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EXHIBIT 10.54
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of April 22, 1999 (as amended,
supplemented or otherwise modified, renewed or replaced from time to time, the
"Pledge Agreement") between (i) LEISURE EXPRESS CRUISE, L.L.C.
("Pledgor") and (ii) FOOTHILL CAPITAL CORPORATION ("Foothill").
INTRODUCTORY STATEMENT
Pursuant to a Secured Promissory Note dated as of April 22,
1999, by Pledgor in favor of Foothill, Foothill has agreed to make a loan (the
"Loan") to the Pledgor. In connection therewith, Foothill and Pledgor have
entered into a Security Agreement dated as of April 22, 1999 (the "Security
Agreement"; capitalized terms used herein and not otherwise defined, shall have
the meanings set forth in the Security Agreement).
Pursuant to the Continuing Guaranty of Pledgor in favor of
Foothill, each dated as of April 22, 1999 (the "Continuing Guaranty"), Pledgor
has agreed to guaranty the respective obligations of Florida Casino Cruises,
Inc. and Leisure Time Cruise Corporation now or hereafter owing to Foothill.
Pledgor owns beneficially and of record all of the issued and
outstanding shares of the capital stock of its subsidiaries listed on Schedule 1
hereto (being referred to herein as the "Pledged Affiliates").
In order to induce Foothill to make the Loan to Pledgor and to
secure the Obligations, the Cruise Corporation Obligations and the Florida
Casino Obligations, Pledgor is pledging to Foothill all of the issued and
outstanding capital stock of the Pledged Affiliates, all as more fully set forth
herein.
Accordingly, the parties hereto agree as follows:
1. Pledge. (a) As security for payment in full of the
Obligations and all of the "Guaranteed Obligations" described in the Continuing
Guaranty, Pledgor hereby pledges, hypothecates, assigns, transfers, sets over
and delivers unto Foothill, and grants a security interest in (i) all the
capital stock of the Pledged Affiliates which Pledgor now or hereafter owns,
(ii) all rights, options and warrants pertaining to such capital, stock, whether
now owned or hereafter acquired and (iii) all proceeds of such capital stock and
all other securities or other property at any time and from time to time
receivable or otherwise distributed in respect of or in exchange for any or all
of such capital stock or additional securities, in each case whether now
existing or hereafter arising. All items referred to in clauses (i), (ii) and
(iii) of this Section 1 are hereinafter referred to collectively as the "Pledged
Securities."
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(b) Pledgor shall deliver to Foothill the certificates
representing the Pledged Securities accompanied by undated stock powers executed
in blank and by such other instruments or documents as Foothill or its counsel
shall reasonably request.
2. Registration in Nominee Name; Denominations. Foothill shall
have the right (in its sole and absolute discretion) to hold the certificates
representing any Pledged Securities in its own name, the name of its nominee or
in the name of Pledgor, endorsed or assigned in blank or in favor of Foothill.
Upon the occurrence and during the continuation of an Event of Default, Foothill
shall have the right to exchange the certificates representing Pledged
Securities for certificates of smaller or larger denominations for any purpose
consistent with this Pledge Agreement.
3. Pledgor's Representations, Warranties and Covenants.
Pledgor hereby represents and warrants to and/or covenants and agrees with
Foothill as follows:
(i) the Pledged Securities constitute 100% of the issued and
outstanding equity securities of the Pledged Affiliates;
(ii) the Pledged Securities are duly authorized, validly
issued, fully paid and non-assessable;
(iii) there are no restrictions on the transfer of the Pledged
Securities other than as a result of the Security Agreement, this Pledge
Agreement, or applicable securities laws or the regulations promulgated
thereunder;
(iv) Pledgor has good title to the Pledged Securities;
(v) the Pledged Securities are not subject to any prior
liens, encumbrances or security interests;
(vi) Pledgor has the right to pledge the Pledged Securities
hereunder free and clear of any liens, encumbrances or security interests
without the consent of the creditors of the Pledged Affiliates or any other
person or any government agency whatsoever;
(vii) Pledgor has full power and authority to execute, deliver
and perform this Pledge Agreement and to pledge the Pledged Securities
hereunder;
(viii) Pledgor will not take any action to allow any
additional equity securities of the Pledged Affiliates to be issued or grant any
options or warrants, unless such securities are pledged to Foothill on terms
satisfactory to Foothill as security for the Obligations and the Guaranteed
Obligations;
(ix) the execution, delivery and performance of this Pledge
Agreement will not violate any provision of law, administrative regulation, any
order of any court or other agency of
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government, any provision of any indenture, agreement or other instrument to
which Pledgor is a party, or be in conflict with, result in a material breach of
or constitute (with due notice and/or lapse of time) a material default under
any such indenture, agreement or other instrument which in the case of a
violation of any provision of or conflict with an indenture would have a
material adverse effect;
(x) there are no pending legal or governmental proceedings
to which Pledgor is a party or to which any of its properties is subject which
will materially affect Pledgor's ability to perform its obligations hereunder;
and
(xi) on the date hereof, the Pledged Securities consist of
the securities listed on Schedule 1.
