Security Agreement - Nipmuc Nation and Lakes Nipmuc LLC
SECURITY AGREEMENT
This Security Agreement is made and entered into this 5th day of July,
2001, between THE NIPMUC NATION, which is or will be a federally recognized
Indian tribe located in the Commonwealth of Massachusetts, with tribal offices
located at 156 Worcester-Providence Road, Suite 28, Sutton Square Mall, Sutton,
Massachusetts 10590 ("DEBTOR") and Lakes Nipmuc, LLC, a Minnesota limited
liability company whose business office is located 130 Cheshire Lane,
Minnetonka, Minnesota 55305 ("SECURED PARTY").
RECITALS
WHEREAS, the Debtor is or will be a federally recognized Indian tribe
eligible for the special programs and services provided by the United States to
Indians because of their status as Indians and is recognized as possessing
powers of self-government.
WHEREAS, the Debtor intends to acquire lands which the Unites States
government will hold in trust for gaming purposes for the benefit of the Tribe
("Tribal Lands"), and over which the Tribe will possess sovereign governmental
powers.
WHEREAS, the Debtor has the inherent power to conduct and regulate
gaming on its Tribal Lands.
WHEREAS, in connection with the development, construction operation,
and management of a Class III gaming facility on the Tribal Lands, the Debtor
and the Secured Party have entered into separate development and management
agreements of even date herewith related thereto (as heretofore and hereafter
amended, the "Development Agreement" and "Management Agreement") with the
Secured Party.
WHEREAS, pursuant to the Development Agreement and the Management
Agreement, Secured Party will, among other things, advance funds to Debtor.
WHEREAS, as a material inducement to Secured Party to enter into the
Development Agreement and the Management Agreement, the Debtor has agreed to
execute this Security Agreement in favor of Secured Party and to grant a
security interest to Secured Party in all of its right, title and interest in
the property described herein.
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AGREEMENT
Now therefore, in consideration of the above recitals and the mutual
covenants hereinafter set forth, the parties hereto agree as follows:
1. CREATION OF SECURITY INTEREST. The Debtor hereby assigns, pledges
and grants to Secured Party a security interest in the Debtor's right, title and
interest in and to the collateral described in Section 2 hereinbelow (the
"COLLATERAL") in each case whether now owned or hereafter acquired by Debtor in
order to secure the payment and performance of the obligations of Debtor to
Secured Party described in Section 3 herein below. On the date of execution of
this Agreement, Debtor shall cause to be delivered to Secured Party: (a) such
financing statements and similar documents necessary to perfect the security
interest granted to Secured Party pursuant to this Agreement (the "Financing
Statements"), and (b) a legal opinion in form and substances reasonably
acceptable to Secured Party, opining as to the due authorization, execution,
delivery and enforceability of this Agreement and the Financing Statements by
Debtor, together with opinions as to Debtor's sovereign immunity waiver and
non-contravention with laws and agreements.
2. COLLATERAL. The Collateral under this Security Agreement includes
all of the following assets, the acquisition of which is funded with the
proceeds of any Facility Loan advance by Secured Party to or for the benefit of
Borrower and/or that may be funded with the proceeds of any such collateral
(collectively all of the following property and similar or after-acquired
property under this Section 2 being hereinafter referred to as "COLLATERAL"):
(a) all furnishings, furniture, fixtures and equipment of
every nature whatsoever of Debtor which are or are to be installed,
attached and/or used in connection with the operation of the
Enterprise, including, but not limited to, all of the following:
(i) cashier, money sorting and money counting
equipment, surveillance and communication equipment, and
security equipment;
(ii) slot machines, video games of chance, table
games, keno equipment and other gaming equipment;
(iii) office furnishings and equipment;
(iv) specialized equipment necessary for the
operation of any portion of the Enterprise for accessory
purposes, including equipment for kitchens, laundries, dry
cleaning, cocktail lounges, restaurants, public rooms,
commercial and parking spaces, and recreational facilities;
and
(v) hotel equipment (to the extent a hotel is
included in the Enterprise);
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each of the foregoing whether now owned or hereafter at any time acquired by
Debtor and wherever located, and includes all replacements, additions, parts,
appurtenances, accessions, substitutions, repairs, proceeds, products,
offspring, rents and profits, relating thereto or therefrom, and all documents,
records, ledger sheets and files of Debtor relating thereto; together further
with all proceeds of any such Collateral, including, without limitation (i)
whatever is now or hereafter receivable or received by Debtor upon the sale,
exchange, collection or other disposition of any item of Collateral, whether
voluntary or involuntary, whether such proceeds constitute equipment,
intangibles, or other assets; (ii) any such items which are now or hereafter
acquired by Debtor with any proceeds of Collateral hereunder; and (iii) any
insurance proceeds or any payments under any indemnity, warranty or guaranty now
or hereafter payable by reason of loss or damage or otherwise with respect to
any item of Collateral or any proceeds thereof.
