SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended April 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 1-8570
CIRCUS CIRCUS ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Nevada 88-0121916
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
2880 Las Vegas Boulevard South, Las Vegas, Nevada 89109-1120
(Address of principal executive offices)
(702) 734-0410
(Registrant's telephone number, including area code)
N/A
(Former name, former address and former fiscal year, if changed since
last report)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at May 31, 1995
Common Stock, $.01-2/3 par value 86,363,803 shares
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
Form 10-Q
INDEX
Page No.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets at
April 30, 1995 (Unaudited) and January 31,
1995........................................... 3-4
Condensed Consolidated Statements of Income
(Unaudited) for the Three Months Ended
April 30, 1995 and 1994........................ 5
Condensed Consolidated Statements of Cash
Flows (Unaudited) for the Three Months
Ended April 30, 1995 and 1994.................. 6
Notes to Condensed Consolidated Financial
Statements (Unaudited)......................... 7-15
Item 2. Management's Discussion and Analysis of Fi-
nancial Condition and Results of Operations.... 16-20
Part II. OTHER INFORMATION 21-23
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
April 30, January 31,
1995 1995
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents................ $ 76,981 $ 53,764
Receivables.............................. 14,988 8,931
Inventories.............................. 21,461 22,660
Prepaid expenses......................... 17,764 20,103
Total current assets................ 131,194 105,458
PROPERTY, EQUIPMENT AND LEASEHOLD INTERESTS,
at cost, less accumulated depreciation
and amortization of $434,001 and $412,909
respectively............................. 1,299,275 1,239,062
EXCESS OF PURCHASE PRICE OVER FAIR MARKET
value of net assets acquired, net........ 9,745 9,836
NOTES RECEIVABLE............................ 127,019 68,083
INVESTMENTS IN JOINT VENTURES............... 80,205 74,840
OTHER ASSETS................................ 15,065 9,806
Total Assets......................... $1,662,503 $1,507,085
The accompanying notes are an integral part of these
condensed consolidated financial statements.
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
LIABILITIES AND STOCKHOLDERS' EQUITY
April 30, January 31,
1995 1995
(Unaudited)
CURRENT LIABILITIES:
Current portion of long-term debt................ $ 61 $ 106
Accounts payable - trade ........................ 16,407 12,102
Accounts payable - construction.................. 1,096 1,101
Accrued liabilities ............................. 81,245 68,576
Income tax payable .............................. 17,969 123
Total current liabilities ................ 116,778 82,008
LONG-TERM DEBT ...................................... 709,312 632,652
DEFERRED INCOME TAX ................................. 109,373 105,313
OTHER LONG-TERM LIABILITIES ......................... 1,287 988
Total liabilities ........................ 936,750 820,961
STOCKHOLDERS' EQUITY:
Common stock, $.01-2/3 par value
Authorized - 450,000,000 shares
Issued - 96,445,107 and 96,441,357 shares ..... 1,607 1,607
Preferred stock, $.01 par value
Authorized - 75,000,000 shares ................ - -
Additional paid-in capital ...................... 125,061 124,960
Retained earnings ............................... 794,133 754,732
Treasury stock (10,577,309 and 10,589,309 shares),
at cost........................................ (195,048) (195,175)
Total stockholders' equity ............... 725,753 686,124
Total Liabilities and
Stockholders' Equity .................. $1,662,503 $1,507,085
The accompanying notes are an integral part of these
condensed consolidated financial statements.
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except share data)
(Unaudited)
Three Months
Ended April 30,
REVENUES: 1995 1994
Casino ....................................... $153,351 $151,248
Rooms ........................................ 68,229 54,192
Food and beverage ............................ 47,132 47,339
Other ........................................ 37,220 40,377
305,932 293,156
Less-complimentary allowances ................ (10,899) (8,255)
295,033 284,901
COSTS AND EXPENSES:
Casino ....................................... 63,362 59,687
Rooms ........................................ 25,665 23,723
Food and beverage ............................ 40,168 45,067
Other operating expenses ..................... 19,684 25,392
General and administrative ................... 47,956 43,548
Depreciation and amortization ................ 22,261 20,490
219,096 217,907
OPERATING PROFIT BEFORE CORPORATE
EXPENSE ...................................... 75,937 66,994
CORPORATE EXPENSE .............................. 4,891 5,914
INCOME FROM OPERATIONS ......................... 71,046 61,080
OTHER INCOME (EXPENSE):
Interest, dividend and
other income (expense)...................... 2,835 (27)
Interest expense ............................. (12,514) (10,598)
( 9,679) (10,625)
INCOME BEFORE PROVISION FOR
INCOME TAX.................................... 61,367 50,455
Provision for income tax ..................... 21,967 18,164
NET INCOME ..................................... $ 39,400 $ 32,291
EARNINGS PER SHARE.............................. $ .46 $ .38
Average shares outstanding ................... 85,859,152 86,088,125
The accompanying notes are an integral part of these
condensed consolidated financial statements.
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)
Three Months
Ended April 30,
1995 1994
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 39,400 $ 32,291
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 22,697 20,899
(Gain) loss on sale of fixed assets (190) 116
(Increase) decrease in other current assets (2,519) 452
(Increase) decrease in other non-current assets (5,307) 5,048
Increase in interest payable 10,037 8,716
Increase in income tax payable 17,846 11,897
Increase in other current liabilities 7,236 8,124
Increase in deferred taxes 4,060 1,766
(Decrease) in other non-current liabilities (16) (16)
Total adjustments 53,844 57,002
Net cash provided by operating activities 93,244 89,293
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (82,836) (31,249)
(Decrease) in construction payables (5) (6,415)
Increase in investments in joint ventures (5,365) (18,612)
Loans to joint ventures (58,936) (2,000)
Proceeds from sale of equipment and other assets 271 82
Net cash used in investing activities (146,871) (58,194)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net effect on cash of issuances and payments
of debt with initial maturities of
three months or less 70,780 (12,918)
Issuances of debt with original maturities
in excess of three months 5,880 -
Principal payments of debt with original
maturities in excess of three months (45) (4,992)
Exercise of stock options and warrants 229 1,431
Purchases of treasury stock - (15,031)
Net cash provided by (used in)
financing activities 76,844 (31,510)
Net increase (decrease) in cash and cash equivalents 23,217 (411)
Cash and cash equivalents at beginning of period 53,764 39,110
Cash and cash equivalents at end of period $ 76,981 $ 38,699
SUPPLEMENTAL CASH FLOW DISCLOSURES
Cash paid during the period for:
Interest (net of amount capitalized) $ 2,193 $ 1,622
Income tax $ 101 $ 4,500
The accompanying notes are an integral part of these
condensed consolidated financial statements.
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(All information for the three months ended April 30, 1995 and 1994
is unaudited.)
(1) Principles of consolidation and basis of presentation -
Circus Circus Enterprises, Inc. (the "Company") was
incorporated February 27, 1974. The Company operates hotel and
casino facilities in Las Vegas, Reno and Laughlin, Nevada and a
riverboat casino in Tunica County, Mississippi. It is also a
one-third owner in a casino operation in Windsor, Canada. On
June 1, 1995, the Company completed its acquisition of a group of
affiliated entities (collectively "Gold Strike Resorts") in which
it acquired two hotel and casino facilities in Jean, Nevada, one
in Henderson, Nevada and a 50% interest in a joint venture
partnership which owns a riverboat casino and land-based
entertainment complex in Elgin, Illinois. See Note 8 for
additional information.
The condensed consolidated financial statements include the
accounts of the Company and its wholly-owned subsidiaries.
Material intercompany accounts and transactions have been
eliminated.
The condensed consolidated financial statements included
herein have been prepared by the Company, without audit, pursuant
to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures
normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed
or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the
information presented not misleading. In the opinion of
management, all adjustments (which include normal recurring
adjustments) necessary for a fair statement of results for the
interim periods have been made. The results for the three-month
period are not necessarily indicative of results to be expected
for the full fiscal year.
Certain reclassifications have been made to the financial
statements for the three months ended April 30, 1994 to conform
to the financial statement presentation for the three months
ended April 30, 1995. These reclassifications have no effect on
net income.
These financial statements should be read in conjunction
with the financial statements and notes thereto included in the
Company's annual report on Form 10-K for the year ended
January 31, 1995.
(2) Long-term debt -
Long-term debt consists of the following (in thousands):
April 30, January 31,
1995 1995
(Unaudited)
Amounts due under corporate
debt program at floating
interest rates, weighted
average of 6.3% $267,481 $210,828
7-5/8% Senior Subordinated
Debentures due 2013 150,000 150,000
6-3/4% Senior Subordinated Notes
due 2003 (net of unamortized
discount of $131 and $134) 149,869 149,866
10-5/8% Senior Subordinated Notes
due 1997 (net of unamortized
discount of $38 and $42) 99,962 99,958
Amounts due under bank credit
agreements at floating interest
rates, weighted average of 6.8% 42,000 22,000
Other notes 61 106
709,373 632,758
Less - current portion (61) (106)
$709,312 $632,652
The Company has established a corporate debt program whereby
it can issue commercial paper or similar forms of short-term
debt. Although the debt instruments issued under this program are
short-term in tenor, they are classified as long-term debt
because (i) they are backed by long-term debt facilities (see
below) and (ii) it is management's intention to continue to
replace such borrowings on a rolling basis as various instruments
come due and to have such borrowings outstanding for longer than
one year. To the extent that the Company incurs debt under this
debt program, it must maintain an equivalent amount of credit
available under its revolving credit and term loan agreements
with its bank group.
In September 1993, the Company entered into revolving loan
agreements consisting of a $250 million unsecured 364-day
facility and a $500 million unsecured reducing revolver which
matures in September 1998 (the "Revolvers"). The $250 million
facility has provisions for annual renewal subject to the consent
of the banks and converts to a two-year term loan if not renewed.
(2) Long-term debt (continued)-
The Revolvers contain financial covenants regarding minimum
net worth, interest charge coverage, maximum leverage ratio, new
venture capital expenditures and new venture investments. The
maximum available credit under the $500 million revolver reduces
by $60 million on each of March 31, 1997, September 30, 1997 and
March 31, 1998. The Revolvers are for general corporate
purposes. The Company currently incurs commitment fees of 22.50
basis points on the unused portion of the $250 million facility
and 27.50 basis points on the unused portion of the $500 million
revolver. As of April 30, 1995, the Company had $42.0 million of
borrowings under the Revolvers. At such date, the Company also
had $267.5 million issued under the corporate debt program thus
reducing, by that amount, the credit available under the
Revolvers for purposes other than repayment of the corporate
debt. The fair value of the debt issued under the corporate debt
program approximates the carrying amount of the debt due to the
short-term maturities of the individual components of the debt.
In July 1993, the Company issued $150 million principal
amount of 6-3/4% Senior Subordinated Notes (the "6-3/4% Notes")
due July 2003 and $150 million principal amount of 7-5/8% Senior
Subordinated Debentures (the "7-5/8% Debentures") due July 2013,
with interest payable each January and July. The 6-3/4% Notes,
which were discounted to $149.8 million, and the 7-5/8%
Debentures are not redeemable prior to maturity and are not
subject to any sinking fund requirements. The net proceeds from
these offerings were used primarily to repay borrowings under the
Company's corporate debt program.
In June 1990, the Company issued $100 million principal
amount of 10-5/8% Senior Subordinated Notes (the "10-5/8% Notes")
due June 1997, with interest payable each June and December. The
10-5/8% Notes, which were discounted to $99.9 million are not
redeemable prior to maturity and are not subject to any sinking
fund requirements. Holders of the 10-5/8% Notes may require the
Company to repurchase all or any portion of their notes at par
upon the occurrence of both a Designated Event (as defined in the
indenture) and a Rating Decline (as defined in the indenture). As
of April 30, 1995, $9.1 million principal amount of the 10-5/8%
Notes was owned by one of the Company's outside directors.
(2) Long-term debt (continued) -
The Company has a policy aimed at managing interest rate
risk associated with its current and future anticipated
borrowings. This policy enables the Company to use any
combination of interest rate swaps, futures, options, caps and
similar arrangements. The Company has entered into various
interest rate swaps, principally with its bank group, to manage
interest expense, which is subject to fluctuation due to the
variable rate nature of the debt under the Company's corporate
debt program. The Company has interest rate swap agreements
under which it pays a fixed interest rate (weighted average of
approximately 8.9%) and receives a variable interest rate
(weighted average of approximately 6.2% at April 30, 1995) on $90
million notional amount of "initial" swaps, and pays a variable
interest rate (weighted average of approximately 6.3% at April
30, 1995) and receives a fixed interest rate (weighted average of
approximately 7.6%) on $95 million notional amount of "reversing"
swaps. The net effect of all such swaps resulted in additional
interest expense for the three months, due to an interest rate
differential which, at April 30, 1995, was approximately .66% on
the total notional amount of the swaps. The initial swaps have
the following termination dates: $35 million in fiscal 1996, $30
million in fiscal 1997 and $25 million in fiscal 2000. The
reversing swaps expire as follows: $35 million in fiscal 1996,
$30 million in fiscal 1997 and $30 million in fiscal 2002. In
addition to the aforementioned swaps, the Company has entered
into an interest rate swap with a notional amount of $100 million
in which the Company pays a floating rate (6.3% at April 30, 1995
and capped at 6.5%) and receives a fixed interest rate of 4.75%.
This swap corresponds in both notional amount and maturity to the
Company's 10-5/8% Notes due in 1997. The variable interest rates
which the Company pays or receives under the various swaps are
based primarily upon the London Interbank Offering Rate (LIBOR).
The Company is exposed to credit loss in the event of
nonperformance by the other parties to the interest rate swap
agreements. However, the Company considers the risk of
nonperformance by the counter-parties to be minimal because the
parties to the swaps and reverse swaps are predominantly members
of the Company's bank group.
(2) Long-term debt (continued) -
As of April 30, 1995, under the Company's most restrictive
loan covenants, the Company was restricted as to the payment of
dividends or the purchase of its own capital stock in excess of
approximately $102 million and was restricted from issuing
additional debt in excess of approximately $539 million.
(3) Warrants, stock options and stock rights -
In June 1989, the stockholders approved a stock purchase
warrant plan enabling the Company to offer warrants to its
officers and other key employees to purchase up to 4.5 million
shares of the Company's common stock. In accordance with the
provisions of such plan, the 4.5 million warrants were issued in
June 1989 at a price of $.17 per warrant with an exercise price
of $14.33 ($.67 per share over the fair market value on the date
the warrants were authorized). Each warrant has a term of seven
years, with 50% of the warrants becoming exercisable two years
from the date of grant and the remaining 50% three years from the
date of grant. As of April 30, 1995, warrants representing 3.5
million shares had been exercised. Warrants representing 12,000
shares were exercised during the three months ended April 30,
1995.
The Company also has various stock option plans for
executive, managerial and supervisory personnel as well as the
Company's outside directors and consultants. The plans permit
grants of options, performance shares and restricted stock
relating to the Company's common stock. As of April 30, 1995,
options for a total of 17.5 million shares were granted, of
which options for 5.6 million shares were exercised, options for
7.3 million shares were canceled and options for 4.6 million
shares remained exercisable at prices ranging from $8.58 to
$39.34 with a weighted average exercise price of $21.78 per
share. During the three months ended April 30, 1995, options for
3,750 shares were exercised at prices ranging from $11.75 to
$15.29 with a weighted average exercise price of $14.58 per
share. As of April 30, 1995, options covering 2.6 million shares
remained available for grant.
The stock options, both incentive and nonqualified, granted
prior to 1988 are immediately exercisable. The stock options
granted in 1988 and thereafter are exercisable in one or more
installments beginning not less than nine months after the grant
date.
(3) Warrants, stock options and stock rights (continued) -
On July 14, 1994, the Company declared a dividend of one Common
Stock Purchase Right (the "Rights") for each share of common
stock outstanding at the close of business on August 15, 1994.
Each Right entitles the holder to purchase from the Company one
share of common stock at an exercise price of $125, subject to
certain antidilution adjustments. The Rights become exercisable
ten days after the earlier of an announcement that an individual
or group has acquired 10% or more of the Company's outstanding
common stock or the announcement of commencement of a tender
offer for 10% or more of the Company's common stock.
In the event the Rights become exercisable, each Right (except
the Rights beneficially owned by the acquiring individual or
group, which become void) would entitle the holder to purchase,
for the exercise price, a number of shares of the Company's
common stock having an aggregate current market value equal to
two times the exercise price. The Rights expire August 15, 2004,
and may be redeemed by the Company at a price of $.01 per Right
any time prior to their expiration or the acquisition of 10% or
more of the Company's common stock. The Rights should not
interfere with any merger or other business combination approved
by the Company's Board of Directors and are intended to cause
substantial dilution to a person or group that attempts to
acquire control of the Company on terms not approved by the Board
of Directors.
(4) Preferred stock -
The Company is authorized to issue up to 75 million shares
of $.01 par value preferred stock in one or more series having
such respective terms, rights and preferences as are designated
by the Board of Directors. No preferred stock has yet been
issued.
(5) Earnings per share -
Earnings per share is computed by dividing net income by the
weighted average number of common shares outstanding during the
period. Outstanding stock options and warrants are not included
in earnings per share computations since their exercise would not
have a material dilutive effect.
(6) Investments in joint ventures-
The Company has investments in joint ventures that are
accounted for on the equity method. Under the equity method,
original investments are recorded at cost and adjusted by the
Company's share of earnings or losses of these companies.
Investments in joint ventures consist of the following (in
thousands):
April 30, January 31,
1995 1995
(Unaudited)
Circus and Eldorado Joint Venture (50%)
(Hotel/Casino, Reno, Nevada) $ 56,395 $ 55,256
Windsor Casino Limited (33 1/3%)
(Hotel/Casino, Windsor, Canada) 6,253 5,413
American Entertainment, L.L.C. (50%)
(Riverboat Casino, Chalmette, Louisiana) 17,557 14,171
$ 80,205 $ 74,840
As of April 30, 1995, the Circus and Eldorado Joint Venture and
American Entertainment, L.L.C. were still in the development or
construction stage and had not generated any earnings or losses.
For additional information on these projects, see Note 7-
Commitments and contingent liabilities.
(7) Commitments and contingent liabilities -
In December 1993, Windsor Casino Limited, a corporation
owned equally by Circus Circus Enterprises, Inc., Caesars World,
Inc. and Hilton Hotels Corporation or their subsidiaries, was
selected to exclusively negotiate an agreement to design, build
and operate a casino complex in Windsor, Ontario, Canada. The
planned complex will include casino, showroom and meeting
facilities as well as a 300-room hotel, all located in Windsor's
central business district, immediately across the Detroit River
from Detroit, Michigan. An interim casino, operated by Windsor
Casino Limited, opened in May 1994. The corporation is currently
negotiating the agreement for the permanent facility, which is
expected to be completed in 1997, the terms and conditions which
are still being finalized.
The Company is also a partner in a 50/50 joint venture with
the Eldorado Hotel/Casino, which is developing and will operate a
hotel/casino in downtown Reno, Nevada. Silver Legacy is themed
after a turn-of-the-century mining town and is located on a site
adjacent to Circus Circus-Reno and the Eldorado, and will be
connected to both properties by enclosed skyways. The project
(7) Commitments and contingent liabilities - (continued)
broke ground in late 1993 and completion is expected by late July
1995. The cost of the project is currently estimated at $335
million (excluding capitalized interest and preopening expenses),
of which the venturers have contributed $103.8 million in equity.
As of April 30, 1995, the Company had loaned the joint venture
$117.0 million, which bears interest at 10%. This loan was
subsequently reduced to $26.2 million from the proceeds of the
joint venture's $230 million credit agreement, which closed on
May 30, 1995, and is subordinated to the indebtedness under that
agreement. As a condition to the credit agreement, the Company
entered into an agreement pursuant to which it will guarantee
completion of Silver Legacy. In addition, the Company entered
into a make-well agreement with the joint venture whereby it is
obligated to make additional contributions to the joint venture
as may be necessary to maintain a minimum coverage ratio (as
defined in the credit agreement).
