SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
__________
FORM 8-K
CURRENT REPORT
Pursuant to section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 7, 1995
ELSINORE CORPORATION
(Exact name of registrant as specified in its charter)
STATE OF NEVADA 1-7831 88 0117554
(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification
No.)
202 Fremont Street,
Las Vegas, Nevada 89101
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code: (702) 385-4011
<PAGE>
Item 5. Other Events.
Waiver of Debt Covenant Noncompliance; Amendment of Note Facilities.
On June 30, 1995, Elsinore Corporation obtained from its noteholders
waivers of certain noncompliance with the Company's covenants under the debt
facilities governing its 12.5% First Mortgage Notes due 2000 ("First Notes")
and its 20% Mortgage Notes due 1996 ("Mortgage Notes"). The debt covenant
noncompliance would have arisen from the Company's inability to achieve by
June 30, 1995, and thereafter maintain a positive Consolidated Net Worth and
a Consolidated Fixed Charges Coverage Ratio of 1.5 to 1, and from the
Company's dispute regarding management of the Spotlight 29 Casino in Palm
Springs, California. A detailed discussion of the background, terms and
conditions of each waiver may be found in the Information Statement dated
June 16, 1995, as amended by the Supplemental Information Statement dated
June 23, 1995, delivered by the Company to each holder of First Notes,
copies of which are attached hereto as Exhibit 10.1 and are incorporated
herein by reference.
Effective June 30, 1995, the Company amended certain terms and
provisions of the Indenture governing the First Notes and the Note and
Stock Purchase Agreement governing the Mortgage Notes. The amendments
(i) eliminated through fiscal year 1997 the requirement that the Company
maintain a Consolidated Fixed Charges Coverage Ratio and reduced the size
of such ratio the Company will be required to maintain from fiscal year
1998 through the maturity date of each series of notes, (ii) imposed
a new debt covenant requiring the Company to have Consolidated EBITDA of
at least $5 million for the six month period ending June 30, 1996 and
at least $7.5 million for the nine month period ending September 30, 1996,
and (iii) deleted from the event of default provisions any references to
the Palm Springs Casino. In addition, the amendment to the Mortgage Notes
eliminated the mandatory quarterly redemptions of principal commencing on
June 30, 1995, and extended the Mortgage Notes' maturity date from
March 31, 1996 until March 31, 2000. Pursuant to the Mortgage Note
amendment, the Mortgage Notes may be put by the holders thereof on a
semi-annual basis commencing March 31, 1996, but may not be called by the
Company prior to their maturity. Copies of Supplemental Indenture
No. 3 governing the First Notes and Amendment No. 2 governing the Mortgage
Notes (including the form of amended and restated Mortgage Note) are
attached hereto as Exhibits 10.2 and 10.3, respectively, and are
incorporated herein by reference.
As additional consideration given by the Company to the noteholders
for the waivers and amendments described above, the Company obtained on
June 30, 1995, from each holder of its 7.5% Convertible Subordinated Notes
due December 31, 1996 ("Convertible Notes") a Waiver of Compliance and
Agreement to Amend Promissory Note ("Convertible Notes Waiver"). Pursuant
to the Convertible Notes Waiver, the Company's mandatory redemptions of
principal due on each of March 31, 1996 and June 30, 1996 were eliminated
and the amount of its mandatory redemptions of principal due on each of
September 30, 1996 and December 31, 1996 was proportionally increased.
A copy of the Convertible Notes Waiver is attached hereto as Exhibit
10.4 and is incorporated herein by reference.
Item 7. Financial Statements and Exhibits
(c) Exhibits.
10.1 Information Statement of Elsinore Corporation dated
June 16, 1995, regarding the Consent to Waiver of Compliance and
Amendment of the Indenture governing its 12.5% First Mortgage
Notes due 2000, as amended by the Supplemental Information
Statement dated June 23, 1995.
10.2 Supplemental Indenture No. 3 dated as of June 30, 1995, by and
among the Company, the Guarantors named therein and First Trust
National Association, as Trustee on behalf of the First Mortgage
Noteholders.
10.3 Amendment No. 2, dated as of June 23, 1995, to the Note and Stock
Purchase Agreement, by and among the Company, each Guarantor
named therein and each Mortgage Noteholder.
10.4 Waiver of Compliance and Agreement to Amend Promissory Notes,
each dated as of June 30, 1995, by and among the Company and
each Convertible Noteholder.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this Current Report on Form 8-K to be signed
on its behalf by the undersigned hereunto duly authorized.
Dated: July 7, 1995.
ELSINORE CORPORATION
By /s/ Thomas E. Martin
THOMAS E. MARTIN, President
<PAGE>
EXHIBIT INDEX
Exhibit No. Title Sequentially
Numbered Page
10.1 Information Statement of Elsinore Corporation
dated June 16, 1995, regarding the Consent to
Waiver of Compliance and Amendment of the
Indenture governing its 12.5% First Mortgage
Notes due 2000, as amended by the Supplemental
Information Statement dated June 23, 1995.
10.2 Supplemental Indenture No. 3 dated as of June 30,
1995, by and among the Company, the Guarantors
named therein and First Trust National
Association, as Trustee on behalf of the First
Mortgage Noteholders.
10.3 Amendment No. 2, dated as of June 23, 1995, to
the Note and Stock Purchase Agreement, by and
among the Company, each Guarantor named
therein and each Mortgage Noteholder.
10.4 Waiver of Compliance and Agreement to Amend
Promissory Notes, each dated as of June 30, 1995,
by and among the Company and each Convertible
Noteholder.
EXHIBIT 10.1<PAGE>
INFORMATION STATEMENT
ELSINORE CORPORATION
Consent to Waiver of Compliance and Amendment
of the Indenture governing
its
12.5% First Mortgage Notes Due 2000
SUBJECT TO THE CONDITIONS DESCRIBED HEREIN, THE COMPANY WILL
ACCEPT ALL CONSENTS RECEIVED PRIOR TO 11:59 P.M., NEW YORK TIME
ON JUNE 23, 1995 (THE "EXPIRATION DATE"). IF THE REQUISITE
CONSENTS (AS DEFINED BELOW) TO THE PROPOSED WAIVER AND AMENDMENT
OF THE INDENTURE ARE NOT RECEIVED BY THE EXPIRATION DATE, THE
COMPANY MAY ELECT TO CONTINUE TO ACCEPT CONSENTS UNTIL THE
REQUISITE CONSENTS HAVE BEEN RECEIVED. CONSENTS MAY BE REVOKED
AT ANY TIME PRIOR TO RECEIPT BY THE COMPANY OF THE REQUISITE
CONSENTS.
This Information Statement and the accompanying form of
consent (the "Consent") are being furnished by Elsinore
Corporation, a Nevada corporation (the "Company"), to holders of
record (the "Noteholders") on May 31, 1995 (the "Record Date")
of its 12.5% First Mortgage Notes Due 2000 (the "First
Notes"), in connection with the following:
1. The waiver of compliance and consent (the "Waiver")
regarding certain provisions of the indenture (the "Indenture")
dated as of October 8, 1993, as amended, between the Company and
First Trust National Association, as Trustee, pursuant to which
the First Notes were issued. The Waiver would (a) waive any
events of default under the Indenture that would occur (i) as a
result of the Company's failure to satisfy Indenture covenants
requiring the maintenance, on a quarterly basis, of positive net
worth and a 1.5 to 1 fixed charges coverage ratio, and (ii) in
connection with the Company's disengagement as manager of the
Spotlight 29 Casino in Palm Springs, California, and (b) consent
to deferring the Company's redemption obligations under, and
extending until March 31, 2000 the maturity date of, the
Company's 20% Mortgage Notes due 1996.
2. The adoption by the Trustee of Supplemental Indenture
No. 3 amending certain provisions of the Indenture (the "Third
Amendment"). The Third Amendment would, among other things,
modify the Indenture's fixed charges coverage ratio covenant to
require the Company to achieve a ratio of 1.0 to 1 for each
quarter in 1997, 1.15 to 1 for each quarter in 1998, 1.3 to 1
for each quarter in 1999, and 1.5 to 1 for each quarter in 2000.
Copies of the proposed forms of Waiver and Third Amendment
are attached to this Information Statement as Exhibit A and
Exhibit B, respectively. Capitalized terms used but not defined
in this Information Statement have the meanings set forth in the
Indenture.
Approval of the Waiver and the Third Amendment requires the
consent of the holders of a majority of the $57 million
principal amount of First Notes outstanding (the "Requisite
Consents").