Capitalized terms used and not otherwise defined herein shall have the
meanings set forth in the Development Agreement and Management Agreement. As
they are used in this Agreement, the terms listed below shall have the following
meanings:
"Enterprise" shall mean the business enterprise of the Debtor
created to engage in Class III Gaming (as defined in the Indian Gaming
Regulatory Act of 1988, Public Law 100-497 ("IGRA")) at the Facility,
and which shall include any other lawful commercial activity allowed in
or near the Facility including, but not limited to, operating and
managing office space, kids arcade, child care facility, hotel with
swimming pool and golf course, restaurant, RV park, retail stores,
entertainment facilities, or the sale of fuel, food, beverages,
alcohol, tobacco, gifts, and souvenirs.
"Facility" means the permanent buildings, structures and
improvements used by the Enterprise for its gaming and incidental
operations located on the Gaming Enterprise Site and all Furnishings
and Equipment (as defined in the Development Agreement).
"Gaming Enterprise Site " shall mean the lands to be made
Tribal Lands and used as the site for constructing the Facility and
operating the Enterprise described on Exhibit A to the Development
Agreement, which is to be in held by the United States government in
trust for gaming purposes for the Debtor, and which meets the
requirements of United States of America to be accepted in trust for
the Debtor for Class II and Class III Gaming purposes.
3. SECURED OBLIGATIONS OF DEBTOR. The Collateral secures and shall
hereafter secure: (i) all loans, compensation, fees, expenses and other amounts
owing by Debtor to Secured Party under or with respect to the Development
Agreement, the Management Agreement, the Interim Promissory Note, the Facility
Note, the Transition Loan, the Facility Loan, the Operating Note, the Indemnity
Agreement and each of the other Transaction Documents (as each of such terms are
defined in the Development Agreement and Management Agreement), each of the
foregoing, whether now existing or hereafter incurred or arising, (ii) any and
all sums advanced by Secured Party in order to preserve the Collateral or
preserve Secured Party's security interest in the Collateral (or the priority
thereof) and (iii) the expenses of retaking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the Collateral, of any
proceeding for the collection or enforcement of any indebtedness, obligations or
liabilities of Debtor referred to above, or of any
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exercise by Secured Party of its rights hereunder, together with reasonable
attorneys' fees and disbursements and court costs (collectively, the "SECURED
OBLIGATIONS"); PROVIDED HOWEVER, Secured Party agrees to terminate this Security
Agreement upon request if Debtor has satisfied the following conditions: (a) all
Secured Obligations have been repaid in full to Secured Party and Secured Party
has no further obligation, if any, to make advances under the Development
Agreement and Management Agreement with respect thereto, and (b) at the time of
the requested termination, no Event of Default has occurred and continues to
exist.
All payments and performance by Debtor with respect to any Secured
Obligations shall be in accordance with the terms under which said indebtedness,
obligations and liabilities were or are hereafter incurred or created.
4. DEBTOR'S REPRESENTATIONS AND WARRANTIES. The Debtor represents and
warrants that:
(a) the Debtor is (or, to the extent that the Collateral is acquired
after the date hereof, will be) the sole legal and beneficial owner of its
respective Collateral and has exclusive possession and control thereof; there
are no security interests in, liens, charges or encumbrances on, or adverse
claims of title to, or any other interest whatsoever in, such Collateral or any
portion thereof except such liens permitted by the Development Agreement and
Management Agreement and that are created by this Security Agreement ("PERMITTED
LIENS"); and that no financing statement, notice of lien, mortgage, deed of
trust or instrument similar in effect covering the Collateral or any portion
thereof or any proceeds thereof ("LIEN NOTICE") exists or is on file in any
public office, except as relates to Permitted Liens and except as may have been
filed in favor of Secured Party relating to this Security Agreement or related
agreements, or for which duly executed termination statements have been
delivered to Secured Party for filing;
(b) the Debtor has full right, power and authority to execute, deliver
and perform this Security Agreement. This Security Agreement constitutes a
legally valid and binding obligation of the Debtor, enforceable against the
Debtor in accordance with its terms subject to any limitations set forth in the
Resolution of Limited Waiver attached to the Management Agreement. Subject to
the completion of the items identified in Section 4(c) below, the provisions of
this Security Agreement are effective to create in favor of Secured Party a
valid and enforceable first, prior and perfected security interest in the
Collateral;
(c) except for the filing or recording of the financing statements and
fixture filings that are to be filed in connection with this Security Agreement,
no authorization, approval or other action by, no notice to or registration or
filing with, any person or entity, including without limitation, any stockholder
or creditor of Debtor or any governmental authority or regulatory body is
required, except as may be agreed to by Debtor and Secured Party: (i) for the
grant by the Debtor of the security interest in the Collateral pursuant to this
Security Agreement or for the execution, delivery or performance of this