The Company is also a partner in a 50/50 joint venture with
American Entertainment Corporation relating to the development of
a riverboat gaming facility in Louisiana. As of April 30, 1995,
construction on the project had been suspended pending a re-
evaluation of the project and the Company's commitment to
continue. Under the joint venture agreement, the Company would
be required to contribute $20 million in equity and to lend the
project any amount which cannot be financed by a third party.
As of April 30, 1995, the Company had a net investment in this
project of approximately $17.6 million and a loan to its joint
venture partner of $10 million. The loan carries interest at the
prime rate plus one percentage point and is payable from the
joint venture partner's share of distributions, but in any event
no later than November 1, 2001.
In March 1995, the Company reached agreement to purchase the
Hacienda Hotel and Casino in Las Vegas for approximately $80
million, subject to receipt of requisite regulatory approvals.
The Hacienda is located on 47 acres of land adjacent to Luxor,
between I-15 and the Las Vegas Strip, and contains approximately
1,100 rooms and 50,000 square feet of casino space. The Company
has paid $5.4 million toward this purchase which is expected to
close by late summer 1995.
(7) Commitments and contingent liabilities - (continued)
The Company anticipates funding the above projects from
internal cash flows, project specific financing or its revolving
lines of credit, currently at $750 million, of which
approximately $441 million was available at April 30, 1995.
The Company is a defendant in various pending litigation. In
management's opinion, the ultimate outcome of such litigation
will not have a material effect on the results of operations or
the financial position of the Company.
(8) Subsequent Event -
On June 1, 1995, the Company completed the acquisition of a
group of affiliated entities (collectively "Gold Strike Resorts")
pursuant to an agreement entered into on March 19, 1995. In
exchange for the equity interests in Gold Strike Resorts, the
Company issued approximately 17 million shares of the Company's
common stock and paid approximately $12 million in cash, while
assuming approximately $165 million in debt. As a result of the
acquisition of Gold Strike Resorts, the Company owns and operates
three additional gaming properties in Nevada (Gold Strike Hotel
and Gambling Hall and Nevada Landing in Jean, and Railroad Pass
in Henderson). It also holds a 50% interest in a joint venture
(with a subsidiary of Hyatt Development Corporation) which owns
and operates The Grand Victoria riverboat in Elgin, Illinois
(which opened in October 1994), and is a 50% partner with a
subsidiary of Mirage Resorts, Incorporated, in the development of
Project Victoria, a major destination resort on the Las Vegas
Strip for which the Company serves as managing partner. The
Company does not anticipate that the acquisition will have a
materially dilutive impact on earnings per share.
Project Victoria has an estimated cost of $325 million
(including land and capitalized interest), and the Company is
obligated to fund any portion of such cost in excess of certain
equity contributions and the funding provided by a $175 million
construction loan. The total equity contribution is anticipated
to be approximately $63 million, of which $35 million had been
funded as of the closing of the acquisition.
CIRCUS CIRCUS ENTERPRISES, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations (Unaudited)
RESULTS OF OPERATIONS
Earnings per Share
For the quarter ended April 30, 1995, the Company reported its
highest ever earnings per share of $.46 versus $.38 in the prior
year quarter, an increase of 21%. Net income was $39.4 million
compared with $32.3 million last year. The continued success of
Circus Circus-Tunica, which opened August 29, 1994, and improved
results at the Company's Las Vegas and Reno properties drove
these record results.
Revenues
For the first quarter, revenues for the Company increased $10.1
million, or 4%, versus the prior year. Circus Circus-Tunica,
which was not open in the prior year first quarter, was the
principal factor in this growth, reporting $16.6 million in total
revenues for the quarter. Revenues at Circus Circus-Reno were up
5%, as the February opening of the nearby Reno National Bowling
Stadium contributed to increased visitor counts.
In Las Vegas, revenues at Luxor, Excalibur and Circus Circus-Las
Vegas for the quarter ended April 30, 1995 were down slightly on
a combined basis. These properties experienced a combined
decrease in casino revenue of approximately 10%. As Las Vegas
has broadened its tourism appeal, customers are apparently
spending less on gaming. Consequently, while visitor counts and
hotel occupancy rates remained strong, casino revenue declined.
This decrease in casino revenue was largely offset by increased
room revenue, which rose over 30% on the strength of higher room
rates. Occupancy rates for all three properties remained strong
at nearly 100%.
In Laughlin, the Colorado Belle and the Edgewater reported a
combined 14% decrease in revenues, as various competitive factors
continue to impact results, similar to the latter three quarters
of the prior year. Within the Laughlin market, competitive
pressure in the form of additional rooms and lower room rates has
negatively affected results. In February, a new Indian casino
opened with over 300 rooms and a competitor opened over 700
additional rooms. Laughlin has also experienced the impact of
competition from the new mega-resorts in Las Vegas, as well as
the effect of unregulated Indian gaming in its prime Arizona
feeder markets.
Operating Income
For the quarter ended April 30, 1995, income from operations rose
$10.0 million, or 16%, from last year's first quarter. The
Company's composite operating margin jumped nearly three
percentage points to 24.1% from 21.4% in the prior year quarter.
The increase in operating income was due primarily to Circus
Circus-Tunica, which posted $6.1 million in operating income for
the first quarter. This increase came despite the fact that a
major new competitor opened adjacent to the property in February.
In Reno, the opening of the Reno National Bowling Stadium
increased visitor counts and contributed to a 10% increase in
operating income at Circus Circus-Reno.
Operating income at the Company's major Las Vegas properties
increased 7% on a combined basis. This increase in operating
income stemmed from the previously mentioned increases in room
revenues, for which few incremental operating costs were
incurred. The decrease in casino revenues did not have as
significant an impact on operating income due to the fact that
some variable expenses, primarily payroll, were reduced in
conjunction with the lower revenues.
The Company's Laughlin properties, the Colorado Belle and the
Edgewater, reported a combined decrease of approximately 23% in
operating income due to the effects of increased competition as
previously discussed.
Interest Expense
Interest expense for the quarter increased $1.9 million compared
to the first quarter last year. The increase was due primarily
to a combination of higher borrowings outstanding and higher
interest rates. Capitalized interest was $1.5 million for the
quarter ended April 30, 1995 versus $.2 million in the year-ago
quarter. Long-term debt at April 30, 1995 was $709 million
compared to $549 million at April 30, 1994. The increase in debt
levels was attributable primarily to expenditures required to
fund completion of Circus Circus-Tunica, the construction of
Silver Legacy and the purchase of 73 acres of undeveloped land
south of Luxor.
Income Tax
The Company's effective tax rate for the three months ended April
30, 1995 and 1994 was approximately 36%. This reflects the
corporate statutory rate of 35% pursuant to the Revenue
Reconciliation Act of 1993 plus the effect of various non-
deductible expenses.
Financial Position and Capital Resources
The Company had cash and cash equivalents of $77.0 million at
April 30, 1995, which included approximately $20 million for a
construction payment due in early May. The Company's pre-tax
cash flow from operations was $93.7 million for the three months
ended April 30, 1995 versus $82.0 million in the prior year, an
increase of 15%. In this context, pre-tax cash flow from
operations is defined as the Company's income from operations
plus non-cash operating expenses (primarily depreciation and
amortization).
For the quarter ended April 30, 1995, capital expenditures were
$82.8 million, of which $73.4 million related to the acquisition
of 73 acres of undeveloped land south of Luxor (see additional
discussion below). The Company also funded equity investments in
new projects totalling $5.4 million during the quarter and loaned
$58.9 million toward the construction of Silver Legacy.
In December 1993, Windsor Casino Limited, a corporation owned
equally by Circus Circus Enterprises, Inc., Caesars World, Inc.
and Hilton Hotels Corporation or their subsidiaries, was selected
to exclusively negotiate an agreement to design, build and
operate a casino complex in Windsor, Ontario, Canada. The
planned complex will include casino, showroom and meeting
facilities as well as a 300-room hotel, all located in Windsor's
central business district, immediately across the Detroit River
from Detroit, Michigan. An interim casino, operated by Windsor
Casino Limited, opened in May 1994 and generated $1.6 million in
operating income for the Company in the quarter ended April 30,
1995. The corporation is currently negotiating an agreement for
a permanent facility, expected to be completed in 1997, the terms
and conditions of which are still being finalized. As of April
30, 1995, Circus had a net investment of approximately $6.3
million in this project.
The Company is a partner in a 50/50 joint venture with the
Eldorado Hotel/Casino, a privately held company, which is
developing and will operate a hotel/casino in downtown Reno,
Nevada. The Silver Legacy is themed after a turn-of-the-century
silver mining town and is located on a site adjacent to Circus
Circus-Reno and the Eldorado, and will be connected to both
properties by enclosed skyways. The project broke ground in late
1993 and completion is expected by late July 1995, The cost of
Silver Legacy is currently estimated at approximately $335
million (excluding capitalized interest and preopening expenses),
of which the venturers have contributed $103.8 million in equity.
As of April 30, 1995, the Company had a net investment of
approximately $56.4 million in the project and had loaned the
joint venture $117.0 million. This loan was subsequently reduced
to $26.2 million from the proceeds of the joint venturer's $230
million credit agreement, which closed May 30, 1995, and is
subordinated to the indebtedness under that agreement. As a
condition to the credit agreement, the Company has guaranteed
completion of Silver Legacy and in addition, has entered into a
make-well agreement with the joint venture whereby it is
obligated to make additional contributions to the joint venture
as may be necessary to maintain a minimum coverage ratio (as
defined in the credit agreement).
The Company is also a partner in a 50/50 joint venture with
American Entertainment Corporation relating to the development of
a riverboat gaming facility in Louisiana. As of April 30, 1995,
construction on the project had been suspended pending a re-
evaluation of the project and the Company's commitment to
continue. Under the joint venture agreement, the Company would be
required to contribute $20 million in equity and to lend the
project any amount which cannot be financed by a third party. As
of April 30, 1995, the Company had a net investment in this
project of approximately $17.6 million and a loan to its joint
venture partner of $10 million. The loan carries interest at the
prime rate plus one percentage point and is payable from the
joint venture partner's share of distributions, but in any event
no later than November 1, 2001.
In March 1995, the Company reached agreement to purchase the
Hacienda Hotel and Casino in Las Vegas for approximately $80
million, subject to receipt of requisite regulatory approvals.
The Hacienda is located on 47 acres of land adjacent to Luxor,
between I-15 and the Las Vegas Strip, and contains approximately
1,100 rooms and 50,000 square feet of casino space. The Company
has paid $5.4 million toward this purchase which is expected to
close by late summer 1995. Also in March 1995, the Company
purchased approximately 73 acres of undeveloped land at the
northwest corner of Russell Road and the Las Vegas Strip, just
south of the Hacienda Hotel, at a cost of approximately $73
million. The acquisition of the Russell Road land was financed
under the bank lines of credit and the Company anticipates
financing the Hacienda acquisition in a similar manner.
The Company is developing a master plan for this area, including
the existing Excalibur and Luxor resorts, that will encompass
several stages of development and may include a series of new and
interconnected hotel/casino/entertainment complexes. It is the
Company's belief that the Las Vegas market can readily absorb
significant new capacity, including that contemplated in its
master plan. Furthermore, the focus in Las Vegas has shifted
toward the south end of the Las Vegas Strip, where the Company
will be developing its master plan at what is essentially the
gateway to Las Vegas.
On June 1, 1995, the Company completed the acquisition of a group
of affiliated entities (collectively "Gold Strike Resorts")
pursuant to an agreement entered into on March 19, 1995. In
exchange for the equity interests in Gold Strike Resorts, the
Company issued approximately 17 million shares of the Company's
common stock and paid approximately $12 million in cash, while
assuming approximately $165 million in debt. As a result of the
acquisition of Gold Strike Resorts, the Company owns and operates
three additional gaming properties in Nevada (Gold Strike Hotel
and Gambling Hall and Nevada Landing in Jean, and Railroad Pass
in Henderson). It also holds a 50% interest in and operates The
Grand Victoria riverboat in Elgin, Illinois (which opened in
October 1994), and is a 50% partner with Mirage Resorts,
Incorporated, in the development of Project Victoria, a major
destination resort on the Las Vegas Strip for which the Company
serves as managing partner. The Company does not anticipate that
the acquisition will have a materially dilutive impact on
earnings per share.
Project Victoria has an estimated cost of $325 million (including
land and capitalized interest), and the Company is obligated to
fund any portion of such cost in excess of certain equity
contributions and the funding provided by a $175 million
construction loan. The total equity contribution is anticipated
to be approximately $63 million, of which $35 million had been
funded as of the closing of the acquisition.
The Company believes that it has sufficient capital resources,
through its bank arrangements and its operating cash flows, to
meet all of its existing cash obligations, fund its commitments
on each of the above discussed projects and strategically
repurchase shares. The Company anticipates that additional funds
could be raised through debt or equity markets, if necessary.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
Reference is made to Item 1 of the Company's Quarterly
Reports on Form 10-Q for the fiscal quarters ended April 30, 1994
and July 31, 1994.
Item 6. Exhibits and Reports on Form 8-K.
(a) The exhibits filed as part of this report are listed on
the Index to Exhibits accompanying this report.
(b) Reports on Form 8-K. No report on Form 8-K was filed
during the period covered by this report.
SIGNATURES
Pursuant to the requirements of the Securities Exchange
Act of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
CIRCUS CIRCUS ENTERPRISES, INC.
(Registrant)
Date: June 14, 1995 By CLYDE T. TURNER
Clyde T. Turner
Chairman of the Board and
Chief Executive Officer
Date: June 14, 1995 By GLENN W. SCHAEFFER
Glenn W. Schaeffer
President and Chief Financial
Officer
INDEX TO EXHIBITS
Exhibit
No. Description
4(a). $230 million Credit Agreement, dated May 30, 1995, by
and among Circus and Eldorado Joint Venture, the Banks
named therein and First Interstate Bank of Nevada,
N.A., as Arranger and Administrative Agent.
27. Financial Data Schedule for the three months ended
April 30, 1995 as required under EDGAR.
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as May 30,
1995 and entered into by and among CIRCUS AND ELDORADO
JOINT VENTURE, a Nevada general partnership ("Partnership"),
THE FINANCIAL INSTITUTIONS LISTED ON THE
SIGNATURE PAGES HEREOF (each individually referred to
herein as a "Lender" and collectively as "Lenders"), FIRST
INTERSTATE BANK OF NEVADA, N.A. ("FIB" and, in its
capacity as Arranger and Administrative Agent for Lenders,
"Agent"), THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY ("LTCBJ") and SOCIETE
GENERALE ("SocGen"), collectively, as Managing Agents for
Lenders (FIB, LTCBJ and SocGen in such capacity, "Managing
Agents") and BANK OF AMERICA, N.T. & S.A. ("BofA"),
CIBC INC. ("CIBC") and CREDIT LYONNAIS, LOS
ANGELES BRANCH ("Lyonnais"), collectively, as Co-Agents for
Lenders (BofA, CIBC and Lyonnais in such capacity, "Co-
Agents").
R E C I T A L S
Partnership has begun to develop and construct the
Project (such term and other defined terms used herein being
defined in subsection 1.1 hereof) which consists of a hotel casino
complex with approximately 1,700 hotel rooms situated on the
Premises.
Partnership desires to obtain financing from Lenders
for the completion, use and operation of the Project and, after the
Conversion, general business purposes.
Lenders agreed to make the Loans upon the terms and
conditions set forth and provided in this Agreement.
NOW, THEREFORE, in consideration of the
premises and the agreements, provisions and covenants herein
contained, Partnership, Lenders, Managing Agents, Co-Agents and
Agent agree as follows:
Section 1. DEFINITIONS
1.1 Certain Defined Terms.
The following terms used in this Agreement shall
have the following meanings:
"Adjusted Eurodollar Rate" means, for any Interest
Rate Determination Date with respect to an Interest Period for a
Eurodollar Rate Loan, the rate per annum obtained by dividing
(i) the offered quotation, if any, to FIB (or an Affiliate of FIB) by
prime banks for U.S. dollar deposits of amounts in same day funds
comparable to the principal amount of the Eurodollar Rate Loan of
FIB for which the Adjusted Eurodollar Rate is then being
determined with maturities comparable to such Interest Period as of
approximately 10:00 A.M. (Pacific time) on such Interest Rate
Determination Date by (ii) a percentage equal to 100% minus the
stated maximum rate of all reserve requirements (including, without
limitation, any marginal, emergency, supplemental, special or other
reserves) applicable on such Interest Rate Determination Date to
any member bank of the Federal Reserve System in respect of
"Eurocurrency liabilities" as defined in Regulation D (or any
successor category of liabilities under Regulation D).
"Advance" means any disbursement of proceeds of a
Pre-Conversion Loan made pursuant to subsection 2.1A(i).
"Affected Lender" has the meaning assigned to that
term in subsection 2.6C.
"Affected Loans" has the meaning assigned to that
term in subsection 2.6C.
"Affiliate," as applied to any Person, means any
other Person directly or indirectly controlling, controlled by, or
under common control with, that Person. For the purposes of this
definition, "control" (including, with correlative meanings, the
terms "controlling," "controlled by" and "under common control
with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise.
"Agent" has the meaning assigned to that term in the
introduction to this Agreement and also means and includes any
successor Agent appointed pursuant to subsection 9.5.
"Agreement" means, as of any date, this Credit
Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time through such date.
"All-In Eurodollar Rate Margin" has the meaning
assigned to that term in subsection 2.2A(iii) as illustrated on
Schedule 1.1 hereto.
"Applicable Base Rate Margin" has the meaning
assigned to that term in subsection 2.2A(iv) as illustrated on
Schedule 1.1 hereto.
"Applicable Eurodollar Rate Margin" has the
meaning assigned to the term "Applicable Eurodollar Rate Margin"
in the Circus Revolving Loan Agreements as such term was defined
therein as of the Closing Date as illustrated on Schedule 1.1 hereto,
determined by reference to Circus' Funded Debt Ratio and Senior
Debt Rating (each as defined in the Circus Revolving Loan
Agreements); provided that if the Circus Revolving Loan
Agreements are amended, supplemented or otherwise modified in a
manner such that the data necessary to calculate the amount
described by the term "Applicable Eurodollar Rate Margin" as used
therein on the Closing Date is no longer available or for any other
reason such referenced term no longer adequately reflects Circus'
credit standing, then Partnership and Lenders shall discuss an
alternative definition for "Applicable Eurodollar Rate Margin," and
if agreement on such alternative definition cannot be reached,
Supermajority Lenders shall make a good faith determination of a
definition for "Applicable Eurodollar Rate Margin" for purposes of
this Agreement that adequately reflects Circus' credit standing and
this Agreement shall be amended (without further action or consent
by Partnership) to substitute such definition notwithstanding
Partnership's failure to agree thereto. If the "Applicable Eurodollar
Margin" under the Circus Revolving Loan Agreements changes as a
result of a change in Circus' Funded Debt Ratio (as defined therein)
or Circus' Senior Debt Rating (as defined therein), the Applicable
Eurodollar Rate Margin hereunder shall change on the same date
that the "Applicable Eurodollar Margin" changes under the Circus
Revolving Loan Agreements.
"Appraisal" means an appraisal of the Project
prepared by an appraiser acceptable to Agent and Lenders and
licensed as an appraiser in the State of Nevada which shall (a) be
satisfactory in form, scope and substance to Agent, (b) contain a
separate appraisal of the stabilized value of the Project as a going
concern following completion of construction and (c) contain a
certification in form and substance satisfactory to Agent from the
appraiser to Agent that it was prepared in compliance with the
standards of Financial Institutions Reform, Recovery and
Enforcement Act.
