Exhibit 10.2

 

Execution Version

 

PLEDGE AND SECURITY AGREEMENT

AND IRREVOCABLE PROXY

 

THIS PLEDGE AND SECURITY AGREEMENT AND IRREVOCABLE PROXY (this “Agreement”),
dated as of June 26, 2015, is made and given by each of the corporations,
limited liability companies and limited partnerships party hereto (together with
any entity subsequently joining in this Agreement, each a “Grantor” and
collectively the “Grantors”) in favor of NEVADA STATE BANK, a Nevada state
banking corporation (the “Secured Party”).

 

RECITALS

 

A.           Gaming Partners International Corporation, a Nevada corporation
(the “Borrower”) and the Secured Party have entered into a Credit Agreement
dated as of the date hereof (as amended, supplemented, extended, restated or
otherwise modified from time to time prior to the date hereof, the “Credit
Agreement”) pursuant to which the Secured Party has agreed, among other things,
to extend to the Borrower certain credit accommodations.

 

B.           It is a condition precedent to the obligation of the Secured Party
to extend credit accommodations pursuant to the terms of the Credit Agreement
that the Grantors agree to enter into this Agreement.

 

C.           Each Grantor finds it advantageous, desirable and in its best
interests to comply with the requirement that it execute and deliver this
Agreement to the Secured Party.

 

NOW, THEREFORE, in consideration of the premises and in order to induce the
Secured Party to enter into the Credit Agreement and to extend credit
accommodations to the Borrower thereunder, each Grantor hereby agrees with the
Secured Party as follows:

 

Section 1.              Defined Terms.

 

(a)          As used in this Agreement, the following terms shall have the
meanings indicated:

 

“Account” shall mean an “Account” as such term is defined in the NV UCC.  

 

“Account Debtor” shall mean a Person who is obligated on or under any Account,
Chattel Paper, Instrument or General Intangible.

 

“Agreement” shall have the meaning indicated in the opening paragraph hereof.

 

“Borrower” shall have the meaning set forth in Recital A above.

 

“Chattel Paper” shall mean “Chattel Paper” as such term is defined in the NV
UCC.

 

 

 

 

“Collateral” shall have the meaning given to such term in Section 2 hereof;
provided however that “Collateral” shall not include and in no event shall the
security interest granted hereunder attach to any Excluded Property so long as,
and only so long as, any such Collateral is Excluded Property.

 

“Commercial Tort Claim” shall mean “Commercial Tort Claims” as defined in the NV
UCC.  

 

“Control” shall have the meaning given to such term in Section 8-106, 9-104 or
9-106 of the applicable Uniform Commercial Code.

 

“Control Agreement” means a control agreement for deposit accounts, sweep
accounts, securities accounts or other investment accounts, granting the Secured
Party Control over such accounts in each case in form and substance reasonably
satisfactory to the Secured Party.

 

“Credit Agreement” shall have the meaning set forth in Recital C above.

 

“Deposit Account” shall mean a “Deposit Account” as such term is defined in the
NV UCC.

 

“Document” shall mean a “Document” as such term is defined in the NV UCC.

 

“Equipment” shall mean “Equipment” as such term is defined in the NV UCC.

 

“Equity Interests” shall mean all shares, interests, participations or other
equivalents, however designated, of or in a corporation, a limited liability
company, a general partnership, a limited liability partnership or a limited
partnership, whether or not voting, including but not limited to common stock,
limited liability company member interests, warrants, partnership interests,
preferred stock, convertible debentures, and all agreements, instruments and
documents convertible, in whole or in part, into any one or more or all of the
foregoing.

 

“Event of Default” shall have the meaning given to such term in Section 23
hereof.

 

“Excluded Property” shall have the meaning given to such term in Section 2
hereof.

 

“Financing Statement” shall have the meaning given to such term in Section 4
hereof.

 

“Fixtures” shall mean “Fixtures” as such term is defined in the NV UCC.

 

2

 

 

“Foreign Subsidiary” shall mean any Subsidiary that is “foreign,” as defined in
Section 7701(a)(5) of the Code, more than 50 percent of (i) the total combined
voting power of all classes of stock of such corporation entitled to vote, or
(ii) the total value of the stock of such corporation, is directly or indirectly
owned by the Borrower.

 

“General Intangibles” shall mean “General Intangibles” as such term is defined
in the NV UCC.

 

“Government Contract” shall mean a contract between any Grantor and an agency,
department or instrumentality of the United States or any other jurisdiction or
any state, municipal or local Governmental Authority located in the United
States or any other jurisdiction or all obligations of any such Governmental
Authority arising under any Account now or hereafter owing by any such
Governmental Authority, as account debtor, to any Grantor.

 

“Grantor” and “Grantors” shall have the meaning indicated in the opening
paragraph hereof.

 

“Initial Pledged Collateral” shall mean the Pledged Equity Interests and the
Pledged Debt.

 

“Instrument” shall mean “Instrument” as such term is defined in the NV UCC.

 

“Inventory” shall mean “Inventory” as such term is defined in the NV UCC.

 

“Investment Property” shall mean “Investment Property” as such term is defined
in the NV UCC.

 

“Letter of Credit Right” shall mean “Letter of Credit Right” as such term is
defined in the NV UCC.

 

“Lien” shall mean any security interest, mortgage, pledge, lien, charge,
encumbrance, title retention agreement or analogous instrument or device
(including the interest of the lessors under capitalized leases) in, of or on
any assets or properties of the Person referred to.

 

“NV UCC” shall mean the Uniform Commercial Code as enacted and in effect in the
State of Nevada on the date of this Agreement.

 

“Obligations” shall mean (a) all indebtedness, liabilities and obligations of
the Borrower to the Secured Party of every kind, nature or description under the
Credit Agreement and each other Loan Document (as defined in the Credit
Agreement), including the Borrower’s obligations on any promissory note or notes
under the Credit Agreement and any note or notes hereafter issued in
substitution or replacement thereof or under the other Loan Documents and
(b) all liabilities of any Grantor under this Agreement, the Guaranty, or any
other Loan Document to which it is a party, and in all of the foregoing cases
whether due or to become due, and whether now existing or hereafter arising or
incurred; provided that “Obligations” shall exclude all Excluded Swap
Obligations.

 

3

 

 

“Partnership/LLC Interests” means, with respect to any Grantor, the entire
partnership, membership interest or limited liability company interest, as
applicable, of such Grantor in each partnership, limited partnership or limited
liability company owned thereby, including, without limitation, such Grantor’s
capital account, its interest as a partner or member, as applicable, in the net
cash flow, net profit and net loss, and items of income, gain, loss, deduction
and credit of any such partnership, limited partnership or limited liability
company, as applicable, such Grantor’s interest in all distributions made or to
be made by any such partnership, limited partnership or limited liability
company, as applicable, to such Grantor and all of the other economic rights,
titles and interests of such Grantor as a partner or member, as applicable, of
any such partnership, limited partnership or limited liability company, as
applicable, whether set forth in the partnership agreement or membership
agreement, as applicable, of such partnership, limited partnership or limited
liability company, as applicable, by separate agreement or otherwise.

 

“Permitted Lien” means Liens permitted under Section 6.13 of the Credit
Agreement.

 

“Person” shall mean any individual, corporation, partnership, limited
partnership, limited liability company, joint venture, firm, association, trust,
unincorporated organization, government, governmental agency or political
subdivision or any other entity, whether acting in an individual, fiduciary or
other capacity.

 

“Pledged Collateral” shall mean collectively (a) the Initial Pledged Collateral
and the certificates and instruments representing the Initial Pledged
Collateral, and all dividends, interest, principal, cash, instruments and other
property from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Initial Pledged Collateral,
(b) all additional shares of stock, limited liability company member interests,
partnership interests and debt of any issuer of or obligor upon the Initial
Pledged Collateral, or any other issuer, from time to time acquired by any
Grantor in any manner, and the certificates and instruments representing such
additional shares, member interests, partnership interests and debt, and all
dividends, interest, principal, cash, instruments and other property from time
to time received, receivable or otherwise distributed in respect of or in
exchange for any or all of such shares, limited liability company member
interests, partnership interests and debt and (c) any and all collateral
security now or hereafter securing all or any items of the Pledged Debt or
securing all or any items of any additional debt described in clause (b) above
(including after-acquired security) and all agreements granting such security
(the “Related Collateral”) and all rights, remedies, powers and privileges of
any Grantor under all of the foregoing.

 

4

 

 

“Pledged Debt” shall mean the indebtedness described in Schedule I hereto as the
same is updated from time to time and issued by the obligors named therein.

 

“Pledged Equity Interests” shall mean the Equity Interests, if any, described in
Schedule I hereto as the same is updated from time to time issued by the
corporations, limited liability companies and partnerships named therein,
including (a) the Grantor’s capital account, if any, relating to the issuers of
such Equity Interests, (b) the entire economic and voting interest of any
Grantor as a shareholder, member or partner, as applicable, in the issuers of
such Equity Interest and (c) the Grantor’s interest in the organizational
documents of the issuers of such Equity Interests.  

 

“Pledged Partnership/LLC Agreement” shall have the meaning given such term in
Section 10(f) hereof.

 

“Related Collateral” shall have the meaning given to such term in the definition
of “Pledged Collateral” herein.

 

“Secured Party” shall have the meaning indicated in the opening paragraph
hereof.

 

“Securities Account” shall have the meaning given to such term in
Section 104.8501 of the NV UCC.

 

“Securities Act” shall have the meaning given such term in Section 28 hereof.

 

“Security Interest” shall have the meaning given such term in Section 2 hereof.

 

(b)          All other terms used in this Agreement that are not specifically
defined herein shall have the meaning assigned to such terms in the Credit
Agreement or, if not specifically defined therein, shall have the meaning
assigned to such terms in Article 9 of the NV UCC.

 

(c)          Unless the context of this Agreement otherwise clearly requires,
references to the plural include the singular, and to the singular include the
plural, and “or” has the inclusive meaning represented by the phrase
“and/or.”  The words “include,” “includes” and “including” shall be deemed to be
followed by the phrase “without limitation.”  The words “hereof,” “herein,”
“hereunder” and similar terms in this Agreement refer to this Agreement as a
whole and not to any particular provision of this Agreement.  References to
Sections and Schedules are references to Sections and Schedules in this
Agreement unless otherwise provided.

 

5

 

 

Section 2.              Grant of Security Interest.  As security for the payment
and performance of all of the Obligations, each Grantor hereby grants to the
Secured Party a first priority security interest (the “Security Interest”) in
all of such Grantor’s right, title and interest in and to the following, whether
now or hereafter owned, existing, arising or acquired and wherever located (all
being collectively referred to herein as the “Collateral”):

 

(a)          All Accounts.

 

(b)          All Chattel Paper.

 

(c)          All Deposit Accounts.

 

(d)          All Documents.

 

(e)          All Equipment.

 

(f)           All Fixtures.

 

(g)          All General Intangibles.

 

(h)          All Instruments.

 

(i)           All Intellectual Property.

 

(j)           All Inventory.

 

(k)          All Investment Property.

 

(l)           All Letter of Credit Rights.

 

(m)          All Pledged Collateral.

 

(n)          To the extent not otherwise included in the foregoing, all other
rights to the payment of money, including rents and other sums payable to such
Grantor under leases, rental agreements and other Chattel Paper; all books,
correspondence, credit files, records, invoices, bills of lading, and other
documents relating to any of the foregoing, including, without limitation, all
tapes, cards, disks, computer software (other than off-the-shelf software),
computer runs and other papers and documents in the possession or control of
such Grantor or any computer bureau from time to time acting for such Grantor;
all rights in, to and under all policies insuring the life of any officer,
director, stockholder or employee of such Grantor, the proceeds of which are
payable to such Grantor; all accessions and additions to, parts and
appurtenances of, substitutions for and replacements of any of the foregoing;
and all proceeds (including insurance proceeds) and products thereof.

 

6

 

 

Notwithstanding anything herein to the contrary, in no event shall the Security
Interest attach to, or the terms “Collateral,” “Pledged Collateral” or “Pledged
Equity Interests” be deemed to include, (i) any of the outstanding Equity
Interests in a Foreign Subsidiary; (ii) any property subject to a Lien permitted
by Section 6.13(b) of the Credit Agreement if the terms of the Indebtedness
secured thereby prohibit other Liens on such property; (iii) any lease, license,
contract, property rights or agreement to which a Grantor is a party or any of
such Grantor’s rights or interests thereunder, in any case if and for so long as
and to the extent that the grant of the Security Interest or lien shall
constitute or result in (A) the abandonment, invalidation or unenforceability of
any material right, title or interest of such Grantor therein or (B) a breach or
termination pursuant to the terms of, or a default under, any such lease,
license, contract, property rights or agreement (other than to the extent that
any such breach, termination or default would be rendered ineffective pursuant
to Sections 104.9406, 104.9407, 104.9408 or 104.9409 of the NV UCC (or any
successor provision or provisions) of any relevant jurisdiction or any other
applicable law or principles of equity), provided, however, that the Security
Interest (x) shall attach immediately at such time as the condition causing such
abandonment, invalidation or unenforceability shall be remedied, (y) to the
extent severable, shall attach immediately to any term of such lease, license,
contract, property rights or agreement to the extent that such attachment does
not result in any of the consequences specified in (A) or (B) above and
(z) shall attach immediately to any such lease, license, contract, property
rights or agreement to which the account debtor or the Grantor’s counterparty
has consented to such attachment; (iv) any Equity Interest acquired after the
Closing Date that is an Equity Interest in an entity other than a Subsidiary of
the Borrower solely to the extent such acquisition or Investment is permitted
under Section 6.11(e) of the Credit Agreement, if the terms of the
organizational documents of the issuer of such Equity Interests do not permit
the grant of a security interest in such Equity Interests by the owner thereof
or the applicable Grantor has been unable to obtain any approval or consent to
the creation of a Security Interest therein that is required under such
organizational documents; (v) any application to register any trademark or
service mark prior to the filing under applicable law of a verified statement of
use (or the equivalent) for such trademark or service mark to the extent the
creation of a Security Interest therein or the grant of a mortgage thereon would
void or invalidate such trademark or service mark; and (vi) any license, permit,
or authorization issued by any Gaming Authority solely to the extent a security
interest is prohibited under Gaming Laws or which would require a license,
registration, finding of suitability or other similar approval or procedure by
any Gaming Authority prior to being pledged, hypothecated, or given as
collateral security (to the extent such license finding or approval has not been
obtained) (collectively, the “Excluded Property”); provided, however, that any
Collateral (or any portion thereof) that ceases to satisfy the criteria for
Excluded Property (whether as a result of a Grantor obtaining any necessary
consent, any change in any rule of law, statute or regulation or otherwise)
shall no longer be Excluded Property and the Security Interest shall attach
immediately to such Collateral (or portion thereof) at such time.