Security Agreement by the Debtor, (ii) for the perfection or maintenance of such
security interest created hereby, including the first priority nature of such
security interest, or the exercise by Secured Party of the rights and remedies
provided for in this Security Agreement (other than any required governmental
consent or filing with respect to any
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patents, trademarks, copyrights, governmental claims, tax refunds, licenses or
permits and the exercise of remedies requiring prior court approval), or (iii)
for the enforceability of such security interest against third parties,
including, without limitation, judgment lien creditors;
(d) Debtor does not do business, and for the previous five years has
not done business, under any fictitious business names or trade names;
(e) the Collateral has not been and will not be used or bought by
Debtor for personal, family or household purposes;
(f) the Debtor's chief executive office is located at the address
referenced as the first page of this Agreement, Debtor has no places of business
other than such address and the Collateral is now and will at all times
hereafter be located at Debtor's places of business or as Debtor may otherwise
notify Secured Party in writing;
(g) Intentionally omitted;
(h) Debtor has not purchased any Collateral, other than for cash,
within twenty-one (21) days prior to the date hereof;
(i) all originals of all promissory notes, other instruments or chattel
paper which evidence Collateral (other than checks received by Debtor in the
ordinary course of business) have been delivered to Secured Party (with all
necessary or appropriate endorsements); and
(j) none of the execution, delivery and performance of this Security
Agreement by Debtor, the consummation of the transactions herein contemplated,
the fulfillment of the terms hereof or the exercise by Secured Party of any
rights or remedies hereunder will constitute or result in a breach of any of the
terms or provisions of, or constitute a default under, or constitute an event
which with notice or lapse of time or both will result in a breach of or
constitute a default under, any agreement, indenture, mortgage, deed of trust,
equipment lease, instrument or other document to which Debtor is a party,
conflict with or require approval, authorization, notice or consent under any
law, order, rule, regulation, license or permit applicable to Debtor of any
court or any federal or state government, regulatory body or administrative
agency, or any other governmental body having jurisdiction over Debtor or its
properties, or require notice, consent, approval or authorization by or
registration or filing with any person or entity (including, without limitation,
any stockholder or creditor of Debtor) other than any notices to Debtor from
Secured Party required hereunder except as may be agreed to by Debtor and
Secured Party. Except for the Permitted Liens, none of the Collateral is subject
to any agreement, indenture, mortgage, deed of trust, equipment lease,
instrument or other document to which Debtor is a party which may restrict or
inhibit Secured Party's rights or ability to sell or dispose of the Collateral
or any part thereof after the occurrence of an Event of Default (as defined
herein).
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5. COVENANTS OF DEBTOR. The Debtor covenants and agrees that:
(a) Debtor will not move or permit to be moved the Collateral or any
portion thereof to any location other than that set forth in Section 4(f)
hereof, the Gaming Enterprise Site or locations established in compliance with
Section 5(b) hereof without the prior written consent of the Secured Party and
the prior filing of a financing statement with the proper office and in the
proper form to perfect or continue the perfection (without loss of priority) of
the security interests created herein, which filing shall be satisfactory in
form, substance and location to Secured Party prior to such filing;
(b) Debtor will not voluntarily or involuntarily change its name,
identity, corporate structure, or location of its chief executive office or any
of its other places of business, unless in any such case: (i) Debtor shall have
first received the prior written consent of Secured Party, (ii) Debtor shall
have executed and caused to be filed financing statements with the proper
offices and in the proper form to perfect or continue the perfection (without
loss of priority) of the security interests created herein, which filing shall
be satisfactory in form, substance and location to Secured Party prior to such
filing, and (iii) Debtor shall have delivered to Secured Party any other
documents required by Secured Party in a form and substance satisfactory to
Secured Party;
(c) Intentionally Omitted;
(d) Debtor will promptly, and in no event later than 21 days after a
request by Secured Party, procure or execute and deliver all further instruments
and documents (including, without limitation, notices, legal opinions, financing
statements, mortgagee waivers, landlord disclaimers and subordination
agreements) necessary or appropriate to and take any other actions which are
necessary or, in the judgment of Secured Party, desirable or appropriate to
perfect or to continue the perfection, priority and enforceability of Secured
Party's security interests in the Collateral, to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral, to protect the Collateral against the rights, claims or interests of
third persons, or to effect or to assure further the purposes' and provisions of
this Security Agreement, and will pay all reasonable costs incurred in
connection therewith. Without limiting the generality of the foregoing, Debtor