"Architect" means Urban Design Group, P.C., or,
with Agent's and Lenders' prior written approval, such other
architect or architects as may be engaged by Partnership from time
to time to take responsibility for primary architectural services
required in connection with the Project.
"Architect's Contract" means, as of any date, the
Agreement Between Owner And Architect dated as of
February 1994, by and between Partnership and Mitchell Cohan
Architects, Inc., as assigned to Architect pursuant to that undated
Assignment by and among Partnership, Mitchell Cohan Architects,
Inc., UDG, Inc. d/b/a Urban Design Group, Inc. and Architect, as
it may hereafter be amended, supplemented or otherwise modified
from time to time through such date.
"Asset Sale" means the sale by Partnership or any of
its Subsidiaries to any Person other than Partnership or any of its
wholly-owned Subsidiaries of (i) any of the stock of any of
Partnership's Subsidiaries, (ii) substantially all of the assets of any
division or line of business of Partnership or any of its Subsidiaries,
or (iii) any other assets (whether tangible or intangible) of
Partnership or any of its Subsidiaries outside of the ordinary course
of business (including, without limitation, sale of the Premises);
provided, in each case, that no such sale or disposition shall be an
Asset Sale for purposes of this Agreement unless the fair market
value of the assets sold or disposed exceeds $3,000,000 for any
given transaction or series of related transactions or $6,000,000 in
the aggregate in any calendar year.
"Assignment Agreement" means an Assignment
Agreement in substantially the form of Exhibit VIII annexed hereto.
"Assignment of Rents and Revenues" means, as of
any date, the Assignment of Rents and Revenues executed and
delivered by Partnership and Agent on the Closing Date,
substantially in the form of Exhibit XXI annexed hereto, as it may
hereafter be amended, supplemented or otherwise modified from
time to time through such date.
"Attraction" means a restaurant and/or other casino
adjacent facility of approximately 32,000 square feet on the
mezzanine level of the casino portion of the Project.
"Auditor's Letter" means a letter, substantially in the
form of Exhibit IX annexed hereto, acknowledged and agreed to by
Partnership and Arthur Andersen LLP and delivered to Agent
pursuant to subsection 4.1Z.
"BofA" has the meaning assigned to that term in the
introduction to this Agreement.
"Bankruptcy Code" means Title 11 of the United
States Code entitled "Bankruptcy", as now and hereafter in effect,
or any successor statute.
"Base Rate" means, at any time, the higher of (x) the
Prime Rate or (y) the rate which is 1/2 of 1% in excess of the
Federal Funds Effective Rate.
"Base Rate Loans" means Loans bearing interest at
rates determined by reference to the Base Rate as provided in
subsection 2.2A.
"Budget" means, at any time, the budget for the
Project delivered to Lenders pursuant to subsection 4.1T, as
modified pursuant to the terms of subsection 4.2B, at such time.
"Business Day" means any day excluding Saturday,
Sunday and any day which is a legal holiday under the laws of the
States of Nevada, New York or California or is a day on which
banking institutions located in any such state are authorized or
required by law or other governmental action to close.
"Capital Lease," as applied to any Person, means any
lease of any property (whether real, personal or mixed) by that
Person as lessee that, in conformity with GAAP, is accounted for as
a capital lease on the balance sheet of that Person.
"Cash" means money, currency or a credit balance in
a Deposit Account.
"Cash Equivalents" means, as at any date of
determination, (i) marketable securities (a) issued or directly and
unconditionally guaranteed as to interest and principal by the United
States Government or (b) issued by any agency of the United States
the obligations of which are backed by the full faith and credit of
the United States, in each case maturing within one year after such
date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such
state or any public instrumentality thereof, in each case maturing
within one year after such date and having, at the time of the
acquisition thereof, the highest rating obtainable from either
Standard & Poor's Ratings Group ("S&P") or Moody's Investors
Service, Inc. ("Moody's"); (iii) commercial paper maturing no
more than one year from the date of creation thereof and having, at
the time of the acquisition thereof, a rating of at least A-1 from
S&P or at least P-1 from Moody's; (iv) certificates of deposit or
bankers' acceptances maturing within one year after such date and
issued or accepted by any Lender or by any commercial bank
organized under the laws of the United States of America or any
state thereof or the District of Columbia that, at the time of the
acquisition of such certificates or acceptances (a) is at least
"adequately capitalized" (as defined in the regulations of its primary
Federal banking regulator) and (b) has Tier 1 capital (as defined in
such regulations) of not less than $100,000,000; (v) shares of any
money market mutual fund that (a) has at least 95% of its assets
invested continuously in the types of investments referred to in
clauses (i) and (ii) above, (b) has net assets of not less than
$500,000,000, and (c) has the highest rating obtainable from either
S&P or Moody's, and (vi) overnight repurchase agreements
executed with Lenders; provided that the terms of such repurchase
agreements require physical delivery of securities (which must be
"Cash Equivalents" as described in clauses (i) - (iv) above), except
in the case of treasury obligations delivered through the Federal
Reserve book entry system.
"Certificate re Non-Bank Status" means a certificate
substantially in the form of Exhibit X annexed hereto delivered by a
Lender to Agent pursuant to subsection 2.7B(iii).
"CIBC" has the meaning assigned to that term in the
introduction to this Agreement.
"Change Orders" means any written order to the
General Contractor signed by the Partnership in accordance with the
Architect's Contract including, without limitation, subsection 1.4.15
of the Supplementary Conditions thereof ordering or authorizing
changes in the work to be performed under the General Contractor's
Contract, the price for such work or the schedule upon which such
work is to be completed in accordance with Section 12 of the
General Conditions of the General Contractor's Contract.
"Circus" means Circus Circus Enterprises, Inc., a
Nevada corporation.
"Circus Bridge" means the elevated building
structure that spans Fifth Street and connects the Improvements with
the buildings located on the adjacent real property owned by Circus
Circus Casinos, Inc., a Nevada corporation.
"Circus Completion Guaranty" means, as of any
date, the Circus Completion Guaranty executed and delivered by
Circus and Agent on the Closing Date, substantially in the form of
Exhibit XIII-A annexed hereto, as it may hereafter be amended,
supplemented or otherwise modified from time to time through such
date.
"Circus Revolving Loan Agreements" means that
certain Reducing Revolving Loan Agreement dated as of
September 30, 1993, among Circus, the Banks named therein,
LTCBJ, FIB, SocGen, Credit Lyonnais Los Angeles Branch, Credit
Lyonnais Cayman Island Branch, as Co-Agents, CIBC Inc., as Co-
Managing Agent and Bank of America National Trust and Savings
Association, as Managing Agent and that certain Revolving Loan
Agreement dated as of September 30, 1993, among Circus, the
Banks named therein, LTCBJ, FIB, SocGen, Credit Lyonnais Los
Angeles Branch, Credit Lyonnais Cayman Island Branch, as Co-
Agents, CIBC Inc., as Co-Managing Agent and Bank of America
National Trust and Savings Association, as Managing Agent, in
each case, as in effect as of the Closing Date.
"Co-Agents" has the meaning assigned to that term in
the introduction to this Agreement.
"Closing Date" means the date on or before May 31,
1995, on which the initial Loans are made.
"Collateral" means all the real, personal and mixed
property made subject to a Lien pursuant to the Collateral
Documents.
"Collateral Account Agreement" means, as of any
date, the Collateral Account Agreement executed and delivered by
Partnership and Agent on the Closing Date, substantially in the
form of Exhibit XI annexed hereto, pursuant to which Partnership
may pledge cash to Agent to secure the obligations of Partnership to
reimburse Issuing Lender for payments made under one or more
Letters of Credit as provided in Section 8, as such Collateral
Account Agreement may hereafter be amended, supplemented or
otherwise modified from time to time through such date.
"Collateral Documents" means the Security
Agreement, the Collateral Account Agreement, the Deed of Trust
and the Assignment of Rents and Revenues and all other
instruments or documents now or hereafter granting Liens on
property of the Partnership or its Subsidiaries to Agent for benefit
of Lenders.
"Combined Lien Waiver" means a "Partial and
Conditional Release and Waiver of Lien of the Current Amount
Due and Unconditional Release and Waiver of Lien of all Previous
Items Provided on the Project" in the form reproduced in
Schedule 2 to the Requisition.
"Commitment" means, prior to the Conversion, the
Pre-Conversion Commitment of any Lender and on and after the
Conversion Date, the Post Conversion Commitment of any Lender,
and "Commitments" means such commitments of all Lenders in the
aggregate at the time of reference.
"Commitment Termination Date" means the earlier
of the date that is (i) six years after the Closing Date and (ii) five
years after the Conversion Date.
"Complete Construction", "Completion of
Construction", "Completed Construction" and any similar terms
mean to cause (i) construction of the Project to have been
substantially completed pursuant to the Plans and the Loan
Documents (except with respect to construction related to Later
Opening Rooms and the Attraction), (ii) all governmental approvals,
including, without limitation, a temporary certificate of occupancy
for all of the Improvements (excluding the Later Opening Rooms
and the Attraction) and for the Skyways, and such gaming, liquor
and other licenses (copies of which shall have been delivered to
Agent), as may be necessary for the opening for business to the
public and operation of the Project to have been obtained (except
with respect to construction related to Later Opening Rooms and the
Attraction that occurs after the last Business Day of the month
immediately preceding the Completion of Construction Date),
(iii) the release of all equitable liens, mechanics liens and any other
Liens (other than Liens created pursuant to the terms of the
Collateral Documents and Permitted Encumbrances) against or
directly related to the Project to have been provided for (except
with respect to construction related to Later Opening Rooms and the
Attraction that occurs after the last Business Day of the month
immediately preceding the Completion of Construction Date) and all
indebtedness secured by such Liens to have been paid or provided
for, to the reasonable satisfaction of Agent and (iv) substantially all
casino and public space (other than the Attraction) and
approximately 1,300 hotel rooms of the Project as set forth in the
Plans to become open for business to the public.
"Completion of Construction Certificate" means an
Officers' Certificate substantially in the form set forth in Exhibit
XX annexed hereto.
"Completion of Construction Date" means the date
on which Partnership delivers to Agent the Completion of
Construction Certificate.
"Compliance Certificate" means a certificate substan-
tially in the form of Exhibit V annexed hereto delivered to Agent
and Lenders by Partnership pursuant to subsection 6.1(iv).
"Consent to Assignment of General Contractor's
Contract" means the Consent to Assignment of General
Contractor's Contract in substantially the form of Exhibit XIX
annexed hereto.
"Consolidated Adjusted EBITDA" means, for any
period, Consolidated EBITDA for that period plus, to the extent
they reduce Consolidated EBITDA, Pre-Opening Expenses.
"Consolidated Available Cash Flow" means, for any
period, an amount equal to Consolidated EBITDA for such period
minus the sum, without duplication, of the amounts actually paid for
such period of Scheduled Facility Reductions, Consolidated Capital
Expenditures, Consolidated Cash Interest Expense, Permitted
General Partner Subordinated Debt Payments, Tax Distributions
permitted under subsection 7.5(ii), Other Partnership Distributions
permitted under subsections 7.5(iii) and (iv), and Other Permitted
Indebtedness Payments.
"Consolidated Capital Expenditures" means, for any
period, the sum of (i) the aggregate of all expenditures (whether
paid in cash or other consideration or accrued as a liability and
including that portion of Capital Leases that is capitalized on the
consolidated balance sheet of Partnership and its Subsidiaries) by
Partnership and its Subsidiaries during that period that, in
conformity with GAAP, are included in "additions to property,
plant or equipment" or comparable items reflected in the
consolidated statement of cash flows of Partnership and its
Subsidiaries plus (ii) to the extent not covered by clause (i) of this
definition, the aggregate of all expenditures by Partnership and its
Subsidiaries during that period to acquire (by purchase or
otherwise) the business, property or fixed assets of any Person, or
the stock or other evidence of beneficial ownership of any Person
that, as a result of such acquisition, becomes a Subsidiary of
Partnership minus to the extent covered by clause (i) or (ii) of this
definition, Construction Costs incurred by Partnership in connection
with the Project.
"Consolidated Cash Interest Expense" means
Consolidated Interest Expense paid or payable in cash, other than
Consolidated Interest Expense accrued but unpaid with respect to
the General Partner Subordinated Debt.
"Consolidated EBITDA" means, for any period,
Consolidated Net Income for such period plus, to the extent such
items were subtracted in the determination of Consolidated Net
Income, the sum of the amounts for such period of (i) Consolidated
Interest Expense, (ii) provisions for taxes based on income,
(iii) total depreciation expense, (iv) total amortization expense, and
(v) other non-cash items reducing Consolidated Net Income less, to
the extent such items were added in the determination of
Consolidated Net Income, the sum of the amounts for such period
of (i) Pre-Opening Expenses and (ii) non-cash items increasing
Consolidated Net Income, all of the foregoing as determined on a
consolidated basis for Partnership and its Subsidiaries in conformity
with GAAP.
"Consolidated Interest Expense" means, for any
period, total interest expense (including that portion attributable to
Capital Leases in accordance with GAAP and capitalized interest) of
Partnership and its Subsidiaries on a consolidated basis with respect
to all outstanding Indebtedness of Partnership and its Subsidiaries,
including, without limitation, all commissions, discounts and other
fees and charges owed with respect to letters of credit and bankers'
acceptance financing and net costs under Interest Rate Agreements,
but excluding, however, all amounts referred to in subsection 2.3
payable to Agent and Lenders, or any of them, on or before the
Closing Date.
"Consolidated Net Income" means, for any period,
the net income (or loss) of Partnership and its Subsidiaries on a
consolidated basis for such period taken as a single accounting
period determined in conformity with GAAP; provided that there
shall be excluded (i) the income (or loss) of any Person (other than
a Subsidiary of Partnership) in which any other Person (other than
Partnership or any of its Subsidiaries) has a joint interest, except to
the extent of the amount of dividends or other distributions actually
paid to Partnership or any of its Subsidiaries by such Person during
such period, (ii) the income (or loss) of any Person accrued prior to
the date it becomes a Subsidiary of Partnership or is merged into or
consolidated with Partnership or any of its Subsidiaries or that
Person's assets are acquired by Partnership or any of its Subsidiar-
ies, (iii) the income of any Subsidiary of Partnership to the extent
that the declaration or payment of dividends or similar distributions
by that Subsidiary of that income is not at the time permitted by
operation of the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to that Subsidiary, (iv) any after-tax gains or losses
attributable to Asset Sales or returned surplus assets of any Pension
Plan, and (v) (to the extent not included in clauses (i) through (iv)
above) any net extraordinary gains or net non-cash extraordinary
losses.
"Construction Consultant's Contract" means, as of
any date, the letter agreement between Partnership and Smith-
Casino Advisory dated as of November 18, 1993, as amended by
Addendum One to Letter Agreement for Project C dated as of
January 24, 1995, as amended by Addendum Two to Letter
Agreement for Silver Legacy dated as of March 10, 1995, as it may
hereafter be amended, supplemented or otherwise modified from
time to time through such date.
"Construction Contracts" means the General
Contractor's Contract, each Consultant's Contract and each other
material agreement, deed or other document to which Partnership or
any of its Subsidiaries becomes a party, intended to create legally
binding obligations, and reasonably necessary or desirable, as
determined by Agent, to Finally Complete Construction; provided
that Construction Contracts shall not include those contracts the
payment for the performance of which is properly characterized as
Pre-Opening Expenses hereunder or contracts that will be
performed in the course of operations following Completion of
Construction.
"Construction Costs" means, collectively, without
duplication, (i) the aggregate costs of all labor, materials,
equipment, fixtures and furnishings necessary for the construction
and equipping of the Project, (ii) the costs of acquiring the Premises
and (iii) all "soft costs" of constructing, equipping and opening the
Project, including, without limitation, architectural and engineering
fees, contractors' fees, interest and fees payable with respect to the
Loans or advances made by any Person to fund construction, real
estate taxes, survey costs, title insurance premiums and attorneys'
fees. Construction Costs shall include any item of Pre-Opening
Expenses.
"Construction Schedule" has the meaning assigned to
such term in subsection 4.1U.
"Consultant" means any Contractor that has a
Consultant's Contract other than the General Contractor.
"Consultant's Contract" means the Architect's
Contract, the Construction Consultant's Contract and any other
Construction Contract set forth on Schedule I to the Security
Agreement other than the General Contractor's Contract.
"Consulting Engineer" means (i) such independent
third-party consultants, including, without limitation, inspecting
engineers, as Agent reasonably deems necessary, selected and
retained by Agent, at any time after a Material Overrun, at
Partnership's expense, or (ii) any employee of Agent, as Agent
reasonably deems necessary, selected, in each case, to provide
various services to Agent and Lenders, including, without
limitation, the following services: (a) review and approve the Plans
and specifications; (b) review the Construction Schedule;
(c) conduct compliance inspections with respect to the progress of
construction of the Project and approve each element of a request
for disbursement relating to Construction Costs; and (d) perform the
Consulting Engineer's contemplated functions under this Agreement
and such other services as may, from time to time, be reasonably
required by Agent to oversee the performance of any undertaking
reasonably necessary or desirable, as determined by Agent, to
Finally Complete Construction, or to protect or assess the value of
the Collateral or to assist in enforcing the Lenders' rights under any
of the Loan Documents.
"Contractors" means the General Contractor and all
other contractors, subcontractors, materialmen and suppliers whose
services or supplies could reasonably be expected to be necessary to
Finally Complete Construction.
"Contingent Obligation," as applied to any Person,
means any direct or indirect liability, contingent or otherwise, of
that Person (i) with respect to any Indebtedness, lease, dividend or
other obligation of another if the primary purpose or intent thereof
by the Person incurring the Contingent Obligation is to provide
assurance to the obligee of such obligation of another that such
obligation of another will be paid or discharged, or that any agree-
ments relating thereto will be complied with, or that the holders of
such obligation will be protected (in whole or in part) against loss
in respect thereof, (ii) with respect to any letter of credit issued for
the account of that Person or as to which that Person is otherwise
liable for reimbursement of drawings, or (iii) under Interest Rate
Agreements and Currency Agreements. Contingent Obligations
shall include, without limitation, (a) the direct or indirect guaranty,
endorsement (otherwise than for collection or deposit in the
ordinary course of business), co-making, discounting with recourse
or sale with recourse by such Person of the obligation of another,
(b) the obligation to make take-or-pay or similar payments if
required regardless of non-performance by any other party or
parties to an agreement, and (c) any liability of such Person for the
obligation of another through any agreement (contingent or
otherwise) (X) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide funds for the
payment or discharge of such obligation (whether in the form of
loans, advances, stock purchases, capital contributions or otherwise)
or (Y) to maintain the solvency or any balance sheet item, level of
income or financial condition of another if, in the case of any
agreement described under subclauses (X) or (Y) of this sentence,
the primary purpose or intent thereof is as described in the
preceding sentence. For purposes of this definition, the amount of
any Contingent Obligation at any time of determination shall be
computed as the amount that, in light of all the facts and
circumstances existing at such time represents the amount that
reasonably can be expected at such time of determination to become
an actual or matured liability.
"Contractual Obligation," as applied to any Person,
means any provision of any Security issued by that Person or of any
material indenture, mortgage, deed of trust, contract, undertaking,
agreement or other instrument (which other instrument is for the
payment of money) to which that Person is a party or by which it or
any of its properties is bound or to which it or any of its properties
is subject.
"Conversion" means the automatic change of all Pre-
Conversion Loans and all other amounts owing under the Pre-
Conversion Commitments to Post-Conversion Loans and amounts
owing under the Post-Conversion Commitments without any
repayment of Pre-Conversion Loans and subsequent funding of
Post-Conversion Loans.