Consents should be sent to First Trust National
Association, as Trustee, at 180 East 5th Street, St. Paul,
Minnesota, 55101, Attention: Richard Prokosch, Facsimile:
(612) 244-0711. In no event should a Noteholder tender or
deliver First Notes or Warrants.
If you require assistance, please contact Mr. Richard
Prokosch at (612) 244-0721 or Ernest East, Esq. of the Company
at (702) 387-5109. The Company has made no arrangements and has
no understanding with any dealer, salesman or person regarding
the Consent. No person has been authorized by the Company to
give any information or to make any representations in connec-
tion with the Consent other than those contained herein, and, if
given or made, such other information or representations must
not be relied upon as having been authorized. The delivery of
this Information Statement shall not, under any circumstances,
create any implication that the information herein is correct as
of any time subsequent to the date hereof.
_________________________
The request for Consents is not being made to, nor will the
Company accept Consents from, Noteholders in any jurisdiction in
which the request would not be in compliance with the securities
or Blue Sky laws of such jurisdiction.
<PAGE>
BACKGROUND
Current Financial Condition of the Company
As reported in Elsinore Corporation's Form 10-Q for the
first quarter of 1995, the Company at March 31, 1995 had a
working capital deficit of $8,655,000. During the first quarter
of 1995, total shareholders' deficit increased $390,000 to
$2,054,000. Cash and cash equivalents, including restricted
amounts, decreased $23.9 million to $6.9 million during the
15 months ended March 31, 1995. The Company experienced a net
loss of $9.4 million for the 1994 fiscal year and $4.1 million
for the first quarter of 1995. The results of operations of
Elsinore Corporation have continued to be negatively affected
since March 31, 1995 and the Company anticipates this will be
the case through the remainder of 1995.
As of March 31, 1995, the Company had gross indebtedness of
approximately $63 million, inclusive of current maturities.
Substantially all of the Company's outstanding indebtedness for
money borrowed consists of the First Notes, $3 million principal
amount of its 20% Mortgage Notes due 1996 (the "Mortgage
Notes"), and $1.7 million principal amount of its 7.5%
Convertible Subordinated Notes due December 31, 1996 (the
"Convertible Notes"). The remainder of the gross indebtedness
consists of capital lease obligations.
Pursuant to its management agreement regarding the 7 Cedars
Casino in Washington state (the "Management Agreement"), the
Company, through a subsidiary, was obligated to fund a reserve
for "working capital" in the amount of $500,000 at the inception
of the casino's operations. In addition, the Company is
required to maintain the working capital reserve at the $500,000
level or such lower amount as may be required in the discretion
of the Jamestown S'Klallam Tribe, the owners of the casino.
Since its opening in February 1995, the 7 Cedars Casino has
experienced lower than anticipated gaming revenues and has
failed to generate positive cash flows and, if the present trend
continues, the Company will be called upon to provide additional
working capital to the casino during the remainder of 1995. The
term "working capital" is not defined in the Management
Agreement. The Company believes the parties did not intend to
apply a working capital definition based upon generally accepted
accounting principals which, in the Company's view, would be
impracticable in the context of the Management Agreement and
which, in practice, has never been followed. If such a
definition were applied, the Company would be required to
significantly increase its working capital advances to the
7 Cedars Casino. The Company intends to seek clarification of
this matter with the Jamestown S'Klallam Tribe. Accordingly,
the extent of the Company's funding obligations to the casino
currently is unclear.
In addition to its substantial debt service obligations,
the Company's liquidity has been adversely affected by its other
capital expenditure and operating requirements, including its
continuing obligations to pay to the IRS in 1995 and 1996 a
remaining balance of approximately $4.1 million of prior period
taxes and interest pursuant to a monthly installment payment
plan entered into with the IRS in December 1994, as amended on
May 31, 1995, and to assume certain payment obligations from
J. F. Temple Development relating to the Mojave Valley Resort
project being developed on the Colorado River near Laughlin,
Nevada.
Currently, the Company's primary source of liquidity is
cash flow from the operations of the Four Queens Hotel Casino.
The substantial decrease in gaming revenues, operating results
and cash flows experienced by the Four Queens in 1994 continued
through the first quarter of 1995, principally resulting from
traffic disruption caused by construction of the Fremont Street
Experience attraction and related downtown infrastructure
improvements. The Company anticipates the Four Queens' operat-
ing results will not improve until the end of 1995, when the
Fremont Street Experience construction is scheduled for
completion. In 1996, the Company anticipates its debt service
obligations will be reduced when the IRS installment payment
plan is completed and the Convertible Notes are fully repaid or
converted. In addition, the Company currently is negotiating
with the holders of its Mortgage Notes to extend the Company's
repayment and redemption obligations under the Mortgage Notes
purchase agreement (See description below) although there is no
assurance such an extension will be obtained on satisfactory
terms or at all.
For the remainder of 1995, unless (i) the Company's avail-
able cash and funds generated from operations significantly
increases, (ii) the Company is able to extend its debt service
and/or delay capital expenditure requirements, (iii) a signifi-
cant portion of the outstanding loans to the Twenty-Nine Palms
Band of Mission Indians is received, or (iv) a combination of
the foregoing occurs, the Company will need to obtain additional
working capital in order to satisfy its payment obligations dur-
ing the year. There is no assurance that any of these alterna-
tives could be effected on satisfactory terms. In addition, the
Company's inability in 1995 to comply with certain financial
covenants and other Indenture requirements, if not waived by the
Noteholders, would subject the Company to one or more Events of
Default under the Indenture and the acceleration of the First
Notes indebtedness. If the alternatives described above prove
to be unavailable, or if the First Notes are accelerated,
Elsinore would be required to sell assets or seek protection
under bankruptcy laws.
Extension of Repayment of Mortgage Note Debt
Prior to issuing its Mortgage Notes in October 1994, the
Company obtained from the holders of more than two-thirds of the
outstanding principal amount of the First Notes written waivers
(collectively, the "Mortgage Notes Waiver") consenting to the
issuance of the Mortgage Notes and the related Mortgage Note
Transactions (as defined in such Waiver). In addition, the
Mortgage Note Waiver expressly permitted the Company to
refinance the Mortgage Notes indebtedness until March 31, 1996.
Currently, the Company's debt service requirements for the
Mortgage Notes include quarterly interest payments and mandatory
quarterly redemptions of $750,000 on each of June 30,
September 30, and December 31, 1995, with the final principal
payment of $750,000, together with accrued interest, due on
March 31, 1996. As of the date hereof, the Company has reached
tentative agreement with the holders of the Mortgage Notes to
amend the payment and redemption terms of the Mortgage Notes and
the purchase agreement relating to the Mortgage Notes as
follows: (a) the maturity date of the Mortgage Notes will be
extended to March 31, 2000; (b) the Mortgage Notes may be
redeemed in whole or in part, at the sole option of the holders,
on March 31, 1996, and every six months thereafter until the
maturity date, at 100% of principal amount; (c) the Mortgage
Notes will not be redeemable at the option of the Company prior
to maturity; (d) the Company will pay the reasonable fees and
expenses of the holders incurred in connection with the
modifications described above; and (e) the modifications
described above must not conflict with any other contracts or
agreements of the Company (including, without limitation, the
Indenture, Mortgage, or Intercreditor Agreement) or with
applicable law.
Termination as Manager of Spotlight 29 Casino
Following its opening near Palm Springs, California on
January 14, 1995, the Spotlight 29 Casino experienced signifi-
cantly lower than anticipated gaming revenue, resulting in
substantial net operating losses through March 31, 1995. This
lower revenue was believed by the Company to be attributable in
large part to competition from other Native American gaming
facilities in the Palm Springs area that continue to operate
electronic gaming machines without an approved compact with the
State of California. Pursuant to its obligations under the
Spotlight 29 management contract, the Company through the first
quarter of 1995 advanced $1.1 million to the casino to cover
working capital shortfalls.
In early March, 1995, the Twenty-Nine Palms Band of Mission
Indians (the "Tribe") caused electronic gaming machines to be
installed at the Spotlight 29 Casino. The Company believed the
operation of these machines without a state compact violated the
Spotlight 29 management contract as well as applicable federal
law, and furthermore threatened to subject the Company to dis-
ciplinary action by the Nevada Gaming Commission. Following the
Tribe's failure to comply with the Company's demand to remove
the machines, the Company on March 16, 1995 filed an injunctive
and declaratory action in federal court against the Tribe to
halt the use of the machines at the casino premises.