will: (i) mark conspicuously each item of chattel paper and each other contract
included in the Collateral with a legend, in form and substance satisfactory to
Secured Party, indicating that such chattel paper and other contracts are
subject to the security interests granted hereby; (ii) execute and file such
financing or continuation statements, or amendments thereto, and such other
instruments or notices as may be necessary or desirable, which Secured Party may
reasonably request in order to perfect and preserve the perfection and priority
of the security interests granted or purported to be granted hereby; (iii) if
any Collateral shall be evidenced by a promissory note or other instrument or
chattel paper (other than checks received by any Debtor in the ordinary course
of business), deliver and pledge to Secured Party such note or instrument or
chattel paper duly endorsed and accompanied by duly executed instruments of
transfer or assignment, all in form and substance reasonably satisfactory to
Secured Party; (iv) if any Collateral is at any time in the possession or
control of any warehouseman, bailee, consignee or any of Debtor's agents or
processors, Debtor shall notify such warehouseman, bailee, consignee, agent or
processor of the security interests created or purported to be created hereby,
shall cause such warehouseman, bailee,
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consignee, agent or processor to execute any financing statements or other
documents which Secured Party may request, and, upon the request of Secured
Party after the occurrence and during the continuation of an Event of Default,
shall instruct such person to hold all such Collateral for Secured Party's
account subject to Secured Party's instructions; (v) deliver and pledge to
Secured Party all securities and instruments (other than checks received by
Debtor in the ordinary course of business) constituting Collateral duly endorsed
and accompanied by duly executed instruments of transfer or assignments, all in
form and substance satisfactory to Secured Party; and (vi) at the request of
Secured Party, deliver to Secured Party any and all certificates of title,
applications for title or similar evidence of ownership of all Collateral and
shall cause Secured Party to be named as lienholder on any such certificate of
title or other evidence of ownership;
(e) without the prior written consent of Secured Party, Debtor will not
in any way encumber, or hypothecate, or create or permit to exist, any lien,
security interest, charge or encumbrance or adverse claim upon or other interest
in the Collateral, except for Permitted Liens, and the Debtor will defend the
Collateral against all claims and demands of all persons at any time claiming
the same or any interest therein, except as expressly provided herein. Debtor
will not permit any Lien Notices to exist or be on file in any public office
with respect to all or any portion of the Collateral except, in each case, for
Lien Notices of holders of Permitted Liens or encumbrances permitted by the
Development Agreement and Management Agreement or except as may have been filed
by or for the benefit of Secured Party relating to this Security Agreement or
related agreements. Debtor shall promptly notify Secured Party of any attachment
or other legal process levied against any of the Collateral and any information
received by any Debtor relative to the Collateral, which may in any material way
affect the value of the Collateral or the rights and remedies of Secured Party
in respect thereto;
(f) without the prior written consent of Secured Party, Debtor will not
sell, transfer, assign (by operation of law or otherwise), exchange or otherwise
dispose of all or any portion of the Collateral or any interest therein, except
that the Debtor may sell worn-out or obsolete equipment provided that the
proceeds thereof are applied to the Secured Obligations or used to purchase new
collateral of equal or greater value and the Secured Party shall be granted a
first priority security interest therein. If the proceeds of any such prohibited
sale are notes, instruments, documents of title, letters of credit or chattel
paper, such proceeds shall be promptly delivered to Secured Party to be held as
Collateral hereunder (with all necessary or appropriate endorsements). If the
Collateral, or any part thereof or interest therein, is sold, transferred,
assigned, exchanged, or otherwise disposed of in violation of these provisions,
the security interest of Secured Party shall continue in such Collateral or part
thereof notwithstanding such sale, transfer, assignment, exchange or other
disposition, and Debtor will hold the proceeds thereof in a separate account for
Secured Party's benefit. Debtor will, at Secured Party's request, transfer such
proceeds to Secured Party in kind;
(g) Secured Party is hereby authorized to file one or more financing
statements or fixture filings, and continuations thereof and amendments thereto,
relative to all or any part of the Collateral, without the signature of Debtor
where permitted by law;
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(h) Except as expressly permitted by the Development Agreement and
Management Agreement, Debtor will not enter into any indenture, mortgage, deed
of trust, contract, undertaking, document, instrument or other agreement, except
for the Development Agreement and Management Agreement and any documents,
instruments or agreements related thereto or issue any securities which may
materially restrict or inhibit Secured Party's rights or ability to sell or
otherwise dispose of the Collateral or any part thereof after the occurrence of
an Event of Default;
(i) The Debtor shall cause to be maintained, insurance with respect to
