EXHIBIT 4(29)
PARENT PLEDGE AND SECURITY AGREEMENT
THIS PARENT PLEDGE AND SECURITY AGREEMENT (as amended, supplemented
or otherwise modified from time to time, the "Security Agreement"), dated as of
December 18, 1998, is executed by RIO HOTEL AND CASINO, INC., a Nevada
corporation ("Debtor"), in favor of BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION ("Secured Party"), as agent for itself and the other lenders
(individually, a "Lender" and collectively, the"Lenders") now or hereafter a
party to that certain Loan Agreement (the "Loan Agreement") of even date
herewith among Rio Properties, Inc., a Nevada corporation (the"Company"), Rio
Leasing, Inc., a Nevada corporation ("Rio Leasing"; collectively with the
Company, the "Borrowers") as borrowers, Secured Party and the Lenders. This
Security Agreement is the Parent Pledge and Security Agreement referred to in
the Loan Agreement. This Security Agreement is executed to induce the Lenders to
make the loans (collectively, the "Loan") to Borrowers described in the Loan
Agreement and evidenced in whole or in part by promissory notes of even date
herewith (collectively, the "Notes"). Debtor has guaranteed the obligations of
Borrowers under the Loan Agreement (and all documents executed in connection
therewith) under the Rio Hotel and Casino, Inc. Guaranty (as amended,
supplemented or otherwise modified from time to time, the "Parent Guaranty") of
even date herewith executed by Debtor in favor of Secured Party. Capitalized
terms used and not otherwise defined herein or in Schedule 1 attached hereto
shall have the same meanings as set forth in the Loan Agreement.
1. Assignment. Subject to approval of the applicable Gaming Authorities as
to the Pledged Stock of the Company and Rio Leasing only, for valuable
consideration, Debtor hereby pledges and assigns to Secured Party (and grants to
Secured Party, pursuant to Article 104.9101 et seq. 9 of the Nevada Revised
Statutes (the Nevada enactment of the Uniform Commercial Code), a security
interest in and to, and a lien upon), all of Debtor's right, title and interest,
whether now existing or hereafter arising, in and to the tangible and intangible
property (collectively, the "Collateral") described in Schedule 1 attached
hereto and incorporated herein by this reference, as security for the prompt
payment and performance of each of the obligations described in Section 2, below
(collectively, the "Secured Obligations").
2. Obligations Secured. This Security Agreement secures the prompt payment
and performance of each of the following Secured Obligations:
2.1 Each of Debtor's obligations to Secured Party and the Lenders
under the Parent Guaranty.
2.2 Each of Debtor's obligations hereunder.
2.3 All other obligations owing to Secured Party and/or the Lenders,
but only to the extent that any such obligation is described or referred to in a
document, executed by Debtor at Secured Party's request, which states that such
obligation is secured hereby.
2.4 Any and all amendments, extensions and other modifications of
any of the foregoing, including without limitation amendments, extensions and
other modifications that are evidenced by new or additional documents or that
change the rate of interest on any Secured Obligation.
3. Representations and Warranties. Debtor hereby represents and warrants
that:
3.1 Debtor is the true and lawful owner of and has good and clear
title to the Collateral, subject only to the rights of Secured Party hereunder.
3.2 Debtor owns all of the issued and outstanding stock of
Borrowers, and there are no outstanding warrants, options or other rights to
subscribe to or acquire any of such stock in favor of any third person.
3.3 True and complete copies of all of the existing documents
respecting the Collateral (the "Collateral Documents") together with all the
amendments, supplements and other modifications to each, written or oral, have
been or will be promptly delivered to Secured Party.
3.4 Debtor is not presently in default under any Collateral Document
nor has any event occurred which, with the giving of notice or the passage of
time or both, would constitute such a default, and there are no existing
defenses or offsets against any amounts due or to become due from any party to
Debtor under any Collateral Document.
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3.5 Debtor is the legal and equitable owner of the Collateral, free
and clear of all liens, encumbrances and other rights and claims of other
persons (other than Secured Party's interest hereunder).
3.6 Except as disclosed to Secured Party in writing prior to the
execution of this Security Agreement or the incorporation of such Collateral
into this Security Agreement, each of the presently existing and future
Collateral Documents is genuine, valid and enforceable against all applicable
parties in accordance with its terms (except to the extent that enforceability
is limited by bankruptcy, insolvency or other laws affecting the enforcement of
creditors' rights generally).
3.7 No consent, license, approval, or authorization of, exemption
by, or registration with any governmental instrumentality is required to be
obtained by Debtor in connection with the execution, delivery, performance,
validity, or enforceability of this Security Agreement, except for (i) the
approval, if required, of the applicable Gaming Authorities as to the Pledged
Stock only and (ii) the filing of applicable financing statements; and no
consent of any other party is required for any of the foregoing.
3.8 Subject to the approval, if required, of the applicable Gaming
Authorities as to the Pledged Stock only, the execution, delivery, and
performance of this Security Agreement does not and will not violate any
provision of applicable law, rule or regulation or of any order, judgment, writ,
award or decree of any court, arbitrator, or governmental instrumentality,
domestic or foreign, applicable to Debtor, or of any indenture, contract,
agreement (including any trust agreement), or other undertaking to which Debtor
is a party or which affects any of its properties and does not and will not
result in a creation or position of any lien, charge, or encumbrance on or
security interest in any of the properties of Debtor except as contemplated by
this Security Agreement.
3.9 All financial information furnished to Secured Party and/or the
Lenders with respect to Debtor (a) is complete and correct in all material
respects, (b) accurately presents the financial condition of Debtor and (c) has
been prepared in accordance with generally accepted accounting principles
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consistently applied. All other documents and information furnished Secured
Party and/or the Lenders with respect to Debtor are correct and all material
respects and complete in so far as completeness is necessary to give Secured
Party and the Lenders an accurate knowledge of their subject matter.
3.10 Debtor's principal place of business and chief executive and
accounting offices are located at 0000 Xxxx Xxxxxxxx Xxxx, Xxx Xxxxx, Xxxxxx
00000.
4. Covenants by Debtor. Debtor hereby agrees, subject to all rights
Debtor, as Guarantor, has under the Loan Agreement, that:
4.1 Prior to or simultaneously with the Debtor's execution of this
Security Agreement, Debtor will execute and cause to be filed in accordance with
the Nevada Uniform Commercial Code financing statements in form and substance
satisfactory to Secured Party. Thereafter, at any time and from time to time,
upon demand of Secured Party, Debtor shall give, execute, acknowledge, file and
record any notice, financing statement, continuation statement, assignment,
instrument, document or agreement that Secured Party reasonably deems necessary
or desirable to create, preserve, continue, perfect or validate any security
interest intended to be created hereunder, including, without limitation, any
security interest in after-acquired property, or to enable Secured Party to
enforce its rights with respect to any such security interest.