 

Section 3.              Grantors Remain Liable.  Anything herein to the contrary
notwithstanding, (a) the relevant Grantor shall remain liable under its
Accounts, Chattel Paper, General Intangibles and other items included in the
Collateral to the extent set forth therein to perform all of its duties and
obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by the Secured Party of any of the rights hereunder
shall not release any Grantor from any of its duties or obligations under the
Accounts or any other items included in the Collateral and (c) the Secured Party
shall not have any obligation or liability under Accounts, Chattel Paper,
General Intangibles and other items included in the Collateral by reason of this
Agreement, nor shall the Secured Party be obligated to perform any of the
obligations or duties of any Grantor thereunder or to take any action to collect
or enforce any claim for payment assigned hereunder.

 

7

 

 

Section 4.              Title to Collateral.  The relevant Grantor has (or will
have at the time it acquires rights in Collateral hereafter acquired or arising)
and will maintain so long as the Security Interest may remain outstanding title
to each item of Collateral (including the proceeds and products thereof), free
and clear of all Liens except the Security Interest and except Permitted
Liens.  The Grantors will not license any Collateral (other than pursuant to
non-exclusive licenses in the ordinary course of business) without the prior
written consent of the Secured Party.  The Grantors will defend the Collateral
against all claims or demands of all Persons (other than the Secured Party and
Persons holding Permitted Liens) claiming the Collateral or any interest
therein.  As of the date of execution of this Agreement, no effective financing
statement or other similar document used to perfect and preserve a security
interest under the laws of any jurisdiction (a “Financing Statement”) covering
all or any part of the Collateral is on file in any recording office, except
(a) such as may have been filed in favor of the Secured Party relating to this
Agreement, (b) such as may have been filed to perfect Permitted Liens or
(c) Financing Statements to be terminated on the Closing Date in connection with
indebtedness repaid on the Closing Date.

 

Section 5.              Disposition of Collateral.  No Grantor will sell, lease
or otherwise dispose of, or discount or factor with or without recourse, any
Collateral, except as otherwise permitted by the Credit Agreement.

 

Section 6.              Delivery of Pledged Collateral.  Subject to Gaming Laws,
all certificates and instruments representing or evidencing the Initial Pledged
Collateral shall be delivered to the Secured Party contemporaneously with the
execution of this Agreement, or within five Business Days after the Closing
Date.  Subject to Gaming Laws, all certificates and instruments representing or
evidencing Pledged Collateral received by any Grantor after the execution of
this Agreement shall be delivered to the Secured Party promptly upon that
Grantor’s receipt thereof.  Subject to Gaming Laws, all such certificates and
instruments shall be held by or on behalf of the Secured Party pursuant hereto
and shall be in suitable form for transfer by delivery or shall be accompanied
by duly executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Secured Party.  With respect to all Pledged
Collateral consisting of uncertificated securities, book-entry securities or
securities entitlements, and subject to Gaming Laws, any Grantor shall either
(a) execute and deliver, and cause any necessary issuers or securities
intermediaries to execute and deliver, control agreements in form and substance
satisfactory to the Secured Party covering such Pledged Collateral, or (b) cause
such Pledged Collateral to be transferred into the name of the Secured
Party.  Subject to Gaming Laws, the Secured Party shall have the right at any
time after an Event of Default has occurred and is continuing to cause any or
all of the Pledged Equity Interests to be transferred of record into the name of
the Secured Party or its nominee (but subject to the rights of any Grantor under
Section 10) and to exchange certificates representing or evidencing Pledged
Equity Interests for certificates of smaller or larger denominations.  

 

8

 

 

Section 7.              Intellectual Property Representations and Warranties.

 

(a)          Schedule III contains a complete and accurate listing as of the
Closing Date (or, if later, as of the date any Grantor becomes party hereto) of
all United States and material state and foreign registered Intellectual
Property of the Grantors, including but not limited to (i) United States, state
and foreign trademark registrations and applications for trademark registration,
(ii) United States, state and foreign patents and patents applications, together
with all reissuances, continuations, continuations in part, revisions,
extensions and reexaminations thereof, (iii) United States, state and foreign
copyright registrations and applications for registration, (iv) industrial
design registrations and industrial design applications, (v) domain names, (vi)
all forms of Intellectual Property described in clauses (i)-(iii) above that are
owned by a third party and licensed to any Grantor or otherwise used by any
Grantor under contract and (vii) the names of any Person that has been granted
rights in respect thereof outside of the ordinary course of business.

 

(b)          Except as could not be reasonably expected to result in a Material
Adverse Effect, such Intellectual Property is valid, subsisting, unexpired
(where registered) and enforceable and has not been abandoned or adjudged
invalid or unenforceable, in whole or in part.

 

(c)          To the Grantor’s knowledge, no Person other than the Grantors has
any right or interest of any kind or nature in or to the Intellectual Property,
including any right to sell, license, lease, transfer, distribute, use or
otherwise exploit the Intellectual Property or any portion thereof outside of
the ordinary course of the Grantors’ business, except as noted on Schedule
III.  Each Grantor has good and marketable title to, and the valid and
enforceable power and right to sell, license, transfer, distribute, use and
otherwise exploit, its Intellectual Property, except as noted on Schedule III or
as could not reasonably be expected to result in a Material Adverse Effect.

 

(d)          None of any Grantor’s material Intellectual Property the value of
which to such Grantor is contingent upon maintenance of the confidentiality
thereof has been disclosed by any Grantor to any Person other than employees,
contractors, customers, representatives and agents of the Grantors who are
parties to customary confidentiality and nondisclosure agreements with the
applicable Grantor, except where such disclosures, individually or in the
aggregate, could not be reasonably expected to result in a Material Adverse
Effect.

 

(e)          To the Grantors’ knowledge, no Person has violated, infringed upon
or breached, or is currently violating, infringing upon or breaching, any of the
rights of any Grantor to the Intellectual Property or has breached or is
breaching any duty or obligation owed to any Grantor in respect of the
Intellectual Property except where those breaches, individually or in the
aggregate, could not be reasonably expected to result in a Material Adverse
Effect.

 

(f)          No settlement, consent, covenant not to sue, nonassertion assurance
or release that any Grantor has entered into, or to which any Grantor is bound,
adversely affects any Grantor’s rights to own or use any Intellectual Property,
except as could not be reasonably expected to result in a Material Adverse
Effect, in each case individually or in the aggregate.

 

9

 

 

(g)          No Grantor has received any written notice that remains outstanding
challenging the validity, enforceability or ownership of any Intellectual
Property, except where such challenges could not reasonably be expected to
result in a Material Adverse Effect, either individually or in the aggregate,
and to each Grantor’s knowledge at the date hereof there are no facts upon which
such a challenge could be made.

 

(h)          Each Grantor owns directly or is entitled to use, by license or
otherwise, all Intellectual Property necessary for the conduct of such Grantor’s
business.

 

(i)          Each Grantor uses adequate standards of quality in the manufacture,
distribution and sale of all products sold and in the provision of all services
rendered under or in connection with all trademarks and has taken all
commercially reasonable action necessary to insure that all licensees of the
trademarks owned or licensed by such Grantor use such adequate standards of
quality, except where the failure to use adequate standards of quality could not
reasonably be expected to result in a Material Adverse Effect.

 

(j)          The consummation of the transactions contemplated by the Loan
Documents will not result in the termination or material impairment of any
material Intellectual Property.

 

(k)          No holding, decision or judgment has been rendered in any action or
proceeding before any court or administrative authority challenging the validity
of, any Grantor’s right to register, or any Grantor’s rights to own or use any
material Intellectual Property, and no such action or proceeding is pending or,
to any Grantor’s knowledge, threatened.

 

(l)          Except as could not be reasonably expected to result in a Material
Adverse Effect, each Grantor has been using appropriate statutory notice of
registration in connection with its use of registered trademarks, proper marking
practices in connection with the use of patents and appropriate notice of
copyright in connection with the publication of copyrights material to such
Grantor’s business.

 

Section 8.            Intellectual Property Covenants.

 

(a)         Concurrently with the execution and delivery of this Agreement, each
Grantor that owns or holds any United States registered Intellectual Property
shall execute and deliver to the Secured Party a separate Confirmatory Grant of
Security Interest in Intellectual Property in the form of Exhibit A.  Upon
filing thereof in the applicable office, and filing of appropriate financing
statements in the appropriate jurisdictions, all action necessary or desirable
to protect and perfect the security interest in, to and on the Grantors’ United
States patents, trademarks or copyrights will have been taken and such perfected
security interest will be enforceable as such as against any and all creditors
of and purchasers from the Grantors.

 

10

 

 

(b)          Notice of Filing of Intellectual Property.  If, after the Closing
Date, any Grantor obtains rights to, including but not limited to by filing and
acceptance of a statement of use or an amendment to allege use with the United
States Patent and Trademark Office, or applies for or seeks federal registration
of, any new patentable invention, trademark or copyright in addition to
Intellectual Property described on Schedule III, such Grantor shall provide the
Secured Party with notice thereof (i) after obtaining such rights or applying
for such application with respect to any such Intellectual Property that is
material to the business and operations of the Grantors, taken as a whole,
within 90 days thereafter, and (ii) with respect to all such Intellectual
Property, promptly following a request from the Secured Party and in any event
within 30 days after such request.  Promptly upon request by the Secured Party,
each Grantor shall execute and deliver to the Secured Party any supplement to
this Agreement or any other document reasonably requested by the Secured Party
to evidence the Security Interest in a form appropriate for recording in the
applicable United States federal office.  Each Grantor also hereby authorizes
the Secured Party to modify this Agreement unilaterally (i) by amending Schedule
III to include any future United States registered Intellectual Property of
which the Secured Party receives notification from any Grantor pursuant hereto
and (ii) by recording, in addition to and not in substitution for this
Agreement, a duplicate original of this Agreement containing in Schedule III a
description of such Intellectual Property.

 

Section 9.            Certain Warranties and Covenants.  Each Grantor makes the
following warranties and covenants:

 

(a)          The Pledged Equity Interests have been duly authorized and validly
issued by the issuer thereof and are fully paid and non-assessable.  The Pledged
Debt, if any, to the Grantor’s knowledge, has been duly authorized, issued and
delivered and is the legal, valid and binding obligation of the obligors thereof
and is not in default.  The certificates and instruments, as applicable,
representing the Pledged Collateral are genuine.  Except as may be provided by
the law of the jurisdiction in which a Foreign Subsidiary is organized, the
Pledged Collateral is not subject to any offset or similar right or claim of the
issuers thereof.  

 

(b)          As of the Closing Date (or, if later, the date such Grantor becomes
a party hereto), the Pledged Equity Interests constitute the percentage of the
issued and outstanding ownership interests of the respective issuers thereof
indicated on Schedule I (if any such percentage is so indicated).

 

(c)          As of the Closing Date (or, if later, the date such Grantor becomes
a party hereto), there are no obligations for borrowed money or other
indebtedness owed to any Grantor, including with respect to the deferred
purchase price of property (but excluding all accounts payable on ordinary trade
terms) other than as specifically permitted pursuant to Section 6.11 of the
Credit Agreement and as set forth on Schedule I hereto, as the same is updated
from time to time. Grantors hereby agree to provide the Secured Party with
written notice within 10 Business Days of obtaining any debt instruments or any
rights or interests owed to such Grantor with an individual value in excess of
$50,000, or an aggregate value for all such debt instruments or rights or
interests in excess of $200,000, and upon written request from the Secured
Party, each Grantor hereby agrees to pledge such debt instrument or such rights
or interests and deliver such documents and certificates as the Secured Party
may reasonably request in connection with the perfection and Control of such
debt instrument or such rights or interests.

 

11

 

 

(d)          No Grantor shall forgive, cancel, subordinate, compromise, modify,
amend or extend the time for payment of, or waive any default under, any of the
Pledged Debt, or modify or amend, or waive any default under, any agreement with
respect to the Related Collateral, or consent to or acquiesce in any of the
foregoing, without in each case the prior written consent of the Secured Party.

 

(e)          None of the Collateral (i) shall be deposited in, credited to or
otherwise subject to any Securities Account, except a Securities Account subject
to the Control of the Secured Party, or (ii) shall be subject to the Control of
any Person other than the applicable Grantor and the Secured Party.  

 

(f)          Each Grantor will (i) cause each issuer of the Pledged Equity
Interests that it controls not to issue any Equity Interests in addition to or
in substitution for the Pledged Equity Interests issued by such issuer, except
to the Grantor or as otherwise permitted by the Credit Agreement, and
(ii) pledge hereunder, promptly upon its acquisition thereof, any and all
additional Equity Interests of each issuer of the Pledged Equity Interests that
are issued to the Grantor.

 

(g)          Other than Deposit Accounts and Securities Accounts for which a
Grantor provides written notice to Secured Party after the date hereof (other
than Deposit Accounts opened with the Secured Party), Schedule II lists, as of
the Closing Date, each Grantor’s Deposit Accounts and Securities Accounts
(collectively, the “Existing Accounts”).  Each Grantor (other than the Parent
and Intermediate Holdings) shall (a) in accordance with Section 6.14 of the
Credit Agreement deposit all of its cash in (i) Deposit Accounts maintained with
the Secured Party or (ii) in an account with another Person otherwise subject to
a Control Agreement to the extent permitted under Section 6.14 of the Credit
Agreement; and (b) maintain all Securities Accounts, if any, with the Secured
Party or in an account otherwise subject to a Control Agreement.