the Enterprise and Collateral as required by the Development Agreement and
Management Agreement and naming Secured Party as an additional insured, loss
payee and mortgagee, if applicable. Upon request, the Debtor shall provide to
the Secured Party certificates of insurance or copies of insurance policies
evidencing that such insurance satisfying the requirements of such Development
Agreement and Management Agreement is in effect at all times;
(j) Except as expressly permitted by the Development Agreement and
Management Agreement, the Debtor will pay and discharge all taxes, assessments
and governmental charges or levies against the Collateral prior to delinquency
thereof and will keep the Collateral free of all unpaid claims and charges
(including claims for labor, materials and supplies) whatsoever;
(k) Debtor will keep and maintain the Collateral in good condition,
working order and repair and from time to time will make or cause to be made all
repairs, replacements and other improvements in connection therewith that are
necessary or desirable toward such end. Debtor will not misuse or abuse the
Collateral, or waste or allow it to deteriorate except for the ordinary wear and
tear of its normal and expected use in Debtor's business in accordance with
Debtor's policies as then in effect (provided that no changes are made to
Debtor's policies as in effect on the date hereof that would be materially
adverse to the interests of the Secured Party), and will comply with all laws,
statutes and regulations pertaining to the use or ownership of the Collateral.
Debtor will promptly notify Secured Party regarding any material loss or damage
to any material Collateral or portion thereof;
(l) The Debtor will take all actions consistent with reasonable
business judgment or, upon the occurrence of an Event of Default, directed by
Secured Party in Secured Party's sole and absolute discretion, to create,
preserve and enforce any liens or guaranties available to secure or guaranty
payments due Debtor under any contracts or other agreements with third parties,
will not voluntarily permit any such payments to become more than thirty (30)
days delinquent and will in a timely manner record and assign to Secured Party,
to the extent and at the earliest time permitted by law, any such liens and
rights to under such guaranties;
(m) Intentionally omitted;
(n) Intentionally omitted;
(o) Secured Party shall have during normal business hours, with
reasonable notice, the right to enter into and upon any premises where any of
the Collateral or records with respect thereto are located for the purpose of
inspecting the same, performing any audit,
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making copies of records, observing the use of any part of the Collateral, or
otherwise protecting its security interest in the Collateral;
(p) Secured Party shall have the right at any time, but shall not be
obligated, to make any payments and do any other acts Secured Party may deem
necessary or desirable to protect its security interest in the Collateral,
including, without limitation, that after the occurrence of an Event of Default
the right to pay, purchase, contest or compromise any encumbrance, charge or
lien (excluding any Permitted Liens) applicable or purported to be applicable to
any Collateral hereunder, and whether prior to or after the occurrence of any
Event of Default, appear in and defend any action or proceeding purporting to
affect its security interest in and/or the value of any Collateral, and in
exercising any such powers or authority, the right to pay all expenses incurred
in connection therewith, including attorneys' fees. Debtor hereby agrees that it
shall be bound by any such payment made or incurred or act taken by Secured
Party hereunder and shall reimburse Secured Party for all reasonable payments
made and expenses incurred under this Security Agreement, which amounts shall be
secured under this Security Agreement. Secured Party shall have no obligation to
make any of the foregoing payments or perform any of the foregoing acts;
(q) if any Debtor shall become entitled to receive or shall receive any
certificate, instrument, option or rights, whether as an addition to, in
substitution of, or in exchange for any or all of the Collateral or any part
thereof, or otherwise, Debtor shall accept any such instruments as Secured
Party's agent, shall hold them in trust for Secured Party, and shall deliver
them forthwith to Secured Party in the exact form received, with Debtor's
endorsement when necessary or appropriate, or accompanied by duly executed
instruments of transfer or assignment in blank or, if requested by Secured
Party, an additional pledge agreement or security agreement executed and
delivered by Debtor, all in form and substance satisfactory to Secured Party, to
be held by Secured Party, subject to the terms hereof, as additional Collateral
to secure the obligations hereunder;
(r) Secured Party is hereby authorized to pay all reasonable costs and
expenses incurred in the exercise or enforcement of its rights hereunder,
including attorneys' fees, and to apply any Collateral or proceeds thereof
against such amounts, and then to credit or use any further proceeds of the
Collateral in accordance herewith; provided however that if the Debtor is the
prevailing party in any action or proceeding seeking enforcement of this
Agreement, then the Debtor shall not be and Secured Party shall be responsible
for such related costs and expenses; and
(s) Secured Party may take any actions permitted hereunder or in
connection with the Collateral by or through agents or employees and shall be
entitled to retain counsel and to act in reliance upon the advice of counsel
concerning all such matters.