4.2 Upon the approval of the relevant Gaming Authorities to the
pledge by Debtor to Secured Party of all shares of stock of the Company and Rio
Leasing owned by Debtor, and, as to all other Pledged Stock, concurrently with
the execution of this Security Agreement, Debtor shall deliver to Secured Party
all of the certificates ("Certificates") evidencing the Pledged Stock. Debtor
agrees that it will upon obtaining any additional shares of stock of any issuer
of Pledged Stock or any other securities that may be converted into, or
exchanged for Pledged Stock, including any options or other rights with respect
thereto, upon the approval of the relevant Gaming Authorities, if required, to
the pledge by Debtors to Secured Party of such additional shares or other
securities, promptly deliver to Secured Party: (i) a duly
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executed Security Agreement Supplement in substantially the form of Schedule 3
hereto (a "Security Agreement Supplement") identifying the additional shares of
stock which are pledged pursuant to this second sentence of this Section 4.2 and
(ii) Certificates evidencing such shares of stock. Debtor hereby authorizes
Secured Party to attach the Security Agreement Supplement to this Security
Agreement and agrees that all shares of stock listed on the Security Agreement
Supplement delivered to Secured Party shall for all purposes hereunder
constitute Pledged Stock.
4.3 Debtor shall notify Secured Party prior to changing its
principal place of business and chief executive and accounting offices from the
location set forth in Section 3.10 of this Security Agreement.
4.4 Debtor shall at all times maintain the Collateral in good
condition and will from time to time make all needed and proper replacements,
repairs, renewals and improvements so that the value of the Collateral is not
impaired.
4.5 Debtor shall keep the Collateral, including, without limitation,
all after-acquired property included in the definition of Collateral, free of
all liens, claims, security interests and encumbrances other than those
described in Section 3.1, above.
4.6 Notwithstanding Secured Party's claim to proceeds, Debtor shall
not sell, lease or otherwise transfer or dispose of any Collateral (and shall
not permit any such act) unless Debtor shall concurrently replace such
Collateral with other Collateral that is of equivalent quality and quantity and
reasonably acceptable to Secured Party; provided, however, that, (i) so long as
Debtor is not in default hereunder, Debtor may sell any Collateral consisting of
inventory in the ordinary course of Debtor's business and may receive and
dispose of collections on the same, and (ii) notwithstanding the foregoing,
Debtor shall not sell, transfer or otherwise dispose of any of the Pledged Stock
without the prior written consent of Secured Party.
4.7 Debtor shall keep Secured Party informed as to the location of
the Collateral and shall not relocate any of the Collateral without Secured
Party's prior written consent.
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4.8 Debtor shall, at Debtor's own cost, defend any and all actions,
proceedings and claims affecting the Collateral, including without limitation
actions, proceedings and claims challenging Debtor's title to the Collateral or
the validity or priority of Secured Party's security interest hereunder, and pay
the cost of all license approvals affecting the Collateral.
4.9 Debtor shall promptly pay all taxes, assessments, license fees
and other public or private charges levied or assessed against any Collateral,
this Security Agreement or any promissory note evidencing any debt secured
hereunder.
4.10 Debtor shall maintain such insurance with respect to the
Collateral as Secured Party reasonably requires from time to time, with insurers
satisfactory to Secured Party and with loss payable to Secured Party as its
interests may appear. Debtor shall, if so requested, deliver the original of any
such policy to Secured Party.
4.11 Debtor shall not use any Collateral in violation of any
applicable laws, rules or regulations.
4.12 All of the Collateral shall at all times remain personal
property.
4.13 Debtor shall fully perform all of its obligations under and
with respect to the Collateral and shall diligently enforce all of the
obligations of each obligor thereunder.
4.14 Debtor shall not modify, amend, supplement or cancel any of the
Collateral without the prior written consent of Secured Party.
4.15 Debtor will at all times keep accurate and complete records
with respect to the Collateral and agrees that the representatives of Secured
Party shall have the right, at any time during normal business hours or at any
other reasonable time, and from time to time, to call at Debtor's places of
business where the Collateral or any part thereof may be located or the records
pertaining to the Collateral may be
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kept and to inspect the Collateral and/or examine such records and to make
abstracts therefrom or copies thereof; in addition, Debtor shall furnish Secured
Party with periodic reports as to the Collateral, in such form and detail and at
such times as Secured Party may require.
4.16 Monies received because of any court or arbitration award or
settlement or insurance payment, for any loss or damage to the Collateral, and
proceeds from any condemnation award or settlement relating to the Collateral
shall be treated as provided in the Loan Documents.
4.17 As soon as practicable, and in any event within ten (10) days,
Debtor shall notify Secured Party of:
(a) Any attachment or other legal process levied against any
of the Collateral;
(b) Any information received by Debtor which may in any manner
materially and adversely affect the value of the Collateral or the rights and
remedies of Secured Party with respect thereto;
(c) The removal of any of the Collateral to a new location and
the removal of any records of Debtor relating to the Collateral to any location
other than that set forth in Section 3.10, above; and
(d) An adequate description and the location of any tangible
or intangible property acquired by Debtor after the execution of this Security
Agreement, which after-acquired property shall be included, subject to the
approval, if required, of the applicable Gaming Authorities as to after-acquired
Pledged Stock only, within the definition of "Collateral" hereunder.
Any notice delivered pursuant to this Section 4.17 shall set forth the nature of
such event and the action which Debtor proposes to take with respect thereto.
5. Events of Default. The occurrence of any of the following shall
constitute a default hereunder:
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5.1 The occurrence of any Event of Default under the Parent
Guaranty.
5.2 The occurrence of any Event of Default under the Loan Agreement
or any other Loan Document.
5.3 Default in any other obligation secured hereunder.
5.4 Default in any obligation contained herein.
5.5 Any statement, representation or warranty made by Debtor herein
or in any document secured hereunder proves to have been false or inaccurate in
any material respect when made.
