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EXHIBIT 10.2
EXECUTION COPY
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PLEDGE AND SECURITY AGREEMENT
made by
AMERICAN CASINO & ENTERTAINMENT PROPERTIES LLC
AMERICAN CASINO & ENTERTAINMENT PROPERTIES FINANCE CORP.
STRATOSPHERE CORPORATION
STRATOSPHERE GAMING CORP.
STRATOSPHERE LAND CORPORATION
STRATOSPHERE LEASING, LLC
STRATOSPHERE DEVELOPMENT, LLC
STRATOSPHERE ADVERTISING AGENCY
ARIZONA CHARLIE'S, LLC
FRESCA, LLC
CHARLIE'S HOLDING LLC
and
THE OTHER GRANTORS FROM TIME TO TIME PARTY HERETO
in favor of
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EXECUTION COPY
BEAR STEARNS CORPORATE LENDING, INC.,
in its capacity as
Collateral Agent, for the benefit of the Secured Parties
Dated as of May 26, 2004
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TABLE OF CONTENTS
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SECTION 1. DEFINED
TERMS................................................................
3
1.1
Definitions.....................................................................
3
1.2 Terms Defined
Elsewhere.........................................................
12
1.3 Other Definitional
Provisions...................................................
13
SECTION 2. GRANT OF SECURITY
INTERESTS..................................................
13
2.1 Security Grant for
Bank Secured Parties.........................................
13
2.2 Security Grant for
Note Secured Parties.........................................
15
2.3 Grantor
Liability...............................................................
15
SECTION 3. REPRESENTATIONS AND
WARRANTIES...............................................
15
3.1 Organization; Good
Standing; Enforceability; Authority; No Conflict.............
15
3.2 Title; No Other
Liens...........................................................
16
3.3 Perfected
Liens.................................................................
16
3.4 Name; Jurisdiction of
Organization, Etc. .......................................
17
3.5 Inventory, Equipment
and Books and Records......................................
17
3.6 Farm
Products...................................................................
17
3.7 Investment
Property.............................................................
18
3.8
Receivables.....................................................................
19
3.9
Contracts.......................................................................
19
3.10 Intellectual
Property...........................................................
20
3.11
Vehicles........................................................................
22
3.12 Letter of Credit
Rights.........................................................
22
3.13 Commercial Tort
Claims..........................................................
22
SECTION 4.
COVENANTS....................................................................
22
4.1 Delivery and Control
of Instruments, Chattel Paper, Negotiable Documents,
Investment Property and Deposit
Accounts........................................ 22
4.2 Maintenance of
Insurance........................................................
24
4.3 Payment of
Obligations..........................................................
24
4.4 Maintenance of
Perfected Security Interests; Further Documentation..............
24
4.5 Changes in Locations,
Name, Jurisdiction of Organization, Etc. .................
25
4.6 Notices
........................................................................
25
4.7 Investment
Property.............................................................
26
4.8
Receivables.....................................................................
27
4.9
Contracts.......................................................................
28
4.10 Intellectual
Property...........................................................
28
4.11
Vehicles........................................................................
31
4.12 Non-Deliverable
Collateral......................................................
31
4.13 Disposal of
Collateral..........................................................
31
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SECTION 5. REMEDIAL
PROVISIONS..........................................................
31
5.1 Gaming Laws and
Intercreditor Agreement.........................................
31
5.2 Certain Matters
Relating to Receivables.........................................
31
5.3 Communications with
Obligors; Grantors Remain Liable............................
32
5.4 Pledged
Securities..............................................................
32
5.5 Proceeds to be Turned
Over To Collateral Agent..................................
33
5.6 Application of
Proceeds.........................................................
34
5.7 Code and Other
Remedies.........................................................
34
5.8 Sales of Pledged
Securities.....................................................
36
5.9 Waiver;
Deficiency..............................................................
36
SECTION 6. THE COLLATERAL
AGENT.........................................................
36
6.1 Collateral Agent's
Appointment as Attorney-in-Fact, Etc. .......................
36
6.2 Duty of Collateral
Agent........................................................
38
6.3 Filing of Financing
Statements..................................................
39
6.4 Authority of
Collateral Agent...................................................
39
6.5 Appointment of
Co-Collateral Agents.............................................
39
6.6 Replacement of
Collateral Agent.................................................
39
SECTION 7.
MISCELLANEOUS................................................................
39
7.1 Amendments in
Writing...........................................................
39
7.2 Notices
........................................................................
40
7.3 No Waiver by Course of
Conduct; Cumulative Remedies.............................
41
7.4 Enforcement Expenses;
Indemnification...........................................
41
7.5 Successors and
Assigns..........................................................
42
7.6
Set-Off.........................................................................
42
7.7
Counterparts....................................................................
42
7.8 Severability
...................................................................
42
7.9 Section Headings
...............................................................
42
7.10
Integration.....................................................................
42
7.11 Governing Law
..................................................................
43
7.12 Submission to Jurisdiction;
Waivers............................................. 43
7.13
Acknowledgments.................................................................
43
7.14 Additional
Grantors.............................................................
44
7.15
Releases........................................................................
44
7.16 Waiver Of Jury
Trial............................................................
45
7.17 Regulatory
Matters..............................................................
45
7.18 Responsibilities of
Collateral Agent............................................
46
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PLEDGE AND SECURITY AGREEMENT
This
PLEDGE AND SECURITY AGREEMENT, dated as of May 26, 2004 (as the
same
may be amended, supplemented or otherwise
modified from time to time, this
"Agreement"), is made by each of the
signatories hereto (together with any other
entity that may become a party hereto as
provided herein, the "Grantors"), in
favor of Bear Stearns Corporate Lending,
Inc., in its capacity as the collateral
agent under the Intercreditor Agreement (as
defined below) (in such capacity,
and together with its successors,
substitutes and assigns in such capacity, the
"Collateral Agent"), for the benefit of the
Secured Parties (as defined below).