6. DEFAULTS AND REMEDIES
6.1 EVENTS OF DEFAULT. Each of the following occurrences shall
constitute an Event of Default:
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(a) Any material representation or warranty made by or on behalf of the
Debtor herein or in any report, certificate or other document furnished by or on
behalf of the Debtor pursuant to this Agreement shall prove to be false or
misleading in any material respect when made.
(b) The Debtor shall default in the due observance or performance of
any of its material obligations hereunder and such default shall continue for
thirty (30) days (unless a shorter or longer cure period is provided under the
terms of this Agreement) after written notice thereof has been sent to the
Debtor by Secured Party; provided, however, that if the nature of such default
(but specifically excluding defaults curable by the payment of money) is such
that it is not possible to cure such breach within thirty (30) days, such 30-day
period shall be extended for so long as the Debtor shall be using diligent
efforts to effect a cure thereof.
(c) A Material Breach shall occur.
6.2 REMEDIES. Upon the occurrence and continuation of an Event of
Default hereunder, the Debtor expressly covenants and agrees that Secured Party
may, at its option, in addition to other rights and remedies provided herein or
otherwise available to it, without notice to or demand upon Debtor (except as
otherwise required herein), exercise any one or more of the rights as set forth
as follows:
(a) declare all advances made by Secured Party to Debtor hereunder, all
other indebtedness owed by Debtor to Secured Party and all Secured Obligations
to be immediately due and payable, whereupon all unpaid principal and interest
on said advances and other indebtedness and Secured Obligations shall become and
be immediately due and payable;
(b) if the Development Agreement and Management Agreement are
terminated and either (i) the Commencement Date (as defined in the Management
Agreement) has not occurred, or (ii) the Debtor does not or at any time fails to
continue operations of Class III Gaming at the Facility or any material portion
of the Enterprise, then subject to the terms of Section 6.4(b) and 6.6(d) of the
Management Agreement, Secured Party may immediately take possession of any of
the Collateral wherever it may be found or require the Debtor to assemble the
Collateral or any part thereof and make it available at one or more places as
Secured Party may designate, and to deliver possession of the Collateral or any
part thereof to Secured Party, who shall have full right to enter upon any or
all of Debtor's places of business, premises and property to exercise Secured
Party's rights hereunder; and without notice (except as specified below), sell
the Collateral or any part thereof in one or more parcels at one or more public
or private sales, at any of Secured Party's offices or elsewhere, at such time
or times, for cash, on credit or for future delivery, and at such price or
prices and upon such other terms as shall be commercially reasonable. The Debtor
acknowledges and agrees that, to the extent notice of sale shall be required by
law, at least ten (10) days' written notice to Debtor of the time and place of
any public sale or of the date on or after which any private sale is to be made
shall constitute reasonable notification. Any public sale shall be held at such
time or times during ordinary business hours and at such place or places as
Secured Party may fix in the notice of such sale. Notwithstanding the foregoing,
Secured Party shall not be obligated to make any sale of Collateral regardless
of notice of sale having been given. Secured Party may, without notice or
publication, adjourn any public or private sale, or cause the same to be
adjourned from time
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to time by announcement at the time and place fixed for sale or, with respect to
a private sale, after which such sale may take place, and any such sale may,
without further notice, be made at the time and place to which it was so
adjourned or, with respect to a private sale, after which such sale may take
place. Each purchaser at any such sale shall hold the property sold free from
any claim or right on the part of Debtor, and the Debtor hereby waives, to the
full extent permitted by law, all rights of stay and/or appraisal which Debtor
now has or may at any time in the future have under any rule of law or statute
now existing or hereafter enacted. The Debtor also hereby waives any claims
against Secured Party arising by reason of the fact that the price at which any
Collateral may have been sold at a private sale was less than the price which
might have been obtained at a public sale, even if Secured Party accepts the
first offer received and does not offer such Collateral to more than one
offeree. The parties hereto agree that the notice provisions, method, manner and
terms of any sale, transfer or disposition of any Collateral in compliance with
the terms set forth herein or any other provision of this Security Agreement are
commercially reasonable;
(c) exercise any or all of the rights and remedies provided for by the
Massachusetts Uniform Commercial Code or applicable law, specifically including,
without limitation, the right to recover the attorneys' fees and other expenses
incurred by Secured Party in the enforcement of this Security Agreement or in
connection with the Debtor's redemption of the Collateral; provided however that
if the Debtor is the prevailing party in any action or proceeding seeking
enforcement of this Agreement, then the Debtor shall not be and SecuredParty
shall be responsible for such related costs and expenses. Secured Party may
exercise its rights under this Security Agreement independently of any other
collateral or guaranty that Debtor may have granted or provided to Secured Party
in order to secure payment and performance of the Secured Obligations, and
Secured Party shall be under no obligation or duty to foreclose or levy upon any
other collateral given by Debtor to secure any Secured Obligation or to proceed
against any guarantor before enforcing its rights under this Security Agreement.