6. Remedies. In the event of any default hereunder, Secured Party shall
have all of the following rights and remedies, each of which may be exercised
with or without further notice to Debtor, subject to applicable Gaming Laws (as
defined in the Loan Agreement):
6.1 To notify any and all obligors on any and all Accounts (as that
term is defined in Schedule 1 attached hereto) assigned hereunder that such
Accounts have been assigned to Secured Party and/or that all payments on such
Accounts are to be made directly to Secured Party;
6.2 To settle, compromise or release on terms acceptable to Secured
Party, in whole or in part, any amounts owing on any and all Accounts;
6.3 To enforce payment and prosecute any action or proceeding with
respect to any and all Accounts;
6.4 To extend the time of payment, make allowances and adjustments
and issue credits with respect to Accounts in Secured Party's name or in the
name of Debtor;
6.5 To foreclose the liens and security interests created under this
Security Agreement or under any other agreement relating to any Collateral by
any available judicial procedure or without judicial process;
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6.6 To sell, assign, lease, or otherwise dispose of the Collateral
or any part thereof, either at public or private sale, in lots or in bulk, for
cash, on credit or otherwise, with or without representations or warranties, and
upon such terms as shall be acceptable to Secured Party, all at Secured Party's
sole option and as Secured Party may deem advisable in its sole discretion;
6.7 To hold, operate, and manage the same and from time to time make
all needed repairs and such alterations, additions, advances and improvements as
Secured Party shall deem appropriate;
6.8 To manage, or retain a manager for, the operation of the
business or businesses being conducted on any real property, including, without
limitation, any after-acquired real property, which is part of the Collateral;
6.9 To collect interest, dividends, principal and or other sums
payable upon or on account of the Collateral;
6.10 To declare all Secured Obligations immediately due and payable;
and
6.11 To exercise any and all other rights and remedies that Secured
Party may have in any jurisdiction where enforcement of this Security Agreement
is sought, including without limitation all rights and remedies of a secured
party under any applicable Uniform Commercial Code. Secured Party shall have the
right to enforce one or more of its remedies successively or concurrently, and
such action shall neither estop nor prevent Secured Party from pursuing any and
all further remedies that it may have. In the event that Debtor fails to perform
any obligation set forth herein, Secured Party may, but shall not be obligated
to, perform the same, and the cost thereof shall be payable by Debtor to Secured
Party on demand and shall bear interest at the default rate of interest set
forth in the Notes evidencing the Loan (or, if there is no such default rate, at
the rate of interest set forth in the Notes). No failure on the part of Secured
Party to exercise, and no delay in exercising, any right or remedy shall operate
as a waiver thereof or of any default, nor shall any single or partial exercise
of any right or remedy preclude any other or further exercise thereof or the
exercise of any other right or remedy.
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7. Sale of Collateral. The following shall apply with respect to any sale,
assignment, lease or other disposition of the Collateral by Secured Party
pursuant to Article 6, above, after Secured Party has complied with applicable
Gaming Laws.
7.1 Debtor shall, at Secured Party's request, assemble any and all
Collateral and make it available to Secured Party at such places as Secured
Party designates that are reasonably convenient to both parties, whether at the
premises of Debtor or elsewhere, and shall make available to Secured Party all
premises and facilities of Debtor for the purpose of Secured Party's taking
possession of the Collateral or removing or putting the Collateral in saleable
form.
7.2 If any Collateral requires repair, maintenance, preparation or
the like, or is in process or other unfinished state, Secured Party shall have
the right to perform all repairs, maintenance, preparation and other processing
and completion of manufacture required to put the same in such saleable form as
Secured Party deems appropriate, but Secured Party shall also have the right to
sell or dispose of such Collateral without any such processing.
7.3 Secured Party shall give Debtor ten (10) days' prior written
notice of any such sale, assignment, lease or other disposition. Debtor agrees
that such notice is commercially reasonable and Debtor hereby waives all other
notices, demands and advertisements of any kind.
7.4 Secured Party may bid or purchase at any such sale, if public,
free from any right of redemption that Debtor may have, which right of
redemption is hereby waived, and Secured Party may restrict the prospective
bidders or purchasers at any such sale to persons who will represent and warrant
that they are acquiring the Collateral for their own account and otherwise in
compliance with the federal Securities Act of 1933, as amended.
7.5 Because of present or future circumstances, a question may arise
under the federal 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
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hereinafter called the Federal Securities Laws) with respect to any disposition
of the Collateral. Debtor acknowledges that compliance with the Federal
Securities Laws and/or Gaming Laws may strictly limit Secured Party's course of
conduct in disposing of all or any part of the Collateral and may also limit the
extent to which or the manner in which any subsequent transferee of the
Collateral may dispose of the same, and that there may be other legal
restrictions or limitations affecting Secured Party in any attempts to dispose
of all or any part of the Collateral under applicable Blue Sky or other state
securities laws or similar laws analogous in purpose or effect.
8. Facilitation of Rights and Remedies. To facilitate the exercise by
Secured Party of the rights and remedies set forth in this Security Agreement,
Debtor authorizes Secured Party, subject to Secured Party's compliance with
applicable Gaming Laws, to exercise any or all of the following powers:
8.1 To enter any premises where any Collateral may be located for
the purpose of taking possession of or removing such Collateral, to remove from
any premises where any Collateral may be located the Collateral and any and all
documents, instruments, files and records relating to the Collateral, and any
receptacles and cabinets containing the same, and to use the supplies and space
of Debtor at any or all of its places of business as may be necessary or
appropriate to properly administer and control the Collateral or the handling of
collections and realizations thereon, at Debtor's cost and expense;
8.2 To receive, open and dispose of all mail addressed to Debtor and
notify postal authorities to change the address for delivery thereof to such
address as Secured Party may designate;
8.3 To manage, or to retain a manager for, the operation of the
business or businesses being conducted on any real property, including, without
limitation, after-acquired real property, which is part of the Collateral;
8.4 To take or bring, in Secured Party's name or in the name of
Debtor, all steps, actions, suits or proceedings deemed necessary or desirable
by Secured Party to effect collection or to realize upon Accounts and any other
Collateral; and
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8.5 To prepare, sign and file or record, for Debtor in Debtor's
name, financing statements, applications for registration, applications for
approval by the Gaming Authorities of the assignment to Secured Party of all
stock of Borrowers owned by Debtor, and like papers.
9. Application of Proceeds. The net cash proceeds resulting from any
collection, liquidation, sale or other disposition of the Collateral by Secured
Party shall be applied first to the expenses (including reasonable attorneys'
fees) of retaking, holding, storing, processing, preparing for sale, selling,
collecting, liquidating and the like, and then to the satisfaction of other
Secured Obligations then due, application as to particular obligations or
against principal or interest to be in Secured Party's absolute discretion.
10. Actions by Secured Party Following Default. While any default
hereunder remains uncured, Secured Party shall have the right (but no
obligation) to take such actions (in its name or in the name of Debtor) as
Secured Party reasonably deems appropriate to cure any default by Debtor under
any agreement which constitutes part of the Collateral or to otherwise protect
the rights and interests of Debtor and/or Secured Party under any such
agreement. Neither Secured Party nor any of the Lenders shall incur any
liability as a result of any such action if such action is taken in good faith
in accordance with the foregoing, and Debtor shall defend, indemnify and hold
Secured Party and each of the Lenders harmless from and against all claims,
demands, causes of action, liabilities, losses, costs and expenses (including
costs of suit and reasonable attorneys' fees) arising from or in connection with
any such good faith action.
11. Specific Assignments and Consents. Upon Secured Party's demand from
time to time, (a) Debtor shall execute and deliver to Secured Party an
assignment of contract(s), in form and substance satisfactory to Secured Party,
which specifically describes one or more of the agreements assigned hereunder
and (b) Debtor shall use its best efforts to obtain and deliver to Secured Party
a consent to assignment, in form and substance satisfactory to Secured Party,
pursuant to which any party other than Debtor to any agreement assigned
hereunder consents to such assignment and agrees to recognize Secured Party as
Debtor's successor in the event that Secured Party succeeds to Debtor's
interests.