RECITALS:
WHEREAS,
pursuant to that certain Indenture, dated as of January 15,
2004
(as the same may be amended, supplemented
or otherwise modified from time to
time, the "Indenture"), by and among
American Casino & Entertainment Properties
LLC, a Delaware limited liability company
("ACEP"), American Casino &
Entertainment Properties Finance Corp., a
Delaware corporation (together with
ACEP, the "Issuers"), the other Grantors
party thereto and Wilmington Trust
Company, a Delaware banking company, as
trustee (together with any substitutes,
successors, assignees or additional
trustees under the Indenture, the
"Trustee"), for the benefit of the
registered holders (the "Holders") of the
Notes (as defined below), the Issuers
issued $215,000,000 aggregate principal
amount of their 7.85% Senior Secured Notes
due 2012 (as they may be amended,
supplemented, replaced or exchanged from
time to time, and including any
Additional Notes (as defined in the
Indenture) issued from time to time under
the Indenture, the "Notes");
WHEREAS,
pursuant to the Indenture, the Grantors party thereto (other
than
the Issuers) have guaranteed all
obligations of the Issuers under the Indenture,
the Notes, the Note Collateral Documents
(as defined below) and each other
document related to any of the foregoing
(the "Note Guarantees");
WHEREAS,
the net proceeds of the Notes together with certain other funds
(and with any interest accrued thereon, the
"Net Proceeds") have been placed in
an escrow account (the "Note Proceeds
Account") pursuant to that certain Escrow
and Security Agreement, dated as of January
29, 2004 (the "Escrow and Security
Agreement"), by and among the Issuers,
American Real Estate Holdings Limited
Partnership, a Delaware limited
partnership, the Trustee, and Fleet National
Bank, a national banking association
organized under the laws of the United
States, as, among other capacities, escrow
agent;
WHEREAS,
pursuant to that certain Credit Agreement, dated as of January
29, 2004 (as amended, supplemented or
otherwise modified from time to time in
accordance with the Intercreditor Agreement
(as defined below), the "Credit
Agreement"), by and among the Issuers, as
borrowers, the other Grantors from
time to time a party thereto, as
guarantors, Bear, Stearns & Co. Inc., as sole
lead arranger and sole bookrunner (in such
capacities, the "Arranger"), the
several lenders from time to time party
thereto (the "Banks"), Bear Stearns
Corporate Lending, Inc., as administrative
agent (together with any substitutes,
successors or assignees in such
1
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capacity, the "Administrative Agent"), and
Bear Stearns Corporate Lending Inc.,
as syndication agent (together with any
substitutes, successors or assignees in
such capacity, the "Syndication Agent"),
the Banks have agreed to provide to
Issuers a secured revolving bank credit
facility of up to $20,000,000;
WHEREAS,
pursuant to the Credit Agreement, the Grantors from time to
time
a party thereto have guaranteed the
obligations of the Issuers under the Credit
Agreement, the Bank Collateral Documents
(as defined below), and each other
document related to any of the foregoing
(the "Credit Agreement Guarantees");
WHEREAS,
pursuant to the Credit Agreement and the Indenture, all
obligations of the Issuers under the Credit
Agreement, the Indenture, the Notes,
the Collateral Documents (as defined below)
and each other document related to
any of the foregoing are to be secured by
the Collateral (as defined below) of
each Issuer;
WHEREAS,
the Note Guarantees and the Credit Agreement Guarantees are to
be
secured by the Collateral of each Grantor
providing a Note Guarantee or a Credit
Agreement Guarantee;
WHEREAS,
the Administrative Agent, for the benefit of the Banks, the
Trustee, for the benefit of the Holders,
and the Collateral Agent have entered
into that certain Intercreditor Agreement,
dated as of January 29, 2004 (as
amended, supplemented or otherwise modified
from time to time, the
"Intercreditor Agreement"), pursuant to
which the Collateral Agent will, among
other things, hold the Collateral, for the
benefit of the Secured Parties, and
act as specified under the Intercreditor
Agreement, this Agreement and certain
of the other Collateral Documents;
WHEREAS,
it is a condition precedent to the release of the Net Proceeds
from the Note Proceeds Account under the
Escrow and Security Agreement and a
covenant under the Indenture that the
Grantors shall have executed and delivered
this Agreement to the Collateral Agent;
WHEREAS,
it is a condition precedent to the effectiveness of the Credit
Agreement and to the release of any funds
under the Credit Agreement and a
covenant under the Credit Agreement that
the Grantors shall have executed and
delivered this Agreement to the Collateral
Agent;
WHEREAS,
ACEP is the direct or indirect parent entity of each other
Grantor; and
WHEREAS,
the Issuers and the other Grantors are engaged in related
businesses, and each Grantor will derive
substantial direct and indirect benefit
from the release of the Net Proceeds from
the Note Proceeds Account, the
effectiveness of the Credit Agreement and
the release of funds under the Credit
Agreement.
NOW,
THEREFORE, in consideration of the premises, and for other good
and
valuable consideration, the receipt and
sufficiency of which are hereby
acknowledged, each Grantor hereby agrees
with the Collateral Agent, for the
benefit of the Secured Parties, as
follows:
2
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SECTION 1. DEFINED TERMS
1.1
Definitions.
(a) The
following terms that are defined in the Current New
York UCC are used herein as so defined:
Accounts, Account Debtor, Certificated
Security, Commodity Account, Commodity
Contract, Commodity Intermediary,
Documents, Electronic Chattel Paper,
Entitlement Order, Equipment, Farm
Products, Financial Asset, Goods,
Instruments, Inventory, Letters of Credit,
Letter of Credit Rights, Payment
Intangible, Securities Account, Securities
Intermediary, Security, Security
Entitlement, Supporting Obligation, Tangible
Chattel Paper, and Uncertificated
Security.
(b) The
following terms shall have the following meanings:
"ACEP" has the meaning given to it in the Recitals hereof.
"Administrative Agent" has the meaning given to it in the
Recitals hereof.
"Agreement" has the meaning given to it in the Preamble
hereof.
"Arranger" has the meaning given to it in the Recitals hereof.
"Bank Collateral Documents" means the "Collateral Documents"
as such term is defined in the Credit
Agreement.
"Bankruptcy Law" means Title 11 of the United States Code
entitled "Bankruptcy," as now and hereafter
in effect, or any successor statute
thereto or any similar federal or state law
for the relief of debtors.
"Bank Secured Parties" means the Collateral Agent, the Banks,
the Arranger, the Administrative Agent and
the Syndication Agent and the
Permitted Counterparties (as defined in the
Intercreditor Agreement).
"Banks" has the meaning given to it in the Recitals hereof.
"Collateral" has the meaning given to it in Section 2 hereof.
"Collateral Account" mean any collateral account established
by the Collateral Agent as provided in
Section 5.2 or 5.5.
"Collateral Agent" has the meaning given to it in the Preamble
hereof.
"Collateral Documents" means, collectively, (a) the Bank
Collateral Documents, and (b) the Note
Collateral Documents.
"Contracts" mean the contracts and agreements listed in
Schedule 7 as the same may be amended,
supplemented, replaced or otherwise
modified from time to time including,
without limitation, (i) all rights of any
Grantor to receive moneys due and to become
due to it thereunder or in
connection therewith, (ii) all rights of
any Grantor to receive proceeds
3
<PAGE>
of any insurance, indemnity, warranty or
guaranty with respect thereto, (iii)
all rights of any Grantor to damages
arising thereunder, (iv) all rights of any
Grantor to cancel, terminate, or suspend
such Contracts or the performance of
work thereunder and to perform and compel
performance of, such Contracts and to
exercise all remedies thereunder; and (v)
all rights of any Grantor to amend or
modify such Contracts and to consent to any
sale, assignment or disposition (by
operation of law or otherwise) by the
counterparty thereto of any part of such
counterparty's interest in any such
Contract.
