will not voluntarily or involuntarily change its
name,
identity, corporate structure, or location
of its chief executive office or any
of its other places of business, unless in
any such case: (i) Debtor shall have
first received the prior written consent of
Secured Party, (ii) Debtor shall
have executed and caused to be filed
financing statements with the proper
offices and in the proper form to perfect
or continue the perfection (without
loss of priority) of the security interests
created herein, which filing shall
be satisfactory in form, substance and
location to Secured Party prior to such
filing, and (iii) Debtor shall have
delivered to Secured Party any other
documents required by Secured Party in a
form and substance satisfactory to
Secured Party;
(c) Intentionally Omitted;
(d) Debtor will promptly, and in no event later than 21 days after
a
request by Secured Party, procure or
execute and deliver all further instruments
and documents (including, without
limitation, notices, legal opinions, financing
statements, mortgagee waivers, landlord
disclaimers and subordination
agreements) necessary or appropriate to and
take any other actions which are
necessary or, in the judgment of Secured
Party, desirable or appropriate to
perfect or to continue the perfection,
priority and enforceability of Secured
Party's security interests in the
Collateral, to enable Secured Party to
exercise and enforce its rights and
remedies hereunder with respect to any
Collateral, to protect the Collateral
against the rights, claims or interests of
third persons, or to effect or to assure
further the purposes and provisions of
this Security Agreement, and will pay all
reasonable costs incurred in
connection therewith. Without limiting the
generality of the foregoing, Debtor
will: (i) mark conspicuously each item of
chattel paper and each other contract
included in the Collateral with a legend,
in form and substance satisfactory to
Secured Party, indicating that such chattel
paper and other contracts are
subject to the security interests
granted
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hereby; (ii) execute and file such
financing or continuation statements, or
amendments thereto, and such other
instruments or notices as may be necessary or
desirable, which Secured Party may
reasonably request in order to perfect and
preserve the perfection and priority of the
security interests granted or
purported to be granted hereby; (iii) if
any Collateral shall be evidenced by a
promissory note or other instrument or
chattel paper (other than checks received
by any Debtor in the ordinary course of
business), deliver and pledge to Secured
Party such note or instrument or chattel
paper duly endorsed and accompanied by
duly executed instruments of transfer or
assignment, all in form and substance
reasonably satisfactory to Secured Party;
(iv) if any Collateral is at any time
in the possession or control of any
warehouseman, bailee, consignee or any of
Debtor's agents or processors, Debtor shall
notify such warehouseman, bailee,
consignee, agent or processor of the
security interests created or purported to
be created hereby, shall cause such
warehouseman, bailee, consignee, agent or
processor to execute any financing
statements or other documents which Secured
Party may request, and, upon the request of
Secured Party after the occurrence
and during the continuation of an Event of
Default, shall instruct such person
to hold all such Collateral for Secured
Party's account subject to Secured
Party's instructions;