The Debtor shall reimburse Secured Party upon demand for, or Secured Party may
apply any proceeds of Collateral to, the reasonable costs and expenses
(including attorneys' fees, transfer taxes and any other charges) incurred by
Secured Party in connection with any sale, disposition, repair, replacement,
alteration, addition, improvement or retention of any Collateral hereunder;
provided however that if the Debtor is the prevailing party in any action or
proceeding seeking enforcement of this Agreement, then the Debtor shall not be
and Secured Party shall be responsible for such related costs and expenses;
7. MISCELLANEOUS PROVISIONS
(a) Notices. All notices, requests, approvals, consents and other
communications required or permitted to be made hereunder shall, except as
otherwise provided, be in writing and may be delivered personally or sent by
telegram, telecopy, facsimile, telex, first class mail or overnight courier,
postage prepaid, to the parties addressed as follows:
To Debtor: The Nipmuc Nation Tribal Council
156 Worcester-Providence Highway
Suite 28
Sutton Square Mall
Sutton, MA 01590
Attention: Chairman
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<PAGE> 12
With a copy to: Christopher P. Sullivan, Esq.
Robins, Kaplan, Miller & Ciresi L.L.P.
222 Berkeley Street
Boston, MA 02116
If to Secured Party: Lakes Nipmuc, LLC
130 Cheshire Lane
Minnetonka, MN 55305
Attention: Timothy J. Cope
With a copy to: Kevin C. Quigley, Esq.
Johnson Hamilton Quigley Twait & Foley PLC
W1450 First National Bank Building
332 Minnesota Street
St. Paul, MN 55101-1314
and Brian J. Klein, Esq.
Maslon, Edelman, Borman & Brand, LLP
3300 Wells Fargo Center
90 South Seventh Street
Minneapolis, MN 55402-4140
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<PAGE> 13
Such notices, requests and other communications sent as provided hereinabove
shall be effective when received by the addressee thereof, unless sent by
registered or certified mail, postage prepaid, in which case they shall be
effective exactly three (3) business days after being deposited in the United
States mail. The parties hereto may change their addresses by giving notice
thereof to the other parties hereto in conformity with this section.
(b) Headings. The various headings in this Security Agreement are
inserted for convenience only and shall not affect the meaning or interpretation
of this Security Agreement or any provision hereof.
(c) Amendments. This Security Agreement or any provision hereof may be
changed, waived, or terminated only by a statement in writing signed by the
party against which such change, waiver or termination is sought to be enforced,
and then any such waiver or consent shall be effective only in the specific
instance and for the specific purpose for which given.
(d) No Waiver. No failure on the part of Secured Party to exercise, and
no delay in exercising, and no course of dealing with respect to, any power,
privilege or right under this Security Agreement or any related agreement shall
operate as a waiver thereof nor shall any single or partial exercise by Secured
Party of any power, privilege or right under this Security Agreement or any
related agreement preclude any other or further exercise thereof or the exercise
of any other power, privilege or right. The powers, privileges and rights in
this Security Agreement are cumulative and are not exclusive of any other
remedies provided by law. No waiver by Secured Party of any default hereunder
shall be effective unless in writing, nor shall any waiver operate as a waiver
of any other default or of the same default on a future occasion.
(e) Binding Agreement. All rights of Secured Party hereunder shall
inure to the benefit of its successors and assigns. Subject to the terms of the
Development Agreement and Management Agreement, Debtor shall not assign any of
their respective interest under this Security Agreement without the prior
written consent of Secured Party. Any purported assignment inconsistent with
this provision shall, at the option of Secured Party, be null and void.
(f) Entire Agreement. This Security Agreement, together with any other
agreement executed in connection herewith, is intended by the parties as a final
expression of their agreement and is intended as a complete and exclusive
statement of the terms and conditions thereof. Acceptance of or acquiescence in
a course of performance rendered under this Security Agreement shall not be
relevant to determine the meaning of this Security Agreement even though the
accepting or acquiescing party had knowledge of the nature of the performance
and opportunity for objection.
(g) Severability. If any provision or obligation of this Security
Agreement should be found to be invalid, illegal, or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions and obligations or any other agreement executed in connection
herewith, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby and shall nonetheless remain in
full force and effect to the maximum extent permitted by law.