"Copyright Licenses" means any written agreement naming any
Grantor as licensor or licensee (including,
without limitation, those listed in
Schedule 6), granting any right under any
Copyright, including, without
limitation, the grant of rights to
manufacture, distribute, exploit and sell
materials derived from any Copyright.
"Copyrights" means (i) all domestic and foreign copyrights,
whether or not the underlying works of
authorship have been published,
including, but not limited to, copyrights
in software and databases, all Mask
Works (as defined in 17 U.S.C. 901 of the
U.S. Copyright Act) and all works of
authorship and other intellectual property
rights therein, all copyrights of
works based on, incorporated in, derived
from or relating to works covered by
such copyrights, all right, title and
interest to make and exploit all
derivative works based on or adopted from
works covered by such copyrights, and
all copyright registrations and copyright
applications, and any renewals or
extensions thereof, including, without
limitation, each registration and
application identified in Schedule 6, (ii)
the rights to print, publish and
distribute any of the foregoing, (iii) the
right to sue or otherwise recover for
any and all past, present and future
infringements and misappropriations
thereof, (iv) all income, royalties,
damages and other payments now and
hereafter due and/or payable with respect
thereto (including, without
limitation, payments under all Copyright
Licenses entered into in connection
therewith, payments arising out of any
other sale, lease, license, or other
disposition thereof and damages and
payments for past, present or future
infringements thereof), and (v) all other
rights of any kind whatsoever accruing
thereunder or pertaining thereto.
"Credit Agreement" has the meaning given to it in the Recitals
hereof.
"Credit Agreement Guarantee" has the meaning given to it in
the Recitals hereof.
"Current New York UCC" means the Uniform Commercial Code as in
effect on the date hereof in the State of
New York.
"Default" means any event that is, or with the passage of time
or the giving of notice or both would be,
an Event of Default.
"Deposit Account" means all "deposit accounts" as defined in
Article 9 of the Uniform Commercial Code of
any applicable jurisdiction and, in
any event, including without limitation (i)
all other accounts maintained with
any financial institution (other than
Securities Accounts or Commodity Accounts)
and (ii) all of the accounts listed on
Schedule 2 hereto under the heading
"Deposit Accounts" (as such schedule may be
amended from time to
4
<PAGE>
time) together, in each case, with all
funds held therein and all certificates
or instruments representing any of the
foregoing.
"Escrow and Security Agreement" has the meaning given to it in
the Recitals hereof.
"Event of Default" means any of the following: (i) the
occurrence of one or more "Events of
Default" as such term is defined in the
Indenture and (ii) the occurrence of one or
more "Events of Default" as such
term is defined in the Credit
Agreement.
"Excluded Assets" means (i) the Note Proceeds Account (it
being understood that the Note Proceeds
Account has been pledged to the Trustee
pursuant to the Escrow and Security
Agreement), (ii) any tangible property or
tangible assets (but in no event including
Cash or Cash Equivalents) acquired by
the Grantors in the future that are neither
(a) located on the Properties (as
defined in the Indenture) nor (b) necessary
for the operation of the Properties
in the ordinary course of business, (iii)
any assets the acquisition of which
was financed by Indebtedness permitted by
Section 4.09 of the Indenture and
Section 7.2 of the Credit Agreement to the
extent that the terms of such
Indebtedness prohibit additional Liens on
such assets (but only to the extent
and only so long as so prohibited, provided
that Excluded Assets shall not
include (and accordingly Collateral shall
include) any and all proceeds of any
such assets), (iv) any assets held by an
Unrestricted Subsidiary or an Excluded
Foreign Subsidiary (provided that the Lien
of the Collateral Agent (on behalf of
the Trustee and the Administrative Agent)
is not required to attach or is
required to be released in accordance with
the terms of the Indenture and the
Credit Agreement), (v) any Excluded Foreign
Subsidiary Voting Stock; provided
that the applicable Grantor is not required
to pledge such Excluded Foreign
Subsidiary Voting Stock to the Collateral
Agent (on behalf of the Trustee and
the Administrative Agent) in accordance
with the terms of the Indenture and the
Credit Agreement; (vi) Gaming Reserves and
(vii) any Contract or Permit, solely
in the event and to the extent that a grant
of a Lien on such Contract or Permit
is prohibited by law (including any Gaming
Law), results in a breach or
termination of the terms of, constitutes a
default under, or termination of any
such Contract or Permit, or requires a
consent (or in the case of a Permit, that
would require a finding of suitability or
other similar approval or procedure by
any of the Gaming Authorities or any other
Governmental Authority, to the extent
such finding or approval has not been
obtained) to such Lien (other than to the
extent that any such prohibition or consent
requirement would be rendered
ineffective pursuant to Section 9-406,
9-407, or 9-408 or 9-409 of the Uniform
Commercial Code (or any successor provision
or provisions) of any relevant
jurisdiction) and, in any event,
immediately upon the ineffectiveness, lapse or
termination of any such terms or default
under such Contract or Permit, the
Excluded Assets shall not include, and the
applicable Grantor shall be deemed to
have granted security interests in, each
such Contract or Permit as if such
terms or provisions had never been in
effect; provided, however, that Excluded
Assets shall not include (and, accordingly,
Collateral shall include) any and
all property or assets acquired with the
proceeds of any disposition of any
property or assets constituting Collateral;
and provided, further, that, any
Contract or Permit qualifying as an
Excluded Asset under this clause no longer
shall constitute an Excluded Asset (and
instead shall constitute Collateral)
from and after such time as the lessor,
licensor, applicable Governmental
Authority or other Person consents to or
approves the grant of a Lien in favor
of Collateral Agent
5
<PAGE>
in such Contract or Permit or the
prohibition against granting a Lien therein in
favor of Collateral Agent shall cease to be
effective.
"Excluded Foreign Subsidiary" means any Subsidiary organized
under the laws of any jurisdiction outside
the United States of America.
"Excluded Foreign Subsidiary Voting Stock" means the voting
Capital Stock of any Excluded Foreign
Subsidiary.
"Gaming Laws" means the gaming laws, rules, regulations or
ordinances, and the laws, regulations and
ordinances governing the sale and
distribution of alcoholic beverages, of any
jurisdiction or jurisdictions to
which any Grantor is, or may be at any time
after the date of the Indenture,
subject, including, without limitation, the
Nevada Gaming Control Act, codified
as Chapter 463 of the Nevada Revised
Statutes and the regulations of the Nevada
Gaming Commission promulgated
thereunder.
"Gaming Reserves" means any mandatory gaming security reserves
or other reserves required under applicable
Gaming Laws or by directive of the
Chairman of the Nevada State Gaming Control
Board.