"Conversion Date" means the date that is the earlier
of (i) the Completion of Construction Date and (ii) one year after
the Closing Date.
"Currency Agreement" means any foreign exchange
contract, currency swap agreement, futures contract, option
contract, synthetic cap, currency collar agreement or other similar
agreement or arrangement designed to protect Partnership or any of
its Subsidiaries against fluctuations in currency values.
"Deed of Trust" means, as of any date, that certain
Deed of Trust, Fixture Filing and Security Agreement with
Assignment of Rents executed and delivered on or prior to the
Closing Date, substantially in the form of Exhibit XV annexed
hereto by Partnership in favor of Agent, as beneficiary thereunder,
pursuant to which Partnership granted to First American Title
Company of Nevada, as trustee, for the benefit of Agent a first
priority Lien on, among other things, the Premises and the
Improvements to secure the obligations of the Partnership, in form
and substance satisfactory to Agent and Lenders, as it may be
amended, supplemented or otherwise modified from time to time
through such date.
"Deposit Account" means a demand, time, savings,
passbook or like account with a bank, savings and loan association,
credit union or like organization, other than an account evidenced
by a negotiable certificate of deposit.
"Direct Costs" means costs described in clause (i) of
the definition of "Construction Costs."
"Dispute" has the meaning assigned to that term in
subsection 10.19.
"Documentary Support" means documentary support
for any Advance including, without limitation, Lien Waivers,
consultants' approvals, applications for payment by subcontractors
and other documentary support similar to that required of General
Contractor in subsections 9.3.1.1 and 9.3.1.2 of the General
Conditions of the General Contractor's Contract as in effect as of
the Closing Date.
"Documents" has the meaning assigned to that term
in subsection 10.19.
"Dollars" and the sign "$" mean the lawful money of
the United States of America.
"Eldorado Bridge" means the elevated building
structure that spans Fourth Street and connects the Improvements
with the buildings located on the adjacent real property owned by
Eldorado Hotel Associates.
"Eldorado Completion Guaranty" means, as of any
date, the Eldorado Completion Guaranty executed and delivered by
Eldorado Hotel Associates, Recreational Enterprises and Hotel-
Casino Management on the Closing Date, substantially in the form
of Exhibit III-B annexed hereto, as it may hereafter be amended,
supplemented or otherwise modified from time to time through such
date.
"Eldorado Hotel Associates" means Eldorado Hotel
Associates Limited Partnership, a Nevada limited partnership and a
member of Eldorado LLC.
"Eldorado LLC" means Eldorado Limited Liability
Company, a Nevada limited liability company.
"Eligible Assignee" means (A)(i) a commercial bank
organized under the laws of the United States or any state thereof;
(ii) a savings and loan association or savings bank organized under
the laws of the United States or any state thereof; and (iii) a
commercial bank organized under the laws of any other country or
a political subdivision thereof; provided that (x) such bank is acting
through a branch or agency located in the United States or (y) such
bank is organized under the laws of a country that is a member of
the Organization for Economic Cooperation and Development or a
political subdivision of such country; and (B) any Lender and any
Affiliate of any Lender; provided that no Affiliate of Partnership,
Circus or Eldorado Hotel Associates shall be an Eligible Assignee.
"Employee Benefit Plan" means any "employee
benefit plan" as defined in Section 3(3) of ERISA which is, or was
at any time, maintained or contributed to by Partnership or any of
its ERISA Affiliates.
"Environmental Claim" means any accusation,
allegation, notice of violation, claim, demand, abatement order,
cleanup order, removal order, or other order or direction
(conditional or otherwise) by any governmental authority or any
Person for any injury, loss or damage, including, without
limitation, personal injury (including sickness, disease or death),
tangible or intangible property damage, contribution, indemnity,
indirect or consequential damages, damage to the environment,
nuisance, pollution, contamination or other adverse effects on the
environment, or for fines, penalties or restrictions or to compel
cleanup or remediation, in each case relating to, resulting from or
in connection with any Hazardous Material and relating to
Partnership, any of its Subsidiaries or any Facility.
"Environmental Indemnities" means, as of any date,
each of the Environmental Indemnities from Circus, Eldorado Hotel
Associates and Partnership in favor of Agent for the benefit of
Lenders dated as of the Closing Date, substantially in the form of
Exhibit XVII annexed hereto, pursuant to which Circus, Eldorado
Hotel Associates and Partnership indemnify Agent for the benefit of
Lenders against environmental risks, as they may hereafter be
amended, supplemented or otherwise modified from time to time
through such date.
"Environmental Laws" means all statutes,
ordinances, orders, rules, regulations, plans, policies, decrees,
permits, guidance documents, and any other requirements of
Governmental Authorities relating to (i) environmental matters,
including, without limitation, those relating to fines, injunctions,
penalties, damages, contribution, cost recovery compensation,
losses or injuries resulting from the Release or threatened Release
of Hazardous Material, (ii) the presence, generation, use, storage,
transportation or disposal of Hazardous Material, or
(iii) occupational safety and health, industrial hygiene, land use or
the protection of human, plant or animal health or welfare, in any
manner applicable to Partnership or any of its Subsidiaries or any of
their respective properties, including, without limitation, the
Comprehensive Environmental Response, Compensation, and
Liability Act (42 U.S.C. section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. section 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C. section 6901 et seq.), the
Federal Water Pollution Control Act ( 33 U.S.C. section 1251 et seq.),
the Clean Air Act (42 U.S.C. section 7401 et seq.), the Toxic Substances
Control Act (15 U.S.C. section 2601 et seq.), the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C. section 136 et seq.), the
Occupational Safety and Health Act (29 U.S.C. section 651 et seq.) and
the Emergency Planning and Community Right-to-Know Act (42
U.S.C. section 11001 et seq.), each as amended or supplemented, and
any analogous future or present local, state and federal statutes,
ordinances and other laws, and rules and regulations promulgated
pursuant thereto, each as in effect as of the date of determination.
"ERISA" means the Employee Retirement Income
Security Act of 1974, as amended from time to time, and any
successor statute.
"ERISA Affiliate", as applied to any Person, means
(i) any Person that is, or was at any time, a member of a controlled
group of Persons within the meaning of Section 414(b) of the
Internal Revenue Code of which that Person is, or was at any time,
a member; (ii) any trade or business (whether or not incorporated)
which is, or was at any time, a member of a group of trades or
businesses under common control within the meaning of
Section 414(c) of the Internal Revenue Code of which that Person
is, or was at any time, a member; and (iii) any member of an
affiliated service group within the meaning of Section 414(m) or (o)
of the Internal Revenue Code of which that Person, any Person
described in clause (i) above or any trade or business described in
clause (ii) above is, or was at any time, a member.
"ERISA Event" means (i) a "reportable event" within
the meaning of Section 4043 of ERISA and the regulations issued
thereunder with respect to any Pension Plan (excluding those for
which the provision for 30-day notice to the PBGC has been waived
by regulation); (ii) the failure to meet the minimum funding
standard of Section 412 of the Internal Revenue Code with respect
to any Pension Plan (whether or not waived in accordance with
Section 412(d) of the Internal Revenue Code) or the failure to make
by its due date a required installment under Section 412(m) of the
Internal Revenue Code with respect to any Pension Plan or the
failure to make any required contribution to a Multiemployer Plan;
(iii) the provision by the administrator of any Pension Plan pursuant
to Section 4041(a)(2) of ERISA of a notice of intent to terminate
such plan in a distress termination described in Section 4041(c) of
ERISA; (iv) the withdrawal by Partnership or any of its ERISA
Affiliates from any Pension Plan with two or more contributing
sponsors or the termination of any such Pension Plan resulting in
liability pursuant to Sections 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension
Plan, or the occurrence of any event or condition which might
constitute grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (vi) the
imposition of liability on Partnership or any of its ERISA Affiliates
pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal by
Partnership or any of its ERISA Affiliates in a complete or partial
withdrawal (within the meaning of Sections 4203 and 4205 of
ERISA) from any Multiemployer Plan if there is any potential
liability therefor, or the receipt by Partnership or any of its ERISA
Affiliates of notice from any Multiemployer Plan that it is in
reorganization or insolvency pursuant to Section 4241 or 4245 of
ERISA, or that it intends to terminate or has terminated under
Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or
omission which could give rise to the imposition on Partnership or
any of its ERISA Affiliates of fines, penalties, taxes or related
charges under Chapter 43 of the Internal Revenue Code or under
Section 409 or 502(c), (i) or (l) or 4071 of ERISA in respect of any
Employee Benefit Plan; (ix) the assertion of a material claim (other
than routine claims for benefits) against any Employee Benefit Plan
other than a Multiemployer Plan or the assets thereof, or against
Partnership or any of its ERISA Affiliates in connection with any
such Employee Benefit Plan; (x) receipt from the Internal Revenue
Service of notice of the failure of any Pension Plan (or any other
Employee Benefit Plan intended to be qualified under Section 401(a)
of the Internal Revenue Code) to qualify under Section 401(a) of the
Internal Revenue Code, or the failure of any trust forming part of
any Pension Plan to qualify for exemption from taxation under
Section 501(a) of the Internal Revenue Code; or (xi) the imposition
of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or pursuant to ERISA with respect to any Pension
Plan.
"Eurodollar Rate Loans" means Loans bearing
interest at rates determined by reference to the Adjusted Eurodollar
Rate as provided in subsection 2.2A.
"Event of Default" means each of the events set forth
in Section 8.
"Exchange Act" means the Securities Exchange Act
of 1934, as amended from time to time, and any successor statute.
"Executive Committee" means the executive
committee of Partnership organized in accordance with subsection
5.7 of the Joint Venture Agreement as in effect on the Closing
Date.
"Executive Committee Signatories" means the
individuals from time to time serving as Partnership's Director of
Finance and Administration and General Manager each of whom
shall have been authorized to sign on behalf of the Executive
Committee and the Partnership pursuant to a resolution of the
Executive Committee.
"Facility" and "Facilities" mean any and all real
property (including, without limitation, all buildings, fixtures or
other improvements located thereon) now, hereafter or heretofore
owned, leased, operated or used by Partnership or any of its
Subsidiaries.
"Federal Funds Effective Rate" means, for any
period, a fluctuating interest rate equal for each day during such
period to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or, if
such day is not a Business Day, for the next preceding Business
Day) by the Federal Reserve Bank of New York, or, if such rate is
not so published for any day which is a Business Day, the average
of the quotations for such day on such transactions received by
Agent from three Federal funds brokers of recognized standing
selected by Agent.
"Fee Letter" means that certain letter agreement
dated as of February 22, 1995, between Partnership and Agent.
"FIB" has the meaning assigned to that term in the
introduction to this Agreement.
"Finally Complete Construction", "Final
Completion of Construction", "Finally Completed Construction"
and any similar term means to cause (i) Completion of Construction
and to complete construction of the remainder of the Project
(including Later Opening Rooms and the Skyways, but not
including the Attraction), pursuant to the Plans and the Loan
Documents, (ii) all governmental approvals, including, without
limitation, a final certificate of occupancy (or a temporary
certificate of occupancy together with evidence satisfactory to Agent
in its reasonable discretion that Partnership will not expend greater
than $5 million to satisfy the requirements to obtain such final
certificate) for all of the Improvements and the Skyways, and all
gaming, liquor and other licenses (copies of which shall have been
delivered to Agent), necessary for the opening for business to the
public and operation of the Project to have been obtained (including
with respect to Later Opening Rooms and the Skyways, but not
including with respect to the Attraction), (iii) the release of all
equitable liens, mechanics liens and any other Liens (other than
Liens created pursuant to the terms of the Collateral Documents and
Permitted Encumbrances) against or directly related to the Project
to have been provided for (including with respect to Later Opening
Rooms and the Skyways, but not including with respect to the
Attraction) and all indebtedness secured by such Liens to have been
paid or provided for, to the reasonable satisfaction of Agent, and
(iv) all casino and public space (other than the Attraction) and hotel
rooms of the Project as set forth in the Plans to become open for
business to the public.
"Final Completion Certificate" means an Officer's
Certificate substantially in the form set forth in Exhibit XX annexed
hereto.
"Final Completion Date" means the date upon which
Partnership delivers to Agent the Final Completion Certificate.
"Fiscal Quarter" means a fiscal quarter of
Partnership as at the Closing Date.
"Fiscal Year" means the fiscal year of Partnership as
determined under GAAP as applied by Partnership as at the Closing
Date.
"Flood Act" means the National Flood Insurance Act
of 1968 as amended by the Flood Disaster Protection Act of 1973
(42 U.S.C. section 4013 et. seq.).
"Full and Final Lien Waiver" means a "Full and
Final Unconditional Release of all Claims and Waiver of Lien" in
the form reproduced in Schedule 2 to the Requisition.
"Funding and Payment Office" means the office of
Agent located at the address set forth on the signature pages hereof.
"Funding Date" means, with respect to any particular
Loan, the date of the funding of that Loan.
"Gaming Board" means, collectively, (a) the Nevada
Gaming Commission, (b) the Nevada State Gaming Control Board,
and (c) any other Governmental Authority that holds regulatory,
licensing or permit authority over gambling, gaming or casino
activities conducted by Partnership and its Subsidiaries within its
jurisdiction.
"Gaming Laws" means all statutes, rules,
regulations, ordinances, codes and administrative or judicial
precedents (including, without limitation, the Nevada Gaming
Control Act (N.R.S. Ch. 463)) pursuant to which any Gaming
Board possesses regulatory, licensing or permit authority over
gambling, gaming or casino activities conducted by Partnership and
its Subsidiaries within its jurisdiction.
"GAAP" means, subject to the limitations on the
application thereof set forth in subsection 1.2, generally accepted
accounting principles set forth in opinions and pronouncements of
the Accounting Principles Board of the American Institute of
Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant
segment of the accounting profession (including, without limitation,
in the AICPA Audit and Accounting Guide: Audits of Casinos), in
each case as the same are applicable to the circumstances as of the
date of determination.
"General Contractor" means Perini Building
Company, U.S. Western Division, an Arizona corporation, or, with
Agent's and Lenders' prior written approval, such other contractor
or contractors as may be engaged by Partnership from time to time
to serve as general contractor in connection with the Project.
"General Contractor's Contract" means, as of any
date, the Contract for Construction between Partnership and General
Contractor dated as of February 7, 1994, as amended by Change
Order Nos. 1 - 10, as amended, supplemented or modified from
time to time pursuant to subsection 4.2E through such date.
"General Partners" means, at any time, Galleon,
Inc., a Nevada corporation and a wholly-owned Subsidiary of
Circus, and Eldorado LLC, a Nevada limited liability company,
each a general partner of Partnership, and their respective
successors and assigns at such time.
"General Partner Subordinated Debt" means any
Subordinated Indebtedness of Partnership issued to any General
Partner, Circus or any of Circus' wholly-owned Subsidiaries
pursuant to the Subordinated Debt Documents substantially in the
form of Exhibit XVIII and, in the case of the Subordination and
Debt Put Agreement, Exhibit XXII annexed hereto.
"Governmental Authority" means any of the United
States government, the government of the State of Nevada or any
other state and any political subdivision, agency, department,
commission, court, board, bureau or instrumentality of any of them,
including any local authorities.
"Governmental Authorization" means any permit,
license, authorization, plan, directive, consent order or consent
decree of or from any Governmental Authority.
"Hazardous Material" means (i) any chemical,
material or substance at any time defined as or included in the
definition of "hazardous substances", "hazardous wastes",
"hazardous materials", "extremely hazardous waste", "restricted
hazardous waste", "infectious waste", "toxic substances" or any
other formulations intended to define, list or classify substances by
reason of deleterious properties such as ignitability, corrosivity,
reactivity, carcinogenicity, toxicity, reproductive toxicity, "TCLP
toxicity" or "EP toxicity" or words of similar import under any
applicable Environmental Law or publication promulgated pursuant
thereto; (ii) any oil, petroleum, petroleum fraction or petroleum
derived substance; (iii) any drilling fluid, produced water and other
waste associated with the exploration, development or production of
crude oil, natural gas or geothermal resources; (iv) any flammable
substance or explosive; (v) any radioactive material; (vi) asbestos in
any form; (vii) urea formaldehyde foam insulation; (viii) electrical
equipment which contains any oil or dielectric fluid containing
polychlorinated biphenyls; (ix) any pesticide; and (x) any other
chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority or which may or
could pose a hazard to human health and safety or the environment
if released into the workplace or the environment.
"Hotel-Casino Management" means Hotel-Casino
Management, Inc., a Nevada corporation and a member of
Eldorado LLC and general partner of Eldorado Hotel Associates.
"Improvements" means all buildings, structures,
facilities and other improvements of every kind and description now
or hereafter located on the Premises, including all parking areas,
roads, driveways, walks, fences, walls, beams, recreation facilities,
drainage facilities, lighting facilities and other site improvements,
all water, sanitary and storm sewer, drainage, electricity, steam,
gas, telephone and other utility equipment and facilities, all
plumbing, lighting, heating, ventilating, air-conditioning,
refrigerating, incinerating, compacting, fire protection and
sprinkler, surveillance and security, vacuum cleaning, public
address and communications equipment and systems, all screens,
awnings, floor coverings, partitions, elevators, escalators, motors,
machinery, pipes, fittings and other items of equipment and
personal property of every kind and description now or hereafter
located on the Premises or attached to the improvements (excluding
the Skyways but including any support structures attached to the
improvements with respect to the Skyways and including the Silver
Legacy Bridge and the Tunnel) that by the nature of their location
thereon or attachment thereto are real property under applicable
law; and including all materials intended for the construction,
reconstruction, repair, replacement, alteration, addition or
improvement of or to such buildings, equipment, fixtures, structures
and improvements.
"Incurred" means, with respect to Construction Costs
(other than (i) interest and fees on the Loans, (ii) payments for
licenses or permits and (iii) purchase order deposits), the labor or
service has been performed or the materials have been supplied and
incorporated into the Project (or, with respect to materials, are
stored on or nearby the Premises, have been paid for and are owned
by Partnership, are reasonably appropriate for the then current stage
of construction, are covered by the insurance required under this
Agreement and are subject to a first-priority security interest in
favor of Agent), payment therefor has been requested by the
contractor, provider or supplier thereof, and such contractor,
provider or supplier is entitled thereto. "Incurred" means, with
respect to Construction Costs that consist of (i) interest and fees on
the Loans, that such amounts are then due and payable hereunder,
(ii) payments for licenses or permits, that such amounts are then
due and payable and (iii) purchase order deposits, that such amounts
are then due and payable and such purchase order is reasonably
appropriate to the then current stage of construction.
"Indebtedness," as applied to any Person, means,
without duplication, (i) all indebtedness for borrowed money,
(ii) that portion of obligations with respect to Capital Leases that is
properly classified as a liability on a balance sheet in conformity
with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for
borrowed money, (iv) any obligation owed for all or any part of the
deferred purchase price of property or services (excluding any such
obligations incurred under ERISA), which purchase price is (a) due
more than six months from the date of incurrence of the obligation
in respect thereof or (b) evidenced by a note or similar written
instrument, (excluding, as an example, any trade payables payable
in the ordinary course of business that are not so due or so
evidenced) and (v) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of
whether the indebtedness secured thereby shall have been assumed
by that Person or is nonrecourse to the credit of that Person.
Obligations under Interest Rate Agreements and Currency
Agreements constitute Contingent Obligations and not Indebtedness.
Indebtedness under this Agreement shall be determined by reference
to Total Utilization of Commitments on any date of determination.
"Indemnitee" has the meaning assigned to that term
in subsection 10.3.
"Intellectual Property" means all patents,
trademarks, tradenames, customer lists, copyrights, technology,
know-how and processes (i) used in or necessary for the conduct of
the business of Partnership and its Subsidiaries as currently
conducted and as proposed to be conducted and (ii) that are material
to the condition (financial or otherwise), business or operations of
Partnership and its Subsidiaries, taken as a whole.