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12. Secured Party's Costs and Expenses. Debtor shall reimburse Secured
Party on demand for all reasonable costs and expenses (including reasonable
attorneys' fees) incurred by Secured Party in connection with the enforcement of
this Security Agreement, regardless of whether any suit is filed, including
without limitation all reasonable costs and expenses incurred in checking,
retaking, holding, handling, preparing for sale and selling or otherwise
disposing of any and all Collateral, or for managing, or retaining a manager
for, the operation of the business or businesses being conducted on the Real
Property. Such reimbursement obligations shall bear interest from the date of
demand at the maximum rate permitted by law.
13. Obligations Unconditional. Debtor's obligation to perform and observe
the agreements and covenants contained herein shall be absolute and
unconditional. Until such time as all Secured Obligations have been fully paid
and performed, Debtor (i) shall perform and observe all of its agreements and
covenants contained in this Security Agreement; and (ii) shall not terminate
this Security Agreement for any cause, including without limitation any acts or
circumstances that may constitute failure of consideration, destruction of, or
damage to, the Collateral, commercial frustration of purpose, any change in the
laws of the United States of America or of the State of Nevada or any political
subdivision of either, or any failure of Secured Party to perform or observe any
agreement, whether express or implied, or any duty, liability or obligation,
arising out of or in connection with this Security Agreement.
14. Nonliability and Indemnity of Secured Party. Debtor hereby agrees that
neither Secured Party's acceptance of the security interests granted hereunder
nor any exercise by Secured Party of its rights and remedies hereunder shall be
deemed to be an assumption by Secured Party or any of the Lenders of any of
Debtor's obligations and liabilities under the terms of any of the Collateral,
and Debtor agrees to indemnify and hold Secured Party and each of the Lenders
harmless against any and all claims, damages, costs and expenses (including
reasonable attorneys' fees) suffered or incurred by Secured Party in connection
therewith.
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15. Waiver of NRS 40.430. Debtor hereby waives all defenses and benefits
that it would otherwise have under Section 40.430 of the Nevada Revised
Statutes.
16. Miscellaneous Waivers. Presentment, protest, notice of protest, notice
of dishonor and notice of nonpayment are waived with respect to any proceeds to
which Secured Party is entitled hereunder.
17. Successors and Assigns. Subject to any applicable restrictions on
assignment contained herein or in any of the Loan Documents, this Security
Agreement shall bind, and shall inure to the benefit of, the respective heirs,
executors, administrators, successors and assigns of Debtor and Secured Party.
The term "Secured Party" shall include any successor agent for the Lenders, the
Lenders individually if there is no agent representing them, and any other
holder and owner from time to time (including any pledgee or assignee) of any of
the Notes or any other Secured Obligation.
18. Attorney-in-Fact. Debtor hereby constitutes and appoints Secured Party
as its attorney-in-fact for the purposes of (a) carrying out the provisions of
this Security Agreement and (b) taking any and all actions and executing any and
all instruments that Secured Party reasonably deems necessary or advisable to
accomplish the purposes of this Security Agreement and/or to protect Secured
Party's interests with respect to the Collateral, and (c) while any default
hereunder remains uncured, enforcing Debtor's rights (in Secured Party's name or
in Debtor's name) under any agreement which constitutes part of the Collateral.
In furtherance of clause (c), Debtor shall deliver to Secured Party, upon
Secured Party's demand while any default hereunder remains uncured, all
documents which Secured Party reasonably deems appropriate to permit Secured
Party's succession to Debtor's rights and interests and to facilitate the
enforcement by Secured Party of Debtor's rights with respect to such agreements.
The power of attorney granted hereunder is coupled with an interest and is
irrevocable.
19. Voting Rights; Dividends; Etc.
19.1 Rights in Absence of Default. So long as no default hereunder
remains uncured:
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19.1.1 Voting Rights. Debtor shall be entitled to exercise any
and all voting and other consensual rights pertaining to the Pledged Stock, or
any part thereof, for any purpose not inconsistent with the terms of this
Security Agreement, or the Parent Guaranty; provided, that Debtor shall not
exercise any such right if it would result in a default hereunder.
19.1.2 Dividend and Distribution Rights. Debtor shall be
entitled to receive and to retain and use any and all dividends or distributions
paid in respect of the Pledged Stock; provided, that any and all such dividends
or distributions received in the form of capital stock shall be Pledged Stock,
and the Certificates representing such capital stock shall be delivered to
Secured Party immediately upon receipt by Debtor, subject, in the case of stock
of the Company and Rio Leasing, to the approval of the applicable Gaming
Authorities, to be held by Secured Party hereunder; and such stock shall, if
received by Debtor and until so delivered, be received and held in trust for the
benefit of Secured Party.
19.2 Rights Following Event of Default. While any default hereunder
remains uncured, subject to compliance with applicable Gaming Laws:
19.2.1 Voting, Dividend and Distribution Rights. At the option
of Secured Party exercised by written notice to Debtor, all rights of Debtor to
exercise the voting and other consensual rights which it would otherwise be
entitled to exercise pursuant to Section 19.1.1, above, and to receive the
dividends and distributions which it would otherwise be authorized to receive
and retain pursuant to Section 19.1.2, above, shall cease, and all such rights
shall thereupon become vested in Secured Party, who shall thereupon have the
sole right to exercise such voting and other consensual rights and to receive
and to hold as Collateral such dividends and distributions.
19.2.2 Dividends and Distributions Held in Trust. All
dividends and other distributions which are received by Debtor contrary to the
provisions of this Security Agreement shall be received and held in trust for
the benefit of Secured Party and shall be delivered to Secured Party as
Collateral immediately upon receipt, in the same form as received (with any
necessary endorsements).
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19.2.3 Irrevocable Proxy. Debtor hereby revokes all previous
proxies with regard to the Pledged Stock and appoints Secured Party as its
proxyholder to attend and vote at any and all meetings of the shareholders of
the issuer of any Pledged Stock held on or after the date of the giving of this
proxy and prior to the termination of this proxy, and to execute any and all
written consents of shareholders of any such issuer executed on or after the
date of the giving of this proxy and prior to the termination of this proxy,
with the same effect as if Debtor had attended the meetings or voted its shares
or signed the written consents, as applicable; provided, that the proxyholder
shall only have the rights described in this paragraph while any default
hereunder remains uncured. Debtor hereby authorizes Secured Party as the
proxyholder and hereby authorizes and directs any such proxyholder to file this
proxy and the substitution instrument with the secretary of the appropriate
issuer of the Pledged Stock. This proxy is coupled with an interest and is
irrevocable until such time as no part of any Secured Obligation remains
outstanding.
20. Additional Provisions re Pledged Stock.
20.1 No Obligation to Act. Secured Party shall have no
responsibility for ascertaining or taking action with respect to calls,
conversions, exchanges, maturities, tenders or other matters relative to any
Pledged Stock.