"General Intangibles" means all "general intangibles" as such
term is defined in Section 9-102(a)(42) of
the Current New York UCC and, in any
event, including, without limitation, with
respect to any Grantor, all rights
and interests in, to and under contracts,
agreements, instruments and
indentures, including, without limitation,
the Contracts, and all Permits in any
form, and portions thereof, to which such
Grantor is a party or under which such
Grantor has any right, title or interest or
to which such Grantor or any
property of such Grantor is subject, as the
same may be amended, supplemented,
or otherwise modified from time to time,
including, without limitation, (i) all
rights of such Grantor to receive moneys
due and to become due to it thereunder
or in connection therewith, (ii) all rights
of such Grantor to receive proceeds
of any insurance, indemnity, warranty or
guaranty with respect thereto, (iii)
all rights of such Grantor to damages
arising thereunder, (iv) all rights of
such Grantor to receive any tax refunds,
and (v) all rights of such Grantor to
terminate and to perform, compel
performance and to exercise all remedies
thereunder.
"Governmental Authority" means any national, state or local
government (whether domestic or foreign),
any political subdivision thereof or
any other governmental, quasi-governmental,
judicial, public or statutory
instrumentality, authority, body, agency,
bureau or entity, (including the
Gaming Authorities, any zoning authority,
the FDIC, the Comptroller of the
Currency or the Federal Reserve Board, any
central bank or any comparable
authority), any entity exercising
executive, legislative, judicial, regulatory
or administrative functions of or
pertaining to government or any arbitrator
with authority to bind a party at law.
"Grantors" has the meaning given to it in the Preamble hereof.
"Guarantor Obligations" means, with respect to any Guarantor,
all obligations and liabilities of such
Guarantor that may arise under or in
connection with (i) this Agreement, (ii)
any other Collateral Document to which
such Guarantor is a party or by which
it
6
<PAGE>
is bound, (iii) the Indenture or any other
agreement associated with the
Indenture to which such Guarantor is a
party or by which it is bound (including,
without limitation, all indemnity
agreements), (iv) the Credit Agreement,
including, without limitation the
Obligations (as defined in the Credit
Agreement) of such Guarantor, or any other
agreement associated with the Credit
Agreement to which such Guarantor is a
party or by which it is bound (including,
without limitation, all indemnity
agreements and guaranty agreements), in each
case whether on account of guarantee
obligations, reimbursement obligations,
fees, indemnities, costs, expenses or
otherwise (including, without limitation,
all fees and disbursements of counsel of
the Collateral Agent or the Secured
Parties that are required to be paid by
such Guarantor pursuant to the terms of
the Indenture, the Credit Agreement, this
Agreement or any other Collateral
Document or any agreement associated with
any of the foregoing).
"Guarantors" means the collective reference to each Grantor
other than the ACEP.
"Holders" has the meaning given to it in the Recitals hereof.
"Indenture" has the meaning given to it in the Recitals
hereof.
"Insurance" means (i) all insurance policies covering any or
all of the Collateral (regardless of
whether the Collateral Agent is the loss
payee thereof) and (ii) any key man life
insurance policies.
"Intellectual Property" means the collective reference to all
rights, priorities and privileges relating
to intellectual property, whether
arising under United States, multinational
or foreign laws or otherwise,
including, without limitation, the
Copyrights, the Copyright Licenses, the
Patents, the Patent Licenses, the
Trademarks, the Trademark Licenses, the Trade
Secrets and the Trade Secret Licenses, and
all rights to sue at law or in equity
for any infringement or other impairment
thereof, including the right to receive
all Proceeds and damages therefrom.
"Intercompany Note" means any promissory note evidencing loans
made by any Grantor to the Issuers or any
of the other Grantors.
"Intercreditor Agreement" has the meaning given to it in the
Recitals hereof.
"Investment Property" means the collective reference to (i)
all "investment property" as such term is
defined in Section 9-102(a)(49) of the
Current New York UCC in effect including,
without limitation, all Certificated
Securities and Uncertificated Securities,
all Security Entitlements, all
Securities Accounts, all Commodity
Contracts and all Commodity Accounts, (other
than any Excluded Foreign Subsidiary Voting
Stock excluded from the definition
of "Pledged Equity Interests"), (ii)
security entitlements, in the case of any
United States Treasury book-entry
securities, as defined in 31 C.F.R. section
357.2, or, in the case of any United States
federal agency book-entry
securities, as defined in the corresponding
United States federal regulations
governing such book-entry securities, and
(iii) whether or not constituting
"investment property" as defined in the
Current New York UCC, all Pledged Notes,
7
<PAGE>
all Pledged Equity Interests, all Pledged
Security Entitlements, all Pledged
Debt Securities and all Pledged Commodity
Contracts.
"Issuers" has the meaning given to it in the Recitals hereof.
"Issuers Obligations" means the collective reference to the
payment and performance by the Issuers of
each covenant, agreement, obligation
and liability of the Issuers contained in
(i) the Indenture and the Notes
including, without limitation, the due and
punctual payment of the principal of
and interest and Liquidated Damages (as
defined in the Indenture), if any, on
the Notes when and as the same shall be due
and payable, whether on an interest
payment date, at maturity, by acceleration,
repurchase, redemption or otherwise,
and interest on the overdue principal of
and interest and Liquidated Damages (to
the extent permitted by law), if any, on
the Notes and performance of all other
obligations of the Company under the
Indenture and the Notes according to the
terms thereunder, (ii) the Credit
Agreement, including, without limitation, the
Borrower Obligations (as defined in the
Credit Agreement) (iii) each Collateral
Document to which either of the Issuers is
a party or by which it is bound and
(iv) each other document related to any of
the foregoing to which either of the
Issuers is a party or by which it is
bound.
"Material Adverse Effect" means a material adverse condition
or material adverse change in or affecting
(i) the business, assets,
liabilities, property, condition (financial
or otherwise), results of
operations, or prospects of the Issuers and
the other Grantors taken as a whole,
(ii) the validity or enforceability of this
Agreement, the Indenture, the Credit
Agreement, or any of the Collateral
Documents, (iii) the validity,
enforceability or priority of the Liens
purported to be created by the
Collateral Documents, or (iv) the rights or
remedies of the Collateral Agent and
the Secured Parties under the Indenture,
the Credit Agreement, this Agreement or
any of the other Collateral Documents.
"Net Proceeds" has the meaning given to it in the Recitals
hereof.
"New York UCC" means the Uniform Commercial Code as from time
to time in effect in the State of New
York.
"Non-Deliverable Collateral" has the meaning given to it in
Section 3.8 hereof.
"Note Collateral Documents" means "Collateral Documents" as
such term is defined in the Indenture.
"Note Guarantees" has the meaning given to it in the Recitals
hereof.