4. Voting Rights; Dividends; etc. (a) Unless and until an
Event of Default shall have occurred and be continuing:
(i) Pledgor shall be entitled to exercise any and
all voting and/or consensual rights and powers accruing to the owner of the
Pledged Securities or any part thereof for any purpose not inconsistent with the
terms hereof and of the Security Agreement.
(ii) Any dividends or distributions of any kind
whatsoever prohibited by the Security Agreement and received by Pledgor, whether
resulting from a subdivision, combination, or reclassification of the
outstanding capital stock of a Pledged Affiliate or received in exchange for the
Pledged Securities or any part thereof or as a result of any merger,
consolidation, acquisition, or other exchange of assets to which a Pledged
Affiliate may be a party, or otherwise, shall be and become part of the Pledged
Securities pledged hereunder and shall immediately be delivered to Foothill to
be held subject to the terms of this Pledge Agreement.
(iii) Foothill shall execute and deliver to Pledgor,
or cause to be executed and delivered to Pledgor, all such proxies, powers of
attorney and other instruments as Pledgor may reasonably request for the purpose
of enabling Pledgor to exercise the voting and/or consensual rights and powers
which it is entitled to exercise pursuant to clause (i) above.
(b) Upon the occurrence and during the continuance of an Event
of Default, all rights of Pledgor to (i) exercise the voting and/or consensual
rights and powers which it is entitled to exercise pursuant to Section 4(a)(i)
hereof and (ii) receive and retain dividends and distributions which Pledgor
would be entitled to receive and retain pursuant to Section 4(a)(ii), if any,
shall cease and all such rights shall thereupon become vested in Foothill who
shall have the sole and exclusive right and authority to exercise such voting
and/or consensual rights; provided, however, that to the extent any governmental
consents or filings are required for the exercise by Foothill of any of the
foregoing rights and powers, Foothill shall refrain from exercising such rights
or powers until the making of such required filings, the receipt of such
consents and the expiration of all related waiting periods.
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5. Remedies Upon Default. (a) If an Event of Default shall
have occurred and be continuing, Foothill may sell the Pledged Securities, or
any part thereof, at public or private sale or at any broker's board or on any
securities exchange, for cash, upon credit or for future delivery as Foothill
shall deem appropriate subject to the terms hereof or as otherwise provided in
the California Uniform Commercial Code. Foothill shall be authorized at any such
sale (if it deems it advisable to do so) to restrict the prospective bidders or
purchasers to persons who will represent and agree that they are purchasing the
Pledged Securities for their own account and not with a view to the distribution
or sale thereof, and upon consummation of any such sale Foothill shall have the
right to assign, transfer, and deliver to the purchaser or purchasers thereof
the Pledged Securities so sold. Each such purchaser at any such sale shall hold
the property sold absolutely, free from any claim or right on the part of the
Pledgor.