 

(h)          Each Grantor shall promptly notify the Secured Party, in writing,
of: (i) any Lien (other than Permitted Liens) on any of the Collateral which
would materially and adversely affect the ability of the Secured Party to
exercise any of its remedies hereunder, (ii) the occurrence of any other event
which could reasonably be expected to materially and adversely effect the
aggregate value of the Collateral or on the Security Interest, (iii) any
Collateral which, to the knowledge of such Grantor, constitutes a Government
Contract with an individual value in excess of $250,000 or to the extent the
aggregate value of all Government Contracts is in excess of $750,000, and (iv)
the acquisition or ownership by such Grantor of any (A) Commercial Tort Claim
(other than, as long as no Default exists, a Commercial Tort Claim for less than
$250,000), or (B) any Letter of Credit Rights after the Closing Date.

 

12

 

 

(i)           As of the date hereof, there are no Partnership/LLC Interests that
are Pledged Equity Interests by their terms expressly provide that they are
securities governed by Article 8 of the applicable Uniform Commercial Code.  
Each Grantor covenants and agrees that it will not permit any issuer of Pledged
Equity Interests to elect to opt into or voluntarily allow any Partnership/LLC
Interest to be governed by Article 8 of the applicable Uniform Commercial Code
without the prior written consent of the Secured Party.   Except to the extent
prohibited by applicable law, if certificates representing any Partnership/LLC
Interests that are Pledged Equity Interests have been issued, such certificates
have been delivered to the Secured Party along with duly executed and undated
stock powers or other similar endorsements in blank with respect to such
Partnership/LLC Interests on the date of this Agreement or if issued after the
date hereof, within 5 Business Days of the issuance of such certificates.  None
of the Partnership/LLC Interests that are Pledged Equity Interests (i) are dealt
in or traded on a Securities exchange or in Securities markets, (ii) are
Investment Company Securities (as defined in the UCC) or (iii) are held in a
Securities Account.

 

Section 10.            Voting Rights; Dividends; Distributions, Equity Interest
in Limited Liability Companies and Partnerships, Etc.  

 

(a)          Subject to paragraph (d) of this Section 10, the relevant Grantor
shall be entitled to exercise or refrain from exercising any and all voting and
other consensual rights pertaining to the Pledged Equity Interests or any other
Equity Interests that become part of the Collateral or any part thereof for any
purpose not inconsistent with the terms of this Agreement or the Credit
Agreement; provided, however, that no Grantor shall exercise or refrain from
exercising any such right if such action could reasonably be expected to have a
material adverse effect on the value of the Pledged Collateral or any material
part thereof.  

 

(b)          Subject to paragraph (e) of this Section 10, the relevant Grantor
shall be entitled to receive, retain and use in any manner not prohibited by the
Credit Agreement any and all principal, interest, dividends and other
distributions paid in respect of the Pledged Collateral, subject to compliance
with applicable Gaming Laws.  

 

(c)          So long as an Event of Default shall have occurred and be
continuing and the Secured Party has notified the applicable Grantor of the
Secured Party’s intention to exercise its voting power under this subsection
(c), subject to compliance with applicable Gaming Laws,

 

i.            the Secured Party may exercise (to the exclusion of such Grantor)
the voting power and all other incidental rights of ownership with respect to
any Pledged Equity Interests or Investment Property constituting
Collateral.  EACH GRANTOR HEREBY GRANTS THE SECURED PARTY AN IRREVOCABLE PROXY
(WHICH IRREVOCABLE PROXY SHALL CONTINUE IN EFFECT UNTIL THE SATISFACTION, IN
FULL, OF ALL OBLIGATIONS) EXERCISABLE UNDER SUCH CIRCUMSTANCES TO VOTE THE
PLEDGED EQUITY INTERESTS, INVESTMENT PROPERTY AND SUCH OTHER COLLATERAL; AND

 

13

 

 

ii.         such Grantor shall promptly deliver to the Secured Party such
additional proxies and other documents as may be necessary to allow the Secured
Party to exercise such voting power.

 

(d)          During the continuance of an Event of Default, and subject to
Gaming Laws, the Secured Party shall have the right in its sole discretion, and
the Grantors shall each execute and deliver all such proxies and other
instruments as may be necessary or appropriate to give effect to such right, to
terminate all rights of the Grantors to exercise or refrain from exercising the
voting and other consensual rights they would otherwise be entitled to exercise
pursuant to Section 10(a) hereof, and all such rights shall thereupon become
vested in the Secured Party that shall thereupon have the sole right to exercise
or refrain from exercising such voting and other consensual rights; provided,
however, that the Secured Party shall not be deemed to possess or have control
over any voting rights with respect to any Pledged Collateral unless and until
the Secured Party has given written notice to the relevant Grantor that any
further exercise of such voting rights by such Grantor is prohibited and that
the Secured Party and/or its assigns will henceforth exercise such voting
rights; and provided, further, that neither the registration of any item of
Pledged Collateral in the Secured Party’s name nor the exercise of any voting
rights with respect thereto shall be deemed to constitute a retention by the
Secured Party of any such Collateral in satisfaction of the Obligations or any
part thereof.

 

(e)          During the continuance of an Event of Default, and subject to
Gaming Laws:

 

i.            all rights of the Grantors to receive the principal, interest,
dividends and other distributions that the Grantors would otherwise be
authorized to receive and retain pursuant to Section 10(b) hereof shall cease,
and all such rights shall thereupon become vested in the Secured Party which
shall thereupon have the sole right to receive and hold such property as Pledged
Collateral, and

 

ii.         all payments of principal, interest, dividends and other
distributions that are received by any Grantor contrary to the provisions of
paragraph (i) of this subsection (e) shall be received in trust for the benefit
of the Secured Party, shall be segregated from such Grantor’s other funds and
shall be forthwith paid over to the Secured Party as Pledged Collateral in the
same form as so received (with any necessary indorsement).

 

(f)          Each of the Grantors covenants and agrees that each of the limited
liability agreement, operating agreement, membership agreement, partnership
agreement or similar agreement to which a Grantor is a party and relating to any
Partnership/LLC Interests that are Pledged Equity Interests (as amended,
restated, supplemented or otherwise modified from time to time, a “Pledged
Partnership/LLC Agreement”) is hereby amended by this Section 10(f) to permit
each member, manager and partner that is a Grantor to pledge all of the
Partnership/LLC Interests that are Pledged Equity Interests in which such
Grantor has rights to and grant and collaterally assign to the Secured Party a
lien and security interest in its Partnership/LLC Interests that are Pledged
Equity Interests in which such Grantor has rights without any further consent,
approval or action by any other party, including, without limitation, any other
party to any Pledged Partnership/LLC Agreement or otherwise, but in all events
subject to Gaming Laws.

 

14

 

 

(g)          During the continuance of an Event of Default, subject to Gaming
Laws, the Secured Party or its designees shall have the right (but not the
obligation) to be substituted for the applicable Grantor as a member, manager or
partner under the applicable Pledged Partnership/LLC Agreement and the Secured
Party shall have all rights, powers and benefits of such Grantor as a member,
manager or partner, as applicable, under such Pledged Partnership/LLC Agreement
in accordance with the terms of Section 10(d).  For avoidance of doubt, such
rights, powers and benefits of a substituted member shall include all voting and
other rights and not merely the rights of an economic interest holder. So long
as this Agreement remains in effect, no further consent, approval or action by
any other party including, without limitation, any other party to the Pledged
Partnership/LLC Agreement or otherwise shall be necessary to permit the Secured
Party to be substituted as a member, manager or partner pursuant to this Section
10(g).  The rights, powers and benefits granted pursuant to this paragraph shall
inure to the benefit of the Secured Party and each of their respective
successors, assigns and designated agents, as intended third party
beneficiaries.

 

(h)          Each applicable Grantor and each applicable Pledged Interest issuer
agrees that so long as this Agreement remains in effect, no Pledged
Partnership/LLC Agreement shall be amended to modify the provisions of Section
10(f) without the prior written consent of the Secured Party, which consent
shall not be unreasonably withheld or delayed.

 

Section 11.            Names, Offices, Locations, Jurisdiction of
Organization.  Each Grantor’s legal name (as set forth in its constituent
documents filed with the appropriate governmental official or agency),
jurisdiction of organization and organizational number are set forth on Schedule
IV.  If any Grantor has been involved in a merger or a disposition of
substantially all of the assets of another person in the five years before the
later of the Closing Date and the date such Grantor becomes a party hereto, the
name of the merged entity or the seller of such assets is set forth on Schedule
IV next to the name of such Grantor. Each Grantor shall from time to time at the
request of the Secured Party provide the Secured Party with current good
standing certificates or state-certified constituent documents from the
appropriate governmental officials. The chief executive office of each Grantor
is located at its address set forth on the signature page hereof.  All premises
where Collateral is located are identified on Schedule IV, which shall be deemed
to be updated from time to time to incorporate additional locations disclosed by
the Borrower in writing to the Secured Party.  No Grantor shall locate or
relocate any item of Collateral into any jurisdiction in which an additional
Financing Statement would be required to be filed to maintain the Secured
Party’s perfected security interest in such Collateral unless such additional
Financing Statement is first filed in such jurisdiction (or such Financing
Statement is a fixture filing).  No Grantor does business nor has done business
during the past five years under any trade name or fictitious business name
except as disclosed on Schedule III or as otherwise specified from time to time
in writing by such Grantor in accordance with the terms of this
Agreement.  Except as disclosed on Schedule IV under such Grantor’s name, no
Grantor has acquired assets from any Person, other than assets acquired in the
ordinary course of such Grantor’s business from a Person engaged in the business
of selling goods of such kind, during the five years before the later of the
Closing Date and the date such Grantor becomes a party to this Agreement.  No
Grantor shall change its name, the location of its chief executive office or its
corporate structure (including without limitation its jurisdiction of
organization) unless the Secured Party has received at least 10 Business Days’
prior written notice thereof and such Grantor has executed and delivered to the
Secured Party such Financing Statements and other instruments as are required or
appropriate to continue the perfection of the Security Interest.

 

15

 

 

Section 12.           Rights to Payment.  Each Account, Chattel Paper, Document,
General Intangible and Instrument constituting or evidencing Collateral is (or,
in the case of all future Collateral, will be when arising or issued) the valid,
genuine and legally enforceable obligation of the Account Debtor or other
obligor named therein or in the relevant Grantor’s records pertaining thereto as
being obligated to pay or perform such obligation.  Without the Secured Party’s
prior written consent, no Grantor will agree to any modifications, amendments,
subordinations, cancellations or terminations of the obligations of any such
Account Debtors or other obligors except in the ordinary course of
business.  Each Grantor will perform and comply in all material respects with
all its obligations under any items included in the Collateral and exercise
promptly and diligently its rights thereunder.

 

Section 13.           Further Assurances; Attorney-in-Fact.

 

(a)          Each Grantor agrees that from time to time, at its expense, and
subject to Gaming Laws and the limitations of Section 13(c), it will promptly
execute and deliver all further instruments and documents, and take all further
action, that may be reasonably necessary or that the Secured Party may
reasonably request, in order to perfect and protect the Security Interest
granted or purported to be granted hereby or to enable the Secured Party to
exercise and enforce its rights and remedies hereunder with respect to any
Collateral (but any failure to request or assure that any Grantor execute and
deliver such instruments or documents or to take such action shall not affect or
impair the validity, sufficiency or enforceability of this Agreement and the
Security Interest, regardless of whether any such item was executed and
delivered or action taken in a similar context or on a prior occasion).  Without
limiting the generality of the foregoing, each Grantor will, promptly and from
time to time at the reasonable request of the Secured Party, (i) execute,
authorize or file such Financing Statements or continuation statements in
respect thereof, or amendments thereto, and such other instruments or notices
(including fixture filings with any necessary legal descriptions as to any goods
included in the Collateral that the Secured Party determines might be deemed to
be fixtures, and, subject to the limitations of Section 13(c), and instruments
and notices with respect to vehicle titles) as may be necessary or desirable, or
as the Secured Party may request, in order to perfect, preserve and enhance the
Security Interest granted or purported to be granted hereby; (ii) use
commercially reasonable efforts to obtain from any bailee holding any item of
Collateral an acknowledgement, in form satisfactory to the Secured Party, that
such bailee holds such Collateral for the benefit of the Secured Party;
(iii) use commercially reasonable efforts to obtain from any securities
intermediary, or other party holding any item of Collateral, Control Agreements
in form satisfactory to the Secured Party; (iv) if an Event of Default exists,
deliver and pledge to the Secured Party all Instruments and Documents, duly
indorsed or accompanied by duly executed instruments of transfer or assignment,
with full recourse to each Grantor, all in form and substance reasonably
satisfactory to the Secured Party; (v) use commercially reasonable efforts to
obtain waivers, in form satisfactory to the Secured Party, of any claim to any
Collateral from any landlords or mortgagees of any property where any Inventory
or Equipment is located; and (vi) deliver all other items and perform all other
actions required pursuant to Section 5.11 of the Credit Agreement.  

 

16

 

 

(b)          Each Grantor hereby authorizes the Secured Party to file one or
more Financing Statements or continuation statements in respect thereof, and
amendments thereto, relating to all or any part of the Collateral without the
signature of such Grantor where permitted by law, including Financing Statements
designating the Collateral as “all assets” or “all personal property” or words
of like import.  Each Grantor irrevocably waives any right to notice of any such
filing, provided that Secured Party shall endeavor to provide notice to such
Grantor promptly after filing any such Financing Statement.  A photocopy or
other reproduction of this Agreement or any Financing Statement covering the
Collateral or any part thereof shall be sufficient as a Financing Statement
where permitted by law.

 

(c)          Upon the occurrence and during the continuance of an Event of
Default, at the request of the Secured Party, all applications for certificates
of title or ownership indicating the Secured Party’s first priority Lien on any
and all Equipment that constitute vehicles (subject to any Permitted Liens)
covered by such certificate, and any other necessary documentation, shall be
filed in each office in each jurisdiction which the Secured Party shall deem
reasonably advisable to perfect its Liens on such vehicles; provided, that at
all times, each certificate of title or ownership relating to each such vehicle
of such Grantor shall be maintained by such Grantor in accordance with
applicable law to reflect the ownership interest of such Grantor.  In addition,
upon the acquisition after the date of this Agreement of any vehicle with a
purchase price of over $100,000, at the request of Secured Party, an application
for certificate of title or ownership indicating the Secured Party’s first
priority Lien on such vehicle (subject to any Permitted Liens), and any other
necessary documentation, shall be filed in each office in each jurisdiction
which the Secured Party shall deem reasonably advisable to perfect its Liens on
such vehicle.