On April 2, 1995, the Company was requested by the Tribe to
provide additional working capital advances to the Spotlight 29.
The Company demanded that, as a condition to providing addi-
tional working capital, the Tribe execute promissory notes for
all working capital advances and loans to date and also for the
additional sums requested, waive its sovereign immunity relating
to enforcement of such promissory notes and resume negotiation
of the terms of an agreement terminating the relationship
between the Company and the Tribe. On April 13, 1995, the Tribe
refused to comply with these demands. The following day, the
Company ceased its funding of working capital to the
Spotlight 29 Casino in view of the alleged breach of the
management contract and loan agreement by the Tribe.
On April 17, 1995, the Company's employees assigned to the
Spotlight 29 Casino were ordered from and escorted off the
casino premises by Tribal representatives. The Company does not
have any employees or representatives at the Spotlight 29 Casino
and the Tribe has de facto discharged the Company as manager of
the casino.
As a result of its discharge as manager, the Company
withdrew as moot the injunctive and declaratory action
previously filed and, on April 19, 1995, the Company issued a
demand letter to the Tribe declaring a complete breach of the
management contract and loan agreement as well as claiming
damages exceeding $12.5 million. On May 16, 1995, the Company
received a "Notice to Terminate Management Agreement" from the
Tribe which alleged material breaches of the management contract
and demanded $1.54 million to cure such breaches. If the
Company is unable to obtain a negotiated resolution of the
dispute with the Tribe, the Company intends to pursue civil
litigation for the referenced damages in the appropriate
judicial forum.
Because of the uncertainty regarding both the future
operational success of the Spotlight 29 Casino and the Tribe's
ability to respond to monetary damages, management is unable to
predict, at this time, the ultimate outcome of the dispute.
NONCOMPLIANCE WITH INDENTURE
Failure to Comply With Debt Covenants
The First Notes are secured by substantially all of the
assets of the Four Queens and a pledge of the capital stock of
Elsinore's material subsidiaries. The Indenture contains
certain affirmative covenants requiring, among other things, the
Company to maintain the right to operate the Spotlight 29 Casino
and to maintain positive net worth and certain fixed charges
coverage ratios, as well as restrictions on, among other things,
the incurrence of additional debt, liens, investments and the
payment of dividends. Certain of these covenants (including the
net worth and fixed charge coverage ratio maintenance covenants)
became effective following completion of the Company's Native
American casino projects.
Based on the Company's recent results of operations and its
expectations as to its operating results for the remainder of
1995 and 1996, the Company believes it will not be able to
comply with certain of its financial covenants, described below,
when they first become effective at the end of the quarter
ending June 30, 1995. Such covenant noncompliance, and the
Company's disengagement as manager of the Spotlight 29 Casino,
if not waived by the requisite number of Noteholders, would
result in one or more Events of Default under the Indenture.
Coverage Ratio. Section 5.17 of the Indenture requires the
Company to maintain, commencing June 30, 1995 and as of the last
day of each subsequent fiscal quarter until the First Notes
maturity date, a Consolidated Fixed Charges Coverage Ratio
("Coverage Ratio") of at least 1.5 to 1. In addition, the
covenant requires the Company to furnish the Noteholders with an
officer's certificate within 50 days after the end of each such
quarter setting forth the calculations of this ratio and stating
that the Company is in compliance with the covenant.
As of March 31, 1995, the Coverage Ratio of the Company was
approximately .55 to 1. Based on the Company's results of
operations to date through the second quarter of 1995, the
Company will not achieve a Coverage Ratio of 1.5 to 1 by
June 30, 1995. In addition, although management believes the
Coverage Ratio will begin to increase in 1996 and thereafter,
based on the current outlook for the Company's operations for
the balance of 1995 and 1996, management believes the Coverage
Ratio will not reach a level of 1.0 to 1 until the first quarter
of 1997 and will not reach the required level of 1.5 to 1 until
the year 2000.
If not waived by the holders of a majority of the First
Notes, the Company's failure to cure, within 30 days following
receipt of notice to cure, its noncompliance with the Coverage
Ratio covenant would result in an Event of Default under Section
7.1(4) of the Indenture, entitling the Noteholders to accelerate
the debt.
Net Worth. Section 5.18 of the Indenture requires the
Company, commencing with the second quarter of 1995, to furnish
the Noteholders within fifty (50) days after the end of each
fiscal quarter a certificate setting forth the Consolidated Net
Worth ("Net Worth") of the Company at the end of such quarter.
If the Net Worth at the end of each of any two consecutive
fiscal quarters is negative, then the Company would be required
to make an irrevocable, unconditional offer to all of the
Noteholders to purchase up to $6 million aggregate principal
amount of First Notes at a purchase price equal to 101% of the
principal amount thereof, plus accrued interest. Such Net Worth
Purchase Offer must remain open for a period of twenty business
days and be completed within five business days thereafter. In
addition, the commencement of such Net Worth Purchase Offer
would constitute an event of default under the purchase
agreement governing the Mortgage Notes.
As of the date hereof, the Company's Net Worth is negative.
Based on the recent results of operations and the Company's
expectation as to its operating results for the remainder of
1995, the Company believes it is unlikely it will achieve a
positive Net Worth by the end of either the second or the third
quarter of 1995. In the event the Company's Net Worth remains
negative through the third quarter of 1995, and such covenant
noncompliance is not waived by the Noteholders, the Company
would not be able to complete the requisite repurchase of First
Notes without obtaining additional financing and a waiver of
default under the Mortgage Note facility. There is no assurance
such financing could be obtained on satisfactory terms or at
all.
Termination of Spotlight 29 Management Contract. Under
Section 7.1(10) of the Indenture governing the First Notes, the
loss by the Company of the legal right to operate the Spotlight
29 Casino, and such loss continuing for more than 90 consecutive
days, would constitute an Event of Default, entitling the
Noteholders to immediately accelerate the debt. As of the date
hereof, the Company's loss of the legal right to operate the
Spotlight 29 Casino has not been determined by any court or
governmental authority, and the Company intends to continue to
vigorously pursue its various remedies under the Spotlight 29
management agreement and at law. In the event, however, that
the Tribe's de facto discharge of the Company as manager of the
casino on April 17, 1995, were to be deemed the loss of the
legal right to operate the casino, the Noteholders' failure to
waive such loss on or before July 16, 1995 would result in an
Event of Default under the Indenture. In addition, under
Section 7.1(9) of the Indenture, the closing of a substantial
portion of the Spotlight 29 Casino for more than 90 consecutive
days would constitute an Event of Default. Although the Company
is not currently aware of any present plans of the Tribe to
close the Spotlight 29 Casino, following its discharge as
manager of the casino the Company has had and will have no
control over the Spotlight 29 Casino's operations, including any
decision to close all or any part of the casino. Accordingly,
in addition to the Noteholders' consent to the Company's efforts
to sever its relationship with the Tribe, the Company seeks the
consent of the Noteholders to waive any Event of Default that
would occur as a result of the Tribe's closure of the casino.
The waiver of any Events of Default under Sections 7.1(9) or 7.1
(10) of the Indenture requires approval of the holders of a
majority of the outstanding First Notes.
EFFECT ON OTHER DEBT FACILITIES
The Company's failure to achieve by June 30, 1995 and
thereafter maintain a Consolidated Fixed Charges Coverage Ratio
of 1.5 to 1 and the Company's loss of the legal right to operate
the Spotlight 29 Casino, unless waived by the holders of the
requisite amount of the Company's Mortgage Notes, would
constitute events of default under the purchase agreement
governing the Mortgage Notes. In addition, the commencement of
a Net Worth Purchase Offer of First Notes as a result of the
Company's inability to achieve and maintain positive
Consolidated Net Worth during the requisite time periods would
constitute an event of default under the purchase agreement
governing the Mortgage Notes. Accordingly, concurrently with
the Consents sought hereunder, the Company intends to seek
appropriate consents from the holders of the Mortgage Notes to
the waiver of the Company's noncompliance with the terms and
provisions of the Mortgage Notes purchase agreement described
above.