"Interest Payment Date" means (i) with respect to
any Base Rate Loan, the last day of each month of each year,
commencing on the first such date to occur after the Closing Date,
and (ii) with respect to any Eurodollar Rate Loan, the last day of
each Interest Period applicable to such Loan; provided that in the
case of each Interest Period of longer than three months "Interest
Payment Date" shall also include each date that is three months, or
an integral multiple thereof, after the commencement of such
Interest Period.
"Interest Period" has the meaning assigned to that
term in subsection 2.2B.
"Interest Rate Agreement" means any interest rate
swap agreement, interest rate cap agreement, interest rate collar
agreement or other similar agreement or arrangement designed to
protect Partnership or any of its Subsidiaries against fluctuations in
interest rates.
"Interest Rate Determination Date" means, with
respect to any Interest Period, the second Business Day prior to the
first day of such Interest Period.
"Internal Revenue Code" means the Internal
Revenue Code of 1986, as amended to the date hereof and from
time to time hereafter.
"Investment" means (i) any direct or indirect
purchase or other acquisition by Partnership or any of its
Subsidiaries of, or of a beneficial interest in, any Securities of any
other Person, (ii) any direct or indirect redemption, retirement,
purchase or other acquisition for value, by Partnership or any
Subsidiary of Partnership from any Person other than Partnership or
any of its Subsidiaries, of any equity Securities of such Subsidiary,
or (iii) any direct or indirect loan, advance (other than advances to
employees for moving, entertainment and travel expenses, drawing
accounts and similar expenditures in the ordinary course of
business) or capital contribution by Partnership or any of its Subsid-
iaries to any other Person, other than any indebtedness or account
receivable or both from that other Person that is a current asset or
arose from sales to that other Person in the ordinary course of busi-
ness. The amount of any Investment shall be the original cost of
such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-
downs or write-offs with respect to such Investment.
"Issuing Lender" means Agent.
"Joint Venture" means a joint venture, partnership or
other similar arrangement, whether in corporate, partnership or
other legal form; provided that in no event shall any corporate
Subsidiary of any Person be considered to be a Joint Venture to
which such Person is a party.
"Joint Venture Agreement" means, as of any date,
the Circus and Eldorado Joint Venture Agreement, dated as of
March 1, 1994, between the General Partners as amended by the
First Amendment to Agreement of Joint Venture of Circus and
Eldorado Joint Venture, dated as of July 27, 1994, as amended,
supplemented or otherwise modified from time to time in
accordance with the terms of subsection 7.14B through such date.
"Later Opening Rooms" means approximately 439
rooms in the hotel furnished and equipped in a manner comparable
to the 1300 hotel rooms initially opened to the public, available for
occupancy by hotel guests, not complete at the Completion of
Construction Date but expected as of the Closing Date to be open to
the public for occupancy on or before May 31, 1996.
"Lender" and "Lenders" means the persons identified
as "Lenders" and listed on the signature pages of this Agreement,
together with their successors and permitted assigns pursuant to
subsection 10.1. The term "Lenders" when used without a
modifier or when modified only by "the" means Requisite Lenders.
"Letter of Credit" or "Letters of Credit" means
Standby Letters of Credit issued or to be issued by Issuing Lender
for the account of Partnership pursuant to subsection 3.1.
"Letter of Credit Usage" means, as at any date of
determination, the sum of (i) the maximum aggregate amount that is
or at any time thereafter may become available for drawing under
all Letters of Credit then outstanding plus (ii) the aggregate amount
of all drawings under Letters of Credit honored by Issuing Lender
and not theretofore reimbursed by Partnership (reimbursement out
of the proceeds of Loans pursuant to subsection 3.3B shall be
considered reimbursement by Partnership for purposes hereof).
"Leverage Increment" has the meaning assigned to
that term in subsection 2.2A(iii).
"Leverage Ratio" means, as of the date of
determination, the ratio of (i) the sum of the average of the daily
Total Utilization of Commitments during the immediately preceding
Fiscal Quarter plus Other Permitted Indebtedness outstanding as of
the last day of such period plus Indebtedness outstanding in respect
of Capital Leases as of the last day of such period to
(ii) Consolidated Adjusted EBITDA, determined for the four
consecutive Fiscal Quarter period ending on the date as of which
the determination is being made.
"License Revocation" means the revocation, failure
to renew (other than with respect to particular types of gambling or
gaming activities (e.g. Keno or Pai Gow) that Partnership has
elected no longer to pursue) or suspension of, or the appointment of
a receiver, supervisor or similar official with respect to, any casino,
gambling or gaming license issued by any Gaming Board covering
any casino or gaming facility of Partnership or any of its
Subsidiaries.
"Lien" means any lien, mortgage, pledge,
assignment, security interest, charge or encumbrance of any kind
(including any conditional sale or other title retention agreement,
any lease in the nature thereof, any agreement to give any security
interest and any mechanic's liens) and any option, trust or other
preferential arrangement having the practical effect of any of the
foregoing.
"Lien Waivers" shall mean, collectively, Combined
Lien Waivers and Full and Final Lien Waivers.
"Loan Documents" means this Agreement, any
Notes, the Letters of Credit (and any applications for, or
reimbursement agreements or other documents or certificates
executed by Partnership in favor of an Issuing Lender relating to,
the Letters of Credit), the Collateral Documents, the Circus
Completion Guaranty, the Eldorado Completion Guaranty, the
Make-Well Agreement, the Subordination and Debt Put Agreement
and the Environmental Indemnities.
"Loan Exposure" means, with respect to any Lender
as of any date of determination (i) prior to the termination of the
Commitments, that Lender's Commitment and (ii) after the
termination of the Commitments, the sum of (a) the aggregate
outstanding principal amount of the Loans of that Lender plus (b) in
the event that Lender is an Issuing Lender, the aggregate Letter of
Credit Usage in respect of all Letters of Credit issued by that
Lender (in each case net of any participations purchased by other
Lenders in such Letters of Credit or any unreimbursed drawings
thereunder) plus (c) the aggregate amount of all participations
purchased by that Lender in any drawings under Letters of Credit
honored by Issuing Lender and not theretofore reimbursed by
Partnership.
"Loan Party" means any of Partnership,
Partnership's Subsidiaries and General Partners and "Loan Parties"
means Partnership, Partnership's Subsidiaries and General Partners,
collectively.
"Loans" means the Pre-Conversion Loans and the
Post-Conversion Loans.
"LTCBJ" has the meaning assigned to that term in
the introduction to this Agreement.
"Lyonnais" has the meaning assigned to that term in
the introduction to this Agreement.
"Make-Well Agreement" means, as of any date, the
Make-Well Agreement executed and delivered by Circus and Agent
on the Closing Date, substantially in the form of Exhibit XIV
annexed hereto, as such agreement may hereafter be amended,
supplemented or otherwise modified from time to time through such
date.
"Manager" means the Person elected to manage the
affairs of a limited liability company.
"Managing Agents" has the meaning assigned to that
term in the introduction to this Agreement.
"Managing Partner" means, at any time, Galleon,
Inc., a Nevada corporation and a wholly-owned subsidiary of
Circus, or its successors or assigns, in the capacity of managing
partner of Partnership under the Joint Venture Agreement, at such
time.
"Margin Stock" has the meaning assigned to that
term in Regulation U of the Board of Governors of the Federal
Reserve System as in effect from time to time.
"Material Adverse Effect" means (i) a material
adverse effect upon (a) the business, operations, properties, assets,
condition (financial or otherwise) or prospects of any Loan Party
and its Subsidiaries taken as a whole, (b) the validity, priority or
enforceability of any of the Loan Documents or any Lien created or
intended to be created thereby, or (c) the construction, use,
occupancy or operation of all or any material part of the Project or
(ii) the impairment of the ability of any Loan Party materially to
perform, or of Agent or Lenders to enforce, the Obligations.
"Material Overrun" means (i) total costs to Finally
Complete Construction exceed, or are projected to exceed, by 10%
or more the total amount projected in the Budget as delivered on the
Closing Date as necessary to Finally Complete Construction, or
(ii) Construction Contracts or changes to Construction Contracts are
agreed to that, if fully performed by the parties thereto, could cause
such total costs to exceed by 10% or more the total amount
projected in the Budget as delivered on the Closing Date as
necessary to Finally Complete Construction and, in each case,
Overrun Contributions concurrently made or previously made do
not, in the aggregate, equal or exceed the aggregate Overrun Excess
Amount.
"Maximum Consolidated Capital Expenditure
Amount" has the meaning assigned to that term in subsection 7.8.
"Maximum Facility Availability" means the
aggregate amount of the Commitments available as of the date of
determination whether or not drawn or outstanding or used as Loans
or for Letters of Credit.
"Multiemployer Plan" means a "multiemployer
plan", as defined in Section 3(37) of ERISA, to which Partnership
or any of its ERISA Affiliates is contributing, or ever has
contributed, or to which Partnership or any of its ERISA Affiliates
has, or ever has had, an obligation to contribute.
"New Change Orders" has the meaning assigned to
such term in subsection 4.2E.
"Notes" means, as of any date, any promissory notes
of Partnership issued pursuant to subsection 2.1E to evidence the
Loans of any Lenders, substantially in the form of Exhibit IV
annexed hereto, as they may hereafter be amended, supplemented or
otherwise modified from time to time through such date.
"Notice of Borrowing" means a notice substantially
in the form of Exhibit I annexed hereto delivered by Partnership to
Agent pursuant to subsection 2.1B with respect to a proposed
borrowing.
"Notice of Conversion/Continuation" means a notice
substantially in the form of Exhibit II annexed hereto delivered by
Partnership to Agent pursuant to subsection 2.2D with respect to a
proposed conversion or continuation of the applicable basis for
determining the interest rate with respect to the Loans specified
therein.
"Notice of Issuance of Letter of Credit" means a
notice substantially in the form of Exhibit III annexed hereto
delivered by Partnership to Agent pursuant to subsection 3.1B(i)
with respect to the proposed issuance of a Letter of Credit.
"Obligations" means all obligations of every nature
of any Loan Party, from time to time owed to Agent, Lenders or
any of them under the Loan Documents, whether for principal,
interest, reimbursement of amounts drawn under Letters of Credit,
fees, expenses, indemnification or otherwise and whether or not the
obligation is allowed as a claim in any proceeding referred to in
Section 8.6 or 8.7.
"Officers' Certificate" means, as applied to any
corporation or partnership, a certificate executed on behalf of such
corporation or partnership by its or its general partner's or its
Manager's, as the case may be, chairman of the board (if an
officer) or its or its general partner's or its Manager's, as the case
may be, president or a vice president and by its or its general
partner's or its Manager's, as the case may be, chief financial
officer or treasurer or, in each case, another duly authorized
representative (or, if such corporation has, in accordance with law,
only a single officer, then that officer); provided that every
Officers' Certificate with respect to the compliance with a condition
precedent to the making of any Loans hereunder shall include (i) a
statement that the officer or officers making or giving such
Officers' Certificate have read such condition and any definitions or
other provisions contained in this Agreement relating thereto, (ii) a
statement that, in the opinion of the signers, they have made or
have caused to be made such examination or investigation as is
necessary to enable them to express an informed opinion as to
whether or not such condition has been complied with, and (iii) a
statement as to whether, in the opinion of the signers, such
condition has been complied with.
"Operating Lease" means, as applied to any Person,
any lease (including, without limitation, leases that may be
terminated by the lessee at any time) of any property (whether real,
personal or mixed) that is not a Capital Lease other than any such
lease under which that Person is the lessor.
"Other Partnership Distributions" means
distributions to the General Partners pursuant to the terms of the
Joint Venture Agreement other than Tax Distributions and Permitted
General Partner Subordinated Debt Payments.
"Other Permitted Indebtedness" means Indebtedness
permitted under subsection 7.1(vi)
"Other Permitted Indebtedness Payments" means
payments of principal and interest on Other Permitted Indebtedness.
"Overrun Contribution" has the meaning assigned to
that term in subsection 4.2C.
"Overrun Excess Amount" has the meaning assigned
to that term in subsection 4.2C.
"Partnership" has the meaning assigned to that term
in the introduction to this Agreement.
"Partnership Parents" means General Partners,
Circus, Eldorado Hotel Associates, Recreational Enterprises, Hotel-
Casino Management, Inc. and their respective successors and
assigns.
"PBGC" means the Pension Benefit Guaranty
Corporation (or any successor thereto).
"Pension Plan" means any Employee Benefit Plan,
other than a Multiemployer Plan, which is subject to Section 412 of
the Internal Revenue Code or Section 302 of ERISA.
"Percentage Interests" has the meaning assigned to
that term in the Joint Venture Agreement.
"Permitted Encumbrances" means the following
types of Liens (other than any such Lien imposed pursuant to
Section 401(a)(29) or 412(n) of the Internal Revenue Code or by
ERISA):
(i) Liens for taxes, assessments or governmental
charges or claims the payment of which is not, at the time,
required by subsection 6.3;
(ii) statutory Liens of landlords and Liens of
carriers, warehousemen, mechanics and materialmen and
other Liens imposed by law incurred in the ordinary course
of business for sums not yet delinquent or being contested in
good faith, if such reserve or other appropriate provision, if
any, as shall be required by GAAP shall have been made
therefor;
(iii) easements, rights of tenants, reservations,
covenants, rights-of-way, restrictions, minor defects, minor
encroachments or minor irregularities in title and other
similar immaterial charges or encumbrances that (i) arise
prior to Closing and are approved in writing by the Agent or
(ii) arise after Closing and would not, individually or in the
aggregate, result in a Material Adverse Effect; and
(iv) Liens arising solely from filing UCC financing
statements relating solely to leases permitted by this Agree-
ment.
"Permitted General Partner Subordinated Debt
Payments" means payments of principal and interest permitted on
the General Partner Subordinated Debt under subsection 7.5(i).
"Person" means and includes natural persons,
corporations, limited partnerships, general partnerships, joint stock
companies, Joint Ventures, associations, companies, trusts, banks,
trust companies, land trusts, business trusts, limited liability
companies or other organizations, whether or not legal entities, and
governments and agencies and political subdivisions thereof.
"Plans" means, as of any date, all preliminary and, as
they are developed in accordance with the provisions hereof or have
been approved hereunder, final drawings, plans, specifications and
other documents (including, without limitation, architectural,
structural, mechanical, electrical and sprinkler systems) prepared by
Partnership, the Architect, General Contractor or any other architect
and/or engineer and/or other Persons, as such Plans may be
amended, supplemented or otherwise modified in accordance with
subsection 4.2E through such date.
"Potential Event of Default" means a condition or
event that, after notice or lapse of time or both, would constitute an
Event of Default.
"Post-Conversion Commitment" and "Post-
Conversion Commitments" have meanings assigned to those terms
in subsection 2.1(A)(ii).
"Post-Conversion Loans" means the loans made by
Lenders to Partnership on and after the Conversion Date pursuant to
subsection 2.1A(ii).
"Pre-Conversion Commitment" and "Pre-
Conversion Commitments" have the meanings assigned to those
terms in subsection 2.1A(i).
"Pre-Conversion Loans" means the loans made by
Lenders to Partnership prior to the Conversion Date pursuant to
subsection 2.1A(i).
"Pre-Opening Expenses" means costs related to the
period before opening of the Project to the public for business that
are properly deferred and charged to expense as of commencement
of operations, in each case in accordance with GAAP.
"Premises" means the real property situated in Reno,
Nevada, and more particularly described in Schedule A annexed
hereto.
"Primary Item" means at any time the line items in
the Budget for land acquisition; architectural/engineering work; base
building construction costs; special attractions; furniture, fixtures
and equipment; contingency; legal; insurance; working capital;
construction period interest; pre-opening expense and real estate
tax; and any similar line items used from time to time in the Budget
to track Project costs at such time.
"Prime Rate" means the rate that FIB announces
from time to time as its prime lending rate, as in effect from time
to time. The Prime Rate is a reference rate and does not necessarily
represent the lowest or best rate actually charged to any customer.
FIB or any other Lender may make commercial loans or other loans
at rates of interest at, above or below the Prime Rate.
"Project" means the hotel, casino and entertainment
complex presently under construction in Reno, Nevada, as of the
Closing Date, including, without limitation, the Premises; the
Improvements (including, without limitation, the Later Opening
Rooms, the Attraction, the Silver Legacy Bridge and the Tunnel);
the Skyways, all street work; drainage; plantings; signalization; and
other installations, equipment and facilities located off of the
Premises and required of Partnership by Governmental Authorities
in connection with development of the Premises to be operated as
the Silver Legacy Hotel & Casino.
"Projected Completion of Construction Date"
means the date projected in the Construction Schedule, as amended
from time to time in accordance with the terms hereof, to be the
Completion of Construction Date.
"Projected Final Completion Date" means May 31,
1996.
"Pro Rata Share" means, with respect to each
Lender, the percentage obtained by dividing (x) the Loan Exposure
of that Lender by (y) the aggregate Loan Exposure of all Lenders,
as such percentage may be adjusted by assignments permitted
pursuant to subsection 10.1. The Pro Rata Share of each Lender on
the Closing Date is set forth opposite the name of that Lender in
Schedule 2.1 annexed hereto.
"Recreational Enterprises" means Recreational
Enterprises, Inc., a Nevada corporation and member of Eldorado
LLC and general partner of Eldorado Hotel Associates.
"Reference Period" has the meaning assigned to that
term in subsection 7.8.
"Register" has the meaning assigned to that term in
subsection 2.1D.
"Regulation D" means Regulation D of the Board of
Governors of the Federal Reserve System, as in effect from time to
time.
"Reimbursement Date" has the meaning assigned to
that term in subsection 3.3B.
"Release" means any release, spill, emission, leaking,
pumping, pouring, injection, escaping, deposit, disposal, discharge,
dispersal, dumping, leaching or migration of Hazardous Material
into the indoor or outdoor environment (including, without
limitation, the abandonment or disposal of any barrels, containers or
other closed receptacles containing any Hazardous Material), or into
or out of any Facility, including the movement of any Hazardous
Material through the air, soil, surface water, groundwater or
property.
"Requirements and Restrictions" has the meaning
set forth in subsection 4.1L.
"Requisite Lenders" means Lenders having or
holding 66 % or more of the aggregate Loan Exposure of all
Lenders.
"Requisition" means an Officers' Certificate in the
form of Exhibit XVI, dated as of the date of the Notice of
Borrowing delivered with respect to the Advance requested under
such Requisition.
"Restricted Junior Payment" means (i) any
distribution of cash or property or other distribution, direct or
indirect, on account of any partnership interest in Partnership now
or hereafter outstanding, except a distribution payable solely in
interests of that class of partnership interest to the holders of that
class, (ii) any redemption, retirement, sinking fund or similar
payment, purchase or other acquisition for value, direct or indirect,
of any interests of any class of partnership interest in Partnership
now or hereafter outstanding, (iii) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other
rights to acquire any interests of any class of partnership interests in
Partnership now or hereafter outstanding, and (iv) any payment or
prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-
substance or legal defeasance), sinking fund or similar payment
with respect to, any Subordinated Indebtedness.
"Scheduled Facility Reductions" means reductions to
Post-Conversion Commitments made pursuant to subsection 2.4A.
"Securities" means any stock, shares, partnership
interests, voting trust certificates, certificates of interest or
participation in any profit-sharing agreement or arrangement,
options, warrants, bonds, debentures, notes, or other evidences of
indebtedness, secured or unsecured, convertible, subordinated or
otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of,
or any right to subscribe to, purchase or acquire, any of the
foregoing.