 

(d)          The Grantors will furnish to the Secured Party from time to time
statements and schedules further identifying and describing the Collateral and
such other reports in connection with the Collateral as the Secured Party
reasonably requests, all in reasonable detail and in form and substance
reasonably satisfactory to the Secured Party.

 

(e)          Subject to compliance with Gaming Laws, in furtherance, and not in
limitation, of the other rights, powers and remedies granted to the Secured
Party in this Agreement and the other Loan Documents, each Grantor hereby
appoints the Secured Party such Grantor’s attorney-in-fact, with full authority
in the place and stead of such Grantor and in the name of such Grantor or
otherwise, from time to time during the continuation of an Event of Default and
in the Secured Party’s good faith discretion, to take any action (including the
right to collect on any Collateral) and to execute any instrument that the
Secured Party may reasonably believe is necessary or advisable to accomplish the
purposes of this Agreement, in a manner consistent with the terms hereof. THE
GRANTORS EACH HEREBY ACKNOWLEDGE, CONSENT AND AGREE THAT THE POWER OF ATTORNEY
GRANTED PURSUANT TO THIS SECTION 13(e) IS IRREVOCABLE AND COUPLED WITH AN
INTEREST AND SHALL BE EFFECTIVE UNTIL THE SATISFACTION OF ALL OBLIGATIONS.

 

17

 

 

Section 14.           Taxes and Claims.  In addition to the requirements under
Section 5.4 of the Credit Agreement, each Grantor will promptly pay all income
taxes and other material governmental charges or taxes levied or assessed upon
or against any Collateral or upon or against the creation, perfection or
continuance of the Security Interest, as well as all other claims of any kind
(including claims for labor, material and supplies) against or with respect to
the Collateral, except to the extent (a) such taxes, charges or claims are being
contested in good faith by appropriate proceedings, (b) such proceedings do not
involve any material danger of the sale, forfeiture or loss of any collateral or
any interest therein and (c) such taxes, charges or claims are adequately
reserved against on such Grantor’s books in accordance with GAAP.

 

Section 15.           Books and Records.  In addition to the requirements under
Section 5.7 of the Credit Agreement, each Grantor will keep and maintain at its
own cost and expense reasonably satisfactory and materially complete records of
the Collateral, including a record of all payments received and credits granted
with respect to all Accounts, Chattel Paper and other items included in the
Collateral.

 

Section 16.           Inspection, Reports, Verifications.  Subject to Gaming
Laws, each Grantor will upon prior written notice and at all reasonable times
(which times, unless an Event of Default is continuing, shall be during normal
business hours and at mutually agreeable times) permit the Secured Party or its
representatives to examine or inspect any Collateral, any evidence of Collateral
and such Grantor’s books and records concerning the Collateral, wherever
located, provided, that, unless a Default or an Event of Default is continuing,
the Secured Party shall not conduct such visits, inspections and examinations
more than two times per calendar year.  Each Grantor will from time to time when
requested by the Secured Party furnish to the Secured Party a report on its
Accounts, Chattel Paper, General Intangibles and Instruments, naming the Account
Debtors or other obligors thereon, the amount due and the aging thereof.  During
the continuance of an Event of Default, the Secured Party or its designee is
authorized to contact Account Debtors and other Persons obligated on any such
Collateral from time to time to verify the existence, amount and/or terms of
such Collateral.

 

Section 17.           Notice of Loss.  The Grantors will promptly notify the
Secured Party of any loss of or material damage to any material item of
Collateral or of any substantial adverse change, known to any Grantor, in any
material item of Collateral or the prospect of payment or performance thereof,
in each case that would reasonably be expected to cause a Material Adverse
Effect.

 

Section 18.           Insurance.  Each Grantor shall maintain with financially
sound and reputable insurance companies insurance on all of its Property in such
amounts and covering such risks as are consistent with sound business
practice  and as are customarily carried by companies engaged in similar
business and owning similar properties in localities where the Grantors operate
in accordance with Section 5.3 of the Credit Agreement, and the Borrower, on
behalf of the Grantors, will furnish to the Secured Party upon request full
information as to the insurance carried and evidence that the endorsements,
declaration pages and certificates furnished pursuant to Section 3.1.(a)(vii) of
the Credit Agreement are in full force and effect.  Each Grantor will name the
Secured Party as an additional insured with respect to general liability
insurance and as a lender loss payee with respect to property insurance at all
times prior to the repayment in full of the Obligations.

 

18

 

 

Section 19.            Lawful Use; Fair Labor Standards Act.  Each Grantor will
use and keep the Collateral, and will require that others use and keep the
Collateral, only for lawful purposes, without any material violation of any
federal, state or local law, statute or ordinance.  All Inventory of any Grantor
as of the date of this Agreement that was produced by such Grantor or with
respect to which such Grantor performed any manufacturing or assembly process
was produced by such Grantor (or such manufacturing or assembly process was
conducted) in compliance in all material respects with all requirements of the
Fair Labor Standards Act, and all Inventory produced, manufactured or assembled
by any Grantor after the date of this Agreement will be so produced,
manufactured or assembled, as the case may be.

 

Section 20.            Action by the Secured Party.  If any Grantor at any time
fails to perform or observe any of the foregoing agreements, subject to Gaming
Laws, the Secured Party shall have (and each Grantor hereby grants to the
Secured Party) the right, power and authority (but not the duty) to perform or
observe such agreement on behalf and in the name, place and stead of such
Grantor (or, at the Secured Party’s option, in the Secured Party’s name) and to
take any and all other actions which the Secured Party may reasonably deem
necessary to cure or correct such failure (including, without limitation, the
payment of taxes, the satisfaction of Liens, the procurement and maintenance of
insurance, the execution of assignments, security agreements and Financing
Statements and the indorsement of instruments); and each Grantor shall thereupon
pay to the Secured Party on demand the amount of all monies expended and all
reasonable costs and expenses (including reasonable attorneys’ fees and legal
expenses) incurred by the Secured Party in connection with or as a result of the
performance or observance of such agreements or the taking of such action by the
Secured Party, together with interest thereon from the date expended or incurred
at the highest lawful rate then applicable to any of the Obligations, and all
such monies expended, costs and expenses and interest thereon shall be part of
the Obligations secured by the Security Interest.

 

Section 21.            Insurance Claims.  As additional security for the payment
and performance of the Obligations, each Grantor hereby assigns to the Secured
Party any and all monies (including proceeds of insurance and refunds of
unearned premiums) due or to become due under, and all other rights of such
Grantor with respect to, any and all policies of insurance now or at any time
hereafter covering the Collateral or any evidence thereof or any business
records or valuable papers pertaining thereto.  At any time whether before or
after the occurrence of any Event of Default (or, for any such claim that is
less than $250,000, only during the continuation of an Event of Default), the
Secured Party may (but need not), in the Secured Party’s name or in any
Grantor’s name, execute and deliver proofs of claim, receive all such monies,
indorse checks and other instruments representing payment of such monies, and
adjust, litigate, compromise or release any claim against the issuer of any such
policy.  Notwithstanding any of the foregoing, so long as no Event of Default is
continuing the Grantors shall be entitled to all insurance proceeds with respect
to Equipment or Inventory provided that such proceeds are applied to the cost of
replacement Equipment or Inventory or other assets used or usable in the
Grantors’ business.

 

19

 

 

Section 22.            The Secured Party’s Duties.  The powers conferred on the
Secured Party hereunder are solely to protect its interest in the Collateral and
shall not impose any duty upon it to exercise any such powers.  The Secured
Party shall be deemed to have exercised reasonable care in the safekeeping of
any Collateral in its possession if such Collateral is accorded treatment
substantially equal to the safekeeping that the Secured Party accords its own
property of like kind.  Except for the safekeeping of any Collateral in its
possession and the accounting for monies and for other properties actually
received by it hereunder, the Secured shall have no duty, as to any Collateral,
as to ascertaining or taking action with respect to calls, conversions,
exchanges, maturities, tenders or other matters relative to any Collateral,
whether or not the Secured Party has or is deemed to have knowledge of such
matters, or as to the taking of any necessary steps to preserve rights against
any Persons or any other rights pertaining to any Collateral.  The Secured Party
will take action in the nature of exchanges, conversions, redemptions, tenders
and the like requested in writing by a Grantor with respect to the Collateral in
the Secured Party’s possession if the Secured Party in its reasonable judgment
determines that such action will not impair the Security Interest or the value
of the Collateral, but a failure of the Secured Party to comply with any such
request shall not of itself be deemed a failure to exercise reasonable care with
respect to the taking of any necessary steps to preserve rights against any
Persons or any other rights pertaining to any Collateral.

 

Section 23.            Default.  Each of the following occurrences shall
constitute an “Event of Default” under this Agreement: (a) any Grantor shall
fail to observe or perform its covenant or agreement set forth in Section 4, 5,
6, 8, 9, 10, 11, 12, 14 or 18 of this Agreement; (b) any Grantor shall fail to
observe or perform any other covenant or agreement applicable to it under this
Agreement, which breach is not remedied within 30 days after the earlier of (i)
the date on which an Authorized Officer of such Grantor becomes aware thereof or
(ii) the date on which such Grantor receives notice of the same from the Secured
Party; (c) any material representation or warranty made by any Grantor in this
Agreement or any material schedule, exhibit, supplement or attachment hereto or
in any financial statements, or written reports or certificates heretofore or at
any time hereafter submitted by or on behalf of any Grantor to the Secured
Party, shall prove to have been false or materially misleading when made; or
(d) any “Event of Default” (as defined in the Credit Agreement) shall occur
under the Credit Agreement.

 

Section 24.            Remedies on Default.  Upon and during the continuance of
an Event of Default, and subject to compliance with Gaming Laws:

 

(a)           The Secured Party may exercise and enforce any and all rights and
remedies available upon default to a secured party under Article 9 of the NV
UCC.

 

20

 

 

(b)          The Secured Party shall have the right to enter upon and into and
take possession of all or such part or parts of the properties of each Grantor,
including lands, plants, buildings, Equipment, Inventory and other property, as
may be necessary or appropriate in the judgment of the Secured Party to permit
or enable the Secured Party to manufacture, produce, process, store or sell or
complete the manufacture, production, processing, storing or sale of all or any
part of the Collateral, as the Secured Party may elect, and to use and operate
said properties for said purposes and for such length of time as the Secured
Party may deem necessary or appropriate for said purposes without the payment of
any compensation to any Grantor therefor.  The Secured Party may require each
Grantor to, and each Grantor hereby agrees that it will, at its expense and upon
request of the Secured Party, forthwith assemble all or part of the Collateral
as directed by the Secured Party and make it available to the Secured Party at a
place or places to be designated by the Secured Party.  The Secured Party may
give any entitlement orders deemed appropriate by it with respect to the
Investment Property and Pledged Collateral.  The Secured Party may for any
reason apply for the appointment of a receiver over any Grantor or any of the
Collateral, to which appointment each Grantor hereby consents.

 

(c)          Any disposition of Collateral may be in one or more parcels at
public or private sale, at any of the Secured Party’s offices or elsewhere, for
cash, on credit or for future delivery, and upon such other terms as the Secured
Party may reasonably believe are commercially reasonable.  The Secured Party
shall not be obligated to dispose of Collateral regardless of notice of sale
having been given and the Secured Party may adjourn any public or private sale
from time to time by announcement made at the time and place fixed therefor, and
such disposition may, without further notice, be made at the time and place to
which the sale was so adjourned.  

 

(d)          The Secured Party is hereby granted a license or other right to
use, without charge, all of each Grantor’s property, including, without
limitation, all of each Grantor’s labels, trademarks, copyrights, patents and
advertising matter, or any property of a similar nature, as it pertains to the
Collateral, in completing production of, advertising for sale or selling any
Collateral, and such Grantor’s rights under all licenses and all franchise
agreements shall inure to the Secured Party’s benefit until the Obligations are
paid in full.  

 

(e)          If notice to any Grantor of any intended disposition of Collateral
or any other intended action is required by law in a particular instance, such
notice shall be deemed commercially reasonable if given in the manner specified
for the giving of notice in Section 30 hereof at least ten calendar days prior
to the date of intended disposition or other action, and the Secured Party may
exercise or enforce any and all other rights or remedies available by law or
agreement against the Collateral, against any Grantor, or against any other
Person or property.  The Secured Party (i) may dispose of the Collateral in its
then present condition or following such preparation and processing as the
Secured Party deems commercially reasonable, (ii) shall have no duty to prepare
or process the Collateral prior to sale, (iii) may disclaim warranties of title,
possession, quiet enjoyment and the like and (iv) may comply with any applicable
state or federal law requirements in connection with a disposition of the
Collateral, and none of the foregoing actions shall be deemed to adversely
affect the commercial reasonableness of the disposition of the Collateral.

 

21

 

 

Section 25.            Remedies as to Certain Rights to Payment.  During the
continuance of an Event of Default the Secured Party may notify any Account
Debtor or other Person obligated on any Accounts or other Collateral that the
same have been assigned or transferred to the Secured Party and that the same
should be performed as requested by, or paid directly to, the Secured Party, as
the case may be.  Each Grantor shall join in giving such notice, if the Secured
Party so requests.  During the continuance of an Event of Default, the Secured
Party may, in the Secured Party’s name or in any Grantor’s name, demand, sue
for, collect or receive any money or property at any time payable or receivable
on account of, or securing, any such Collateral or grant any extension to, make
any compromise or settlement with or otherwise agree to waive, modify, amend or
change the obligation of any such Account Debtor or other Person.  If any
payments on any such Collateral are received by such Grantor after an Event of
Default has occurred and is continuing, such payments shall be held in trust by
such Grantor as the property of the Secured Party and shall not be commingled
with any funds or property of such Grantor and shall upon the request of the
Secured Party be forthwith remitted to the Secured Party for application on the
Obligations.  

 

Section 26.           Application of Proceeds.  Subject to Gaming Laws, all cash
proceeds received by the Secured Party in respect of any sale of, collection
from or other realization upon all or any part of the Collateral in connection
with the Secured Party’s exercise of its remedies hereunder may, in the
discretion of the Secured Party, be held by the Secured Party as collateral for,
or then or at any time thereafter so long as an Event of Default shall have
occurred and be continuing be applied in whole or in part by the Secured Party
against, all or any part of the Obligations (including, without limitation, any
expenses of the Secured Party payable pursuant to Section 27 hereof).