TERMS OF THE WAIVER AND THIRD AMENDMENT
The Waiver
If approved, the Waiver would (i) through the end of the
Company's 1996 fiscal year, waive compliance by the Company and
the Guarantors with the provisions of Section 5.17 of the
Indenture which, among other things, requires the maintenance on
a quarterly basis of a Consolidated Fixed Charges Coverage Ratio
of 1.5 to 1 commencing June 30, 1995; (ii) waive, through the
end of the Company's 1997 fiscal year, compliance by the Company
and the Guarantors with the provisions of Section 5.18 of the
Indenture, which, among other things, requires the Company to
maintain a positive Consolidated Net Worth on a quarterly basis
commencing June 30, 1995; (iii) solely to permit the Company and
the Guarantors to disengage as manager of the Spotlight 29
Casino, waive compliance by the Company and the Guarantors with
the provisions of Section 5.14 of the Indenture which, among
other things, prohibits the Company from disposing of any
property, business or assets that are subject to the Mortgage
securing the Indenture; (iv) solely to permit the covenant
noncompliance described in items (i) through (iii) above, waive
compliance by the Company and the Guarantors with the provisions
of Section 7.1(4) of the Indenture which, among other things,
provides that the failure to observe or perform any covenant or
agreement contained in the Indenture, for 30 days following
receipt of written notice, constitutes an Event of Default under
the Indenture; (v) solely to permit the Company and the
Guarantors to disengage as manager of the Spotlight 29 Casino
and to terminate the Spotlight 29 management agreement, waive
compliance by the Company and the Guarantors with the provisions
of Section 7.1(10) of the Indenture which, among other things,
provides that the loss of the legal right to operate the
Spotlight 29 Casino for 90 consecutive days constitutes an Event
of Default under the Indenture; (vi) solely with respect to any
future closure of the Spotlight 29 Casino, waive compliance by
the Company and the Guarantors with the provisions of Section
7.1(9) of the indenture which, among other things, provides that
the closing of a substantial portion of the Spotlight 29 Casino
would constitute an Event of Default under the Indenture;
(vii) consent to the modification, amendment and/or restatement
of the Mortgage Notes and the Mortgage Note purchase agreement
substantially in accordance with the terms and provisions
contained in the form of Mortgage Note Amendment attached hereto
as Exhibit C; and (viii) waive compliance by the Company and the
Guarantors with such other provisions of the Indenture and
related instruments the waiver of compliance with which would be
necessary or appropriate solely to (A) relieve the Company for
the time periods indicated from its obligations to comply with
the Consolidated Fixed Charges Coverage Ratio and Consolidated
Net Worth covenants under the Indenture, (B) complete its
disengagement as manager of the Spotlight 29 Casino and
terminate the Spotlight 29 management agreement, and
(C) implement the Mortgage Note Amendment.
The Third Amendment
The Third Amendment, if approved, would cause Section 5.17
of the Indenture to be amended and restated in its entirety to
read as follows:
"Commencing the first fiscal quarter of 1997, the
Company shall maintain a Consolidated Fixed Charges
Coverage Ratio, as of the last day of each fiscal
quarter, of at least 1.0 to 1, increasing to 1.15 to 1
for each fiscal quarter in 1998, 1.3 to 1 for each
fiscal quarter in 1999, and 1.5 to 1 for each fiscal
quarter in 2000, and shall furnish to the Trustee an
officers certificate within 50 days after the end of
each such fiscal quarter (or 95 days after the fourth
fiscal quarter of any fiscal year) setting forth the
calculations of this ratio and stating that the
Company is in compliance with this covenant."
In addition, the Third Amendment, if approved, would amend
the provisions of Section 7.1(9) and 7.1(10) by eliminating from
each the reference therein to "the Palm Springs Casino."
THE CONSENT PROCESS
Procedure for Giving Consents
Noteholders wishing to consent to the proposed Waiver and
Third Amendment should complete, sign and date the accompanying
Consent (or a facsimile thereof) in accordance with the
instructions set forth herein and in the Consent and forward or
hand deliver such Consent to the Trustee on behalf of the
Company at the appropriate address as set forth therein.
An "Accepted Consent" is a properly completed Consent
executed by the Noteholder of record on the Record Date (or his
legal representative or attorney-in-fact) that is (a) timely
received by the Trustee on behalf of the Company, and not
thereafter revoked as provided herein and (b) accepted by the
Company in accordance with the provisions and subject to the
terms and conditions set forth in this Information Statement.
Only a registered Noteholder on the Record Date (or his
legal representative or attorney-in-fact) may deliver a Consent.
Except as provided below, any beneficial owner of First Notes
who is not the registered holder of such First Notes must
arrange with the registered holder to execute and deliver a
consent on his behalf.
CONSENTS SHOULD BE SENT TO THE TRUSTEE BY FACSIMILE. IN NO
EVENT SHOULD A NOTEHOLDER TENDER OR DELIVER FIRST NOTES OR
WARRANTS.
Consents should be delivered by facsimile with the original
to follow by mail, overnight express or hand to the Trustee at
the address set forth herein and in the Consent.
All questions as to the validity, form, eligibility
(including time of receipt) and acceptance of Consents will be
resolved by the Company, whose determination shall be final and
binding. The Company also reserves the right to waive any
irregularities or conditions of delivery as to particular
Consents. Neither the Company nor the Trustee shall be under
any duty to give notification of any such irregularities or
waiver. Deliveries of such particular Consents will not be
deemed to have been made until such irregularities have been
cured or waived.
Revocation of Consents
Section 10.4 of the Indenture provides that Consents may be
revoked only before the date the Waiver and Third Amendment
become effective. Prior to such time, Consents with respect to
the Waiver and/or Third Amendment may be revoked upon receipt by
the Company of a notice of revocation by a Noteholder on the
Record Date. The notice of revocation must indicate the serial
number or numbers of the First Notes to which such revocation
relates (or information sufficient to enable the Company to
identify such First Notes), as well as the aggregate principal
amount represented by such First Notes. A properly executed
Consent with the "Does Not Consent" box marked, submitted in
accordance with the foregoing procedures, will be treated as a
revocation of the Consent regarding the First Notes to which it
relates. A Noteholder on the Record Date who has delivered a
revocation may thereafter deliver a new Consent in accordance
with the terms set forth in this Information Statement. Except
as discussed above, a Consent given by a holder of any Note
shall be conclusive and binding upon such holder and upon all
future holders and owners of such Note, and of any Note issued
in exchange for or in substitution therefor, whether or not any
notation in regard thereto is made on such Note. A revocation
of a Consent shall be deemed to be canceled by a subsequent
delivered properly completed and executed Consent relating to
the same First Note or First Notes, if such subsequent Consent
is given by the same Noteholder of record.
Effective Date of the Waiver and Third Amendment
The Company, the Guarantors and the Trustee intend to
execute the Waiver and Third Amendment as soon as practicable
after the Company receives the Requisite Consents.
CERTAIN FEDERAL INCOME TAX CONSIDERATIONS
The Company does not believe that the grant of the Waiver
or the adoption of the Third Amendment, if approved, would
result in any tax consequence to the Noteholders for Federal
income tax purposes. Each Noteholder is, however, urged to
consult with its tax advisor as to any potential tax
consequences to it resulting from the Waiver (including
consequences resulting from the application of any state, local
or foreign income or other tax laws).
ADDITIONAL INFORMATION ABOUT THE COMPANY
Elsinore Corporation is subject to the reporting and
information requirements of the Securities Exchange Act of 1934,
as amended, and in accordance therewith files reports and other
information with the Securities and Exchange Commission (the
"Commission"). The Company has previously furnished to the
Noteholders the Company's Annual Report on Form 10-K for its
fiscal year ending December 31, 1994, which, among other
matters, contains a description of the Company's business and
its consolidated financial statements, and the Company's
Quarterly Report on Form 10-Q for its fiscal quarter ending
March 31, 1995. Information as of particular dates concerning
the Company's directors and officers, the remuneration of such
persons and any material interest of such persons in
transactions with the Company, as the case may be, is set forth
in other reports filed with the Commission. Such reports and
other information may be inspected and copies may be obtained at
the principal offices of the Commission at 450 Fifth Street,
N.W., Washington, D.C. 20549; Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661; and 7 World Trade
Center, Suite 1300, New York, New York 10048. Copies of such
material can be obtained from the Public Reference Section of
the Commission at 450 Fifth Street, N.W., Washington, D.C.
20549, upon payment of the prescribed fees.
Such reports and other information may also be obtained
from the Company.
DELIVERY OF CONSENTS
Noteholders on the Record Date who wish to consent to the
proposed Waiver and Third Amendment should either (1) complete
and sign the Consent (or a facsimile thereof) and forward it by
facsimile to the Trustee or (2) request their broker, bank or
trust company or nominee to effect the transaction on their
behalf. Requests for additional copies of this Information
Statement and the Consent should be directed to Mr. Richard
Prokosch at the address and telephone and facsimile numbers
listed below.