"Security Agreement" means, as of any date, the
Security Agreement executed and delivered by Partnership and
Agent on the Closing Date, substantially in the form of Exhibit XII
annexed hereto, pursuant to which Partnership grants to Agent on
behalf of Lenders a security interest in all of Partnership's assets
including personal property and fixtures (including gaming devices
and accessories), as it may hereafter be amended, supplemented or
otherwise modified from time to time through such date.
"Senior Officer" means, with respect to any Person,
any Chief Executive Officer, President, Executive Vice President,
Vice President, Chief Financial Officer, Treasurer or Controller of
such Person, or any individual holding an equivalent position with
such Person or any partner or member of such Person, including
without limitation, the General Manager and Chief Financial Officer
of Partnership.
"Short Term General Partner Subordinated Debt"
means any General Partner Subordinated Debt that has economic
terms satisfactory to Requisite Lenders issued in exchange for
monetary contributions to the Partnership in connection with the
Project prior to the Closing Date in excess of the equity
contributions required to have been made in subsection 4.1I the
proceeds of which are applied to Construction Costs, which
contributions (i) are not made pursuant to the Make-Well
Agreement, the Circus Completion Guaranty or the Eldorado
Completion Guaranty and (ii) are not otherwise prohibited by the
terms of this Agreement.
"Silver Legacy Bridge" means the elevated building
structure that connects the hotel portion of the Project with the
casino portion of the Project.
"Skyway Easements" means those two certain Bridge
Easements recorded in the Official Records of Washoe County,
Nevada, one by and between Partnership and Eldorado Hotel
Associates and the other by and between Partnership and Circus
Circus Casinos, Inc., pursuant to which, among other things,
Partnership was granted perpetual easements for pedestrian access
to and from the Improvements via the Eldorado Bridge and the
Circus Bridge, respectively.
"Skyways" means the Circus Bridge and the Eldorado
Bridge; the Skyways are owned by Circus and Eldorado Hotel
Associates, respectively, and are subject to the terms and provisions
of the Skyway Easements. The Skyways do not include the Silver
Legacy Bridge.
"SocGen" has the meaning assigned to that term in
the introduction to this Agreement.
"Solvent" means, with respect to any Person, that as
of the date of determination both (A) (i) the then fair saleable value
of the property of such Person is (y) greater than the total amount
of liabilities (including contingent liabilities) of such Person and
(z) not less than the amount that will be required to pay the
probable liabilities on such Person's then existing debts as they
become absolute and matured considering all financing alternatives
and potential asset sales reasonably available to such Person;
(ii) such Person's capital is not unreasonably small in relation to its
business or any contemplated or undertaken transaction; and
(iii) such Person does not intend to incur, or believe (nor should it
reasonably believe) that it will incur, debts beyond its ability to pay
such debts as they become due; and (B) such Person is "solvent"
within the meaning given that term and similar terms under
applicable laws relating to fraudulent transfers and conveyances.
For purposes of this definition, the amount of any contingent
liability at any time shall be computed as the amount that, in light
of all of the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"Standby Letter of Credit" means any standby letter
of credit or similar instrument issued for the purpose of supporting
(i) Indebtedness of Partnership or any of its Subsidiaries in respect
of industrial revenue or development bonds or financings,
(ii) workers' compensation liabilities of Partnership or any of its
Subsidiaries, (iii) the obligations of third party insurers of
Partnership or any of its Subsidiaries arising by virtue of the laws
of any jurisdiction requiring third party insurers, and (iv) perfor-
mance, payment, deposit or surety obligations of Partnership or any
of its Subsidiaries, in any case if required by law or governmental
rule or regulation or in accordance with custom and practice in the
industry; provided that Standby Letters of Credit may not be issued
for the purpose of supporting (a) trade payables, (b) any
Indebtedness constituting "antecedent debt" (as that term is used in
Section 547 of the Bankruptcy Code), or (c) any Indebtedness or
Contingent Obligation of Partnership or any of its Subsidiaries if
such Indebtedness or Contingent Obligation is secured by real
property of Partnership or such Subsidiary located in the State of
California.
"Subordination and Debt Put Agreement" means,
as of any date, the Subordination and Debt Put Agreement executed
and delivered by Circus, Partnership and Agent on the Closing
Date, substantially in the form of Exhibit XXII annexed hereto, as
it may hereafter be amended, supplemented or otherwise modified
from time to time through such date.
"Subordinated Indebtedness" means (i) the General
Partner Subordinated Debt and (ii) any other Indebtedness of
Partnership subordinated in right of payment to the Obligations
pursuant to documentation containing maturities, amortization
schedules, covenants, defaults, remedies, subordination provisions
and other material terms in form and substance satisfactory to Agent
and Lenders.
"Subordinated Debt Documents" means, as of any
date, the Subordination and Debt Put Agreement, the Loan
Agreement dated as of even date herewith by and between Circus
and Partnership, and, to the extent secured in accordance with the
terms of this Agreement and the Subordination and Debt Put
Agreement, the deed of trust by Partnership as trustor for the
benefit of Circus, the environmental indemnity by and between
Partnership and Circus, the security agreement between Partnership
and Circus, UCC-1 fixture filings and financing statements with
respect thereto together with all other documents and instruments
evidencing, securing or pertaining to the General Partner
Subordinated Debt, as they may hereafter be amended,
supplemented or otherwise modified from time to time through such
date. As used in any Loan Document, the phrase "the
documentation evidencing the General Partner Subordinated Debt"
or "the documents evidencing the General Partner Subordinated
Debt" shall be deemed a reference to the Subordinated Debt
Documents.
"Subsidiary" means, with respect to any Person, any
corporation, partnership, association, joint venture or other business
entity of which more than 50% of the total voting power of shares
of stock or other ownership interests entitled (without regard to the
occurrence of any contingency) to vote in the election of the Person
or Persons (whether directors, managers, trustees or other Persons
performing similar functions) having the power to direct or cause
the direction of the management and policies thereof is at the time
owned or controlled, directly or indirectly, by that Person or one or
more of the other Subsidiaries of that Person or a combination
thereof.
"Supermajority Lenders" means Lenders having or
holding 75% or more of the aggregate Loan Exposure of all
Lenders.
"Tax" or "Taxes" means any present or future tax,
levy, impost, duty, charge, fee, deduction or withholding of any
nature and whatever called, by whomsoever, on whomsoever and
wherever imposed, levied, collected, withheld or assessed; provided
that "Tax on the overall net income" of a Person shall be
construed as a reference to a tax imposed by the jurisdiction in
which that Person's principal office (and/or, in the case of a
Lender, its lending office) is located or in which that Person is
deemed to be doing business on all or part of the net income,
profits or gains of that Person (whether worldwide, or only insofar
as such income, profits or gains are considered to arise in or to
relate to a particular jurisdiction, or otherwise).
"Tax Distributions" means distributions to the
General Partners of cash or property pursuant to subsection 4.1(a)
of the Joint Venture Agreement as in effect on the Closing Date
made in order to satisfy the General Partners' federal tax liability
accruing in the Fiscal Year with respect to which such distributions
are made assuming each General Partner's tax liabilities accrue at
the maximum marginal federal income tax rate that applies to such
General Partner as set forth in subsection 4.2 of the Joint Venture
Agreement as in effect on the Closing Date.
"Title Company" has the meaning assigned to such
term in subsection 4.1F.
"Title Policy" has the meaning assigned to such term
in subsection 4.1F.
"Total Utilization of Commitments" means, as at
any date of determination, the sum of (i) the aggregate principal
amount of all outstanding Loans (other than Loans made for the
purpose of reimbursing the Issuing Lender for any amount drawn
under any Letter of Credit but not yet so applied) plus (ii) the Letter
of Credit Usage.
"Tunnel" means the tunnel beneath Sierra Street that
connects the casino portion of the Project to the hotel portion of the
Project.
"Unutilized Amount" has the meaning assigned to
that term in subsection 7.8.
"Unauthorized Encroachment" has the meaning
assigned to such term in subsection 8.18.
"Working Capital Loan" means any Pre-Conversion
Loan that, when aggregated with all other Working Capital Loans,
does not exceed the amount permitted in subsection 2.1A(i) and is
made pursuant to a Notice of Borrowing that states that the
proceeds of such Loan shall be used for working capital purposes.
1.2 Accounting Terms; Utilization of GAAP for Purposes of
Calculations Under Agreement.
Except as otherwise expressly provided in this
Agreement, all accounting terms not otherwise defined herein shall
have the meanings assigned to them in conformity with GAAP.
Financial statements and other information required to be delivered
by Partnership to Lenders pursuant to clauses (i), (ii), (iii) and (xiii)
of subsection 6.1 shall be prepared in accordance with GAAP as in
effect at the time of such preparation (and delivered together with
the reconciliation statements provided for in subsection 6.1(v)).
Calculations in connection with the definitions, covenants and other
provisions of this Agreement shall utilize accounting principles and
policies in conformity with GAAP as in effect at the time such
calculations are made.
1.3 Other Definitional Provisions.
References to "Sections" and "subsections" shall be to
Sections and subsections, respectively, of this Agreement unless
otherwise specifically provided. Any of the terms defined in
subsection 1.1 may, unless the context otherwise requires, be used
in the singular or the plural, depending on the reference.
Section 2. AMOUNTS AND TERMS OF COMMITMENTS
AND LOANS
2.1 Commitments; Making of Loans; the Register; Optional
Notes.
A. (i) Pre-Conversion Commitments. Subject to the
terms and conditions of this Agreement and in reliance upon the
representations and warranties of the Loan Parties set forth in the
Loan Documents, each Lender hereby severally agrees, subject to
the limitations set forth below with respect to the maximum amount
of Pre-Conversion Loans permitted to be outstanding from time to
time, to lend to Partnership from time to time during the period
from the Closing Date to but excluding the Conversion Date an
aggregate amount not exceeding its Pro Rata Share of the aggregate
amount of the Pre-Conversion Commitments to be used for the pur-
poses identified in subsection 2.5A(i); provided that no more than
$10,000,000 of Pre-Conversion Loans may be Working Capital
Loans. Each Lender's commitment to make Pre-Conversion Loans
pursuant to this subsection 2.1A(i) is herein called its "Pre-
Conversion Commitment," and such commitments of all Lenders
in the aggregate are herein called the "Pre-Conversion
Commitments." The amount of each Lender's Pre-Conversion
Commitment on the Closing Date is set forth opposite its name on
Schedule 2.1 annexed hereto and the aggregate original amount of
the Pre-Conversion Commitments is $230,000,000; provided that
the Pre-Conversion Commitments of Lenders shall be adjusted to
give effect to any assignments of the Commitments pursuant to
subsection 10.1; and provided, that the amount of the Pre-
Conversion Commitments shall be reduced from time to time by the
amount of any reductions thereto made pursuant to subsections
2.4B(ii) and 2.4B(iii) or terminated as set forth in Section 8. Each
Lender's Pre-Conversion Commitment shall expire on the
Conversion Date and the Conversion shall occur on that date
without the reissuance of the Notes, if any; provided, that each
Lender's Pre-Conversion Commitment shall expire immediately and
without further action on May 31, 1995 if the initial Loans are not
made on or before that date. Amounts borrowed under this
subsection 2.1A(i) and repaid may not be reborrowed as Pre-
Conversion Loans.
Anything contained in this Agreement to the contrary
notwithstanding, the Loans and the Pre-Conversion Commitments
shall be subject to the limitations that:
(a) in no event shall the Total Utilization of
Commitments at any time exceed the Commitments
then in effect; and
(b) at no time prior to the Conversion Date
shall any Advance cause the Total Utilization of
Commitments to exceed the Construction Costs
Incurred after the Closing Date and through the date
of the Requisition with respect to such Advance plus
Short Term General Partner Subordinated Debt (other
than Short Term General Partner Subordinated Debt
that is to be repaid with the proceeds of such
Advance) plus the aggregate amount of all Working
Capital Loans.
(ii) Post-Conversion Commitments. Subject to
the terms and conditions of this Agreement and in reliance upon the
representations and warranties of the Loan Parties set forth in the
Loan Documents, each Lender hereby severally agrees, subject to
the limitations set forth below with respect to the maximum amount
of Post-Conversion Loans permitted to be outstanding from time to
time, to lend to Partnership from time to time during the period on
and after the Conversion Date to but excluding the Commitment
Termination Date an aggregate amount not exceeding its Pro Rata
Share of the aggregate amount of the Post-Conversion Commitments
to be used for the purposes identified in subsection 2.5A(ii). Each
Lender's commitment to make Post-Conversion Loans pursuant to
this subsection 2.1A(ii) is herein called its "Post-Conversion
Commitment," and such commitments of all Lenders in the aggre-
gate are herein called the "Post-Conversion Commitments". The
amount of each Lender's Post-Conversion Commitment on the
Conversion Date shall equal the amount of such Lender's Pre-
Conversion Commitment immediately prior to Conversion; provided
that the Post-Conversion Commitments of Lenders shall be adjusted
to give effect to any assignments of the Commitments pursuant to
subsection 10.1; provided, further that the amount of the Post-
Conversion Commitments shall be reduced from time to time by the
amount of any reductions thereto made pursuant to subsections
2.4A, 2.4B(ii) and 2.4B(iii) or terminated as set forth in Section 8;
provided, further that the Post-Conversion Loans on the Conversion
Date shall be in an aggregate amount of the Pre-Conversion Loans
automatically converted pursuant to the Conversion plus the amount
of any Loans made on the Conversion Date. Each Lender's Post-
Conversion Commitment shall expire on the Commitment Termina-
tion Date and all Post-Conversion Loans and all other amounts
owed hereunder with respect to the Post-Conversion Loans and the
Post-Conversion Commitments shall be paid in full no later than
that date; provided that each Lender's Post-Conversion Commitment
shall expire immediately and without further action on May 31,
1995 if the initial Loans are not made on or before that date.
Amounts borrowed under this subsection 2.1A(ii) may be repaid
and reborrowed to but excluding the Commitment Termination
Date.
Anything contained in this Agreement to the contrary
notwithstanding, the Loans and the Post-Conversion Commitments
shall be subject to the limitation that in no event shall the Total
Utilization of Commitments at any time exceed the Commitments
then in effect.
B. Borrowing Mechanics. Loans made on any Funding
Date (other than Loans made pursuant to subsection 3.3B for the
purpose of reimbursing Issuing Lender for the amount of a drawing
under a Letter of Credit issued by it) shall be in an aggregate
minimum amount of $1,000,000 and, on and after the Conversion
Date, integral multiples of $100,000 in excess of that amount;
provided that Loans made on any Funding Date as Eurodollar Rate
Loans with a particular Interest Period shall be in an aggregate
minimum amount of $1,000,000 and integral multiples of $100,000
in excess of that amount. Subject to the next following paragraph,
whenever Partnership desires that Lenders make Loans it shall
deliver to Agent a Notice of Borrowing no later than 8:30 A.M.
(Pacific time) at least three Business Days in advance of the pro-
posed Funding Date (in the case of a Eurodollar Rate Loan) or at
least one Business Day in advance of the proposed Funding Date (in
the case of a Base Rate Loan). The Notice of Borrowing shall
specify (i) the proposed Funding Date (which shall be a Business
Day), (ii) the amount of Loans requested, (iii) in the case of Loans
made prior to the Completion of Construction Date, that such Loans
shall be Base Rate Loans, (iv) in the case of Loans made on and
after the Completion of Construction Date, whether such Loans
shall be Base Rate Loans or Eurodollar Rate Loans, (v) if Pre-
Conversion Loans, whether and what amount of such Loans will be
used for reimbursement of Short Term General Partner
Subordinated Debt or will be Working Capital Loans and (vi) in the
case of any Loans requested to be made as Eurodollar Rate Loans,
the initial Interest Period requested therefor. Loans may be contin-
ued as or converted into Base Rate Loans and Eurodollar Rate
Loans in the manner provided in subsection 2.2D.
Unless Agent, in its sole and absolute discretion, has
notified Partnership to the contrary, a Loan may be requested by
telephone by a duly authorized officer or other Person authorized to
borrow on behalf of Partnership, in which case Partnership shall
confirm such request by delivering promptly a Notice of Borrowing
with respect to such Loan in person or by telecopier to Agent.
Partnership and Lenders may enter a memorandum of understanding
that sets forth specific procedures for such telephonic requests; if
Lenders comply with the procedures set forth in such memorandum
(or if no such memorandum is entered), neither Agent nor any
Lender shall incur any liability to any Loan Party in acting upon
any such telephonic notice that Agent believes in good faith to have
been given by a duly authorized officer or other person authorized
to borrow on behalf of Partnership or for otherwise acting in good
faith under this subsection 2.1B, and upon funding of Loans by
Lenders in accordance with this Agreement pursuant to any such
telephonic notice Partnership shall have effected Loans hereunder.
Partnership shall notify Agent prior to the funding of
any Loans in the event that any of the matters to which Partnership
is required to certify in the applicable Notice of Borrowing is no
longer true and correct as of the applicable Funding Date, and the
acceptance by Partnership of the proceeds of any Loans shall
constitute a re-certification by Partnership, as of the applicable
Funding Date, as to the matters to which Partnership is required to
certify in the applicable Notice of Borrowing.
Except as otherwise provided in subsections 2.6B,
2.6C and 2.6G, a Notice of Borrowing for a Eurodollar Rate Loan
(or telephonic notice in lieu thereof) shall be irrevocable on and
after the related Interest Rate Determination Date, and Partnership
shall be bound to make a borrowing in accordance therewith.
C. Disbursement of Funds. All Loans under this
Agreement shall be made by Lenders severally and simultaneously
and in proportion to their respective Pro Rata Shares, it being
understood that no Lender shall be responsible for any default by
any other Lender in that other Lender's obligation to make a Loan
requested hereunder nor shall the Commitment of any Lender be
increased or decreased as a result of a default by any other Lender
in that other Lender's obligation to make a Loan requested hereun-
der. Promptly after receipt by Agent of a Notice of Borrowing
pursuant to subsection 2.1B (or telephonic notice in lieu thereof),
Agent shall notify each Lender of the proposed borrowing. Each
Lender shall make the amount of its Loan available to Agent, in
same day funds in Dollars, at the Funding and Payment Office, not
later than 1:00 P.M. (Pacific time) on the applicable Funding Date.
Except as provided in subsection 3.3B with respect to Loans used to
reimburse Issuing Lender for the amount of a drawing under a
Letter of Credit issued by it, upon satisfaction or waiver of the
conditions precedent specified in subsections 4.1 (in the case of
Loans made on the Closing Date), 4.2 (in the case of Pre-
Conversion Loans), 4.3 (in the case of Post-Conversion Loans) and
4.4 (in the case of all Loans), Agent shall make the proceeds of
such Loans available to Partnership on the applicable Funding Date
by causing an amount of same day funds in Dollars equal to the
proceeds of all such Loans received by Agent from Lenders to be
credited to the account of Partnership at the Funding and Payment
Office.
Unless Agent shall have been notified by any Lender
prior to the Funding Date for any Loans that such Lender does not
intend to make available to Agent the amount of such Lender's
Loan requested on such Funding Date, Agent may assume that such
Lender has made such amount available to Agent on such Funding
Date and Agent may, in its sole discretion, but shall not be
obligated to, make available to Partnership a corresponding amount
on such Funding Date. If such corresponding amount is not in fact
made available to Agent by such Lender, Agent shall be entitled to
recover such corresponding amount on demand from such Lender
together with interest thereon, for each day from such Funding Date
until the date such amount is paid to Agent, at the Federal Funds
Effective Rate for three Business Days and thereafter at the Base
Rate. If such Lender does not pay such corresponding amount
forthwith upon Agent's demand therefor, Agent shall promptly
notify Partnership and Partnership shall immediately pay such
corresponding amount to Agent together with interest thereon, for
each day from such Funding Date until the date such amount is paid
to Agent, at the rate payable under this Agreement for Base Rate
Loans. Nothing in this subsection 2.1C shall be deemed to relieve
any Lender from its obligation to fulfill its Commitment hereunder
or to prejudice any rights that Partnership may have against any
Lender as a result of any default by such Lender hereunder.