(b) Foothill shall give the Pledgor 10 days' written notice of
Foothill's intention to make any such public or private sale, or sale at any
broker's board or on any such securities exchange, or of any other disposition
of the Pledged Securities contemplated by Section 5(a). Such notice, in the case
of public sale, shall state the time and place for such sale and, in the case of
sale at a broker's board or on a securities exchange, shall state the board or
exchange at which such sale is to be made and the day on which the Pledged
Securities, or portion thereof, will first be offered for sale at such board or
exchange. Any such public sale shall be held at such time or times within
ordinary business hours and at such place or places as Foothill may fix and
shall state in the notice of such sale. At any such sale, the Pledged
Securities, or portion thereof, to be sold may be sold in one lot as an entirety
or in separate parcels, as Foothill may (in its sole and absolute discretion)
determine. Foothill shall not be obligated to make any sale of the Pledged
Securities if it shall determine not to do so, regardless of the fact that
notice of sale of the Pledged Securities may have been given. Foothill may,
without notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and place
fixed for sale, and such sale may, without further notice, be made at the time
and place to which the same was so adjourned. In case the sale of all or any
part of the Pledged Securities is made on credit or for future delivery, the
Pledged Securities so sold shall be retained by Foothill until the sale price is
paid by the purchaser or purchasers thereof, but Foothill shall not incur any
liability in case any such purchaser or purchasers shall fail to take up and pay
for the Pledged Securities so sold and, in case of any such failure, such
Pledged Securities may be sold again upon like notice. At any sale or sales made
pursuant to this Section 5, Foothill may bid for or purchase, free from any
claim or right of whatever kind, including any equity of redemption, of the
Pledgor, any such demand, notice, claim, right or equity being hereby expressly
waived and released, any or all of the Pledged Securities offered for sale, and
may make any payment on the account thereof by using any claim for moneys then
due and payable to Foothill by the Pledgor, Florida Casino or Cruise Corporation
(as defined in the Security Agreement) as a credit against the purchase price;
and Foothill, upon compliance with the terms of sale, may hold, retain and
dispose of the Pledged Securities without further accountability therefor to the
Pledgor or any third party. Foothill shall in any such sale make no
representations or warranties with respect to the Pledged Securities or any part
thereof, and Foothill shall not be chargeable with any of the obligations or
liabilities of the Pledgor with respect thereto. Pledgor hereby agrees (i) it
will
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indemnify and hold Foothill harmless from and against any and all claims with
respect to the Pledged Securities asserted before the taking of actual
possession or control of the Pledged Securities by Foothill pursuant to this
Pledge Agreement or arising out of any act of, or omission to act on the part
of, any party other than Foothill prior to such taking of actual possession or
control by Foothill, or arising out of any act on the part of such Pledgor or
its agents before or after the commencement of such actual possession or control
by Foothill; and (ii) Foothill shall have no liability or obligation arising out
of any such claim. As an alternative to exercising the power of sale herein
conferred upon it, Foothill may proceed by a suit or suits at law or in equity
to foreclose this Pledge Agreement and to sell the Pledged Securities, or any
portion thereof, pursuant to a judgment or decree of a court or courts having
competent jurisdiction.
6. Application of Proceeds of Sale and Cash. The proceeds of
any sale of the Pledged Securities sold pursuant to Section 6 hereof shall be
applied by Foothill in any manner selected by Foothill, in Foothill's sole
discretion.
7. Foothill Appointed Attorney-in-Fact. Upon the occurrence of
an Event of Default and during the continuance of an Event of Default, Pledgor
hereby appoints Foothill its attorney-in-fact for the purpose of carrying out
the provisions of this Pledge Agreement and the pledge of the Pledged Securities
hereunder and taking any action and executing any instrument which Foothill may
deem necessary or advisable to accomplish the purposes hereof, which appointment
is irrevocable and coupled with an interest. Without limiting the generality of
the foregoing, Foothill shall have the right and power to receive, endorse, and
collect all checks and other orders for the payment of money made payable to
Pledgor representing any dividend or other distribution payable in respect of
the Pledged Securities or any part thereof and to give full discharge for the
same.
8. Securities Act, etc. In view of the position of Pledgor in
relation to the Pledged Securities, or because of other present or future
circumstances, a question may arise under the Securities Act of 1933, as
amended, as now or hereafter in effect, or any similar statute hereafter enacted
analogous in purpose or effect (such Act and any such similar statute as from
time to time in effect being hereinafter called the "Federal Securities Laws"),
with respect to any disposition of the Pledged Securities permitted hereunder.
Pledgor understands that compliance with the Federal Securities Laws may very
strictly limit the course of conduct of Foothill if the Foothill were to attempt
to dispose of all or any part of the Pledged Securities, and may also limit the
extent to which or the manner in which any subsequent transferee of any Pledged
Securities may dispose of the same. Similarly, there may be other legal
restrictions or limitations affecting Foothill in any attempt to dispose of all
or any part of the Pledged Securities under applicable "Blue Sky" or other state
securities laws, or similar laws analogous in purpose or effect. To the maximum
extent permitted by applicable law, Pledgor hereby agrees that Foothill shall
not have any such general duty or obligation to it, and Pledgor will not attempt
to hold Foothill responsible for selling all or any part of the Pledged
Securities at an inadequate price, even if the Foothill shall accept the first
offer received or does not approach more than one possible purchaser. Without
limiting the generality of the foregoing, the provisions of this Section 8 would
apply if, for example, Foothill were to place all or any part of the Pledged
Securities for private placement by
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an investment banking firm, or if such investment banking firm purchased all or
any part of the Pledged Securities for its own account, or if Foothill placed
all or any part of the Pledged Securities privately with a purchaser or
purchasers.
9. Continuation and Reinstatement. Pledgor further agrees that
its pledge hereunder shall continue to be effective or be reinstated, as the
case may be, if at any time payment, or any part thereof, of principal of or
interest on any of the Obligations or the Guaranteed Obligations is rescinded or
must otherwise be restored by Foothill upon the bankruptcy or reorganization of
Pledgor or otherwise.