"Note Proceeds Account" has the meaning given to it in the
Recitals hereof.
"Notes" has the meaning given to it in the Recitals hereof.
"Note Secured Parties" means, collectively, the Collateral
Agent, the Trustee and the Holders.
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"Obligations" means (i) in the case of the Issuers, the
Issuers Obligations, and (ii) in the case
of each Guarantor, its Guarantor
Obligations.
"Patent License" means all agreements, whether written or
oral, providing for the grant by or to any
Grantor of any right to manufacture,
use or sell any invention covered in whole
or in part by a Patent, including,
without limitation, any of the foregoing
referred to in Schedule 6.
"Patents" means (i) all patents, patent applications and
patentable inventions, including, without
limitation, each issued patent and
patent application identified in Schedule
6, all certificates of invention or
similar intellectual property rights, (ii)
all inventions and improvements
described and claimed therein, (iii) the
right to sue or otherwise recover for
any and all past, present and future
infringements and misappropriations
thereof, (iv) all income, royalties,
damages and other payments now and
hereafter due and/or payable with respect
thereto (including, without
limitation, payments under all Patent
Licenses entered into in connection
therewith, payments arising out of any
other sale, lease, license or other
disposition thereof and damages and
payments for past, present or future
infringement thereof), and (v) all
reissues, divisions, continuations,
continuations-in-part, substitutes,
renewals, and extensions thereof, all
improvements thereon and all other rights
of any kind whatsoever accruing
thereunder or pertaining thereto.
"Permits" mean all licenses, permits, approvals, franchises,
concessions, entitlements, registrations,
findings or suitability and other
authorizations issued by any Governmental
Authority.
"Permitted Lien" means any Lien permitted to be incurred under
both the Indenture and the Credit Agreement
(to the extent such documents are in
effect).
"Person" means any individual, corporation, partnership,
limited liability company or partnership,
joint venture, association,
joint-stock company, trust, unincorporated
organization, government, or any
agency or political subdivision thereof or
any other entity.
"Pledged Alternative Equity Interests" means all interests of
any Grantor in participation or other
interests in any equity or profits of any
business entity and the certificates, if
any, representing such interests and
all dividends, distributions, cash,
warrants, rights, options, instruments,
securities and other property or proceeds
from time to time received, receivable
or otherwise distributed in respect of or
in exchange for any or all of such
interests and any other warrant, right or
option to acquire any of the
foregoing; provided, however, that Pledged
Alternative Equity Interests shall
not include any Pledged Stock, Pledged
Partnership Interests, Pledged LLC
Interests and Pledged Trust Interests.
"Pledged Commodity Contracts" means all commodity contracts
listed on Schedule 2 (as such Schedule may
be amended from time to time) and all
other commodity contracts to which any
Grantor is party from time to time.
"Pledged Debt Securities" means all debt securities now owned
or hereafter acquired by any Grantor,
including, without limitation, the debt
securities listed on Schedule 2 (as such
Schedule may be amended from time to
time) together with any other
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certificates, options, rights or Security
Entitlements of any nature whatsoever
in respect of the debt securities of any
Person that may be issued or granted
to, or held by, any Grantor while this
Agreement is in effect; provided,
however, that Pledged Debt Securities shall
not include Pledged Notes.
"Pledged Equity Interests" means all Pledged Stock, Pledged
LLC Interests, Pledged Partnership
Interests, Pledged Trust Interests and
Pledged Alternative Equity Interests.
"Pledged Gaming Equity Interests" has the meaning given to it
in Section 7.17 hereof.
"Pledged LLC Interests" means all interests of any Grantor now
owned or hereafter acquired in any limited
liability company including, without
imitation, all limited liability company
interests listed on Schedule 2 hereto
under the heading "Pledged LLC Interests"
(as such Schedule may be amended from
time to time) and the certificates, if any,
representing such limited liability
company interests and any interest of such
Grantor on the books and records of
such limited liability company and all
dividends, distributions, cash, warrants,
rights, options, instruments, securities
and other property or proceeds from
time to time received, receivable or
otherwise distributed in respect of or in
exchange for any or all of such limited
liability company interests and any
other warrant, right or option to acquire
any of the foregoing.
"Pledged Notes" means all promissory notes now owned or
hereafter acquired by any Grantor
including, without limitation, those listed on
Schedule 2 (as such Schedule may be amended
from time to time), all Intercompany
Notes at any time issued to any Grantor and
all other promissory notes issued to
or held by any Grantor.
"Pledged Partnership Interests" means all interests of any
Grantor now owned or hereafter acquired in
any general partnership, limited
partnership, limited liability partnership
or other partnership including,
without limitation, all partnership
interests listed on Schedule 2 hereto under
the heading "Pledged Partnership Interests"
(as such Schedule may be amended
from time to time) and the certificates, if
any, representing such partnership
interests and any interest of such Grantor
on the books and records of such
partnership and all dividends,
distributions, cash, warrants, rights, options,
instruments, securities and other property
or proceeds from time to time
received, receivable or otherwise
distributed in respect of or in exchange for
any or all of such partnership interests
and any other warrant, right or option
to acquire any of the foregoing.
"Pledged Securities" means the collective reference to the
Pledged Debt Securities, the Pledged Notes
and the Pledged Equity Interests.
"Pledged Security Entitlements" means all Security
Entitlements with respect to the financial
assets listed on Schedule 2 (as such
Schedule may be amended from time to time)
and all other security entitlements
of any Grantor.
"Pledged Security Issuers" means the collective reference to
each issuer of a Pledged Security.
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"Pledged Stock" means all shares of corporate stock now owned
or hereafter acquired by any Grantor,
including, without limitation, all shares
of corporate stock described on Schedule 2
hereto under the heading "Pledged
Stock" (as such Schedule may be amended
from time to time), and the
certificates, if any, representing such
shares and any interest of such Grantor
in the entries on the books of the issuer
of such shares and all dividends,
distributions, cash, warrants, rights,
options, instruments, securities and
other property or proceeds from time to
time received, receivable or otherwise
distributed in respect of or in exchange
for any or all of such shares and any
other warrant, right or option to acquire
any of the foregoing; provided,
however, that in no event shall more than
65% of the total outstanding Excluded
Foreign Subsidiary Voting Stock be required
to be pledged hereunder.
"Pledged Trust Interests" means all interests of any Grantor
now owned or hereafter acquired in a
Delaware business trust or other trust
including, without limitation, all trust
interests listed on Schedule 2 hereto
under the heading "Pledged Trust Interests"
(as such Schedule may be amended
from time to time) and the certificates, if
any, representing such trust
interests and any interest of such Grantor
on the books and records of such
trust or on the books and records of any
securities intermediary pertaining to
such interest and all dividends,
distributions, cash, warrants, rights, options,
instruments, securities and other property
or proceeds from time to time
received, receivable or otherwise
distributed in respect of or in exchange for
any or all of such trust interests and any
other warrant, right or option to
acquire any of the foregoing.