D. The Register.
(i) Agent shall maintain, at its address referred to
in subsection 10.8, a register for the recordation of the
names and addresses of Lenders and the Commitment and
Loans of each Lender from time to time (the "Register").
The Register shall be available for inspection by Partnership,
any Lender or any Gaming Board and their respective agents
at any reasonable time and from time to time upon
reasonable prior notice.
(ii) Agent shall record in the Register the
Commitment and the Loans from time to time of each
Lender and each repayment or prepayment in respect of the
principal amount of the Loans of each Lender. Any such
recordation shall be presumed to be correct; provided that
failure to make any such recordation, or any error in such
recordation, shall not affect Partnership's Obligations in
respect of the applicable Loans.
(iii) Each Lender shall record on its internal
records (including, without limitation, any Note held by such
Lender) the amount of each Loan made by it and each
payment in respect thereof. Any such recordation shall be
presumed to be correct; provided that failure to make any
such recordation, or any error in such recordation, shall not
affect Partnership's Obligations in respect of the applicable
Loans; and provided, further that in the event of any
inconsistency between the Register and any Lender's records,
the recordations in the Register shall govern.
(iv) Partnership, Agent and Lenders shall deem and
treat the Persons listed as Lenders in the Register as the
holders and owners of the corresponding Commitments and
Loans listed therein for all purposes hereof, and no
assignment or transfer of any such Commitment or Loan
shall be effective, in each case unless and until an
Assignment Agreement effecting the assignment or transfer
thereof shall have been accepted by Agent and recorded in
the Register as provided in subsection 10.1B(ii). Prior to
such recordation, all amounts owed with respect to the
applicable Commitment or Loan shall be owed to the Lender
listed in the Register as the owner thereof, and any request,
authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is
listed in the Register as a Lender shall be conclusive and
binding on any subsequent holder, assignee or transferee of
the corresponding Commitment or Loans.
(v) Partnership hereby designates FIB to serve as
Partnership's agent solely for purposes of maintaining the
Register as provided in this subsection 2.1D, and Partnership
hereby agrees that, to the extent FIB serves in such capacity,
FIB and its officers, directors, employees, agents and
affiliates shall constitute Indemnitees for all purposes under
subsection 10.3.
E. Optional Notes. If so requested by any Lender by
written notice to Partnership (with a copy to Agent) at least two
Business Days prior to the Closing Date or at any time thereafter,
Partnership shall execute and deliver to such Lender (and/or, if
applicable and if so specified in such notice, to any Person who is
an assignee of such Lender pursuant to subsection 10.1) on the
Closing Date (or, if such notice is delivered after the Closing Date,
promptly after Partnership's receipt of such notice) a promissory
note to evidence such Lender's Loans, substantially in the form of
Exhibit IV annexed hereto with appropriate insertions.
2.2 Interest on the Loans.
A. Rate of Interest. Subject to the provisions of
subsections 2.6 and 2.7, each Loan shall bear interest on the unpaid
principal amount thereof from the date made through maturity
(whether by acceleration or otherwise) at a rate determined by
reference to the Base Rate or the Adjusted Eurodollar Rate, as the
case may be. The applicable basis for determining the rate of
interest with respect to any Loan shall be selected by Partnership
initially at the time a Notice of Borrowing is given with respect to
such Loan pursuant to subsection 2.1B. The basis for determining
the interest rate with respect to any Loan may be changed from
time to time pursuant to subsection 2.2D. If on any day a Loan is
outstanding with respect to which notice has not been delivered to
Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that
day that Loan shall bear interest determined by reference to the
Base Rate.
Subject to the provisions of subsections 2.2E and 2.6,
the Loans shall bear interest through maturity as follows:
(i) Prior to the Conversion Date at the Base Rate.
(ii) On and after the Conversion Date and prior to the
fifth consecutive Fiscal Quarter following the Conversion Date, if a
Eurodollar Rate Loan, then at the sum of the Adjusted Eurodollar
Rate plus the Applicable Eurodollar Rate Margin plus 0.50% per
annum.
(iii) Commencing with the fifth consecutive Fiscal Quarter
following the Conversion Date, if a Eurodollar Rate Loan, then at
the sum of the Adjusted Eurodollar Rate plus the sum (the "All-In
Eurodollar Rate Margin") of (x) the Applicable Eurodollar Rate
Margin plus (y) a percentage per annum (the "Leverage
Increment") determined pursuant to either clause (a) or clause (b)
below;
EITHER
(a) If the Leverage Ratio (determined by
reference to the most recent Compliance Certificate delivered
pursuant to subsection 6.1(iv)) exceeds 3.00:1.00, 0.50% per
annum commencing on the first day of the Fiscal Quarter
immediately following delivery of such Compliance Certifi-
cate and throughout such Fiscal Quarter or, if no Compliance
Certificate has been delivered with respect to the
immediately preceding Fiscal Quarter as required by
subsection 6.1(iv), 0.50% per annum commencing on the
first day of the Fiscal Quarter immediately following the date
on which delivery of such Compliance Certificate was due
and throughout such Fiscal Quarter;
OR
(b) If the Leverage Ratio (determined by
reference to the most recent Compliance Certificate delivered
pursuant to subsection 6.1(iv)) is less than or equal to
3.00:1.00, 0.25% per annum commencing on the first day of
the Fiscal Quarter immediately following delivery of such
Compliance Certificate and throughout such Fiscal Quarter
or, if no Compliance Certificate has been delivered with
respect to the immediately preceding Fiscal Quarter as
required by subsection 6.1(iv), 0.50% per annum
commencing on the first day of the Fiscal Quarter
immediately following the date on which delivery of such
Compliance Certificate was due and throughout such Fiscal
Quarter.
(iv) On and after the Conversion Date, if a Base Rate Loan,
then at the sum of the Base Rate plus a percentage per annum (the
"Applicable Base Rate Margin") equal to the then applicable
All-In Eurodollar Rate Margin minus 1.00% per annum; provided
that the Applicable Base Rate Margin shall not be less than zero.
B. Interest Periods. In connection with each Eurodollar
Rate Loan, Partnership may, pursuant to the applicable Notice of
Borrowing or Notice of Conversion/Continuation, as the case may
be, select an interest period (each an "Interest Period") to be appli-
cable to such Loan, which Interest Period shall be, at Partnership's
option, either a one, two, three or six month period; provided that:
(i) the initial Interest Period for any Eurodollar
Rate Loan shall commence on the Funding Date in respect of
such Loan, in the case of a Loan initially made as a
Eurodollar Rate Loan, or on the date specified in the
applicable Notice of Conversion/Continuation, in the case of
a Loan converted to a Eurodollar Rate Loan;
(ii) in the case of immediately successive Interest
Periods applicable to a Eurodollar Rate Loan continued as
such pursuant to a Notice of Conversion/Continuation, each
successive Interest Period shall commence on the day on
which the immediately preceding Interest Period expires;
(iii) if an Interest Period would otherwise expire on
a day that is not a Business Day, such Interest Period shall
expire on the next succeeding Business Day; provided that, if
any Interest Period would otherwise expire on a day that is
not a Business Day but is a day of the month after which no
further Business Day occurs in such month, such Interest
Period shall expire on the next preceding Business Day;
(iv) any Interest Period that begins on the last
Business Day of a calendar month (or on a day for which
there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall, subject to
clause (v) of this subsection 2.2B, end on the last Business
Day of a calendar month;
(v) no Interest Period with respect to any portion
of the Loans shall extend beyond the Commitment
Termination Date;
(vi) no Interest Period with respect to any portion
of the Loans shall extend beyond the date on which a
permanent reduction of the Commitments is scheduled to
occur unless the sum of (a) the aggregate principal amount of
Loans that are Base Rate Loans plus (b) the aggregate
principal amount of Loans that are Eurodollar Rate Loans
with Interest Periods expiring on or before such date plus
(c) the excess of the Commitments then in effect over the
Total Utilization of Commitments as of such date equals or
exceeds the permanent reduction of the Commitments that is
scheduled to occur on such date;
(vii) there shall be no more than ten Interest Periods
outstanding at any time; and
(viii) in the event Partnership fails to specify an
Interest Period for any Eurodollar Rate Loan in the
applicable Notice of Borrowing or Notice of Conversion/
Continuation, Partnership shall be deemed to have selected
an Interest Period of one month.
C. Interest Payments. Subject to the provisions of
subsection 2.2E, interest on each Loan shall be payable in arrears
on and to each Interest Payment Date applicable to that Loan, upon
any prepayment of that Loan (to the extent accrued on the amount
being prepaid) and at maturity (including final maturity); provided
that in the event any Loans that are Base Rate Loans are prepaid
pursuant to subsection 2.4B(i), interest accrued on such Loans
through the date of such prepayment shall be payable on the next
succeeding Interest Payment Date applicable to Base Rate Loans
(or, if earlier, at final maturity).
D. Conversion or Continuation. Subject to the
provisions of subsection 2.6, Partnership shall have the option at
any time on or after the Conversion Date (i) to convert all or any
part of its outstanding Post-Conversion Loans equal to $1,000,000
and integral multiples of $100,000 in excess of that amount from
Loans bearing interest at a rate determined by reference to one basis
to Loans bearing interest at a rate determined by reference to an
alternative basis or (ii) upon the expiration of any Interest Period
applicable to a Eurodollar Rate Loan, to continue all or any portion
of such Loan equal to $1,000,000 and integral multiples of
$100,000 in excess of that amount as a Eurodollar Rate Loan;
provided, however, that a Eurodollar Rate Loan may only be
converted into a Base Rate Loan on the expiration date of an
Interest Period applicable thereto.
Subject to the next following paragraph, Partnership
shall deliver a Notice of Conversion/Continuation to Agent no later
than 10:00 A.M. (Pacific time) at least one Business Day in
advance of the proposed conversion date (in the case of a
conversion to a Base Rate Loan) and at least three Business Days in
advance of the proposed conversion/continuation date (in the case of
a conversion to, or a continuation of, a Eurodollar Rate Loan). A
Notice of Conversion/Continuation shall specify (i) the proposed
conversion/continuation date (which shall be a Business Day),
(ii) the amount and type of the Post-Conversion Loan to be convert-
ed/continued, (iii) the nature of the proposed conversion/
continuation, (iv) in the case of a conversion to, or a continuation
of, a Eurodollar Rate Loan, the requested Interest Period, and (v) in
the case of a conversion to, or a continuation of, a Eurodollar Rate
Loan, that no Potential Event of Default or Event of Default has
occurred and is continuing.
Unless Agent, in its sole and absolute discretion, has notified
Partnership to the contrary, a Loan may be requested by telephone
by a duly authorized officer or other Person authorized to borrow
on behalf of Partnership, in which case Partnership shall confirm
such request by delivering promptly a Notice of Borrowing with
respect to such Loan in person or by telecopier to Agent.
Partnership and Lenders may enter a memorandum of understanding
that sets forth specific procedures for such telephonic requests; if
Lenders comply with the procedures set forth in such memorandum
(or if no such memorandum is entered), neither Agent nor any
Lender shall incur any liability to Partnership in acting upon any
such telephonic notice that Agent believes in good faith to have
been given by a duly authorized officer or other person authorized
to act on behalf of Partnership or for otherwise acting in good faith
under this subsection 2.2D, and upon conversion or continuation of
the applicable basis for determining the interest rate with respect to
any Loans in accordance with this Agreement pursuant to any such
telephonic notice Partnership shall have effected a conversion or
continuation, as the case may be, hereunder.
Except as otherwise provided in subsections 2.6B,
2.6C and 2.6G, a Notice of Conversion/Continuation for conversion
to, or continuation of, a Eurodollar Rate Loan (or telephonic notice
in lieu thereof) shall be irrevocable on and after the related Interest
Rate Determination Date, and Partnership shall be bound to effect a
conversion or continuation in accordance therewith.
E. Post-Maturity Interest. Any principal payments on
the Loans not paid when due and, to the extent permitted by
applicable law, any interest payments on the Loans or any fees or
other amounts owed hereunder not paid when due, in each case
whether at stated maturity, by notice of prepayment (which may be
revoked by Partnership to the extent such revocation will not result
in the incurrence of costs by Agent or any Lender or, if incurred,
such costs are reimbursed by Partnership), by acceleration or
otherwise, shall thereafter bear interest (including post-petition
interest in any proceeding under the Bankruptcy Code or other
applicable bankruptcy laws) payable on demand at a rate which is
2% per annum in excess of the interest rate otherwise payable under
this Agreement with respect to the applicable Loans (or, in the case
of any such fees and other amounts, at a rate which is 2% per
annum in excess of the interest rate otherwise payable under this
Agreement for Base Rate Loans); provided that, in the case of
Eurodollar Rate Loans, upon the expiration of the Interest Period in
effect at the time any such increase in interest rate is effective such
Eurodollar Rate Loans shall thereupon become Base Rate Loans and
shall thereafter bear interest payable upon demand at a rate which is
2% per annum in excess of the interest rate otherwise payable under
this Agreement for Base Rate Loans. Payment or acceptance of the
increased rates of interest provided for in this subsection 2.2E is not
a permitted alternative to timely payment and shall not constitute a
waiver of any Event of Default or otherwise prejudice or limit any
rights or remedies of Agent or any Lender.
F. Computation of Interest. Interest on the Loans shall
be computed (i) in the case of Base Rate Loans, on the basis of a
365-day or 366-day year, as the case may be, and (ii) in the case of
Eurodollar Rate Loans, on the basis of a 360-day year, in each case
for the actual number of days elapsed in the period during which it
accrues. In computing interest on any Loan, the date of the making
of such Loan or the first day of an Interest Period applicable to
such Loan or, with respect to a Base Rate Loan being converted
from a Eurodollar Rate Loan, the date of conversion of such
Eurodollar Rate Loan to such Base Rate Loan, as the case may be,
shall be included, and the date of payment of such Loan or the
expiration date of an Interest Period applicable to such Loan or,
with respect to a Base Rate Loan being converted to a Eurodollar
Rate Loan, the date of conversion of such Base Rate Loan to such
Eurodollar Rate Loan, as the case may be, shall be excluded;
provided that if a Loan is repaid on the same day on which it is
made, one day's interest shall be paid on that Loan.
2.3 Fees.
A. Commitment Fees. Partnership agrees to pay to
Agent, for distribution to each Lender in proportion to that Lender's
Pro Rata Share, commitment fees for the period from and including
the Closing Date to and excluding the Commitment Termination
Date equal: (i) to the average of the daily excess of the Maximum
Facility Availability over the Total Utilization of Commitments
multiplied by (ii) (a) prior to the fifth consecutive Fiscal Quarter
following the Conversion Date, 0.50% per annum and
(b) commencing with such fifth consecutive Fiscal Quarter, the
applicable Leverage Increment, such commitment fees to be
calculated on the basis of a 365-day or 366-day year, as the case
may be, and the actual number of days elapsed and to be payable
quarterly in arrears on March 31, June 30, September 30 and
December 31 of each year, commencing on the first such date to
occur after the Closing Date, and on the Commitment Termination
Date.
B. Upfront Fee. Partnership agrees to pay to Agent, on
the Closing Date, a non-refundable one-time upfront fee in an
amount set forth in the Fee Letter for distribution to each Lender in
the amount set forth in a letter from Agent to such Lender.
C. Arrangement Fee and Servicing Fee. Partnership
agrees to pay to Agent a non-refundable arrangement fee and a non-
refundable servicing fee, payable in amounts set forth in the Fee
Letter.
2.4 Prepayments and Reductions in Commitments; General
Provisions Regarding Payments.
A. Scheduled Reductions of Commitments. The
Commitments shall be permanently reduced on the dates and in the
amounts set forth below:
Scheduled
Reduction
Date of
Commitments
September 30, 1996 6,250,000
December 31, 1996 6,250,000
March 31, 1997 6,250,000
June 30, 1997 6,250,000
September 30, 1997 5,000,000
December 31, 1997 5,000,000
March 31, 1998 5,000,000
June 30, 1998 6,000,000
September 30, 1998 6,000,000
December 31, 1998 6,000,000
March 31, 1999 6,000,000
June 30, 1999 6,000,000
September 30, 1999 6,000,000
December 31, 1999 6,000,000
March 31, 2000 6,000,000
June 30, 2000 7,000,000
September 30, 2000 Remaining
Outstanding
Loans
; provided that the scheduled reductions of the Commitments
set forth above shall be (i) reduced in connection with any
voluntary or mandatory reductions of the Commitments in
accordance with subsection 2.4B(iv) and (ii) accelerated to
the extent acceleration of the Loans occurs pursuant to
subsection 8.20B.
B. Prepayments and Unscheduled Reductions in
Commitments.
(i) Voluntary Prepayments. Partnership may,
upon not less than one Business Day's prior written or
telephonic notice, in the case of Base Rate Loans, and three
Business Days' prior written or telephonic notice, in the case
of Eurodollar Rate Loans, in each case given to Agent by
10:00 A.M. (Pacific time) on the date required and, if given
by telephone, promptly confirmed in writing to Agent (which
original written or telephonic notice Agent will promptly
transmit by telefacsimile or telephone to each Lender), at any
time and from time to time prepay any Loans on any
Business Day in whole or in part in an aggregate minimum
amount of $1,000,000 and integral multiples of $100,000 in
excess of that amount; provided, however, that a Eurodollar
Rate Loan may only be paid on the expiration of the Interest
Period applicable thereto. Notice of prepayment having been
given as aforesaid, the principal amount of the Loans
specified in such notice shall become due and payable on the
prepayment date specified therein; provided that such notice
may be revoked by Partnership to the extent such revocation
will not result in the incurrence of costs by Agent or any
Lender or, if incurred, such costs are reimbursed by
Partnership. Any such voluntary prepayment shall be
applied as specified in subsection 2.4B(iv).
(ii) Voluntary Reductions of Commitments.
Partnership may, upon not less than three Business Days'
prior written or telephonic notice confirmed in writing to
Agent (which original written or telephonic notice Agent will
promptly transmit by telefacsimile or telephone to each
Lender), at any time and from time to time terminate in
whole or permanently reduce in part, without premium or
penalty, the Commitments in an amount up to the amount by
which the Commitments exceed the Total Utilization of
Commitments at the time of such proposed termination or
reduction; provided that any such partial reduction of the
Commitments shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $100,000 in excess of
that amount. Partnership's notice to Agent shall designate
the date (which shall be a Business Day) of such termination
or reduction and the amount of any partial reduction, and
such termination or reduction of the Commitments shall be
effective on the date specified in Partnership's notice and
shall reduce the Commitment of each Lender proportionately
to its Pro Rata Share. Any such voluntary reduction of the
Commitments shall be applied as specified in subsection
2.4B(iv).
(iii) Mandatory Prepayments and Mandatory
Reductions of Commitments.
(a) Prepayments and Reductions Due to
Reversion of Surplus Assets of Pension Plans. On the
date of return to Partnership or any of its Subsidiaries
of any surplus assets of any pension plan (as defined
in Section 3(2) of ERISA) of Partnership or any of its
Subsidiaries, Partnership shall prepay the Loans, and
the Commitments shall be permanently reduced, in an
amount equal to 100% of such returned surplus
assets, net of transaction costs and expenses incurred
in obtaining such return, including incremental taxes
payable as a result thereof. Any such mandatory
prepayments or reductions of the Commitments shall
be applied as specified in subsection 2.4B(iv).
(b) Prepayments Due to Reductions or
Restrictions of Commitments. Partnership shall
prepay the Loans to the extent necessary so that the
Total Utilization of Commitments shall not at any
time exceed the Commitments then in effect.