_________________________
Consents Should Be Sent To:
First Trust National Association,
as Trustee
180 East 5th Street
St. Paul, Minnesota 55101
Attention: Richard Prokosch
Telephone: (612) 244-0721
Facsimile: (612) 244-0711
<PAGE>
EXHIBITS
A - Form of Waiver - Not Attached
B - Form of Third Amendment - See Exhibit 10.2 to this Form 8-K
C - Form of Mortgage Notes Amendment - See Exhibit 10.3 to this
Form 8K
<PAGE>
SUPPLEMENTAL
INFORMATION STATEMENT
ELSINORE CORPORATION
Restated Consent to Waiver of Compliance and Amendment
of the Indenture governing
its
12.5% First Mortgage Notes Due 2000
SUBJECT TO THE CONDITIONS DESCRIBED HEREIN, THE COMPANY WILL
ACCEPT ALL RESTATED CONSENTS RECEIVED PRIOR TO 11:59 P.M., NEW
YORK TIME ON JUNE 27, 1995 (THE "EXPIRATION DATE"). IF THE
REQUIRED NUMBER OF RESTATED CONSENTS TO THE PROPOSED WAIVER AND
AMENDMENT OF THE INDENTURE ARE NOT RECEIVED BY THE EXPIRATION
DATE, THE COMPANY MAY ELECT TO CONTINUE TO ACCEPT RESTATED
CONSENTS UNTIL THE REQUIRED NUMBER HAS BEEN RECEIVED. RESTATED
CONSENTS MAY BE REVOKED AT ANY TIME PRIOR TO RECEIPT BY THE
COMPANY OF THE REQUIRED NUMBER OF CONSENTS.
This Supplemental Information Statement (this "Supplement")
and the accompanying form of amended and restated consent (the
"Restated Consent") are being furnished by Elsinore Corporation,
a Nevada corporation (the "Company"), to holders of record (the
"Noteholders") on May 31, 1995 (the "Record Date") of its 12.5% First
Mortgage Notes Due 2000 (the "First Notes").
This Supplement supplements the information provided in the
Information Statement dated as of June 16, 1995 (the "Informa-
tion Statement") previously delivered to the Noteholders in
connection with the Company's solicitation of consents to the
proposed forms of Waiver and Third Amendment (as defined in the
Information Statement). The accompanying form of Restated
Consent is intended to replace the form of consent previously
delivered with the Information Statement. Prior to executing
and delivering the Restated Consent, each Noteholder is
encouraged to read the additional information contained in this
Supplement.
Each Noteholder should complete and promptly return the
Restated Consent whether or not such Noteholder already returned
the form of consent previously distributed. Restated Consents
should be sent to First Trust National Association, as Trustee,
at 180 East 5th Street, St. Paul, Minnesota 55101, Attention:
Richard Prokosch, Facsimile: (612) 244-0711. In no event should
a Noteholder tender or deliver First Notes or Warrants.
Additional Term to be Added to the Third Amendment
As additional consideration to be given by the Company to
the Noteholders in return for their consent to the execution and
delivery of the Waiver and the Third Amendment, the Company has
agreed to satisfy an additional financial covenant that will be
added to the Company's existing debt covenants under Article V
of the Indenture. Pursuant to the new covenant, the Company
will be required to generate "Consolidated EBITDA" of at least
$5 million for the six-month period ending June 30, 1996, and at
least $7.5 million for the nine-month period ending
September 30, 1996. "Consolidated EBITDA" is currently defined
in the Indenture to mean, with respect to any person and for any
period, the "Consolidated Net Income of such person for such
period adjusted to add thereto (to the extent deducted from net
revenues in determining Consolidated Net Income, without dupli-
cation), the sum of (i) Consolidated Income Tax Expense, and
(ii) Consolidated Depreciation and Amortization expense, and
(iii) Consolidated Fixed Charges" (as each such capitalized term
is defined in the Indenture). Accordingly, the Third Amendment,
if approved, would, in addition to the other items set forth in
the form of Third Amendment attached to the Information State-
ment, cause a new Section 5.27 to be added to the Indenture as
follows:
The Company shall have (a) for the six month period
ending June 30, 1996, Consolidated EBITDA of not less
than $5,000,000 and (b) for the nine month period ending
September 30, 1996, Consolidated EBITDA of not less than
$7,500,000.
Each other term and provision of the proposed Third Amend-
ment, as described in the Information Statement and set forth as
Exhibit B thereto, will remain in full force and effect.
Modification of Convertible Notes
As additional consideration to the Noteholders to induce
their execution and delivery of the Restated Consents, the
Company has agreed, as a condition to the effectiveness of the
Restated Consents, to modify certain repayment obligations with
respect to the $1,706,250 principal amount of its 7.5% Converti-
ble Subordinated Notes due December 31, 1996 (the "Convertible
Notes"). Specifically, the Company will seek to eliminate its
required amortization payments of 25% (approximately $425,000)
of the outstanding principal amount of the Convertible Notes due
on each of March 31, 1996 and June 30, 1996, and to increase its
amortization payments due on each of September 30, 1996 and
December 31, 1996 from 25% to 50% of such balance (together with
accrued and unpaid interest thereon). Accordingly, concurrently
with the Restated Consents sought hereunder, the Company is
seeking appropriate consents from the holders of the Convertible
Notes to amend the Note Purchase Agreement, dated as of
March 30, 1995, that governs the Convertible Notes and to issue
amended and restated Convertible Notes reflecting the revised
payment schedule.
No Other Changes to Documents
Except for the information provided in this Supplement, each
term and provision of the Information Statement (including
Exhibits) remains in full force and effect. Each term and
provision of the Information Statement (including Exhibits) is
hereby incorporated by reference in this Supplement.
DELIVERY OF CONSENTS
Noteholders who wish to consent to the proposed Waiver and
Third Amendment (as amended pursuant to the terms described in
this Supplement) should either (1) complete and sign the accom-
panying Restated Consent (or a facsimile thereof) and forward it
by facsimile to the Trustee or (2) request their broker, bank or
trust company or nominee to effect the transaction on their
behalf. Requests for additional copies of this Supplement, the
original Information Statement and/or the Restated Consent
should be directed to Mr. Richard Prokosch at the address and
telephone and facsimile numbers listed below.
If you require assistance, please contact Mr. Richard
Prokosch at (612) 244-0721 or Ernest East, Esq. of the Company
at (702) 387-5109. The Company has made no arrangements and has
no understanding with any dealer, salesman or person regarding
the Consent. No person has been authorized by the Company to
give any information or to make any representations in connec-
tion with the Consent other than those contained herein, and, if
given or made, such other information or representations must
not be relied upon as having been authorized. The delivery of
this Information Statement shall not, under any circumstances,
create any implication that the information herein is correct as
of any time subsequent to the date hereof.
_________________________
Consents Should Be Sent To:
First Trust National Association,
as Trustee
180 East 5th Street
St. Paul, Minnesota 55101
Attention: Richard Prokosch
Telephone: (612) 244-0721
Facsimile: (612) 244-0711
EXHIBIT 10.2<PAGE>
ELSINORE CORPORATION
Issuer
and
THE GUARANTORS NAMED HEREIN
and
FIRST TRUST NATIONAL ASSOCIATION
Trustee
_______________
SUPPLEMENTAL
INDENTURE NO. 3
Dated as of June 30, 1995
TO
INDENTURE
Dated as of October 8, 1993,
as amended
_______________
$57,000,000
12.5% First Mortgage Notes due 2000
<PAGE>
SUPPLEMENTAL INDENTURE NO. 3 dated as of June __, 1995 to
INDENTURE, dated as of October 8, 1993, as amended, between
ELSINORE CORPORATION, a Nevada corporation (the "Company"), the
Guarantors referred to therein and FIRST TRUST NATIONAL
ASSOCIATION, a national association, as Trustee (the
"Indenture"). Capitalized terms used but not defined herein
shall have the meanings set forth in the Indenture.