10. Termination. The pledge hereunder shall terminate when all
of the Obligations, the Cruise Corporation Obligations and the Florida Casino
Obligations shall have been fully paid and performed. At such time Foothill
shall, at the sole cost and expense of Pledgor, assign and deliver to Pledgor,
or to such person or persons as Pledgor shall designate, against receipt, such
of the Pledged Securities (if any) as shall not have been sold or otherwise
applied by Foothill pursuant to the terms hereof and shall still be held by it
hereunder, together with appropriate instruments of reassignment and release.
Any such reassignment shall be without recourse upon or representation or
warranty by Foothill.
11. Further Assurances. Pledgor, at its own expense, will
execute and deliver, from time to time, any and all further, or other,
instruments, and perform such acts, as Foothill may reasonably request to effect
the purposes of this Pledge Agreement and to secure to Foothill the benefits of
all rights, authorities, and remedies conferred upon Foothill by the terms of
this Pledge Agreement.
12. Notices. Notices and other communication provided for or
permitted herein shall be given as set forth in the Security Agreement.
13. Non-Waiver of Rights and Remedies. No delay or failure on
the part of Foothill in the exercise of any right or remedy shall operate as a
waiver thereof, no single or partial exercise by Foothill of any right or remedy
shall preclude other or further exercise thereof or the exercise of any other
right or remedy and no course of dealing between the parties shall operate as a
waiver of any right or remedy of Foothill.
14. CHOICE OF LAW AND VENUE; JURY TRIAL WAIVER. THE VALIDITY
OF THIS AGREEMENT, ITS CONSTRUCTION, INTERPRETATION, AND ENFORCEMENT, AND THE
RIGHTS OF THE PARTIES HERETO SHALL BE DETERMINED UNDER, GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF CALIFORNIA,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. THE PARTIES AGREE THAT ALL
ACTIONS OR PROCEEDINGS ARISING IN CONNECTION WITH THIS AGREEMENT SHALL BE TRIED
AND LITIGATED ONLY IN THE STATE AND FEDERAL COURTS LOCATED IN THE COUNTY OF LOS
ANGELES, STATE OF CALIFORNIA OR, AT THE SOLE OPTION OF FOOTHILL, IN ANY OTHER
COURT
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IN WHICH FOOTHILL SHALL INITIATE LEGAL OR EQUITABLE PROCEEDINGS AND WHICH HAS
SUBJECT MATTER JURISDICTION OVER THE MATTER IN CONTROVERSY. EACH OF PLEDGOR AND
FOOTHILL WAIVES, TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, ANY RIGHT EACH
MAY HAVE TO ASSERT THE DOCTRINE OF FORUM NON CONVENIENS OR TO OBJECT TO VENUE TO
THE EXTENT ANY PROCEEDING IS BROUGHT IN ACCORDANCE WITH THIS SECTION 14. PLEDGOR
AND FOOTHILL HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH
OF DUTY CLAIMS, AND ALL OTHER COMMON LAW OR STATUTORY CLAIMS. PLEDGOR AND
FOOTHILL REPRESENT THAT EACH HAS REVIEWED THIS WAIVER AND EACH KNOWINGLY AND
VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS FOLLOWING CONSULTATION WITH LEGAL
COUNSEL. IN THE EVENT OF LITIGATION, A COPY OF THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO A TRIAL BY THE COURT.
15. Severability. This Pledge Agreement shall be interpreted
in such manner as to be effective and valid under applicable law, but if any
provision of this Pledge Agreement shall be prohibited by or invalidated under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Pledge Agreement and the parties hereto
agree to negotiate in good faith a provision to replace the ineffective
provision, such provision to be as similar in effect and intent as the
ineffective provision as permissible.
16. Amendments. This Pledge Agreement may not be amended
except by a writing signed by the parties hereto.
17. Successors and Assigns. This Pledge Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns.
18. Counterparts. This Pledge Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall
constitute an original for all purposes, but all such counterparts taken
together shall constitute the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Pledge
Agreement to be duly executed as of the day and year first above written.
LEISURE EXPRESS CRUISE, L.L.C.
By: Leisure Time Cruise Corporation, its
Managing Member
By: /s/
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Name:
Title:
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FOOTHILL CAPITAL CORPORATION
By: /s/
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Name:
Title:
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SCHEDULE 1
Pledged Securities
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Stock Certificate No. of
Pledged Affiliate No. Shares Owner of Stock
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Florida Casino Cruises, Inc. Leisure Express Cruise, L.L.C.
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