"Proceeds" means all "proceeds" as such term is defined in
Section 9-102(a)(64) of the Current New
York UCC and, in any event, shall
include, without limitation, all dividends
or other income from the Pledged
Securities, collections thereon or
distributions or payments with respect
thereto.
"Receivable" means any right to payment for goods or other
property sold, leased, licensed or
otherwise disposed of or for services
rendered, whether or not such right is
evidenced by an Instrument, Tangible
Chattel Paper or Intangible Chattel Paper
and whether or not it has been earned
by performance (including, without
limitation, any Account or Payment
Intangible). References herein to a
Receivable shall include any Supporting
Obligation or collateral securing such
Receivable.
"Requirement of Law" means, as to any Person, the governing
documents or other constituent documents of
such Person, and any law, treaty,
order, rule or regulation or determination
of an arbitrator or a court or other
Governmental Authority, in each case
applicable to or binding upon such Person
or any of its property or to which such
Person or any of its property is
subject.
"Secured Parties" means, collectively, and without
duplication, the Bank Secured Parties and
the Note Secured Parties.
"Securities Act" means the Securities Act of 1933, as amended.
"Syndication Agent" has the meaning set forth in the Recitals
hereof.
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"Trademark License" means any agreement, whether written or
oral, providing for the grant by or to any
Grantor of any right to use any
Trademark, including, without limitation,
any of the foregoing referred to in
Schedule 6.
"Trademarks" means (i) all domestic and foreign trademarks,
service marks, trade names, corporate
names, company names, business names,
trade dress, trade styles, logos, or other
indicia of origin or source
identification, internet domain names,
trademark and service mark registrations,
and applications for trademark or service
mark registrations and any renewals
thereof, including, without limitation,
each registration and application
identified in Schedule 6, (ii) the right to
sue or otherwise recover for any and
all past, present and future infringements
and misappropriations thereof, (iii)
all income, royalties, damages and other
payments now and hereafter due and/or
payable with respect thereto (including,
without limitation, payments under all
Trademark Licenses entered into in
connection therewith, and damages and
payments for past, present or future
infringements thereof), and (iv) all other
rights of any kind whatsoever accruing
thereunder or pertaining thereto,
together in each case with the goodwill of
the business connected with the use
of, and symbolized by, each of the
above.
"Trade Secret License" means any agreement, whether written or
oral, providing for the grant by or to any
Grantor of any right to use any Trade
Secret, including, without limitation, any
of the foregoing referred to in
Schedule 6.
"Trade Secrets" means (i) all trade secrets and all
confidential and proprietary information,
including know-how, manufacturing and
production processes and techniques,
inventions, research and development
information, technical data, financial,
marketing and business data, pricing and
cost information, business and marketing
plans, and customer and supplier lists
and information, including, without
limitation, any of the foregoing referred to
in Schedule 6, (ii) the right to sue or
otherwise recover for any and all past,
present and future infringements and
misappropriations thereof, (iii) all
income, royalties, damages and other
payments now and hereafter due and/or
payable with respect thereto (including,
without limitation, payments arising
out of the sale, lease, license, assignment
or other disposition thereof, and
damages and payments for past, present or
future infringements thereof), and
(iv) all other rights of any kind
whatsoever of any Grantor accruing thereunder
or pertaining thereto.
"Trustee" has the meaning given to it in the Recitals hereof.
"UETA" has the meaning given to it in the Section 3.3(a)
hereof.
"Vehicles" means all cars, trucks, trailers, construction and
earth moving equipment and other vehicles
covered by a certificate of title law
of any jurisdiction and, in any event
including, without limitation, the
vehicles listed on Schedule 8 and all tires
and other appurtenances to any of
the foregoing.
1.2
Terms Defined
Elsewhere. The following terms shall have the
meaning given to them in the Credit
Agreement (or, in the event the Credit
Agreement is terminated, the meanings given
to such item in the Credit Agreement
immediately prior to such termination):
Business Day
Capital Stock
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Cash Equivalents
Gaming Authority
Lien
Subsidiary
Termination Date
Unrestricted Subsidiary
1.3 Other
Definitional Provisions.
(a) The words
"hereof", "herein", "hereto" and "hereunder"
and words of similar import when used in
this Agreement shall refer to this
Agreement as a whole and not to any
particular provision of this Agreement, and
Section and Schedule references are to this
Agreement unless otherwise
specified.
(b) The meanings
given to terms defined herein shall be
equally applicable to both the singular and
plural forms of such terms.
(c) Where the
context requires, terms relating to the
Collateral or any part thereof, when used
in relation to a Grantor, shall refer
to such Grantor's Collateral or the
relevant part thereof.
(d) The expressions "payment in
full," "paid in full" and
any other similar terms or phrases when
used herein with respect to the Issuers
Obligations or the Guarantor Obligations
shall mean the unconditional, final and
irrevocable payment in full, in immediately
available funds, of all of the
Issuers Obligations or the Guarantor
Obligations, as the case may be.
SECTION 2. GRANT OF SECURITY INTERESTS
2.1 Security
Grant for Bank Secured Parties. Each Grantor, subject
to Section 7.17 and except with respect to
Excluded Assets, hereby assigns and
transfers to the Collateral Agent, for the
benefit of the Bank Secured Parties,
and hereby grants to the Collateral Agent,
for the benefit of the Bank Secured
Parties, a security interest on a first
priority basis in all of the personal
property of such Grantor, including,
without limitation, the following property,
in each case, wherever located and now
owned or at any time hereafter acquired
by such Grantor or in which such Grantor
now has or at any time in the future
may acquire any right, title or interest
(collectively, the "Collateral"), as
collateral security for the prompt and
complete payment and performance when due
(whether at the stated maturity, by
acceleration or otherwise) of such Grantor's
Obligations to the Bank Secured
Parties:
(a) all
Accounts;
(b) all Chattel
Paper;
(c) all
Contracts;
(d) all Deposit
Accounts;
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(e) all
Documents;
(f) all
Equipment;
(g) all General
Intangibles (including, without limitation,
Payment Intangibles);
(h) all
Instruments;
(i) all
Intellectual Property;
(j) all
Inventory;
(k) all
Investment Property;
(l) all Letters
of Credit and Letter of Credit Rights;
(m) all
money;
(n) all
Vehicles;
(o) all Goods
and other property not otherwise described above;
(p) all bank
accounts, all funds held therein and all certificates
and instruments, if any, from time to time representing or
evidencing such bank accounts;
(q) all books,
records, ledger cards, files, correspondence,
customer lists, blueprints, technical specifications, manuals,
computer software, computer printouts, tapes, disks and other
electronic storage media and related data processing software
and similar items that at any time evidence or contain
information relating to any of the Collateral or are otherwise
necessary or helpful in the collection thereof or realization
thereupon;
(r) all
Permits;
(s) all
Insurance and all loss proceeds and other amounts payable
thereunder and all eminent domain proceeds; and
(t)
to the extent
not otherwise included, all other personal
property of the Grantor and Proceeds, accessions and products
of any kind and all of the foregoing and all collateral
security and guarantees given by any Person with respect to
any of the foregoing (including, without limitation,
Supporting Obligations).