WHEREAS, in accordance with the provisions of Section 10.2
of the Indenture, the Holders of the requisite aggregate prin-
cipal amount of the outstanding Securities have consented, by
written act delivered to the Company and the Trustee, to the
amendments to the provisions of the Indenture contained herein;
and
WHEREAS, the Company and the Guarantors, as authorized by
Board Resolutions, have approved the amendments to the provi-
sions of the Indenture contained herein;
NOW, THEREFORE, each party hereto agrees as follows for the
benefit of each other party and for the equal and ratable bene-
fit of the Holders of the Securities:
1. Section 5.17. Section 5.17 of the Indenture is hereby
amended and restated in its entirety to read as follows:
"Commencing the first fiscal quarter of 1997, the
Company shall maintain a Consolidated Fixed Charges
Coverage Ratio, as of the last day of each fiscal
quarter, of at least 1.0 to 1, increasing to 1.15 to 1
for each fiscal quarter in 1998, 1.3 to 1 for each
fiscal quarter in 1999, and 1.5 to 1 for each fiscal
quarter in 2000, and shall furnish to the Trustee an
officers certificate within 50 days after the end of
each such fiscal quarter (or 95 days after the fourth
fiscal quarter of any fiscal year) setting forth the
calculations of this ratio and stating that the
Company is in compliance with this covenant."
2. Section 5.27. A new Section 5.27 of the Indenture is
hereby added to the Indenture, as follows:
SECTION 5.27. Minimum Consolidated EBITDA
"The Company shall have (a) for the six-month period
ending June 30, 1996, Consolidated EBITDA of not less
than $5,000,000 and (b) for the nine-month period
ending September 30, 1996, Consolidated EBITDA of not
less than $7,500,000."
3. Section 7.1(9). Section 7.1(9) of the Indenture is
hereby amended by deleting therefrom the reference to "the Palm
Springs Casino". Except as so amended, Section 7.1(9) shall
remain in full force and effect.
4. Section 7.1(10). Section 7.1(10) of the Indenture is
hereby amended by deleting therefrom the reference to "the Palm
Springs Casino". Except as so amended, Section 7.1(10) shall
remain in full force and effect.
5. No Conflict With Existing Provisions. Notwithstanding
any other provision of the Indenture, the Guaranties or the
Notes to the contrary, the performance by the Company and the
Guarantors of the terms and provisions of this Supplemental
Indenture No. 3 shall not contravene any covenant, duty or
obligation of the Company or the Guarantors contained in the
Indenture, the Guaranties or the Securities.
All parties may sign any number of copies or counterparts
of this Supplemental Indenture. Each signed counterpart shall
be an original, but all of them together shall represent the
same agreement.
SIGNATURE
IN WITNESS WHEREOF, the parties hereto have caused this
Supplemental Indenture to be duly executed as of the date first
written above.
ELSINORE CORPORATION
By /s/ Thomas E. Martin
Thomas E. Martin, President
Attest:
Name
Title
FIRST TRUST NATIONAL ASSOCIATION,
as Trustee
By /s/ Richard Prokosch
Richard Prokosch
Title
Attest:
Name
Title
GUARANTORS:
PINNACLE GAMING CORPORATION
(FORMERLY ELSUB II, INC.)
By /s/ Thomas E. Martin
Thomas E. Martin, President
ELSUB MANAGEMENT CORPORATION
By /s/ Thomas E. Martin
Thomas E. Martin, President
FOUR QUEENS, INC.
By /s/ Tomas E. Martin
Thomas E. Martin, President
FOUR QUEENS EXPERIENCE
CORPORATION
By /s/ Thomas E. Martin
Thomas E. Martin, President
EAGLE GAMING, INC.
By /s/ Thomas E. Martin
Thomas E. Martin, President
ELSINORE TAHOE, INC.
By /s/ Thomas E. Martin
Thomas E. Martin, President
PALM SPRINGS EAST, LIMITED
PARTNERSHIP
By: ELSUB MANAGEMENT CORPORA-
TION, its general partner
By /s/ Thomas E. Martin
Thomas E. Martin, President
OLYMPIA GAMING CORPORATION
By /s/ Thomas E. Martin
Thomas E. Martin, President
ELSINORE-MISSOURI GAMING, INC.
By /s/ Thomas E. Martin
Thomas E. Martin, President
EXHIBIT 10.3
ELSINORE CORPORATION
Issuer
and
THE HOLDERS NAMED HEREIN
and
THE GUARANTORS NAMED HEREIN
AMENDMENT NO. 2
Dated as of June 30, 1995
TO
NOTE AND STOCK PURCHASE AGREEMENT
Dated as of October 11, 1994
$3,000,000
20% Mortgage Notes due 1996
<PAGE>
AMENDMENT No. 2 dated as of June 30, 1995, to the NOTE AND STOCK
PURCHASE AGREEMENT, dated as of October 11, 1994 (the "Note Agreement"),
between Elsinore Corporation, a Nevada corporation (the "Company"), the
Purchasers referred to therein and the Guarantors referred to therein.
Capitalized terms used by not defined herein, shall have
the meanings set forth in the Note Agreement.
RECITALS
1. In accordance with Section 10.3 of the Note Agreement, the Holders
of 100% of the aggregate principal amount of the Notes are hereby agreeing
to amend the Note Agreement and the Notes, such amendments to become
effective on the date set forth in Section 9.
2. The Company and the Guarantors, as authorized by Board
Resolutions, have approved the amendments to the Note Agreement contained
herein.
NOW, THEREFORE, each party hereto agrees as follows for the benefit of
each other party and for the equal and ratable benefit of the Holders of the
Securities:
1. Section 1. Stated Maturity. The defined term "Stated Maturity"
set forth in Section 1 of the Note Agreement is hereby amended by deleting
the number "1996" and replacing it with the number "2000".
2. SECTION 5.17. Section 5.17 of the Note Agreement is hereby
amended and restated in its entirety to read as follows:
"Commencing the first fiscal quarter of 1997, the Company shall maintain
a Consolidated Fixed Charges Coverage Ratio, as of the last day of
each fiscal quarter, of at least 1.0 to 1, increasing to 1.15 to 1 for
each fiscal quarter in 1998, 1.3 to 1 for each fiscal quarter in 1999,
and 1.5 to 1 for each fiscal quarter in 2000, and shall furnish to the
Holders an Officers' Certificate within 50 days after the end of each
such fiscal quarter (or 95 days after the fourth fiscal quarter of any
fiscal year) setting forth the calculations of this ratio and stating
that the Company is in compliance with this covenant."
3. Section 5.27. A new Section 5.27 of the Note Agreement is hereby
added to the Note Agreement, as follows:
SECTION 5.27. Minimum Consolidated EBITDA
"The Company shall have (a) for the six-month period ending
June 30, 1996, Consolidated EBITDA of not less than $5,000,000 and
(b) for the nine-month period ending September 30, 1996, Consolidated
EBITDA of not less than $7,500,000."
4. Section 7.1(i). Section 7.1(i) of the Note Agreement is hereby
amended by deleting therefrom the reference to the "the Palm Springs
Casino". Except as so amended, Section 7.1(i) shall remain in full force
and effect.
5. Section 7.1(j). Section 7.1 (j) of the Note Agreement is hereby
amended by deleting therefrom the reference to "the Palm Springs Casino".
Except as so amended, Section 7.1(j) shall remain in full force and effect.
6. Section 9.3 Section 9.3 of the Note Agreement is hereby amended
in its entirety to read as follows:
"9.3 No Optional Right of Redemption. The Notes are not redeemable
at the option of the Company prior to maturity."
7. Section 9.,4. Section 9.4 of the Note Agreement is hereby amended
in its entirety to read as follows:
"9.4 Mandatory Redemption. The Company shall redeem all
outstanding Notes on March 31, 2000."
8. Section 9.9. The Note Agreement is hereby amended by adding the
following new Section 9.9 as follows:
"9.9 Right of Holders to Put Notes to Company. A Holder shall
have the right to require the Company to redeem a Note, in whole
or in part, at 100% of principal amount, together with accrued
and unpaid interest, on each of March 31 and September 30
commencing in 1996 and continuing until March 31, 2000. A Holder
exercising such right shall mail a notice of exercise of the put
option (the "Put Notice") to the Company at least 60 days before
a Redemption Date by first class mail, postage prepaid. The
Put Notice shall identify the Notes (or part thereof) to be
redeemed by the Company and the Redemption Date. On the
Redemption Date, the Company shall pay the Redemption Price to the
Holder and the Holder shall surrender the Notes to the Company.
9. Exhibit A. Exhibit A to the Note Agreement shall be amended in
its entirety by deleting the existing Exhibits A and replacing it with
Exhibit A in the form attached hereto.