 

Section 27.           Costs and Expenses; Indemnity.  In addition to the
requirements set forth in Section 8.12 of the Credit Agreement, the Grantors
will pay or reimburse the Secured Party on demand for all reasonable out of
pocket expenses paid or incurred by the Secured Party, including in each case
all filing and recording costs and fees, taxes, reasonable charges and
disbursements of outside counsel to the Secured Party or the allocated costs of
in-house counsel incurred from time to time, in connection with the creation,
perfection, protection, satisfaction, foreclosure, collection or enforcement of
the Security Interest and the preparation, administration, continuance,
amendment or enforcement of this Agreement, including without limitation any
actions taken by the Secured Party pursuant to Section 12, and all such costs
and expenses shall be part of the Obligations secured by the Security
Interest.  The Grantors shall indemnify and hold the Secured Party harmless from
and against any and all claims, losses and liabilities (including reasonable
attorneys’ fees) arising or resulting from this Agreement and the Security
Interest hereby created (including enforcement of this Agreement) or the Secured
Party’s actions pursuant hereto, except claims, losses or liabilities resulting
from the Secured Party’s gross negligence or willful misconduct as determined by
a final judgment of a court of competent jurisdiction.  Any liability of the
Grantors to indemnify and hold the Secured Party harmless pursuant to the
preceding sentence shall be part of the Obligations secured by the Security
Interest.  The obligations of the Grantors under this Section shall survive any
termination of this Agreement.

 

22

 

 

Section 28.           Waiver of Certain Claims.  The Grantors acknowledge that
because of present or future circumstances, a question may arise under the
Securities Act of 1933, as from time to time amended (the “Securities Act”),
with respect to any disposition of the Pledged Collateral and Investment
Property permitted hereunder.  The Grantors understand that compliance with the
Securities Act may very strictly limit the course of conduct of the Secured
Party if the Secured Party attempts to dispose of all or any portion of the
Pledged Collateral and Investment Property and may also limit the extent to
which or the manner in which any subsequent transferee of the Pledged Collateral
and Investment Property or any portion thereof may dispose of the same.  There
may be other legal restrictions or limitations affecting the Secured Party in
any attempt to dispose of all or any portion of the Pledged Collateral and
Investment Property under the applicable “Blue Sky” or other securities laws or
similar laws analogous in purpose or effect.  The Secured Party may be compelled
to resort to one or more private sales to a restricted group of purchasers who
will be obliged to agree, among other things, to acquire such Pledged Collateral
and Investment Property for their own account for investment only and not to
engage in a distribution or resale thereof.  The Grantors agree that the Secured
Party shall not incur any liability, and any liability of the Grantors for any
deficiency shall not be impaired, as a result of the sale of the Pledged
Collateral and Investment Property or any portion thereof at any such private
sale in a manner that the Secured Party reasonably believes is commercially
reasonable (within the meaning of Section 9-627 of the Uniform Commercial
Code).  The Grantors hereby waive any claims against the Secured Party arising
by reason of the fact that the price at which the Pledged Collateral and
Investment Property may have been sold at such sale was less than the price that
might have been obtained at a public sale or was less than the aggregate amount
of the Obligations, even if the Secured Party shall accept the first offer
received and does not offer any portion of the Pledged Collateral and Investment
Property to more than one possible purchaser, so long as such sale was
commercially reasonable.  The Grantors further agree that the Secured Party has
no obligation to delay sale of any Pledged Collateral and Investment Property
for the period of time necessary to permit the issuer of such Pledged Collateral
and Investment Property to qualify or register such Pledged Collateral and
Investment Property for public sale under the Securities Act, applicable Blue
Sky laws and other applicable state and federal securities laws, even if said
issuer would agree to do so.  Without limiting the generality of the foregoing,
the provisions of this Section would apply if, for example, the Secured Party
were to place all or any portion of the Pledged Collateral and Investment
Property for private placement by an investment banking firm, or if such
investment banking firm purchased all or any portion of the Pledged Collateral
and Investment Property for its own account, or if the Secured Party placed all
or any portion of the Pledged Collateral and Investment Property privately with
a purchaser or purchasers, so long as in each case such sale was commercially
reasonable.

 

Section 29.           Waivers; Remedies; Marshalling.  This Agreement can be
waived, modified, amended, terminated or discharged and the Security Interest
can be released only explicitly in a writing signed by the Secured Party.  A
waiver so signed shall be effective only in the specific instance and for the
specific purpose given.  Mere delay or failure to act shall not preclude the
exercise or enforcement of any rights and remedies available to the Secured
Party.  All rights and remedies of the Secured Party shall be cumulative and may
be exercised singly in any order or sequence, or concurrently, at the Secured
Party’s option, and the exercise or enforcement of any such right or remedy
shall neither be a condition to nor bar the exercise or enforcement of any
other.  The Grantors hereby waive all requirements of law, if any, relating to
the marshalling of assets that would be applicable in connection with the
enforcement by the Secured Party of its remedies hereunder, absent this waiver.

 

23

 

 

Section 30.           Notices.  Any notice or other communication to any party
in connection with this Agreement shall be in writing and shall be sent by
manual delivery, facsimile transmission, overnight courier or United States mail
(postage prepaid) addressed to such party at the address specified on the
signature page hereof, or at such other address as such party shall have
specified to the other party hereto in writing.  All periods of notice shall be
measured from the date of delivery thereof if manually delivered, from the date
of sending thereof if sent by facsimile transmission, from the first business
day after the date of sending if sent by overnight courier or from four days
after the date of mailing if mailed.  All notices shall be made in a manner
consistent with the Credit Agreement.

 

Section 31.           Grantor Acknowledgments.  Each Grantor hereby acknowledges
that (a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement, (b)  Secured Party has no fiduciary relationship to
the respective Grantor, the relationship being solely that of debtor and
creditor and (c) no joint venture exists between the respective Grantor and the
Secured Party.

 

Section 32.           Continuing Security Interest; Assignments under Credit
Agreement.  This Agreement shall (a) create a continuing security interest in
the Collateral and shall remain in full force and effect until payment in full
of the Obligations and the expiration of the obligations (other than inchoate
indemnity obligations, if any) of the Secured Party to extend credit
accommodations to the Borrower, (b) be binding upon each Grantor, its successors
and assigns and (c) inure to the benefit of, and be enforceable by, the Secured
Party and its successors, transferees and assigns.  Without limiting the
generality of the foregoing clause (c), subject to Gaming Laws, the Secured
Party may assign or otherwise transfer all or any portion of their respective
rights and obligations under the Credit Agreement to any other Persons to the
extent and in the manner provided in the Credit Agreement and may similarly
transfer all or any portion of its rights under this Agreement to such Persons.

 

Section 33.           Termination of Security Interest.  Upon payment in full of
the Obligations and the expiration of any obligation of the Secured Party to
extend credit accommodations to the Borrower (other than inchoate indemnity
obligations), the Security Interest and other liens granted hereby shall
terminate.  Upon such termination, the Secured Party will promptly return to the
Borrower or the applicable Grantor such of the Collateral then in the possession
of the Secured Party as shall not have been sold or otherwise applied pursuant
to the terms hereof and execute and deliver to the Grantors such documents,
releases, satisfactions and termination statements as the Grantors shall
reasonably request to evidence such termination.  Any reversion or return of
Collateral upon termination of this Agreement and any instruments of transfer or
termination shall be at the expense of the Grantors and shall be without
warranty by, or recourse to, the Secured Party.  As used in this Section,
“Grantors” includes any assigns of any Grantor, any Person holding a subordinate
security interest in any of the Collateral or whoever else may be lawfully
entitled to any part of the Collateral.

 

Section 34.            Governing Law and Construction.  THE VALIDITY,
CONSTRUCTION AND ENFORCEABILITY OF THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS) OF THE STATE OF NEVADA.  GRANTORS AND SECURED PARTY INTEND THAT THIS
AGREEMENT COMPLIES WITH ALL APPLICABLE GAMING LAWS.  ACCORDINGLY, THE PROVISIONS
OF THIS AGREEMENT ARE SUBJECT, IN THEIR ENTIRETY, TO APPLICABLE GAMING LAWS AND
APPROVALS OF ANY APPLICABLE GAMING AUTHORITY, EVEN THOUGH A PARTICULAR PROVISION
MAY NOT SO EXPRESSLY PROVIDE.  Whenever possible, each provision of this
Agreement and any other statement, instrument or transaction contemplated hereby
or relating hereto shall be interpreted in such manner as to be effective and
valid under such applicable law, but, if any provision of this Agreement or any
other statement, instrument or transaction contemplated hereby or relating
hereto shall be held to be prohibited or invalid under such applicable law, such
provision shall be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of such provision or the
remaining provisions of this Agreement or any other statement, instrument or
transaction contemplated hereby or relating hereto.

 

24

 

 

Section 35.           Consent to Jurisdiction.  AT THE OPTION OF THE SECURED
PARTY, THIS AGREEMENT MAY BE ENFORCED IN ANY FEDERAL COURT OR STATE COURT
SITTING IN CLARK COUNTY, NEVADA; AND EACH OF THE PARTIES HERETO CONSENTS TO THE
JURISDICTION AND VENUE OF ANY SUCH COURT AND WAIVES ANY ARGUMENT THAT VENUE IN
SUCH FORUMS IS NOT CONVENIENT.  IN THE EVENT ANY GRANTOR COMMENCES ANY ACTION IN
ANOTHER JURISDICTION OR VENUE UNDER ANY TORT OR CONTRACT THEORY ARISING DIRECTLY
OR INDIRECTLY FROM THE RELATIONSHIP CREATED BY THIS AGREEMENT, THE SECURED PARTY
AT ITS OPTION SHALL BE ENTITLED TO HAVE THE CASE TRANSFERRED TO ONE OF THE
JURISDICTIONS AND VENUES ABOVE DESCRIBED, OR IF SUCH TRANSFER CANNOT BE
ACCOMPLISHED UNDER APPLICABLE LAW, TO HAVE SUCH CASE DISMISSED WITHOUT
PREJUDICE.

 

Section 36.           Waiver of Notice and Hearing.  TO THE EXTENT PERMITTED BY
APPLICABLE LAW, EACH GRANTOR HEREBY WAIVES ALL RIGHTS TO A JUDICIAL HEARING OF
ANY KIND PRIOR TO THE SECURED PARTY’S EXERCISE OF ITS RIGHTS TO POSSESSION OF
THE COLLATERAL WITHOUT JUDICIAL PROCESS OR ITS RIGHTS TO REPLEVY, ATTACH OR LEVY
UPON THE COLLATERAL WITHOUT PRIOR NOTICE OR HEARING.  EACH GRANTOR ACKNOWLEDGES
THAT IT HAS BEEN ADVISED BY COUNSEL OF ITS CHOICE WITH RESPECT TO THIS PROVISION
AND THIS AGREEMENT.

 

Section 37.           Waiver of Jury Trial; Arbitration; Class Action
Waiver.  This Section contains a jury waiver, arbitration clause, and a class
action waiver.  READ IT CAREFULLY.

 

(a)          Jury Trial Waiver.  The Grantors each waive their respective rights
to a trial before a jury in connection with any Dispute (as “Dispute” is
hereinafter defined), and Disputes shall be resolved by a judge sitting without
a jury.  If a court determines that this provision is not enforceable for any
reason and at any time prior to trial of the Dispute, but not later than 30 days
after entry of the order determining this provision is unenforceable, any party
shall be entitled to move the court for an order compelling arbitration and
staying or dismissing such litigation pending arbitration (“Arbitration Order”).

 

(b)          Arbitration.  If a claim, dispute, or controversy arises with
respect to this Agreement or the other Loan Documents, or any other agreement or
business relationship between the parties hereto whether or not related to the
subject matter of this Agreement (all of the foregoing, a “Dispute”), and only
if a jury trial waiver is not permitted by applicable law or ruling by a court,
either party may require that the Dispute be resolved by binding arbitration
before a single arbitrator at the request of any party.  By agreeing to
arbitrate a Dispute, each party gives up any right that party may have to a jury
trial, as well as other rights that party would have in court that are not
available or are more limited in arbitration, such as the rights to discovery
and to appeal.

 

25

 

 

Arbitration shall be commenced by filing a petition with, and in accordance with
the applicable arbitration rules of, JAMS or National Arbitration Forum
(“Administrator”) as selected by the initiating party.  If the parties agree,
arbitration may be commenced by appointment of a licensed attorney who is
selected by the parties and who agrees to conduct the arbitration without an
Administrator.  Disputes include matters (i) relating to a deposit account,
application for or denial of credit, enforcement of any of the obligations we
have to each other, compliance with applicable laws and/or regulations,
performance or services provided under any agreement by any party, (ii) based on
or arising from an alleged tort, or (iii) involving either party’s employees,
agents, affiliates, or assigns of a party.  However, Disputes do not include the
validity, enforceability, meaning, or scope of this arbitration provision and
such matters may be determined only by a court.  If a third party is a party to
a Dispute, each party will consent to including the third party in the
arbitration proceeding for resolving the Dispute with the third party.  Venue
for the arbitration proceeding shall be at a location determined by mutual
agreement of the parties or, if no agreement, in Las Vegas, Nevada.  

 

After entry of an arbitration order, the non-moving party shall commence
arbitration.  The moving party shall, at its discretion, also be entitled to
commence arbitration but is under no obligation to do so, and the moving party
shall not in any way be adversely prejudiced by electing not to commence
arbitration.  The arbitrator:  (i) will hear and rule on appropriate dispositive
motions for judgment on the pleadings, for failure to state a claim, or for full
or partial summary judgment; (ii) will render a decision and any award applying
applicable law;  (iii) will give effect to any limitations period in determining
any Dispute or defense; (iv) shall enforce the doctrines of compulsory
counterclaim, res judicata, and collateral estoppel, if applicable; (v) with
regard to motions and the arbitration hearing, shall apply rules of evidence
governing civil cases; and (vi) will apply the law of the state specified in the
agreement giving rise to the Dispute.  Filing of a petition for arbitration
shall not prevent any party from (i) seeking and obtaining from a court of
competent jurisdiction (notwithstanding ongoing arbitration) provisional or
ancillary remedies including but not limited to injunctive relief, property
preservation orders, foreclosure, eviction, attachment, replevin, garnishment,
and/or the appointment of a receiver, (ii) pursuing non-judicial foreclosure, or
(iii) availing itself of any self-help remedies such as setoff and
repossession.  The exercise of such rights shall not constitute a waiver of the
right to submit any Dispute to arbitration.