Notwithstanding anything to the contrary in this Agreement, the
term
"Collateral" shall not include any of the
Excluded Assets.
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2.2 Security
Grant for Note Secured Parties. Each Grantor, subject
to Section 7.17 and except with respect to
Excluded Assets, hereby assigns and
transfers to the Collateral Agent, for the
benefit of the Note Secured Parties,
and hereby grants to the Collateral Agent,
for the benefit of the Note Secured
Parties, a security interest on a second
priority basis in the Collateral, as
collateral security for the prompt and
complete payment and performance when due
(whether at the stated maturity, by
acceleration or otherwise) of such Grantor's
Obligations to the Note Secured
Parties.
2.3 Grantor
Liability. Notwithstanding anything herein to the
contrary, (a) each Grantor shall remain
liable for all obligations under the
Collateral and nothing contained herein is
intended or shall be a delegation of
duties to the Collateral Agent or any
Secured Party, (b) each Grantor shall
remain liable under and each of the
agreements included in the Collateral,
including, without limitation, any
Receivables, any Contracts and any agreements
relating to Pledged Partnership Interests
or Pledged LLC Interests, to perform
all of the obligations undertaken by it
thereunder all in accordance with and
pursuant to the terms and provisions
thereof and neither the Collateral Agent
nor any Secured Party shall have any
obligation or liability under any of such
agreements by reason of or arising out of
this Agreement or any other document
related thereto nor shall the Collateral
Agent nor any Secured Party have any
obligation to make any inquiry as to the
nature or sufficiency of any payment
received by it or have any obligation to
take any action to collect or enforce
any rights under any agreement included in
the Collateral, including, without
limitation, any agreements relating to any
Receivables, any Contracts, Pledged
Partnership Interests or Pledged LLC
Interests, and (c) the exercise by the
Collateral Agent or any Secured Party of
any of its rights hereunder shall not
release any Grantor from any of its duties
or obligations under the contracts
and agreements included in the
Collateral.
SECTION 3. REPRESENTATIONS AND WARRANTIES
Each
Grantor hereby represents and warrants to the Collateral Agent,
for
the benefit of the Secured Parties,
that:
3.1
Organization; Good Standing; Enforceability; Authority; No
Conflict.
(a) Such Grantor
(i) is duly formed or organized, validly
existing and in good standing under the
laws of the jurisdiction of its
formation or organization, (ii) has the
organizational power and authority, and
the legal right, to own and operate its
property, to lease the property it
operates as lessee and to conduct the
business in which it is currently engaged,
(iii) is duly qualified as a foreign
organization and in good standing under the
laws of each jurisdiction where its
ownership, lease or operation of property or
the conduct of its business requires such
qualification, except to the extent
that the failure to do so does not and
could not, in the aggregate, have a
Material Adverse Effect and (iv) is in
compliance with all Requirements of Law
except to the extent that the failure to
comply therewith does not and could
not, in the aggregate, have a Material
Adverse Effect.
(b) Such Grantor
has the organizational power and authority,
and the legal right, to make, deliver and
perform this Agreement and every
Collateral Document to which it is a party
and has taken all necessary action to
authorize the execution, delivery and
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performance of this Agreement and every
Collateral Document to which it is a
party. No consent or authorization of,
filing with, notice to or other act by or
in respect of, any Governmental Authority
or any other Person is required in
connection with the execution, delivery,
performance, validity or enforceability
of this Agreement or any Collateral
Document to which such Grantor is a party.
This Agreement and each other Collateral
Document to which it is a party has
been duly executed and delivered on behalf
of such Grantor. This Agreement and
each Collateral Document to which it is a
party constitute, legal, valid and
binding obligations of such Grantor
enforceable against such Grantor in
accordance with their terms, subject to the
effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization,
moratorium and other similar laws
relating to or affecting creditors' rights
generally and general equitable
principles (whether considered in a
proceeding in equity or at law).
(c) The
execution, delivery and performance of this
Agreement and each Collateral Document to
which such Grantor is a party will not
violate any Requirement of Law or any
obligation under any Contract of such
Grantor and will not result in, or require,
the creation or imposition of any
Lien on any of its or their respective
properties or revenues pursuant to any
such Requirement of Law or obligation
(other than pursuant to this Agreement).
(d) No
litigation, investigation or proceeding of or before
any arbitrator or Governmental Authority is
pending or, to the knowledge of such
Grantor, threatened by or against such
Grantor or against any of its properties
or revenues (i) with respect to this
Agreement or any Collateral Document or any
of the transactions contemplated hereby or
thereby, or (ii) that has had or
could reasonably be expected to have a
Material Adverse Effect.
3.2 Title; No
Other Liens. Such Grantor owns each item of the
Collateral free and clear of any and all
Liens or claims, including, without
limitation, Liens arising as a result of
such Grantor becoming bound (as a
result of merger or otherwise) as Grantor
under a security agreement entered
into by another Person, except for
Permitted Liens. No effective financing
statement, mortgage or other instrument
similar in effect with respect to all or
any part of the Collateral is on file or of
record in any public office, except
such as have been filed in favor of the
Collateral Agent pursuant to this
Agreement or as are otherwise permitted by,
the Indenture and the Credit
Agreement.
3.3 Perfected
Liens.
(a)
The security
interests granted pursuant to this
Agreement (i) constitute valid and, subject
only to the filing of the financing
statements and the taking of the other
actions listed on Schedule 3 hereto,
fully perfected first priority security
interest in all of the Collateral in
favor of the Collateral Agent, for the
benefit of the Bank Secured Parties, and
fully perfected second priority interest in
all of the Collateral in favor of
the Collateral Agent, for the benefit of
the Note Secured Parties, as collateral
security for such Grantor's Obligations,
enforceable in accordance with the
terms hereof against all creditors of such
Grantor and (ii) are subject to no
other Liens on the Collateral except for
Permitted Liens. Without limiting the
foregoing, each Grantor has taken all
actions necessary or desirable, including,
without limitation, those specified in
Section 4.4 to: (i) establish the
Collateral Agent's "control" (within the
meanings of Sections 8-106 and 9-106 of
the New York UCC) over any portion of the
Investment Property constituting
Certificated Securities, Uncertificated
Securities, Securities
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Accounts, Securities Entitlements or
Commodity Accounts (each as defined in the
New York UCC), (ii) establish the
Collateral Agent's "control" (within the
meaning of Section 9-104 of the New York
UCC) over all Deposit Accounts, (iii)
establish the Collateral Agent's "control"
(within the meaning of Section 9-107
of the New York UCC) over all Letter of
Credit Rights, (iv) establish the
Collateral Agent's control (within the
meaning of Section 9-105 of the New York
UCC) over all Electronic Chattel Paper and
(v) establish the Collateral Agent's
"control" (within the meaning of Section 16
of the Uniform Electronic
Transaction Act as in effect in the
applicable jurisdiction "UETA") over all
"transferable records" (as defined in
UETA).