10. .Representation and Warranties. The Company and each of the
Guarantors jointly and severally represent and warrant to each Holder as
of the date hereof as follows:
10.1 Organization, Standing and Qualification.
(a) Each of the Company and the Guarantors is duly
organized, validly existing and in good standing under the laws of its
respective jurisdiction of organization; has all requisite power and
authority to own or lease, and operate its respective properties and
assets, and to carry on its respective businesses as now conducted and
as proposed to be conducted.
(b) Each of the Company and the Guarantors has all requisite
corporate power and authority to enter into and perform all of its
respective obligations under the Note Agreement, as amended hereby, and the
other Documents to which it is a party, and to carry out the transactions
contemplated by the Note Agreement, as amended hereby, or any other
Document.
10.2 Authorization of Amendment to Note Agreement
Each of the Company and the Guarantors has taken all corporate actions
necessary to authorize it to enter into and perform its respective
obligations under each of the Note Agreement, as amended hereby, and the
other Documents to which it is a party and to consummate the transactions
contemplated hereby and thereby. The Note Agreement, as amended hereby, and
each of the Documents to which the Company or any of the Guarantors is a
party, is a legal, valid and binding obligation of the Company or such
Guarantor, as the case may be, enforceable against the Company or such
Guarantor, as the case may be, in accordance with its terms, except as such
enforcement may be subject to (i) applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and similar laws now or
hereafter affecting creditors' rights and remedies generally and (ii)
general principles of equity (regardless of whether such enforcement is
sought in a proceeding in equity or at law).
10.3 No Violation
(a) Except with respect to defaults to be waived by the
Holders pursuant to a Wavier of Compliance dated the date hereof, and
defaults identified with respect to the 1993 Notes in an Information
Statement dated June 16, 1995, neither the Company nor any Guarantor is (i)
in violation of its respective Charter Documents, or (ii) in default in the
performance of any obligation, agreement or condition contained in any bond,
debenture, note or any other evidence of indebtedness or in any indenture,
mortgage, deed of trust or any other agreement or instrument to which any of
them is a party other than such defaults that would not, singly or in the
aggregate, reasonably be expected to result in a Material Adverse Effect.
Except with respect to defaults to be waived by the Holders pursuant to a
Waiver of Compliance dated the date hereof, and defaults identified with
respect to the 1993 Notes in an Information Statement dated June 16, 1995,
there exists no condition that, with the passage of time or otherwise, would
constitute (i) a violation of such Charter Documents, or (ii) a default
under any such document or instrument or result in the imposition of any
penalty or the acceleration of any indebtedness or other obligation other
than such defaults that would not, singly or in the aggregate, reasonably be
expected to result in a Material Adverse Effect.
(b) Neither the execution or delivery by the Company or any
Guarantor of this Amendment, the performance by the Company or the
Guarantors of any of their obligations pursuant to the Note Agreement, as
amended hereby, and the other Documents, nor the consummation of the
transaction contemplated hereby or thereby will conflict with, violate,
constitute a breach of or a default (with the passage of time or otherwise)
under, require the consent of any Person (other than consents already
obtained) under, result in the imposition of any penalty, or result in the
imposition of a Lien (other than Liens permitted under the Note Agreement
and the 1993 Indenture) on any properties of the Company or any of the
Guarantors or any acceleration of indebtedness or other obligation pursuant
to, (i) the Charter Documents of the Company or such Guarantors, (ii) any
bond, debenture, note or any other evidence of indebtedness or any
indenture, mortgage, deed of trust or any other material agreement or
instrument to which the Company or such Guarantors are a party or by which
any of them is bound or to which any of the property or assets of the Company
or such Guarantors is subject, or (iii) any applicable law.
11. Effective Date; Conditions: This Amendment shall become effective
on the date (the "Effective Date") that the Supplemental Indenture No. 3 to
the Indenture, substantially in the form attached as Exhibit B to the
Information Statement dated June 16, 1995, as supplemented by a Supplemental
Information Statement dated June 23, 1995 (the "Information Statement") is
executed and delivered by the Trustee, the Company, and the Guarantors,
and the Waiver of Compliance, substantially in the form attached as
Exhibit A to the Information Statement, is executed and delivered by the
Trustee, provided that such date is before July 31, 1995 and that on
such date the following conditions shall have been satisfied:
11.1. The Holders shall have received from Ernest E. East, General
Counsel to the Company, and Lionel, Sawyer & Collins, counsel to the Company
and the Guarantors, an opinion dated the Effective Date with respect to the
transactions contemplated hereby, with opinion shall be in form and
substance satisfactory to the Holders.
11.2 The representation and warranties of the Company and the
Guarantors contained herein shall be true and correct in all respects at and
as of the Effective Date. There shall exist at and as of the Effective Date
(after giving effect to the transactions contemplated by the note Agreement,
as amended hereby, and the other Documents) no Default or Event of
Default.
11.3 The Company and the Guarantors shall have duly authorized,
executed, acknowledged, delivered, filed, registered and recorded such
Documents, including amendments to Security Documents and financing
statements, as the Holders may have requested in order to perfect or
maintain the perfection of the security interests and encumbrances created
pursuant to the Documents.
11.4 Amended and restated Notes and Guarantees in the form of
Exhibit A to the Note Agreement, as amended hereby, shall have been duly
executed by the Company and Guarantors and delivered to the Holders upon
surrender of the Holders' existing Notes.
11.5 The Company shall furnish the Holders with a certificate,
signed by the President or Vice President of the Company stating that the
conditions set forth in this Section 11 have been satisfied.
11.6 Holders of the Company's 7.5% Convertible Subordinated Notes
due December 31, 1996 (the "Subordinated Notes") shall have entered into an
agreement with the Company consenting to the deferral of amortization
payments on the Subordinated Notes as set forth in the Information Statement.
12. Registration. Within 30 days of the Effective Date, the Company
and the Guarantors shall file with the Securities and Exchange Commission
one or more registration statements or amendments to previously filed
registration statements to register (i) the Notes to be issued pursuant to
the Exchange Offer in accordance with the Registration Rights Agreement,
and (ii) the Shares pursuant to the Shares Registration Rights Agreement.
Failure by the Company to comply will be an Event of Default under the Note
Agreement.
13. Expenses. Whether or not this Amendment becomes effective on the
Effective Date, the Company shall pay all reasonable expenses of the Holders
relating to this Amendment and the Waiver of Compliance dated the date
hereof, including reasonable fees and charges and disbursements of Ropes
& Gray and any local counsel the Holders may employ.
<PAGE>
SIGNATURES
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 2
to be duly executed as of the date first written above.
PURCHASERS: PUTNAM DIVERSIFIED INCOME TRUST,
PUTNAM HIGH INCOME CONVERTIBLE
AND BOND FUND, PUTNAM MASTER
INTERMEDIATE INCOME TRUST, PUTNAM
MANAGED HIGH YIELD TRUST, PUTNAM
CAPITAL MANAGER TRUST - PUTNAM
DIVERSIFIED INCOME FUND
By:
Title:
ISSUER: ELSINORE CORPORATION
By: Thomas E. Martin
Name: Thomas E. Martin
Title: President
GUARANTORS: PINNACLE GAMING CORPORATION
(FORMERLY ELSUB II, INC.)
By: Thomas E. Martin
Name: Thomas E. Martin
Title: President
ELSUB MANAGEMENT CORPORATION
By: Thomas E. Martin
Name: Thomas E. Martin
Title: President
<PAGE>
FOUR QUEENS, INC.
By: Thomas E. Martin
Name: Thomas E. Martin
Title: President
FOUR QUEENS EXPERIENCE CORPORATION
By: Thomase E. Martin
Name: Thomas E. Martin
Title: President
EAGLE GAMING, INC.
By: Thomas E. Martin
Name: Thomas E. Martin
Title: President
ELSINORE TAHOE, INC.
By: Thomase E. Martin
Name: Thomas E. Martin
Title: President
ELSINORE-MISSOURI GAMING, INC.
By: Thomase E. Martin
Name: Thomas E. Martin
Title: President<PAGE>
PALM SPRINGS EAST LIMITED PARTNERSHIP
By: ELSUB MANAGEMENT CORPORATION,
its general partner
By: Thomas E. Martin
Name: Thomas E. Martin
Title: President
OLYMPIA GAMING CORPORATION
By: Thomas E. Martin
Name: Thomas E. Martin
Title: President
EXHIBIT 10.4<PAGE>
WAIVER OF COMPLIANCE AND AGREEMENT
TO AMEND PROMISSORY NOTES
Reference is made to those certain four promissory notes of
Elsinore Corporation, a Nevada corporation (the "Company"), each
dated March 31, 1995, made and given to Magnolia Partners, L.P.,
a Delaware limited partnership ("Purchaser") in the respective
original principal amounts of $175,000, $175,000, $175,0000 and
$600,000 (collectively, the "Elsinore Notes"). Each of the
Elsinore Notes was executed and delivered in accordance with
that certain Note Purchase Agreement dated as of March 30, 1995
regarding the $1,706,250 original principal amount of 7.5% con-
vertible subordinated notes due December 31, 1996 of Elsinore
Corporation (the "Purchase Agreement").