20.2 Reliance on Agreement. Subject to compliance with applicable
Gaming Laws, Debtor hereby consents and agrees that the issuers of any Pledged
Stock, or any registrar or transfer agent or trustee for any of the Pledged
Stock, shall be entitled to accept the provisions of this Security Agreement as
conclusive evidence of the right of Secured Party to effect any transfer or
exercise any right hereunder, notwithstanding any other notice or direction to
the contrary heretofore or hereafter given by Debtor or any other Person to such
issuers or obligors or to any such registrar, transfer agent or trustee.
20.3 Covenant Not to Issue Uncertificated Securities. Debtor
represents and warrants to Secured Party that all of the capital stock of
Borrowers is in certificated form (as contemplated by Article 104.8101 et seq.
of the Nevada Revised Statutes), and covenants to Secured Party that it will
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not cause or permit Borrowers (or any other issuer of any Pledged Stock) to
issue any capital stock in uncertificated form or seek to convert all or any
part of its existing capital stock into uncertificated form (as contemplated by
Article 104.8101 et seq. of the Nevada Revised Statutes).
20.4 Covenant Not to Dilute Interests of Secured Party. Debtor shall
not at any time cause or permit Borrowers (or any other issuer of any Pledged
Stock) to issue any additional capital stock, or any warrants, options or other
rights to acquire any additional capital stock, if the effect thereof would be
to dilute in any way the interests of Secured Party in Borrowers or any such
issuer.
20.5 Foreclosure By Private Sale. By virtue of the Securities Act of
1933, as amended ("1933 Act"), or any other Laws or regulations, legal
restrictions or limitations may apply and affect Secured Party in any attempts
to dispose of all or any portion of the Collateral in the enforcement of Secured
Party's rights and remedies hereunder. For these reasons, Secured Party is
hereby authorized by Debtor, but not obligated, in the event of any Event of
Default giving rise to Secured Party's rights to sell or otherwise dispose of
any Collateral consisting of securities, to sell all or any part of the
securities at private sale, subject to investment letter restrictions or in any
other manner which will not require the securities, or any part thereof, to be
registered in accordance with the 1933 Act, as amended, or the rules and
regulations promulgated thereunder, or any other law or regulation
("Registration"), at the best price reasonably obtainable by Secured Party at
any such private sale or other disposition in any such manner mentioned above.
Secured Party is hereby further authorized by Debtor, provided Secured Party has
complied with all applicable portions of the Gaming Laws, but not obligated, in
the event of any Event of Default giving rise to Secured Party's rights to sell
or otherwise dispose of Collateral, to sell all or any part of Collateral
consisting of securities at a public sale at the best price obtainable by
Secured Party at any such public sale. A commercially reasonable public sale of
securities shall be deemed to include, but not be limited to, the following: (i)
Secured Party shall publish a notice of the sale in a newspaper of general
circulation in the county of the office of the Secured Party or the county of
the place of sale chosen by Secured
-17-
Party, if not at its office, and elsewhere as chosen by the Secured Party; (ii)
the notice of sale shall state that Secured Party reserves the right to bid for
and purchase the collateral; (iii) all securities of equal class and series of
the same issuer shall be sold only as a block and shall not be sold jointly or
broken down; (iv) the purchaser of the securities shall provide an investment
letter; (v) the securities sold shall bear a legend to the effect that the
securities are restricted and may not be sold or transferred without
registration under the 1933 Act and under applicable state securities laws or
under a valid exemption from the 1933 Act and from applicable state securities
laws; and (vi) any other procedures or restrictions necessary to sell or dispose
of the securities, or any part thereof, without Registration of the securities
or to comply with any other express requirements of the Uniform Commercial Code.
Secured Party is also hereby authorized by Debtor, but not obligated, to take
such actions, give such notices, obtain such consents, and do such other things
as Secured Party may deem required or appropriate in the event of a sale or
disposition of any of Collateral consisting of securities. Debtor understands
that Secured Party may in its discretion approach a restricted number of
potential purchasers in a private sale and that a sale under such circumstances
may yield a lower price for Collateral, or any part or parts thereof, than would
otherwise be obtainable if the same were registered and sold in the open market.
Debtor also understands that a public sale of securities in any manner that will
not require the registration of the securities or any part thereof, may yield a
lower price for the securities, or any part or parts thereof, than would
otherwise be obtainable if the same were registered and sold in the open market.
Debtor agrees (i) that in the event Secured Party shall, upon any default
hereunder, sell Collateral consisting of securities, or any portion thereof, at
such private sale or sales or at such public sale, Secured Party shall have the
right to rely upon the advice and opinion of any member firm of a national
securities exchange as to the best price reasonably obtainable upon such private
sale or public sale thereof, and (ii) that such reliance shall be conclusive
evidence that Secured Party handled such matter in a commercially reasonable
manner under the Uniform Commercial Code.
-18-
21. Guarantor and Suretyship Provisions. The following provisions shall
apply to the extent that all or any portion of the Secured Obligations now or
hereafter constitute obligations of person(s) (collectively, "Borrowers") other
than, or in addition to, Debtor:
21.1 Conditions to Exercise of Rights. Debtor hereby waives any
right it may now or hereafter have to require Secured Party, as a condition to
the exercise of any remedy or other right against Debtor hereunder or under any
other document executed by Debtor in connection with any Secured Obligation, (a)
to proceed against any Borrower or other person, or against any other collateral
assigned to Secured Party by Debtor or any other person, (b) to pursue any other
right or remedy in Secured Party's power, (c) to give notice of the time, place
or terms of any public or private sale of real or personal property collateral
assigned to Secured Party by any Borrower or other person (other than Debtor),
or otherwise to comply with the Nevada enactment of the Uniform Commercial Code
(as modified or recodified from time to time) with respect to any such personal
property collateral, or (d) to make or give (except as otherwise expressly
provided in the Loan Documents) any presentment, demand, protest, notice of
dishonor, notice of protest or other demand or notice of any kind in connection
with any Secured Obligation or any collateral (other than the Collateral) for
any Secured Obligation.