(b) No
authorization, approval or other action by, and no
notice to or filing with, any Governmental
Authority or regulatory body (except
those that have been made or obtained) is
required for either (i) the pledge or
grant by any Grantor of the security
interests purported to be created in favor
of the Collateral Agent hereunder or (ii)
the exercise by the Collateral Agent
of any rights or remedies in respect of any
Collateral (whether specifically
granted or created hereunder or created or
provided for by applicable law),
except (A) for filings and actions
specified on Schedule 3 and (B) as may be
required, in connection with the
disposition of any Investment Property, by laws
generally affecting the offering and sale
of securities.
3.4 Name;
Jurisdiction of Organization, Etc. On the date hereof,
such Grantor's exact legal name (as
indicated on the public record of such
Grantor's jurisdiction of formation or
organization), jurisdiction of
organization, organizational i.d. number,
if any, and the location of such
Grantor's chief executive office or sole
place of business are specified on
Schedule 4. Each Grantor is organized
solely under the law of the jurisdiction
so specified and has not filed any
certificates of domestication, transfer or
continuance in any other jurisdiction.
Except as otherwise indicated on Schedule
4, the jurisdiction of each such Grantor's
organization of formation is required
to maintain a public record showing the
Grantor to have been organized or
formed. Except as specified on Schedule 4,
such Grantor has not changed its
name, jurisdiction of organization, chief
executive office or sole place of
business or its corporate structure in any
way (e.g., by merger, consolidation,
change in corporate form or otherwise)
within the previous five-year period and
has not within such period become bound
(whether as a result of merger or
otherwise) as grantor under a security
agreement entered into by another Person,
which has not heretofore been
terminated.
3.5 Inventory,
Equipment and Books and Records. On the date
hereof, the Inventory and the Equipment
(other than mobile goods) and the books
and records pertaining to the Collateral
are kept at the locations listed on
Schedule 5. No material Inventory or
Equipment (in the aggregate) of such
Grantor is in the possession of an issuer
of a negotiable document (as defined
in Section 7-104 of the New York UCC)
therefor that has not been delivered to
the Collateral Agent or is otherwise in the
possession of any bailee or
warehouseman.
3.6 Farm
Products. None of the Collateral constitutes, or is the
Proceeds of, Farm Products.
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3.7 Investment
Property.
(a) Schedule 2
hereto (as such schedule may be amended from
time to time) sets forth under the headings
"Pledged Stock, "Pledged LLC
Interests," "Pledged Partnership Interests"
and "Pledged Trust Interests,"
respectively, all of the Pledged Stock,
Pledged LLC Interests, Pledged
Partnership Interests and Pledged Trust
Interests owned by any Grantor and such
Pledged Equity Interests constitute the
percentage of issued and outstanding
shares of stock, percentage of membership
interests, percentage of partnership
interests or percentage of beneficial
interest of the respective issuers thereof
indicated on Schedule 2. Schedule 2 (as
such Schedule may be amended from time
to time) sets forth under the heading
"Pledged Debt Securities" or "Pledged
Notes" all of the Pledged Debt Securities
and Pledged Notes owned by any Grantor
and all of such Pledged Debt Securities and
Pledged Notes have been duly
authorized, authenticated or issued, and
delivered and the legal, valid and
binding obligations of the issuers thereof
enforceable in accordance with their
terms and are not in default and constitute
all of the issued and outstanding
indebtedness evidenced by an instrument or
certificated security of the
respective issuers thereof owing to such
Grantor. Schedule 2 hereto (as such
Schedule may be amended from time to time)
sets forth under the headings
"Securities Accounts," "Commodities
Accounts," and "Deposit Accounts"
respectively, all of the Securities
Accounts, Commodities Accounts and Deposit
Accounts in which each Grantor has an
interest. Each Grantor is the sole
entitlement holder or customer of each such
account, and such Grantor has not
consented to, and is not otherwise aware
of, any Person (other than the
Collateral Agent pursuant hereto or as
otherwise permitted under the Indenture
and the Credit Agreement) having "control"
(within the meanings of Sections
8-106, 9-106 and 9-104 of the New York UCC)
over, or any other interest in, any
such Securities Account, Commodity Account
or Deposit Account or any securities,
commodities or other property credited
thereto.
(b) The shares
of Pledged Equity Interests pledged by such
Grantor hereunder constitute all of the
issued and outstanding shares of all
classes of the Capital Stock of each
Issuers owned by such Grantor or, in the
case of Excluded Foreign Subsidiary Voting
Stock, 65% of the outstanding
Excluded Foreign Subsidiary Voting Stock of
each relevant Pledged Security
Issuer.
(c) All the
shares of the Pledged Equity Interests of such
Grantor have been duly and validly issued
and, with respect to corporate stock,
are fully paid and nonassessable.
(d) Each Pledged
LLC Interest and Pledged Partnership
Interest owned by such Grantor and included
in the Pledged Equity Interests is
certificated (and each Grantor covenants
that it will not issue or cause or
permit its Subsidiaries to issue any
Capital Stock in uncertificated form or
seek to convert all or any part of its
existing Capital Stock into
uncertificated form) and the terms of such
certificated Pledged LLC Interests
and Pledged Partnership Interests expressly
provide that they are securities
governed by Article 8 of the Uniform
Commercial Code in effect from time to time
in the applicable jurisdiction.
(e) Such Grantor
is the record and beneficial owner of, and
has good and marketable title to, the
Investment Property pledged by it
hereunder, free of any and all Liens or
options in favor of, or claims of, any
other Person, except Permitted Liens and
there are
18
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no outstanding warrants, options or other
rights to purchase, or shareholder,
voting trust or similar agreements
outstanding with respect to, or property that
is convertible into, or that requires the
issuance or sale of, any Pledged
Equity Interests.
(f) Each Pledged
Security Issuer that is not a Grantor
hereunder but is an Affiliate of any
Grantor has executed and delivered to the
Collateral Agent an Acknowledgment and
Agreement, in substantially the form of
Exhibit A, to the pledge of the Pledged
Securities pursuant to this Agreement.
3.8
Receivables.
(a) No amount
payable to such Grantor under or in connection
with any Receivable is evidenced by any
Instrument or Tangible Chattel Paper
that has not been deliver