 

Judgment upon an arbitration award may be entered in any court having
jurisdiction except that, if the arbitration award exceeds $4,000,000, any party
shall be entitled to a de novo appeal of the award before a panel of three
arbitrators.  To allow for such appeal, if the award (including Administrator,
arbitrator, and attorney’s fees and costs) exceeds $4,000,000, the arbitrator
will issue a written, reasoned decision supporting the award, including a
statement of authority and its application to the Dispute.  A request for de
novo appeal must be filed with the arbitrator within 30 days following the date
of the arbitration award; if such a request is not made within that time period,
the arbitration decision shall become final and binding.  On appeal, the
arbitrators shall review the award de novo, meaning that they shall reach their
own findings of fact and conclusions of law rather than deferring in any manner
to the original arbitrator.  Appeal of an arbitration award shall be pursuant to
the rules of the Administrator or, if the Administrator has no such rules, then
the JAMS arbitration appellate rules shall apply.

 

26

 

 

Arbitration under this provision concerns a transaction involving interstate
commerce and shall be governed by the Federal Arbitration Act, 9 U.S.C. § 1 et
seq.  This arbitration provision shall survive any termination, amendment, or
expiration of this Agreement.  If the terms of this provision vary from the
Administrator’s rules, this arbitration provision shall control.

 

(c)          Class Action Waiver.  the GRANTORS EACH waive the right to Litigate
in court or arbitrate any claim or Dispute as a class action, either as a member
of a class or as a representative, or to act as a private attorney general.

 

(d)          Reliance.  Each party (i) certifies that no one has represented to
such party that the other party would not seek to enforce jury and class action
waivers in the event of suit, and (ii) acknowledges that it and the other party
have been induced to enter into this Agreement by, among other things, the
mutual waivers, agreements, and certifications in this Section.

 

Section 38.           Counterparts.  This Agreement may be executed in any
number of counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument.

 

Section 39.           General.  All representations and warranties contained in
this Agreement or in any other agreement between any Grantor and the Secured
Party shall survive the execution, delivery and performance of this Agreement
and the creation and payment of the Obligations.  The Grantors waive notice of
the acceptance of this Agreement by the Secured Party.  Captions in this
Agreement are for reference and convenience only and shall not affect the
interpretation or meaning of any provision of this Agreement.

 

27

 

 

Section 40.           Waiver of Defenses.  Each Grantor waives the benefit of
any and all defenses and discharges available to a guarantor, surety, indorser
or accommodation party, dependent on its character as such.  Without limiting
the generality of the foregoing, each Grantor (in such capacity) waives
presentment, demand for payment and notice of nonpayment or protest of any note
or other instrument evidencing any of the Obligations; and each Grantor agrees
that each Grantor’s liability hereunder and the Security Interest hereby created
shall not be affected or impaired in any way by any of the following acts and
things (which the Secured Party may do from time to time without notice to each
Grantor): (a) by any sale, pledge, surrender, compromise, settlement, release,
renewal, extension, indulgence, alteration, substitution, exchange, change in,
modification or other disposition of any of the Obligations or any evidence
thereof or any collateral therefor, (b) by any acceptance or release of
collateral for or guarantors of any of the Obligations, (c) by any failure,
neglect or omission to realize upon or protect any of the Obligations or to
obtain, perfect, enforce or realize upon any collateral therefor or to exercise
any Lien upon or right of appropriation of any moneys, credits or property
toward the liquidation of any of the Obligations, (d) by any application of
payments or credits upon any of the Obligations, or (e) by any irregularity or
avoidability of the Obligations (including any avoidability of the Obligations
or fraudulent transfers or fraudulent conveyances under any applicable
law).  The Secured Party shall not be required, before exercising its rights
under this Agreement, to first resort for payment of any of the Obligations to
the Borrower or any other Person, its or their properties or estates, or any
collateral, property, Liens or other rights or remedies whatsoever.  Each
Grantor agrees not to exercise any right of contribution, recourse, subrogation
or reimbursement available to each Grantor against the Borrower or any other
Person or property, unless and until all Obligations and all other debts,
liabilities and obligations owed by the Borrower and each Grantor to the Secured
Party have been paid and discharged.  Each Grantor expects to derive benefits
from the transactions resulting in the creation of the Obligations.  The Secured
Party may rely conclusively on the continuing warranty, hereby made, that each
Grantor continues to be benefited by the Secured Party’s extension of credit
accommodations to the Borrower, and the Secured Party shall have no duty to
inquire into or confirm the receipt of any such benefits, and this Agreement
shall be effective and enforceable by the Secured Party without regard to the
receipt, nature or value of any such benefits.

 

Section 41.           Uniform Electronic Transactions Act.  The Grantors
authorize the Secured Party to (a) create electronic images and to destroy paper
originals of any imaged documents (and any such images maintained by the Secured
Party as a part of its normal business processes shall be given the same legal
effect as the paper originals) and (b) convert any instrument into a
“transferable record” under the Uniform Electronic Transactions Act (UETA), with
the image of such instruments in the Secured Party’s possession constituting an
“authoritative copy” under UETA.

 

Section 42.           Gaming Approval.  Notwithstanding anything to the contrary
herein or in any of the other Loan Documents, the parties hereto acknowledge and
agree that:

 

(a)          To the extent that the approval of a Gaming Authority is required
under applicable Gaming Laws for the pledge of any of the Collateral consisting
of Equity Interests to be effective, the pledge of such Equity Interests will
not be effective without such approval; provided, that upon receipt of such
approval, such pledge shall become immediately effective without any act or
action of any party; provided, further, that until receipt of such approval,
physical delivery of certificates representing such pledged Equity Interests
shall not be required.  

 

(b)          The physical location of all certificates evidencing the Pledged
Collateral shall at all times remain within the territory of the State of Nevada
(or, as applicable under the law of another state, in such state) and each such
certificate shall be made available for inspection by agents of any Gaming
Authority upon request.  

 

[REMAINDER OF THIS PAGE INTENTIONALLY LEFT BLANK]

 

28

 

 

IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly executed
and delivered by its respective officer thereunto duly authorized as of the date
first above written.

 

  GAMING PARTNERS INTERNATIONAL
CORPORATION         By:     Name:  Gregory S. Gronau   Title:  President        
GAMING PARTNERS INTERNATIONAL USA, INC.         By:     Name:  Gregory S. Gronau
  Title:  President

 

Address for the Grantors:
Gaming Partners International Corporation

1700 South Industrial Road

Las Vegas, NV  89102

Fax:  702-598-2494

 

Signature Page to Pledge and Security Agreement and Irrevocable Proxy

 

 

 

 

EXHIBIT A TO
PLEDGE AND SECURITY AGREEMENT
AND IRREVOCABLE PROXY

 

Form of Confirmatory Grant of Security Interest in Intellectual Property

 

THIS CONFIRMATORY GRANT OF SECURITY INTEREST IN [COPYRIGHTS]
[PATENTS][TRADEMARKS] (this “Confirmatory Grant”) is made effective as of
[_____________], 20[__], by and from the grantor party hereto (the “Grantor”),
to and in favor of NEVADA STATE BANK, a Nevada banking corporation (the “Secured
Party”).

 

WHEREAS, Gaming Partners International Corporation, a Nevada corporation (the
“Borrower”) and the Secured Party have entered into a Credit Agreement dated as
of June 26, 2015 (as amended, supplemented, extended, restated or otherwise
modified from time to time prior to the date hereof, the “Credit Agreement”)
pursuant to which the Secured Party has agreed, among other things, to extend to
the Borrower certain credit accommodations..

 

WHEREAS, the Grantor has granted security interests to the Secured Party under
the Pledge and Security Agreement and Irrevocable Proxy of even date herewith
(as amended, restated, supplemented or otherwise modified from time to time, the
“Security Agreement”);

 

[WHEREAS, the Grantor owns the trademarks (the “Trademarks”) listed on Exhibit
A, which are registered or applied for with the United States Patent and
Trademark Office; and]

 

[WHEREAS, the Grantor owns the patents (the “Patents”) listed on Exhibit A,
which are registered or applied for with the United States Patent and Trademark
Office; and]

 

[WHEREAS, the Grantor owns the copyrights (the “Copyrights”) listed on Exhibit
A, which are registered or applied for with the United States Copyright Office;
and]

 

WHEREAS, this Confirmatory Grant has been granted in conjunction with the
security interest granted to the Secured Party under the Security
Agreement.  The rights and remedies of the Secured Party with respect to the
security interest granted herein are without prejudice to and are in addition to
those set forth in the Security Agreement and the other Loan Documents, all
terms and provisions of which are incorporated herein by reference.  If any
provisions of this Confirmatory Grant are deemed to conflict with the Security
Agreement, the provisions of the Security Agreement shall govern.

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements set
forth herein and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, it is hereby agreed that:

 

1)         Definitions.  All capitalized terms not defined herein shall have the
respective meaning given to them in the Credit Agreement.

 

 

 

 

2)         The Security Interest.

 

(a)          This Confirmatory Grant is made to secure the performance and
payment of (i) all the Obligations and (ii) all of the obligations and
liabilities of the Guarantors under the Guaranty.  Upon the payment in full of
all Obligations (other than contingent indemnification obligations), the Secured
Party shall promptly, upon such satisfaction, execute, acknowledge, and deliver
to the Grantor (at the Grantor’s expense) all reasonably requested instruments
releasing the security interest in the [Trademarks]/[Patents]/[Copyrights]
acquired under this Confirmatory Grant.

 

(b)          The Grantor hereby grants to the Secured Party a security interest
in [all of the Trademarks set forth in Exhibit A now owned or from time to time
after the date hereof owned or acquired by the Grantor]/[all of the Patents set
forth in Exhibit A now owned or from time to time after the date hereof owned or
acquired by the Grantor]/[all of the Copyrights set forth in Exhibit A now owned
or from time to time after the date hereof owned or acquired by the Grantor];

 

(c)          Unless and until an Event of Default occurs and is continuing, the
Grantor shall retain the legal and equitable title to the
[Trademarks]/[Patents]/[Copyrights], and shall have the right to use and
register the Trademarks, Patents and Copyrights in the ordinary course of the
business of the Grantor.

 

[The remainder of this page has been intentionally left blank]

 

SI-2

 

 

IN WITNESS WHEREOF, the Grantor has executed this Confirmatory Grant of Security
Interest in [Trademarks][Patents][Copyrights] effective as of the date first
written above.

 

  [Grantor]       By:       Name:   Title: 

 

SI-3

 

 

CONFIRMATORY GRANT OF SECURITY INTEREST
IN UNITED STATES TRADEMARKS

Exhibit A - SCHEDULE OF TRADEMARKS

 

United States Trademarks:

 

Mark Reg. No. Reg. Date Country        

 

 

 

 

CONFIRMATORY GRANT OF SECURITY INTEREST
IN UNITED STATES PATENTS

Exhibit A - SCHEDULE OF PATENTS

 

PATENT OR
PATENT
APPLICATION
PUBLICATION
OWNER
TITLE FILING
DATE
ISSUE DATE          

 

 

 

 

CONFIRMATORY GRANT OF SECURITY INTEREST
IN UNITED STATES COPYRIGHTS

Exhibit A - SCHEDULE OF COPYRIGHTS

 

COPYRIGHT 
OWNER REGISTRATION
NO. REGISTRATION
DATE        

 

 

 

 

SCHEDULE I
TO
PLEDGE AND SECURITY AGREEMENT

 

PLEDGED EQUITY INTERESTS

 

Issuer Grantor Percentage
Ownership Certificate
No. Class of
Interest No. of
Units/
Shares Gaming Partners International USA, Inc. (Subject to approval by the
applicable Gaming Authority in Nevada pursuant to Section 6.22 of the Credit
Agreement) Gaming Partners International Corporation 100% 1 Common 500

 

PLEDGED DEBT

 

None.

 

 

 

 

SCHEDULE II
TO
PLEDGE AND SECURITY AGREEMENT

 

Deposit Accounts

 

Grantor Account Name GPIC Payroll Acct. GPIC Operating/Accts Pay. Acct. GPIC
Escrow Acct. – Blue Chip GPI USA Operating/Accts Pay. Acct. GPI USA
Operating/Accts Pay. Acct. GPI USA Payroll Acct.

 

Securities Accounts

 

Grantor Account Name GPIC Marketable Securities GPIC Marketable Securities GPIC
American Stock & Transfer Account

 

 

 

 

SCHEDULE III TO
PLEDGE AND SECURITY AGREEMENT

 

Intellectual Property

 

See attached

 

 

 

 

PATENTS

 

US Patent No.

Issue Date Title Assignment
Type Assignor Assignee Date Reel/Frame 5,651,548 7/29/1997 Gaming Chips with
Electronic Circuits Scanned by Antennas in Gaming Chip Placement Areas for
Tracking the Movement of Gaming Chips Within a Casino Apparatus and Method
Assignment of Assignors Interest John B. French and William Piehl Chip Track
International 11/4/1996 008207/0341 Assignment of Assignors Interest William
Piehl, Chip Track International Inc. A Nevada Corporation, and John B. French
Enpat Inc. 10/30/2000 011213/0614 Assignment of Assignors Interest Enpat, Inc.
Shuffle Master, Inc. 1/7/2005 015571/0075 Assignment of Assignors Interest
Shuffle Master, Inc. IGT 7/25/2005 017411/0268 Assignment of Assignors Interest
Shuffle Master, Inc. IGT 11/2/2006 018471/0422 Assignment of Assignors Interest
IGT Gaming Partners International USA, Inc. 8/13/2014 033530/0393 8,783,688
7/22/2014 Gaming Tables Having a Table Top Exchangeable Insert Assignment of
Assignors Interest Emmanuel Gelinotte, Francisco Javier Moreno, and Gregory S.
Gronau Gaming Partners International USA, Inc. 3/26/2013 030083/0931 Assignment
of Assignors Interest Gaming Partners International USA, Inc. Gaming Partners
International Corporation 5/28/2013 030492/0849

 

SIII-3

 

 

US Patent No.