21.2 Defenses. Debtor hereby waives any defense it may now or
hereafter have that relates to: (a) any disability or other defense of any
Borrower or other person; (b) the cessation, from any cause other than full
performance, of the obligations of any Borrower or other person; (c) the
application of the proceeds of any Secured Obligation, by any Borrower or other
person, for purposes other than the purposes represented to Debtor by any
Borrower or otherwise intended or understood by Debtor; (d) any act or omission
by Secured Party which directly or indirectly results in or contributes to the
release of any Borrower or other person or any collateral for any Secured
Obligation; (e) the unenforceability or invalidity of any collateral assignment
(other than this Security Agreement) or guaranty with respect to any Secured
Obligation, or the lack of perfection or continuing perfection or lack of
-19-
priority of any lien (other than the lien hereof) which secures any Secured
Obligation; (f) any failure of Secured Party to marshal assets in favor of
Debtor or any other person; (g) any modification of any Secured Obligation,
including any renewal, extension, acceleration or increase in interest rate; (h)
any election of remedies by Secured Party that impairs any subrogation or other
right of Debtor to proceed against any Borrower or other person, including any
loss of rights resulting from anti-deficiency laws relating to nonjudicial
foreclosures of real property or other laws limiting, qualifying or discharging
obligations or remedies; (i) any law which provides that the obligation of a
surety or guarantor must neither be larger in amount nor in other respects more
burdensome than that of the principal or which reduces a surety's or guarantor's
obligation in proportion to the principal obligation; (j) any failure of Secured
Party to file or enforce a claim in any bankruptcy or other proceeding with
respect to any person; (k) the election by Secured Party, in any bankruptcy
proceeding of any person, of the application or non-application of Section
1111(b)(2) of the United States Bankruptcy Code; (l) any extension of credit or
the grant of any lien under Xxxxxxx 000 xx xxx Xxxxxx Xxxxxx Bankruptcy Code;
(m) any use of cash collateral under Section 363 of the United States Bankruptcy
Code; or (n) any agreement or stipulation with respect to the provision of
adequate protection in any bankruptcy proceeding of any person.
21.3 Subrogation. Debtor hereby waives (a) any right of subrogation
which Debtor may now or hereafter have against any Borrower that relates to any
Secured Obligation, (b) any right to enforce any remedy Debtor may now or
hereafter have against any Borrowers that relates to any Secured Obligation
(including without limitation any right of reimbursement, indemnity or
contribution), and (c) any right to participate in any collateral now or
hereafter assigned to Secured Party with respect to any Secured Obligation (and
Debtor further agrees that, if and to the extent that any waiver set forth in
this paragraph is ever held to be unenforceable, all such rights of subrogation,
enforcement and participation shall be junior and subordinate to the right of
Secured Party to obtain payment and performance of the Secured Obligations and
to all rights of Secured Party in and to any property which now or hereafter
serves as collateral security for any Secured Obligation).
-20-
21.4 Borrowers' Information. Debtor warrants and agrees: (a) that
Debtor has not relied, and will not rely, on any representations or warranties
by Secured Party to Debtor with respect to the creditworthiness of any Borrower
or the prospects of payment of any Secured Obligation from sources other than
the Collateral; (b) that Debtor has established and/or will establish adequate
means of obtaining from each Borrower on a continuing basis financial and other
information pertaining to the business operations, if any, and financial
condition of such Borrower; (c) that Debtor assumes full responsibility for
keeping informed with respect to any Borrower's business operations, if any, and
financial condition; and (d) that Secured Party shall have no duty to disclose
or report to Debtor any information now or hereafter known to Secured Party with
respect to any Borrower, including without limitation information relating to
any Borrower's business operations or financial condition.
21.5 Other Rights of Sureties. Debtor hereby waives all other rights
it may now or hereafter have, whether or not similar to any of the foregoing, by
reason of laws of the State of Nevada pertaining to sureties or guarantors.
21.6 Duration. The lien of this Security Agreement on the Collateral
shall continue until the expiration of all periods within which any amount at
any time paid on account of the obligations secured hereby may be required to be
restored or returned by Secured Party upon the bankruptcy, insolvency or
reorganization of any Borrower, any guarantor or surety or any other person. In
the event that any amount at any time paid on account of the obligations secured
hereby is required to be restored or returned by Secured Party as a result of
any such bankruptcy, insolvency or reorganization, this Security Agreement shall
secure such amount as if such amount was never paid.
21.7 Subordination. Until all of the Secured Obligations have been
fully paid and performed, (a) Debtor hereby agrees that all existing and future
indebtedness and other obligations of each Borrower to Debtor (collectively, the
"Subordinated Debt") shall be and are hereby subordinated to all Secured
Obligations which constitute obligations of the
-21-
applicable Borrower, and the payment thereof is hereby deferred in right of
payment to the prior payment and performance of all such Secured Obligations;
(b) Debtor shall not collect or receive any cash or non-cash payments on any
Subordinated Debt or transfer all or any portion of the Subordinated Debt; and
(c) in the event that, notwithstanding the foregoing, any payment by, or
distribution of assets of, any Borrower with respect to any Subordinated Debt is
received by Debtor such payment or distribution shall be held in trust and
immediately paid over to Secured Party, is hereby assigned to Secured Party as
security for the Secured Obligations, and shall be held by Secured Party in an
interest bearing account until all Secured Obligations have been fully paid and
performed.
21.8 Lawfulness and Reasonableness. Debtor warrants that all of the
waivers in this Security Agreement are made with full knowledge of their
significance, and of the fact that events giving rise to any defense or other
benefit waived by Debtor may destroy or impair rights which Debtor would
otherwise have against Secured Party, any Borrower and other persons, or against
collateral. Debtor agrees that all such waivers are reasonable under the
circumstances and further agrees that, if any such waiver is determined (by a
court of competent jurisdiction) to be contrary to any law or public policy,
such waiver shall be effective to the fullest extent permitted by law.
220 Waiver of Jury Trial. DEBTOR, AGENT AND THE LENDERS EACH WAIVE THEIR
RESPECTIVE RIGHTS TO A TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED ON OR
ARISING OUT OF OR RELATED TO THIS SECURITY AGREEMENT, OR THE TRANSACTIONS
CONTEMPLATED HEREBY, IN ANY ACTION, PROCEEDING OR OTHER LITIGATION OF ANY TYPE
BROUGHT BY ANY OF THE PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH
RESPECT TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE. DEBTOR, THE LENDERS AND
THE AGENT EACH AGREE THAT ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A
COURT TRIAL WITHOUT A JURY. WITHOUT LIMITING THE FOREGOING, THE PARTIES FURTHER
AGREE THAT THEIR RESPECTIVE RIGHT TO A TRIAL BY JURY IS WAIVED BY OPERATION OF
THIS SECTION AS TO ANY ACTION, COUNTERCLAIM OR OTHER PROCEEDING WHICH SEEKS, IN
WHOLE OR IN PART, TO CHALLENGE THE VALIDITY OR ENFORCEABILITY OF THIS AGREEMENT
OR THE OTHER LOAN DOCUMENTS OR ANY PROVISION HEREOF OR THEREOF. THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR MODIFICATIONS
TO THIS AGREEMENT.
-22-
23. Notices. All notices or communications herein required or permitted to
be given shall be in writing and shall be governed in all respects by the notice
provisions of the Loan Agreement.
24. Entire Agreement; Amendment; Waiver. This Security Agreement, together
with any and all other documents referred to herein, constitutes the entire
agreement between Debtor and Secured Party pertaining to the subject matter
contained herein. This Security Agreement may not be amended, changed, modified,
altered or terminated except by a written instrument signed by Secured Party and
Debtor. Neither Secured Party nor Debtor may waive any right hereunder except by
a signed written instrument.