In consideration for the Company's agreement below to
increase the quarterly payments due under the Elsinore Notes on
each of September 30, 1996 and December 31, 1996, from 25% to
50% of the outstanding principal balance of each Elsinore Note,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned
hereby waives its rights under the Elsinore Notes to payment of
the quarterly installment of principal due under the Elsinore
Notes on March 31, 1996 and June 30, 1996. The undersigned
hereby acknowledges and agrees that the Company's failure to
make the payments of principal due under the Elsinore Notes on
March 31, 1996 and June 30, 1996, will not constitute an "Event
of Default" under Section 6(a) of the Purchase Agreement or
otherwise breach any other term or provision of the Elsinore
Notes or the Purchase Agreement. This waiver shall only apply
to the payment of principal under the Elsinore Notes and shall
have no effect on the Company's continuing obligation to pay
accrued interest on the unpaid principal balance of the Elsinore
Notes as set forth in each Elsinore Note.
This Agreement shall have the force and effect of an amend-
ment to each Elsinore Note and any applicable provisions of the
Note Purchase Agreement. Each other term and provision of the
Elsinore Notes and the Purchase Agreement are hereby incorpo-
rated by reference.
Date: June 29, 1995.
MAGNOLIA PARTNERS, L.P.
By: Elsco, Inc., its general
partner
By /s/ Harry C. Hagerty III
Harry C. Hagerty III,
President
In consideration for the waivers granted hereinabove, an
for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company hereby
agrees to increase from 25% to 50% the amount of outstanding
principal balance of the Elsinore Notes due and payable on each
of September 30, 1996 and December 31, 1996. This Agreement
shall have the force and effect of an amendment to each Elsinore
Note and any applicable provisions of the Note Purchase Agree-
ment. Each other term and provision of the Elsinore Notes and
the Purchase Agreement are hereby incorporated by reference.
Date: June 30, 1995.
ELSINORE CORPORATION
By /s/ Thomas E. Martin
Thomas E. Martin, President<PAGE>
WAIVER OF COMPLIANCE AND AGREEMENT
TO AMEND PROMISSORY NOTE
Reference is made to that certain promissory note of
Elsinore Corporation, a Nevada corporation (the "Company"),
dated March 31, 1995, made and given to Mojave Partners, L.P., a
Delaware limited partnership ("Purchaser") in the original prin-
cipal amount of $300,000 (the "Elsinore Note"). The Elsinore
Note was executed and delivered in accordance with that certain
Note Purchase Agreement dated as of March 30, 1995 between the
Company and the Purchaser regarding the $1,706,250 original
principal amount of 7.5% convertible subordinated notes due
December 31, 1996 of Elsinore Corporation (the "Purchase
Agreement").
In consideration for the Company's agreement below to
increase the quarterly payments due under the Elsinore Note on
each of September 30, 1996 and December 31, 1996, from 25% to
50% of the outstanding principal balance thereof, and for other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the undersigned hereby waives its
rights under the Elsinore Note to payment of the quarterly
installment of principal due under the Elsinore Note on
March 31, 1996 and June 30, 1996. The undersigned hereby
acknowledges and agrees that the Company's failure to make the
payments of principal due under the Elsinore Note on March 31,
1996 and June 30, 1996, will not constitute an "Event of
Default" under Section 6(a) of the Purchase Agreement or other-
wise breach any other term or provision of the Elsinore Note or
the Purchase Agreement. This waiver shall only apply to the
payment of principal under the Elsinore Note and shall have no
effect on the Company's continuing obligation to pay accrued
interest on the unpaid principal balance of the Elsinore Note as
set forth therein.
This Agreement shall have the force and effect of an amend-
ment to the Elsinore Note and any applicable provisions of the
Note Purchase Agreement. Each other term and provision of the
Elsinore Note and the Purchase Agreement are hereby incorporated
by reference.
Date: June 27, 1995.
MOJAVE PARTNERS, L.P.
By: Woodhaven Investors, Inc.,
its general partner
By /s/ Edward Herrick
Edward Herrick, President
In consideration for the waivers granted hereinabove, and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company hereby
agrees to increase from 25% to 50% the amount of outstanding
principal balance of the Elsinore Note due and payable on each
of September 30, 1996 and December 31, 1996.
This Agreement shall have the force and effect of an
amendment to the Elsinore Note and any applicable provisions of
the Note Purchase Agreement. Each other term and provision of
the Elsinore Note and the Purchase Agreement are hereby
incorporated by reference.
Date: June 30, 1995.
ELSINORE CORPORATION
By /s/ Thomas E. Martin
Thomas E. Martin, President
<PAGE>
WAIVER OF COMPLIANCE AND AGREEMENT
TO AMEND PROMISSORY NOTES
Reference is made to those certain four promissory notes of
Elsinore Corporation, a Nevada corporation (the "Company"), each
dated March 31, 1995, made and given to (i) G & O Partners, L.P., a
Delaware limited partnership, in the original principal amount
of $180,000, (ii) GroRan LLC1, a Delaware limited liability company,
in the original principal amount of $56,250, (iii) Paul Orwicz, an
individual, in the original principal amount of $22,500, and (iv) David
Ganek, an individual, in the original principal amount of $22,500 (G & O
Partners, L.P., GroRan LLC1, Paul Orwicz and David Ganek,
collectively the "Purchasers" and the promissory notes described
above, collectively, the "Elsinore Notes"). Each of the
Elsinore Notes was executed and delivered in accordance with the
Note Purchase Agreement dated as of March 30, 1995 between the
Company and each Purchaser regarding the $1,706,250 original
principal amount of 7.5% convertible subordinated notes due
December 31, 1996 of Elsinore Corporation (the "Purchase
Agreement").
In consideration for the Company's agreement below to
increase the quarterly payments due under the Elsinore Notes on
each of September 30, 1996 and December 31, 1996, from 25% to
50% of the outstanding principal balance of each Elsinore Note,
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the undersigned
hereby waives its rights under the Elsinore Notes to payment of
the quarterly installment of principal due under the Elsinore
Notes on March 31, 1996 and June 30, 1996. The undersigned
hereby acknowledges and agrees that the Company's failure to
make the payments of principal due under the Elsinore Notes on
March 31, 1996 and June 30, 1996, will not constitute an "Event
of Default" under Section 6(a) of the Purchase Agreement or
otherwise breach any other term or provision of the Elsinore
Notes or the Purchase Agreement. This waiver shall only apply
to the payment of principal under the Elsinore Notes and shall
have no effect on the Company's continuing obligation to pay
accrued interest on the unpaid principal balance of the Elsinore
Notes as set forth in each Elsinore Note.
This Agreement shall have the force and effect of an amend-
ment to each Elsinore Note and any applicable provisions of the
Note Purchase Agreement. Each other term and provision of the
Elsinore Notes and the Purchase Agreement are hereby incorpo-
rated by reference.
Date: June 28, 1995.
G & O PARTNERS, L.P.
By: Ganek & Orwicz Partners,
Inc., its general partner
By /s/ Paul Orwicz
Paul Orwicz, Vice President
GRORAN, LLC1
By: Ganek & Orwicz Partners,
Inc., its investment manager
By /s/ Paul Orwicz
Paul Orwicz, Vice President
/s/ David Ganek
David Ganek, an individual
/s/ Paul Orwicz
Paul Orwicz, an individual
In consideration for the waivers granted hereinabove, and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company hereby
agrees to increase from 25% to 50% the amount of outstanding
principal balance of the Elsinore Notes due and payable on each
of September 30, 1996 and December 31, 1996. This Agreement
shall have the force and effect of an amendment to each Elsinore
Note and any applicable provisions of the Note Purchase Agree-
ment. Each other term and provision of the Elsinore Notes and
the Purchase Agreement are hereby incorporated by reference.
Date: June 30, 1995.
ELSINORE CORPORATION
By /s/ Thomas E. Martin
Thomas E. Martin, President