Issue Date Title Assignment
Type Assignor Assignee Date Reel/Frame 8,528,909 9/10/2013 Gaming Table
Protecting Antennas From Electromagnetic Interferences Assignment of Assignors
Interest Emmanuel Gelinotte, Francisco Javier Moreno, Gregory S. Gronau, and
Justin Woodard Gaming Partners International USA, Inc. 3/25/2011 026025/0481
Assignment of Assignors Interest Gaming Partners International USA, Inc. Gaming
Partners International Corporation 5/28/2013 030492/0849 D657427 4/10/2012 RFID
Chip Tray Assignment of Assignors Interest Gregory S. Gronau, Emmanuel
Gelinotte, Francisco Javier Moreno, and Justin Woodard Gaming Partners
International USA, Inc. 11/18/2010 025373/0221 Assignment of Assignors Interest
Gaming Partners International USA, Inc. Gaming Partners International
Corporation 5/28/2013 030492/0849 D669473 10/23/2012 Portable Chip Reader
Assignment of Assignors Interest Gregory S. Gronau, Emmanuel Gelinotte,
Francisco Javier Moreno, and Justin Woodard Gaming Partners International USA,
Inc. 11/18/2010 025373/0183 Assignment of Assignors Interest Gaming Partners
International USA, Inc. Gaming Partners International Corporation 5/28/2013
030492/0849 7,913,915 3/29/2011 Token With Structure to Prevent Damage During
Molding Assignment of Assignors Interest Heriberto Corrales Castaneda Gaming
Partners International USA, Inc. 12/10/2005 016878/0800 Assignment of Assignors
Interest Gaming Partners International USA, Inc. Gaming Partners International
Corporation 5/28/2013 030492/0849

 

SIII-4

 

 

US Patent No.

Issue Date Title Assignment
Type Assignor Assignee Date Reel/Frame 7,926,725 4/19/2011 Method of Making a
Token With an Electronic Identifier Assignment of Assignors Interest Gerard
Charlier and Heriberto Corrales Castaneda Gaming Partners International USA,
Inc. 1/4/2006 016971/0033 Assignment of Assignors Interest Gaming Partners
International USA, Inc. Gaming Partners International Corporation 5/28/2013
030492/0849 7,942,334 5/17/2011 Token With an Electronic Identifier Assignment
of Assignors Interest Gerard Charlier and Heriberto Corrales Castaneda Gaming
Partners International USA, Inc. 1/4/2006 016970/0971 Assignment of Assignors
Interest Gaming Partners International USA, Inc. Gaming Partners International
Corporation 5/28/2013 030492/0849 6,199,862 3/13/2011 Token Drop Assignment of
Assignors Interest Shane Long and David Warren Gaming Edge Products, LLC
3/14/2001 011584/0593 Assignment of Assignors Interest David Warren and Shane
Long Gaming Edge Products 2/15/2005 016256/0997 Assignment of Assignors Interest
GamingEdge Products, LLC Gaming Partners International USA, Inc. 3/20/2005
015918/0973

 

SIII-5

 

 

US Patent No.

Issue Date Title Assignment
Type Assignor Assignee Date Reel/Frame 6,834,855 12/28/2004 Dice Scanner
Assignment of Assignors Interest Edward J. Mancuso Gaming Partners International
USA, Inc. 3/8/2005 015748/0653 4,827,640 5/9/1989 Gaming Token and Process
Therefor Assignment of Assignors Interest Bernard B. Jones Bud Jones Company,
Inc., The 8/11/2000 011052/0220 Merger The Bud Jones Company, Inc. Paul-Son
Gaming Supplies, Inc. 9/16/2004 015134/0130 Change of Name Paul-Son Gaming
Supplies, Inc. Gaming Partners International USA, Inc. 9/30/2004 015201/0590
5,166,502 11/24/1992 Gaming Chip With Implanted Programmable Identifier Means &
Process for Fabricating Same Assignment of Assignors Interest Trend Plastics,
Inc. Bud Jones Company, Inc., The 8/15/2001 012075/0055 Assignment of Assignors
Interest Bud Jones Co. Inc., By Assignment, The Paul-Son Gaming Supplies, Inc.
2/3/2004 015676/0850 Change of Name Paul-Son Gaming Supplies, Inc. Gaming
Partners International USA, Inc. 9/30/2004 015201/0590

 

SIII-6

 

 

US Patent No.

Issue Date Title Assignment
Type Assignor Assignee Date Reel/Frame 5,568,666 10/29/1996 Gaming Table Cloth
Assignment of Assignors Interest Gilbert E. Seibert Paulson Gaming Supplies,
Inc. 11/19/1999 010395/0490 Assignment of Assignors Interest Gilbert E. Seibert
Paulson Gaming Supplies, Inc. 12/3/1999 010437/0436 Assignment of Assignors
Interest Gibert E. Seibert Paulson Gaming Supplies, Inc. 11/18/2002 013475/0661
Change of Name Paul-Son Gaming Supplies, Inc. Gaming Partners International USA,
Inc. 9/30/2004 015201/0590 Assignment of Assignors Interest Gaming Partners
International USA, Inc. Gaming Partners International Corporation 5/28/2013
030492/0849 5,673,503 10/7/1997 Gaming Chip With Edge Insert and Process for
Fabricating Same Assignment of Assignors Interest Thomas G. Rendleman Trend
Plastics, Inc. 1/23/1996 007809/0962 Assignment of Assignors Interest Trend
Plastics, Inc. Bud Jones Company, Inc., The 8/15/2001 012075/0055 Assignment of
Assignors Interest The Bud Jones Company, Inc. Paul-Son Gaming Supplies, Inc.
2/3/2004 014926/0762 Change of Name Paul-Son Gaming Supplies, Inc. Gaming
Partners International USA, Inc. 9/30/2004 015201/0590 Assignment of Assignors
Interest Gaming Partners International USA, Inc. Gaming Partners International
Corporation 5/28/2013 030492/0849

 

SIII-7

 

 

US Patent No.

Issue Date Title Assignment
Type Assignor Assignee Date Reel/Frame 5,692,748 12/2/1997 Card Shuffling Device
and Method Assignment of Assignors Interest Anthony Frisco and Ferrell Sullibant
Paulson Gaming Supplies, Inc. 9/26/1996 008428/0693 Change of Name Paul-Son
Gaming Supplies, Inc. Gaming Partners International USA, Inc. 9/30/2004
015201/0590 6,296,190 10/2/2001 Gaming Chip With Transponder and a Method for
Making Same Assignment of Assignors Interest Thomas G. Rendleman Trend Plastics,
Inc. 5/3/1999 009940/0139 Assignment of Assignors Interest Trend Plastics, Inc.
Bud Jones Company, Inc., The 8/15/2001 012075/0055 Assignment of Assignors
Interest The Bud Jones Co., Inc. Paul-Son Gaming Supplies, Inc. 2/3/2004
014926/0762 Change of Name Paul-Son Gaming Supplies, Inc. Gaming Partners
International USA, Inc. 9/30/2004 015201/0590 Assignment of Assignors Interest
Gaming Partners International USA, Inc. Gaming Partners International
Corporation 5/28/2013 030492/0849 6,508,466 1/21/2003 Easy Handling Gaming Chip
Assignment of Assignors Interest Thomas G. Rendleman Trend Plastics, Inc.
10/29/1999 010356/0032 Assignment of Assignors Interest Trend Plastics, Inc. Bud
Jones Company, Inc., The 8/15/2001 012075/0055 Assignment of Assignors Interest
The Bud Jones Co., Inc. Paul-Son Gaming Supplies, Inc. 2/3/2004 014926/0762
Change of Name Paul-Son Gaming Supplies, Inc. Gaming Partners International USA,
Inc. 9/30/2004 015201/0590 Assignment of Assignors Interest Gaming Partners
International USA, Inc. Gaming Partners International Corporation 5/28/2013
030492/0849

 

SIII-8

 

 

US Patent No.

Issue Date Title Assignment
Type Assignor Assignee Date Reel/Frame 6,210,267 4/3/2001 Air Rail Assignment of
Assignors Interest Shane Long and David Warren Gaming Edge Products, L.L.C.
1/10/2001 011431/0644 Assignment of Assignors Interest GamingEdge Products, LLC
Gaming Partners International USA, Inc. 3/20/2005 015918/0973 Assignment of
Assignors Interest Gaming Partners International USA, Inc. Gaming Partners
International Corporation 5/28/2013 030492/0849 6,402,142 6/11/2002 Method for
Handling of Cards in a Dealer Shoe, and a Dealer Shoe Assignment of Assignors
Interest David Warren and Shane Long Gaming Edge Products LLC 5/1/2002
012853/0921 Assignment of Assignors Interest David Warren and Shane Long Gaming
Edge Products 2/15/2005 016256/0997 Assignment of Assignors Interest GamingEdge
Products, LLC Gaming Partners International USA, Inc. 3/20/2005 015918/0973

 

SIII-9

 

 

US Patent No.

Issue Date Title Assignment
Type Assignor Assignee Date Reel/Frame 5,735,742 4/7/1998 Gaming Table Tracking
System and Method Assignment of Assignors Interest William Piehl, Chip Track
International Inc. A Nevada Corporation, and John B. French Enpat Inc.
10/30/2000 011213/0614 Assignment of Assignors Interest Enpat, Inc. Shuffle
Master, Inc. 1/7/2005 015571/0075 Assignment of Assignors Interest Shuffle
Master, Inc. IGT 7/25/2005 017411/0268 Assignment of Assignors Interest Shuffle
Master, Inc. IGT 11/2/2006 018471/0422 Assignment of Assignors Interest IGT
Gaming Partners International USA, Inc. 8/13/2014 033530/0393 D702236 4/8/2014
Portable Chip Reader Assignment of Assignors Interest Gaming Partners
International USA, Inc. Gaming Partners International Corporation 5/28/2013
030492/0849 8,668,148 3/11/2014 RFID Chip Tray Assignment of Assignors Interest
Gaming Partners International USA, Inc. Gaming Partners International
Corporation 5/28/2013 030492/0849

 

SIII-10

 

 

US Patent No.

Issue Date Title Assignment
Type Assignor Assignee Date Reel/Frame 6,508,466 1/21/2003 Easy Handling Gaming
Chip Assignment of Assignors Interest Thomas G. Rendleman Trend Plastics, Inc.
10/29/1999 010356/0032 Assignment of Assignors Interest Trend Plastics, Inc. Bud
Jones Company, Inc., The 8/15/2001 012075/0055 Assignment of Assignors Interest
The Bud Jones Co., Inc. Paul-Son Gaming Supplies, Inc. 2/3/2004 014926/0762
Change of Name Paul-Son Gaming Supplies, Inc. Gaming Partners International USA,
Inc. 9/30/2004 015201/0590 Assignment of Assignors Interest Gaming Partners
International USA, Inc. Gaming Partners International Corporation 5/28/2013
030492/0849 7,382,229 6/3/2008 Method of Managing a Plurality of Electronic
Microcircuit Chip Readers and Equipments for Implementing Said Method Assignment
of Assignors Interest Dan Tudor Vuza Gaming Partners International 6/30/2005
018128/0327 Assignment of Assignors Interest Viktor Mayer Gaming Partners
International 6/9/2006 017753/0226 Assignment of Assignors Interest Gaming
Partners International USA, Inc. Gaming Partners International Corporation
5/28/2013 030492/0849

 

SIII-11

 

 

US Patent No.

Issue Date Title Assignment
Type Assignor Assignee Date Reel/Frame 8888102 11/18/2014 Gaming tables having a
table top exchangeable insert           6581747 6/24/2003 Gaming token with an
electronic chip and methods for manufacturing the same           7100501
9/5/2006 Devices for marking gaming chips and pad printing installations
incorporating same           7063012 6/20/2006 Method for ink pad and
sublimation printing and sublimable tampographic links           7563834
7/21/2009 Method for ink pad and sublimation printing and sublimable
tampographic links          

 

SIII-12

 

 

US Patent No.

Issue Date Title Assignment
Type Assignor Assignee Date Reel/Frame 7883408 2/8/2011 Station for reading
and/or writing in electronic gaming chips           7931204 4/26/2011 Electronic
microchip token and its fabrication process           7918455 4/5/2011 Chip with
insert including an electronic microchip           7866583 1/11/2011 Token with
electronic device, method of making thereof, and apparatus for making thereof  
        8336881 12/25/2012 Method of producing a gaming chip, and a gaming chip
comprising two plaques           5794532 8/16/1998 Gambling chip and method
marking same          

 

SIII-13

 

 

US Patent No.