25. Severability. In the event any provision of this Security Agreement is
held invalid or unenforceable by any court of competent jurisdiction, such
holding shall not invalidate or render unenforceable any other provision hereof.
26. Section Headings. The subject headings and the sections and
subsections of this Security Agreement are included for convenience only and
shall not affect the construction or interpretation of any provision.
27. Governing Law. This Security Agreement shall be construed in
accordance with and governed by the laws of the State of Nevada.
28. Definitions. Unless otherwise defined, words used herein have the
meanings given them in the Uniform Commercial Code of Nevada.
-23-
29. Execution of Counterparts. This Security Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an original, and
all of which shall constitute but one and the same instrument.
IN WITNESS WHEREOF, Debtor has caused this Security Agreement to be
duly executed as of the date first written above.
"Debtor":
RIO HOTEL AND CASINO, INC.,
a Nevada corporation
By /s/ Xxxxxx X. Xxxxxxxxx
-------------------------------------
Its Vice President - Treasurer
----------------------------------
By
-------------------------------------
Its
----------------------------------
-24-
SCHEDULE 1
DESCRIPTION OF COLLATERAL
All of Debtor's right, title and interest in, to and under the following:
(a) All Accounts of Debtor;
(b) All Chattel Paper of Debtor;
(c) All Contracts of Debtor;
(d) All Documents of Debtor;
(e) All Equipment of Debtor;
(f) All Fixtures of Debtor;
(g) All General Intangibles of Debtor;
(h) All Instruments of Debtor;
(i) All Inventory of Debtor;
(j) All Pledged Stock;
(k) All property of Debtor held by Secured Party, or any other
party for whom Secured Party is acting as agent hereunder, including,
without limitation, all property of every description now or hereafter in
the possession or custody of or in transit to Secured Party or such other
party for any purpose, including, without limitation, safekeeping,
collection or pledge, for the account of Debtor, or as to which Debtor may
have any right or power; and
(l) To the extent not otherwise included, all Proceeds of each
of the foregoing and all accessions to, substitutions and replacements
for, and rents, profits and products of each of the foregoing.
Defined Terms.
As used in this Schedule 1, the following terms shall have the
following meanings (such meanings being equally applicable to both the singular
and plural forms of the terms defined):
"Account Debtor" means any "account debtor," as such term is
defined in Section 9105(1)(a) of the UCC.
"Accounts" means any "account," as such term is defined in
Section 9106 of the UCC, now owned or hereafter acquired by Debtor and, in
any event, shall include, without limitation, all accounts receivable,
book debts and other forms of obligations (other than forms of obligations
evidenced by Chattel Paper, Documents or Instruments) now owned or
hereafter received or acquired by or belonging or owing to Debtor
(including, without limitation, under any trade name, style or division
thereof) whether arising out of goods sold or services rendered by Debtor
or from any other transaction, whether or not the same involves the sale
of goods or services (including, without limitation, any such obligation
which may be characterized as an account or contract right under the UCC)
and all of Debtor's rights in, to and under all purchase orders or
receipts now owned or hereafter acquired by it for goods or services, and
all of Debtor's rights to any goods represented by any of the foregoing
(including, without limitation, unpaid seller's rights of rescission,
replevin, reclamation and stoppage in transit and rights to returned,
reclaimed or repossessed goods), and all monies due or to become due to
Debtor under all purchase orders and contracts for the sale of goods or
the performance of services or both by Debtor (whether or not yet earned
by performance on the part of Debtor or in connection with any other
transaction), now in existence or hereafter occurring, including, without
limitation, the right to receive the proceeds of said purchase orders and
contracts, and all collateral security and guarantees of any kind given by
any Person with respect to any of the foregoing.
-2-
"Chattel Paper" means any "chattel paper," as such term is
defined in Section 9105(l)(b) of the UCC, now owned or hereafter acquired
by Debtor.
"Contracts" means all contracts, undertakings, franchise
agreements or other agreements (other than rights evidenced by Chattel
Paper, Documents or Instruments) in or under which Debtor may now or
hereafter have any right, title or interest, including, without
limitation, with respect to an Account, any agreement relating to the
terms of payment or the terms of performance thereof.
"Documents" means any "documents," as such term is defined in
Section 9105(l)(f) of the UCC, now owned or hereafter acquired by Debtor.
"Equipment" means any "equipment," as such term is defined in
Section 9109(2) of the UCC, now or hereafter owned or acquired by Debtor
and, in any event, shall include, without limitation, all ambulances and
other vehicles, gaming equipment, machinery, furnishings, computers and
other electronic data-processing equipment of any nature whatsoever, any
and all additions, substitutions and replacements of any of the foregoing,
wherever located, together with all attachments, components, parts,
equipment and accessories installed thereon or affixed thereto.
"Fixtures" means "fixtures," as such term is defined in
Section 9313-(1)(a) of the UCC, now or hereafter owned or acquired by
Debtor and, in any event shall include, without limitation, regardless of
where located, all of the fixtures, systems, machinery, apparatus,
equipment and fittings of every kind and nature whatsoever and all
appurtenances and additions thereto and substitutions or replacements
thereof, now or hereafter attached or affixed to or constituting a part
of, or located in or upon, real property wherever located, including,
without limitation, all security systems, heating, electrical, mechanical,
lighting, lifting, plumbing, ventilating, air-conditioning and air
cooling, refrigerating, food preparation, incinerating and power,
-3-
loading and unloading, signs, escalators, elevators, boilers,
communication, switchboards, sprinkler and other fire prevention and
extinguishing fixtures, systems, machinery, apparatus and equipment, and
all engines, motors, dynamos, machinery, pipes, pumps, tanks, conduits and
ducts constituting a part of any of the foregoing, together with all
right, title and interest of Debtor in and to all extensions,
improvements, betterments, renewals, substitutes, and replacements of, and
all additions and appurtenances to any of the foregoing property, and all
conversions of the security constituted thereby, immediately upon any
acquisition or release thereof or any such conversion, as the case may be.
"General Intangibles" means any "general intangibles," as such
term is defined in Section 9106 of the UCC now owned or hereafter acquired
by Debtor and, in any event shall include, without limitation, all right,
title and interest which Debtor may now or hereafter have in or under any
Contract, all customer lists, Trademarks, Patents, rights or intellectual
property, interests in partnerships, joint ventures and other business
associations, Licenses, permits, copyrights, trade secrets, proprietary or
confidential information, inventions (whether or not patented or
patentable), technical information, procedures, designs, knowledge,
know-how, software, data bases, data, skill, expertise, recipes,
experience, processes, models, drawings, materials and records, goodwill
(including, without limitation, the goodwill associated with any
Trademark, Trademark registration or Trademark licensed under any
Trademark License), claims in or under insurance policies, including
unearned premiums, uncertificated securities, deposit accounts, rights to
receive tax refunds and other payments and rights of indemnification.