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<PAGE> 14
(h) Survival of Provisions. All representations, warranties and
covenants of Debtor contained herein shall survive the execution and delivery of
this Security Agreement, and shall terminate only upon the termination of this
Security Agreement pursuant to Subsection 7(k) hereof.
(i) Power of Attorney. The Debtor hereby irrevocably appoints Secured
Party its attorney-in-fact, which appointment is coupled with an interest, with
full authority in the place and stead of Debtor and in the name of Debtor,
Secured Party or otherwise, from time to time in Secured Party's discretion (a)
to execute and file financing and continuation statements (and amendments
thereto and modifications thereof) on behalf and in the name of the Debtor with
respect to the security interests granted or purported to be granted hereby, (b)
to take any action and to execute any instrument which Secured Party may deem
necessary or advisable to exercise its rights under Section 5(r) hereunder, and
(c) upon the occurrence and during the continuance of an Event of Default, to
take any action and to execute any instrument which Secured Party may deem
necessary or advisable to accomplish the purposes of this Security Agreement,
including, without limitation:
(i) to obtain and adjust insurance required to be paid to
Secured Party pursuant hereto;
(ii) to ask, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for moneys due and to become
due under or in respect of any of the Collateral;
(iii) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper, in connection with clauses
(i) and (ii) above;
(iv) to sell, convey or otherwise transfer any item of
Collateral to any purchaser thereof; and
(v) to file any claims or take any action or institute any
proceedings which Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights
of Secured Party with respect to any of the Collateral.
(j) Counterparts. This Security Agreement and any amendments, waivers,
consents or supplements may be executed in any number of counterparts and by
facsimile, each of which when so executed and delivered shall be deemed an
original, but all of which shall together constitute one and the same agreement.
(k) Termination of Agreement. Unless earlier terminated pursuant to
Section 3 hereof, this Security Agreement and the security interest hereunder
shall not terminate until full and final payment and performance of all
indebtedness and obligations secured hereunder. At such time, Secured Party
shall reassign and redeliver to Debtor all of the Collateral hereunder which
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<PAGE> 15
has not been sold, disposed of, retained or applied by Secured Party in
accordance with the terms hereof, and execute and deliver to Debtor such
documents as Debtor may reasonably request to evidence such termination. Such
reassignment and redelivery shall be without warranty by or recourse to Secured
Party, and shall be at the expense of Debtor; provided, however, that this
Security Agreement (including all representations, warranties and covenants
contained herein) shall continue to be effective or be reinstated, as the case
may be, if at any time any amount received by Secured Party in respect of the
indebtedness and obligations secured hereunder is rescinded or must otherwise be
restored or returned by Secured Party upon or in connection with the insolvency,
bankruptcy, dissolution, liquidation or reorganization of Debtor or any other
person or upon or in connection with the appointment of any intervenor or
conservator of, or trustee or similar official for, Debtor or any other person
or any substantial part of its assets, or otherwise, all as though such payments
had not been made.
(l) Sovereign Immunity Waiver; Arbitration; Submission to Jurisdiction.
This Agreement constitutes the Security Agreement as defined and referred to in
the Development Agreement and Management Agreement. As such and without limiting
the scope of such agreements, the provisions of Sections 5.9 and 6.1 of the
Development Agreement and 9.10 and Article 10 of the Management Agreement apply
to this Agreement and are hereby incorporated by reference, including, without
limitation, the limited sovereign immunity waiver, limitations on recourse and
arbitration provisions contained therein and the Resolution of Limited Waiver
attached thereto. This Agreement will be governed by the internal laws of the
Commonwealth of Massachusetts without giving effect to its conflict of laws
principles. The parties hereto may not change the law governing this Agreement
without express written consent of the Debtor and Secured Party.
[THE REMAINDER OF THIS PAGE HAS BEEN INTENTIONALLY LEFT BLANK.]
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IN WITNESS WHEREOF, the parties hereto have caused this Security
Agreement to be duly executed and delivered under seal by their respective
undersigned duly authorized officers as of the date first above written.
DEBTOR:
THE NIPMUC NATION
ATTEST:
By: /s/ Arthur Selden By: /s/ Robert Hazzard
-------------------------------- --------------------------------
Name: Arthur Selden Name: Robert Hazzard
Its: Vice Chair Title: Chair
SECURED PARTY:
LAKES NIPMUC, LLC
ATTEST:
By: /s/ Timothy J. Cope By: /s/ Lyle Berman
-------------------------------- --------------------------------
Name: Timothy J. Cope Name: Lyle Berman
Its: CFO Title: CEO