Issue Date Title Assignment
Type Assignor Assignee Date Reel/Frame 5895321 4/20/1999 Gambling chip          
6467413 10/22/2002 Method for marking a gaming disk by pad printing and device
for implementing same           US
Publication
No. Publication
Date

Title

Assignment
Type

Assignor

Assignee

Date

Reel/Frame

20030218299 11/27/2003 Method of Manufacturing Gaming Dice and Die Made Thereby
Assignment of Assignors Interest Fred Zapata Bud Jones Company, Inc., The
5/22/2002 01037/0748 Merger Bud Jones Company, Inc., The Paul-Son Gaming
Supplies, Inc. 5/5/2003 014032/0622 Change of Name Paul-Son Gaming Supplies,
Inc. Gaming Partners International USA, Inc. 9/30/2004 015201/0590

 

SIII-14

 

 

US Patent No. Issue Date

Title

Assignment
Type

Assignor

Assignee

Date

Reel/Frame

20120105215 5/3/2012 Portable Reader Assignment of Assignors Interest Gregory S.
Gronau, Emmanuel Gelinotte, Francisco Javier Moreno, and Justin Woodard Gaming
Partners International Corporation 5/8/2013 030373/0813 Assignment of Assignors
Interest Gaming Partners International USA, Inc. Gaming Partners International
Corporation 5/28/2013 030492/0849 20130313776 11/28/2013 Anti-Bacterial Gaming
Currency and Gaming Accessories Assignment of Assignors Interest Emmanuel
Gelinotte, Gregory S. Gronau, and Celine Rappeneau Gaming Partners International
USA, Inc. 7/6/2012 028503/0855 Assignment of Assignors Interest Gaming Partners
International USA, Inc. Gaming Partners International Corporation 5/28/2013
030492/0849

 

SIII-15

 

 

US Patent No. Issue Date

Title

Assignment
Type

Assignor

Assignee

Date

Reel/Frame

20130316797 11/28/2013 Total Money Management System Assignment of Assignors
Interest Emmanuel Gelinotte, Kirsten Clark, Scott McCarthy, and Gregory S.
Gronau Gaming Partners International Corporation 7/24/2013 030865/0123
20140339107 11/20/2014 RFID Plaque Box Assignment of Assignors Interest Emmanuel
Gelinotte, Bernard Molina, Miguel Choi, Scott McCarthy, Benjamin Raz, Kirstin
Clark, Gregory S. Gronau, and Regis Marcel Roger Vicaire Gaming Partners
International Corporation 11/5/2013 031548/0027 20130229952 9/5/2013 Method and
Apparatus for Avoiding Interference Between Multiple Radios in a User Equipment
Assignment of Assignors Interest Henri Markus Koskinen, Jussi Kustaa Ojala,
Antti-Veikko Pipponen, and Tommi Juhani Zetterman Nokia Corporation 5/21/2013
030459/0253 Corrective Assignment Henri Markus Koskinen, Jussi Kustaa Ojala,
Antti-Veikko Piipponen, and Tommi Juhani Zetterman Nokia Corporation 8/21/2013
031058/0804 Assignment of Assignors Interest

Francisco Javier Moreno, Emmanuel Gelinotte, Gregory S. Gronau, Kirsten Clark,
Heriberto C. Corrrales, Ramon R. Saturnino, Raul M. Castro, and Joseph B.
Friedman

  Gaming Partners International Corporation 5/16/2013 030428/0837

 

SIII-16

 

 

TRADEMARKS

 

Our Matter Your Ref. Trademark

Trademark

Description

Country

Application No./

Filed

Registration No./

Issued

Status International Class(es) Goods 101821.000520 T0063.US   BUD JONES BUD
JONES (word mark) United States

78/154960

08/16/2002

2890152

09/28/2004

Renewal due 09/28/2024 28 Dice and gaming chips 101821.000522 T0140.US
 [tpg54a.jpg] D-TECT (word mark) United States

85/904681

04/15/2013

4439965

09/10/2013

Section 8 Declaration due 09/10/2019 28 Game equipment, namely, chips
101821.000526 T0108.US  [tpg54b.jpg] PAULSON PRO SERIES (word mark) United
States

85/181085

11/1/2010

4129429

04/17/2012

Section 8 Declaration due 04/17/2018 28 Gaming equipment, namely, playing cards
and chips 101821.000529 T0102.US [tpg54c.jpg] LASERTRACK (word mark) United
States

85/047786

05/25/2010

4020331

08/30/2011

Section 8 Declaration due 08/30/2017 28 Dice; Game equipment, namely, infrared
security dyes sold as a component part of gaming chips; Playing cards
101821.000530 T0062.US [tpg54d.jpg] E READY & Design (in red & blue) United
States

77/746897

05/28/2009

3741374

01/19/2010

(Supplemental)

Section 8 Declaration due 01/19/2016 28 Gaming tables 101821.000531 T0061.US
[tpg54de.jpg] PSV SERIES (word mark) United States

77/735819

05/13/2009

3791347

05/18/2010

Drop per client instructions 28 Playing cards 101821.000532 T0060.US
[tpg54df.jpg] EREADY (word mark) United States

77/732030

05/07/2009

3738415

01/12/2010

(Supplemental)

Section 8 Declaration due 01/12/2016 28 Gaming tables 101821.000537 T0074.US
CASINO CURRENCY CONTROL CASINO CURRENCY CONTROL (word mark) United States

78/980767

11/15/2005

3545460

12/09/2008

Drop per client instructions 8/27/2014 9 35

Gaming tokens and chips, electronic or non-contact electronic chip operated;
devices for control, authentication, identification, monitoring of movement,
reading and writing for gaming tokens and chips, electronic or non-contact
electronic chip, comprising a radio frequency identification transponder and
containing an electronic memory; apparatus for reading, writing, recording,
transmission or reproduction of data, equipment for processing information,
namely, chips, integrated circuits, magnetic data media, optical data media,
magnetic encoded cards, magnetic identity cards, data processing apparatus,
intercommunication apparatus, transmitters of electronic signals,
telecommunication transmitting sets, microprocessors, electronic transistors,
transmitters; equipment for software, computers, namely, network computers,
computers intended for casino's customers; computer network programs, electronic
sorting machines, all the aforesaid goods for use with gaming tokens and chips;
token-operated electronic game boards; electronic gaming tables; electronic
gaming chip casino tables; electronic security and information management
systems for casinos or games rooms; electronic security systems, namely,
anti-intrusion alarms, people locators in the nature of a device programmed to
use a global positioning systems (GPS) and cellular telecommunications and
information management systems, namely, computer software for scheduling and
downloading information about patrons in casinos or game rooms; electronic or
electro-magnetic detectors for game tokens or chips.

 

Sales promotion services directly to casinos of supplies and equipment for
casinos for use with gaming chips and tokens

 

SIII-17

 

 

Our Matter Your Ref. Trademark

Trademark

Description

Country

Application No./

Filed

Registration No./

Issued

Status International Class(es) Goods 101821.000538 T0070.US [tpg55a.jpg] GPI &
Design (black & white) United States

78/753509

11/14/2005

3158096

10/17/2006

Renewal due 10/17/2016 9 Casino gaming supplies, namely, radio frequency
identification device chips and plaques, and radio frequency identification
device chip readers 101821.000539 T0071.US [tpg55b.jpg] GPI & Design (black &
white) United States

78/753520

11/14/2005

3158098

10/17/2006

Renewal due 10/17/2016 28 Game equipment, namely, chips, dice, playing cards,
table layouts and gaming tables 101821.000540 T0069.US [tpg55c.jpg] GPI & Design
(black & white) United States

78/753494

11/14/2005

3176646

11/28/2006

Renewal due 11/28/2016 35 Wholesale distributorship featuring gaming and casino
supplies 101821.000541 T0068.US [tpg55d.jpg] T-K (word mark) United States

78/753388

11/14/2005

3158093

10/17/2006

Renewal due 10/17/2016 28 Gaming equipment, namely, dice 101821.000545 T0067.US
[tpg55e.jpg] PAULSON (word mark) United States

78/570082

02/17/2005

3191178

01/02/2007

Renewal due 01/02/2017 9 Computer gaming software and hardware 101821.000546
T0066.US    PAULSON PAULSON (word mark) United States

78/553677

01/25/2005

3089726

05/09/2006

Renewal due 05/09/2016 40 Custom manufacturing of gaming equipment of others

 

SIII-18

 

 

Our Matter Your Ref. Trademark

Trademark

Description

Country

Application No./

Filed

Registration No./

Issued

Status International Class(es) Goods 101821.000547 T0064.US    PAULSON PAULSON
(word mark) United States

78/553636

01/25/2005

3191145

01/02/2007

Renewal due 01/02/2017 28 Playing cards 101821.000548 T0065.US    PAULSON
PAULSON (word mark) United States

78/553663

01/25/2005

3191146

01/02/2007

Renewal due 01/02/2017 28 Gaming chips and dice 101821.000549 T0046.US   
CHIPSOFT CHIPSOFT United States

76/535249

08/06/2003

2985876

08/16/2005

Renewal due 08/16/2015 9 28

Electronic and smart contactless gaming tokens, chips and plaques all containing
electronic chips for supervision, authentication, identification, tracking, and
sorting of casino and gaming activity; c gaming tokens, chips [ and plaques ]
with embedded radio frequency identification transponders including an
electronic memory.

 

Gaming tokens, chips

101821.000550 T0045.US    GPI GPI (word mark) United States

76/322104

10/09/2001

2733101

07/01/2003

Renewal due 07/01/2023 35 [Retail store services, wholesale stores, and ]
wholesale distributorships featuring casino supplies and equipment 101821.000551
T0044.US GAMING PARTNERS INTERNATIONAL GAMING PARTNERS INTERNATIONAL (word mark)
United States

76/332103

10/09/2001

2722803

06/03/2003

Renewal due 06/03/2023 35 [Retail store services featuring supplies and
equipment and wholesale stores featuring casino supplies and equipment and ]
wholesale distributorships featuring casino supplies and equipment 101821.000555
T0037.US    GRAND PIP GRAND PIP (word mark) United States

75/938596

03/08/2000

2530623

01/15/2002

Renewal due 01/15/2022 28 Playing Cards 101821.000556 T0036.US    PAUL-SON FX
PAUL-SON (word mark) United States

75/938595

03/08/2000

2579724

06/11/2002

Renewal due 06/11/2022 40 Custom manufacture of gaming table layouts for others
101821.000557 T0033.US CASINO DE ISTHMUS CITY CASINO DE ISTHMUS CITY (word mark)
United States

75/741056

07/01/1999

2439440

03/27/2001

Renewal due 03/27/2021 28 Gaming Chips 101821.000558 T0026.US AIR RAIL AIR RAIL
(word mark) United States

75/494616

06/01/1998

2369265

07/18/2000

Renewal due 07/18/2020 11 General ventilation equipment, namely, smoke diversion
units, fans and blowers for commercial use

 

SIII-19

 

 

Our Matter Your Ref. Trademark

Trademark

Description

Country

Application No./

Filed

Registration No./

Issued

Status International Class(es) Goods 101821.000561 T0003.US  [tpg57a.jpg] Deisgn
of Visuel United States

74/639938

02/24/1995

1951247

01/23/1996

Renewal due 01/23/2016 16 Playing cards 101821.000562 T0002.US  PAUL-SON GAMING
SUPPLIES PAUL-SON GAMING SUPPLIES (word mark) United States

74/635749

02/17/1995

1972584

05/07/1996

Renewal due 05/07/2016 40 Custom manufacture of gaming equipment for others
101821.000563 T0001.US [tpg57b.jpg] Top Hat Design United States

72/423184

05/03/1972

960790

06/12/1973

Renewal due 06/12/2023 28 Gaming chips 101821.000668 T0164.US [tpg57c.jpg]
Sunburst Design United States

85/336608

06/02/2011

4141474

05/15/2012

Section 8 due 05/15/2018 28 Playing cards 101821.000669 T0165.US [tpg57d.jpg]
THE ZONKS and Design of Yellow and Black Striped Bar United States

78/699823

08/24/2005

3203614

01/30/2007

Renewal due 01/30/2017 28 Playing cards 101821.000670 T0166.US GEMPAK Gempak
(word mark) United States

77/014691

10/05/2006

3319246

10/23/2007

Renewal due 10/23/2017 28 Playing cards 101821.000671 T0167.US GEMACO Gemaco
(word mark) United States

77/057906

12/06/2006

3374987

01/29/2008

Renewal due 01/29/2018 16, 28

Calendar cards

 

Playing cards, fabric table layouts for gaming tables

101821.000679 T0175.US [tpg57e.jpg] Card back repetitive gem design United
States

73/412475

02/04/1983

1314104

01/08/1985

Renewal due 01/08/2018 28 Playing cards 101821.000680

 

T0176.US

[tpg57f.jpg] Diamond design United States

73/508181

11/13/1984

1337878

05/28/1985

Renewal due 05/28/2015 28 Playing cards

 

SIII-20

 

 

Our Matter Your Ref. Trademark

Trademark

Description

Country

Application No./

Filed

Registration No./

Issued

Status International Class(es) Goods 101821.000681 T0177.US [tpg58a.jpg] Card
back with five star design United States

73462140

01/23/1984

1349226

07/16/1985

Renewal due

07/16/2015

28 Playing cards 101821.000682 T0178.US VALUGEM Valugem (word mark) United
States

77/921056

01/27/2010

3840909

08/31/2010

Section 8 due 08/31/2016 28 Playing cards 101821.000683 T0179.US [tpg58b.jpg]
Findex (stylized letters) United States

73/605818

06/23/1986

1429200

02/17/1987

Renewal due 02/17/2017 28 Information bearing file cards 101821.000684 T0180.US
MINIGEM Minigem (word mark) United States

75/793861

09/07/1999

2362343

06/27/2000

Renewal due 06/27/2020 28 Playing cards 101821.000685 T0181.US [tpg58c.jpg]
Sentinel Security Series and design of a spade, eagle and ribbon with stars
United States

75/764573

07/30/1999

2372707

08/01/2000

Renewal due 08/01/2020 28 Playing cards 101821.000686 T0182.US CALDEX Caldex
(word mark) United States

74/071652

06/22/1990

1642806

04/30/1991

Renewal due 04/30/2021 28 Calendar cards 101821.000687 T0183.US IDEA DECK Idea
Deck (word mark) United States

76/121963

09/05/2000

2478092

08/14/2001

Renewal due 08/14/2021 28 Playing cards

 

SIII-21

 

COPYRIGHTS

 

 

Work Title

Registration Date
Registration Number Owner GPI Casino Royale Gaming Chips

Reg No. VA0001710796

Reg 04/08/2008

Gaming Partners International USA, Inc. GPI Casino Royale Gaming Chips

Reg No. VA0001753684

Reg 04/08/2008

Gaming Partners International USA, Inc. GPI Paulson Poker Chips

Reg No. VA0001710841

Reg 04/08/2008

Gaming Partners International USA, Inc.

 

SIII-22

 

 

SCHEDULE IV TO
PLEDGE AND SECURITY AGREEMENT

 

Names, Jurisdictions of Organization; Organizational Numbers;
Locations of Collateral; Trade Names

 

NAMES, OFFICES, LOCATIONS AND JURISDICTIONS

 

1.        Gaming Partners International Corporation

a.         Jurisdiction: Nevada

b.         Entity Number: C16935-1993

c.         NV Business ID: NV19931102753

 

2.        Gaming Partners International USA, Inc.

a.         Jurisdiction: Nevada

b.         Entity Number: C2472-1969

c.         NV Business ID: NV19691002459

 

3.        Locations Where Collateral is Located:

a.         1700 S. Industrial Road, Las Vegas, NV 89102;

b.         2925 North 7 Highway, Blue Springs, MO 64014;

c.         1220 N. Hidalgo Avenue, San Luis, AZ 85349;

d.         3101 Geospace Drive, Independence, MO 64056;

e.         2901 Atlantic Avenue, Atlantic City, NJ 08401; and

f.         12231 Ashley Drive, Gulfport, MS 39503.