"Instruments" means any "instrument," as such term is defined
in Section 9105(1)(i) of the UCC now owned or hereafter acquired by
Debtor, including, without limitation, all notes, certificated securities,
and other evidences of indebtedness, other than instruments that
constitute or are a part of a group of writings that constitute, Chattel
Paper.
-4-
"Inventory" means any "inventory," as such term is defined in
Section 9109(4) of the UCC, wherever located, now or hereafter owned or
acquired by, Debtor and, in any event, shall include, without limitation,
all inventory, merchandise, goods and other personal property which are
held by or on behalf of Debtor for sale or lease or are furnished or are
to be furnished under a contract of service or which constitute raw
materials, work in process or materials used or consumed or to be used or
consumed in Debtor's business, or the processing, packaging, promotion,
delivery or shipping of the same, and all furnished goods whether or not
such inventory is listed on any schedules, assignments or reports
furnished to Secured Party from time to time and whether or not the same
is in transit or in the constructive, actual or exclusive occupancy or
possession of Debtor or is held by Debtor or by others for Debtor's
account, including, without limitation, all goods covered by purchase
orders and contracts with suppliers and all goods billed and held by
suppliers and all inventory which may be located on premises of Debtor or
of any carriers, forwarding agents, truckers, warehousemen, vendors,
selling agents or other persons.
"License" means any Patent License, Trademark License or other
license of rights or interests now held or hereafter acquired by Debtor.
"Patent License" means any of the following now owned or
hereafter acquired by Debtor: any written agreement granting any
right with respect to any invention on which a Patent is in
existence.
"Patents" means all of the following in which Debtor now holds
or hereafter acquires any interest: (a) letters patent of the United
States or any other country, all registrations and recordings thereof, and
all applications for letters patent of the United States or any other
country, including, without limitation, registrations, recordings and
applications in the United States Patent and Trademark Office or in any
similar office or agency of the United States, any State thereof
-5-
or any other country and (b) all reissues, continuations,
continuations-in-part or extensions thereof; all xxxxx patents,
divisionals, and patents of addition; and (c) all patents to issue on such
applications.
"Pledged Stock" means all of the shares of stock described in
Schedule 2 hereto and issued by the issuers named therein and all
additional shares of stock of any such issuer from time to time acquired
by Debtor in any manner and any other securities, options or rights
received by Debtor pursuant to any reclassification, reorganization,
increase or reduction of capital or stock dividend or in substitution of
or in exchange for any such shares of stock (all of which shares of stock
shall be deemed part of the Pledged Stock) and all shares of stock
acquired, received or owned by Debtor of any issuer who, after the date of
this Security Agreement, becomes, as a result of any occurrence, a
Subsidiary (as that term is defined in the Loan Agreement) of Debtor.
"Proceeds" means "proceeds," as such term is defined in
Section 9306(1) of the UCC and, in any event, shall include, without
limitation, (a) any and all Accounts, Chattel Paper, Instruments, cash or
other proceeds payable to Debtor from time to time in respect of the
Collateral or any Contract, (b) any and all proceeds of any insurance,
indemnity, warranty or guaranty payable to Debtor from time to time with
respect to any of the Collateral or any Contract, (c) any and all payments
(in any form whatsoever) made or due and payable to Debtor from time to
time in connection with any requisition, confiscation, condemnation,
seizure or forfeiture of all or any part of the Collateral above by any
governmental body, authority, bureau or agency (or any person acting under
color of governmental authority), (d) any claim of Debtor against third
parties (i) for past, present or future infringement of any Patent or
Patent License or (ii) for past, present or future infringement or
dilution of any Trademark or Trademark License or for injury to the
goodwill associated with any Trademark, Trademark registration or
Trademark licensed under any Trademark License and (e) any and all other
amounts from time to time paid or payable under or in connection with any
of the Collateral or any Contract.
-6-
"Trademark License" means any of the following now owned or
hereafter acquired by Debtor: any written agreement granting any right to
use any Trademark or Trademark registration.
"Trademarks" means any of the following now owned or hereafter
acquired by Debtor: (a) any trademarks, tradenames, corporate names,
business names, trade styles, service marks, logos, other source or
business identifiers, prints and labels on which any of the foregoing have
appeared or appear, designs and general intangibles of like nature, now
existing or hereafter adopted or acquired, all registrations and
recordings thereof, and any applications in connection therewith,
including, without limitation, registrations, recordings and applications
in the United States Patent and Trademark Office or in any similar office
or agency of the United States, any State thereof or any other country or
any political subdivision thereof and (b) any reissues, extensions or
renewals thereof.
"UCC" or "Uniform Commercial Code" means the Uniform
Commercial Code as the same may, from time to time, be in effect in the
State of Nevada; provided, however, in the event that, by reason of
mandatory provisions of law, any or all of the attachment, perfection or
priority of Secured Party's security interest in any collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction
other than the State of Nevada, the term "UCC" or "Uniform Commercial
Code" shall mean the Uniform Commercial Code as in effect in such other
jurisdiction for purposes of the provisions hereof relating to such
attachment, perfection of priority and for purposes of definitions related
to such provisions.
-7-
SCHEDULE 2
PLEDGED STOCK
Percentage Number
of of
Stock Issuer Class of Stock Ownership Shares Cert. No.
------------ -------------- ---------- ------ ---------
Rio Properties, Inc. Common 100% 100 1
Rio Leasing, Inc. Common 100% 99,000 12
SCHEDULE 3
SECURITY AGREEMENT SUPPLEMENT
This Security Agreement Supplement, dated as of ,
is delivered pursuant to Section 4.2 of the Security Agreement referred to
below. The undersigned hereby agrees that this Security Agreement Supplement may
be attached to the Parent Pledge and Security Agreement, dated as of
, 1998 (as amended, supplemented or otherwise modified
from time to time, the "Security Agreement", the terms defined therein and not
otherwise defined herein being used as therein defined), made by Rio Hotel and
Casino, Inc. in favor of Bank of America National Trust and Savings Association
as agent for itself and the Lenders and that the shares of stock listed on this
Security Agreement Supplement shall be and become part of the Pledged Stock
referred to in the Security Agreement and shall secure all Secured Obligations
in accordance therewith.
The undersigned agrees that the securities listed on Exhibit A
attached to this Security Agreement Supplement shall for all purposes constitute
Pledged Stock and shall be subject to the security interest created by the
Security Agreement in favor of the Secured Party.
The undersigned hereby certifies that the representations and
warranties set forth in Section 3 of the Security Agreement are true and correct
as to the Pledged Stock listed herein on and as of the date hereof.
RIO HOTEL AND CASINO, INC.,
a Nevada corporation
By:
------------------------------------
Title:
---------------------------------
EXHIBIT A
TO SECURITY AGREEMENT SUPPLEMENT
Percentage Number
of of
Stock Issuer Class of Stock Ownership Shares Cert. No.
------------ -------------- ---------- ------- ---------