Partnership shall make any prepayment required under
this subsection 2.4B(iii)(b) within three (3) Business
Days of the earlier of (x) the date on which any
Senior Officer of the Partnership learns that such
excess exists or (y) the date on which Partnership
receives written notice from any Lender that a
payment is due under this subsection 2.4B(iii)(b).
Any such mandatory prepayments shall be applied as
specified in subsection 2.4B(iv).
(c) Prepayments from Consolidated Available
Cash Flow. Upon delivery of each Compliance
Certificate delivered at, but, in any case, no later than
45 days after, the end of each of the eight full Fiscal
Quarters commencing with the first full Fiscal Quarter
beginning after the Conversion Date, Partnership shall
prepay the Loans, and the Commitments shall be
permanently reduced, in an amount equal to 50% of
the Consolidated Available Cash Flow for such full
Fiscal Quarter. Any such mandatory prepayments
shall be applied as specified in subsection 2.4B(iv).
(iv) Application of Prepayments and Unscheduled
Reductions of Commitments.
(a) Application of Prepayments to Base
Rate Loans and Eurodollar Rate Loans. Any
prepayment of the Loans shall be applied first to Base
Rate Loans to the full extent thereof before applica-
tion to Eurodollar Rate Loans, in each case in a
manner which minimizes the amount of any payments
required to be made by Partnership pursuant to
subsection 2.6D.
(b) Application of Unscheduled Reductions
of Commitments. Any voluntary or mandatory
reduction of the Commitments pursuant to subsection
2.4B(ii) or 2.4B(iii) shall be applied to reduce the
scheduled reductions of the Commitments set forth in
subsection 2.4A in reverse chronological order.
C. General Provisions Regarding Payments.
(i) Manner and Time of Payment. All payments
by Partnership of principal, interest, fees and other
Obligations hereunder and under the Notes shall be made in
Dollars in same day funds, without defense, set-off or
counterclaim, free of any restriction or condition, and
delivered to Agent not later than 12:00 Noon (Pacific time)
on the date due at the Funding and Payment Office for the
account of Lenders; funds received by Agent after that time
on such due date shall be deemed to have been paid by
Partnership on the next succeeding Business Day.
Partnership hereby authorizes Agent to charge its accounts
with Agent upon the occurrence and during the continuance
of an Event of Default, in order to cause timely payment to
be made to Agent of all principal, interest, fees and expenses
due hereunder (subject to sufficient funds being available in
its accounts for that purpose) and after such a charge is made
on sufficient funds available, payment of principal, interest
and fees under this subsection 2.4C shall be deemed to have
been made; provided however that until such occurrence and
continuance of an Event of Default Agent shall not charge
Partnership's accounts with Agent until receipt by Agent of
written authorization from Partnership in accordance with the
provisions of subsection 10.8.
(ii) Application of Payments to Principal and
Interest. All payments in respect of the principal amount of
any Loan shall include payment of accrued interest on the
principal amount being repaid or prepaid, and all such
payments shall be applied to the payment of interest before
application to principal.
(iii) Apportionment of Payments. Aggregate
principal and interest payments shall be apportioned among
all outstanding Loans to which such payments relate, in each
case proportionately to Lenders' respective Pro Rata Shares.
Agent shall promptly distribute to each Lender, at its
primary address set forth below its name on the appropriate
signature page hereof or at such other address as such
Lender may request, its Pro Rata Share of all such payments
received by Agent and the commitment fees of such Lender
when received by Agent pursuant to subsection 2.3.
Notwithstanding the foregoing provisions of this subsection
2.4C(iii), if, pursuant to the provisions of subsection 2.6C,
any Notice of Conversion/Continuation is withdrawn as to
any Affected Lender or if any Affected Lender makes Base
Rate Loans in lieu of its Pro Rata Share of any Eurodollar
Rate Loans, Agent shall give effect thereto in apportioning
payments received thereafter.
(iv) Payments on Business Days. Whenever any
payment to be made hereunder shall be stated to be due on a
day that is not a Business Day, such payment shall be made
on the next succeeding Business Day and such extension of
time shall be included in the computation of the payment of
interest hereunder or of the commitment fees hereunder, as
the case may be.
(v) Notation of Payment. Each Lender agrees that
before disposing of any Note held by it, or any part thereof
(other than by granting participations therein), that Lender
will make a notation thereon of all Loans evidenced by that
Note and all principal payments previously made thereon and
of the date to which interest thereon has been paid; provided
that the failure to make (or any error in the making of) a
notation of any Loan made under such Note shall not limit or
otherwise affect the obligations of any Loan Party hereunder
or under such Note with respect to any Loan or any pay-
ments of principal or interest on such Note.
2.5 Use of Proceeds.
A. (i) Pre-Conversion Loans. The proceeds of the
Pre-Conversion Loans shall be applied by Partnership, together with
other funds available to Partnership, (a) for Construction Costs and
(b) to reimburse Circus or Circus' Subsidiaries for Short Term
General Partner Subordinated Debt (including interest accrued
thereon). Partnership may apply the proceeds of Working Capital
Loans for working capital purposes.
(ii) Post-Conversion Loans. The proceeds of the
Post-Conversion Loans, together with other funds available to
Partnership, shall be applied by Partnership for (a) general business
purposes, including, without limitation, working capital purposes
and (b) any Construction Costs not paid with the proceeds of the
Pre-Conversion Loans.
B. Margin Regulations. No portion of the proceeds of
any borrowing under this Agreement shall be used by Partnership or
any of its Subsidiaries in any manner that might cause the
borrowing or the application of such proceeds to violate Regulation
G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of
such Board or to violate the Exchange Act, in each case as in effect
on the date or dates of such borrowing and such use of proceeds.
2.6 Special Provisions Governing Eurodollar Rate Loans.
Notwithstanding any other provision of this
Agreement to the contrary, the following provisions shall govern
with respect to Eurodollar Rate Loans as to the matters covered:
A. Determination of Applicable Interest Rate. As soon
as practicable after 8:30 A.M. (Pacific time) on each Interest Rate
Determination Date, Agent shall determine (which determination
shall, absent manifest error, be final, conclusive and binding upon
all parties) the interest rate that shall apply to the Eurodollar Rate
Loans for which an interest rate is then being determined for the
applicable Interest Period and shall promptly give notice thereof (in
writing or by telephone confirmed in writing) to Partnership and
each Lender.
B. Inability to Determine Applicable Interest Rate. In
the event that Agent shall have determined (which determination
shall be final and conclusive and binding upon all parties hereto),
on any Interest Rate Determination Date with respect to any
Eurodollar Rate Loans, that by reason of circumstances affecting
the interbank Eurodollar market adequate and fair means do not
exist for ascertaining the interest rate applicable to such Loans on
the basis provided for in the definition of Adjusted Eurodollar Rate,
Agent shall on such date give notice (by telefacsimile or by
telephone confirmed in writing) to Partnership and each Lender of
such determination, whereupon (i) no Loans may be made as, or
converted to, Eurodollar Rate Loans until such time as Agent
notifies Partnership and Lenders that the circumstances giving rise
to such notice no longer exist and (ii) any Notice of Borrowing or
Notice of Conversion/Continuation given by Partnership with
respect to the Loans in respect of which such determination was
made shall be deemed to be rescinded by Partnership.
C. Illegality or Impracticability of Eurodollar Rate
Loans. In the event that on any date any Lender shall have
determined (which determination shall be final and conclusive and
binding upon all parties hereto but shall be made only after
consultation with Partnership and Agent) that the making,
maintaining or continuation of its Eurodollar Rate Loans (i) has
become unlawful as a result of compliance by such Lender in good
faith with any law, treaty, governmental rule, central bank
directive, regulation, guideline or order (or would conflict with any
such treaty, governmental rule, regulation, guideline or order not
having the force of law even though the failure to comply therewith
would not be unlawful) or (ii) has become impracticable, or would
cause such Lender material hardship, as a result of contingencies
occurring after the date of this Agreement which materially and
adversely affect the interbank Eurodollar market or the position of
such Lender in that market, then, and in any such event, such
Lender shall be an "Affected Lender" and it shall on that day give
notice (by telefacsimile or by telephone confirmed in writing) to
Partnership and Agent of such determination (which notice Agent
shall promptly transmit to each other Lender). Thereafter (a) the
obligation of the Affected Lender to make Loans as, or to convert
Loans to, Eurodollar Rate Loans shall be suspended until such
notice shall be withdrawn by the Affected Lender, (b) to the extent
such determination by the Affected Lender relates to a Eurodollar
Rate Loan then being requested by Partnership pursuant to a Notice
of Borrowing or a Notice of Conversion/Continuation, the Affected
Lender shall make such Loan as (or convert such Loan to, as the
case may be) a Base Rate Loan, (c) the Affected Lender's
obligation to maintain its outstanding Eurodollar Rate Loans (the
"Affected Loans") shall be terminated at the earlier to occur of the
expiration of the Interest Period then in effect with respect to the
Affected Loans or when required by law, and (d) the Affected
Loans shall automatically convert into Base Rate Loans on the date
of such termination. Notwithstanding the foregoing, to the extent a
determination by an Affected Lender as described above relates to a
Eurodollar Rate Loan then being requested by Partnership pursuant
to a Notice of Borrowing or a Notice of Conversion/Continuation,
Partnership shall have the option, subject to the provisions of
subsection 2.6D, to rescind such Notice of Borrowing or Notice of
Conversion/Continuation as to all Lenders by giving notice (by
telefacsimile or by telephone confirmed in writing) to Agent of such
rescission on the date on which the Affected Lender gives notice of
its determination as described above (which notice of rescission
Agent shall promptly transmit to each other Lender). Except as
provided in the immediately preceding sentence, nothing in this
subsection 2.6C shall affect the obligation of any Lender other than
an Affected Lender to make or maintain Loans as, or to convert
Loans to, Eurodollar Rate Loans in accordance with the terms of
this Agreement.
D. Compensation For Breakage or Non-
Commencement of Interest Periods. Partnership shall compensate
each Lender, upon written request by that Lender (which request
shall set forth the basis for requesting such amounts), for all reason-
able losses, expenses and liabilities (including, without limitation,
any interest paid by that Lender to lenders of funds borrowed by it
to make or carry its Eurodollar Rate Loans and any loss, expense or
liability sustained by that Lender in connection with the liquidation
or re-employment of such funds) which that Lender may sustain:
(i) if for any reason (other than a default by that Lender) a
borrowing of any Eurodollar Rate Loan does not occur on a date
specified therefor in a Notice of Borrowing or a telephonic request
for borrowing, or a conversion to or continuation of any Eurodollar
Rate Loan does not occur on a date specified therefor in a Notice of
Conversion/Continuation or a telephonic request for conversion or
continuation, (ii) if any prepayment or other principal payment or
any conversion of any of its Eurodollar Rate Loans occurs on a date
prior to the last day of an Interest Period applicable to that Loan,
(iii) if any prepayment of any of its Eurodollar Rate Loans is not
made on any date specified in a notice of prepayment given by
Partnership, or (iv) as a consequence of any other default by
Partnership in the repayment of its Eurodollar Rate Loans when
required by the terms of this Agreement.
E. Booking of Eurodollar Rate Loans. Any Lender
may make, carry or transfer Eurodollar Rate Loans at, to, or for
the account of any of its branch offices or the office of an Affiliate
of that Lender.
F. Assumptions Concerning Funding of Eurodollar
Rate Loans. Calculation of all amounts payable to a Lender under
this subsection 2.6 and under subsection 2.7A shall be made as
though that Lender had actually funded each of its relevant
Eurodollar Rate Loans through the purchase of a Eurodollar deposit
bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Eurodollar Rate in an amount equal to the
amount of such Eurodollar Rate Loan and having a maturity
comparable to the relevant Interest Period and through the transfer
of such Eurodollar deposit from an offshore office of that Lender to
a domestic office of that Lender in the United States of America;
provided, however, that each Lender may fund each of its
Eurodollar Rate Loans in any manner it sees fit and the foregoing
assumptions shall be utilized only for the purposes of calculating
amounts payable under this subsection 2.6 and under subsection
2.7A.
G. Eurodollar Rate Loans After Default. After the
occurrence of and during the continuation of a Potential Event of
Default or an Event of Default, (i) Partnership may not elect to
have a Loan be made or maintained as, or converted to, a
Eurodollar Rate Loan after the expiration of any Interest Period
then in effect for that Loan and (ii) subject to the provisions of
subsection 2.6D, any Notice of Borrowing or Notice of Conversion/
Continuation given by Partnership with respect to a requested
borrowing or conversion/continuation that has not yet occurred shall
be deemed to be rescinded by Partnership.
2.7 Increased Costs; Taxes; Capital Adequacy.
A. Compensation for Increased Costs and Taxes.
Subject to the provisions of subsection 2.7B, in the event that any
Lender shall determine (which determination shall, absent manifest
error, be final and conclusive and binding upon all parties hereto)
that any law, treaty or governmental rule, regulation or order, or
any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law,
treaty or governmental rule, regulation or order), or any
determination of a court or governmental authority, in each case
that becomes effective after the date hereof, or compliance by such
Lender with any guideline, request or directive issued or made after
the date hereof by any central bank or other governmental or quasi-
governmental authority (whether or not having the force of law):
(i) subjects such Lender (or its applicable lending
office) to any additional Tax (other than any Tax on the
overall net income of such Lender) with respect to this
Agreement or any of its obligations hereunder or any
payments to such Lender (or its applicable lending office) of
principal, interest, fees or any other amount payable
hereunder;
(ii) imposes, modifies or holds applicable any
reserve (including without limitation any marginal,
emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar
requirement against assets held by, or deposits or other
liabilities in or for the account of, or advances or loans by,
or other credit extended by, or any other acquisition of funds
by, any office of such Lender (other than any such reserve
or other requirements with respect to Eurodollar Rate Loans
that are reflected in the definition of Adjusted Eurodollar
Rate); or
(iii) imposes any other condition (other than with
respect to a Tax matter) on or affecting such Lender (or its
applicable lending office) or its obligations hereunder or the
interbank Eurodollar market;
and the result of any of the foregoing is to increase the cost to such
Lender of agreeing to make, making or maintaining Loans
hereunder or to reduce any amount received or receivable by such
Lender (or its applicable lending office) with respect thereto; then,
in any such case, Partnership shall promptly pay to such Lender,
upon receipt of the statement referred to in the next sentence, such
additional amount or amounts (in the form of an increased rate of,
or a different method of calculating, interest or otherwise as such
Lender in its sole discretion shall determine) as may be necessary to
compensate such Lender for any such increased cost or reduction in
amounts received or receivable hereunder. Such Lender shall
deliver to Partnership (with a copy to Agent) a written statement,
setting forth in reasonable detail the basis for calculating the
additional amounts owed to such Lender under this subsection 2.7A,
which statement shall be conclusive and binding upon all parties
hereto absent manifest error.
B. Withholding of Taxes.
(i) Payments to Be Free and Clear. All sums
payable by Partnership under this Agreement and the other
Loan Documents shall be paid free and clear of and (except
to the extent required by law) without any deduction or
withholding on account of any Tax (other than a Tax on the
overall net income of any Lender) imposed, levied,
collected, withheld or assessed by or within the United States
of America or any political subdivision in or of the United
States of America or any other jurisdiction from or to which
a payment is made by or on behalf of Partnership or by any
federation or organization of which the United States of
America or any such jurisdiction is a member at the time of
payment.
(ii) Grossing-up of Payments. If Partnership or
any other Person is required by law to make any deduction
or withholding on account of any such Tax (other than a Tax
on the overall net income of any Lender) from any sum paid
or payable by Partnership to Agent or any Lender under any
of the Loan Documents:
(a) Partnership shall notify Agent of any
such requirement or any change in any such
requirement as soon as Partnership becomes aware of
it;
(b) Partnership shall pay any such Tax
(other than a Tax on the overall net income of any
Lender) before the date on which penalties attach
thereto, such payment to be made (if the liability to
pay is imposed on Partnership) for its own account or
(if that liability is imposed on Agent or such Lender,
as the case may be) on behalf of and in the name of
Agent or such Lender;
(c) the sum payable by Partnership in
respect of which the relevant deduction, withholding
or payment is required shall be increased to the extent
necessary to ensure that, after the making of that
deduction, withholding or payment, Agent or such
Lender, as the case may be, receives on the due date
a net sum equal to what it would have received had
no such deduction, withholding or payment been
required or made; and
(d) within 30 days after paying any sum
from which it is required by law to make any
deduction or withholding, and within 30 days after the
due date of payment of any Tax which it is required
by clause (b) above to pay, Partnership shall deliver
to Agent evidence satisfactory to the other affected
parties of such deduction, withholding or payment and
of the remittance thereof to the relevant taxing or
other authority;
(iii) Evidence of Exemption from U.S. Withholding
Tax.
(a) Each Lender that is organized under the
laws of any jurisdiction other than the United States
or any state or other political subdivision thereof (for
purposes of this subsection 2.7B(iii), a "Non-US
Lender") shall deliver to Agent for transmission to
Partnership, on or prior to the Closing Date (in the
case of each Lender listed on the signature pages
hereof) or on the date of the Assignment Agreement
pursuant to which it becomes a Lender (in the case of
each other Lender), and at such other times as may be
necessary in the determination of Partnership or Agent
(each in the reasonable exercise of its discretion),
(1) two original copies of Internal Revenue Service
Form 1001 or 4224 (or any successor forms),
properly completed and duly executed by such
Lender, together with any other certificate or state-
ment of exemption required under the Internal
Revenue Code or the regulations issued thereunder to
establish that such Lender is not subject to deduction
or withholding of United States federal income tax
with respect to any payments to such Lender of
principal, interest, fees or other amounts payable
under any of the Loan Documents or (2) if such
Lender is not a "bank" or other Person described in
Section 881(c)(3) of the Internal Revenue Code and
cannot deliver either Internal Revenue Service Form
1001 or 4224 pursuant to clause (1) above, a
Certificate re Non-Bank Status together with two
original copies of Internal Revenue Service Form W-8
(or any successor form), properly completed and duly
executed by such Lender, together with any other
certificate or statement of exemption required under
the Internal Revenue Code or the regulations issued
thereunder to establish that such Lender is not subject
to deduction or withholding of United States federal
income tax with respect to any payments to such
Lender of interest payable under any of the Loan
Documents.
(b) Each Lender required to deliver any
forms, certificates or other evidence with respect to
United States federal income tax withholding matters
pursuant to subsection 2.7B(iii)(a) hereby agrees,
from time to time after the initial delivery by such
Lender of such forms, certificates or other evidence,
whenever a lapse in time or change in circumstances
renders such forms, certificates or other evidence
obsolete or inaccurate in any material respect, such
Lender shall (1) deliver to Agent for transmission to
Partnership two new original copies of Internal
Revenue Service Form 1001 or 4224, or a Certificate
re Non-Bank Status and two original copies of
Internal Revenue Service Form W-8, as the case may
be, properly completed and duly executed by such
Lender, together with any other certificate or
statement of exemption required in order to confirm
or establish that such Lender is not subject to deduc-
tion or withholding of United States federal income
tax with respect to payments to such Lender under the
Loan Documents or (2) immediately notify Agent and
Partnership of its inability to deliver any such forms,
certificates or other evidence.
(c) Partnership shall not be required to pay
any additional amount to any Non-US Lender under
clause (c) of subsection 2.7B(ii) if such Lender shall
have failed to satisfy the requirements of subsection
2.7B(iii)(a); provided that if such Lender shall have
satisfied such requirements on the Closing Date (in
the case of each Lender listed on the signature pages
hereof) or on the date of the Assignment Agreement
pursuant to which it became a Lender (in the case of
each other Lender), nothing in this subsection
2.7B(iii)(c) shall relieve Partnership of its obligation
to pay any additional amounts pursuant to clause (c)
of subsection 2.7B(ii) in the event that, as a result of
any change in any applicable law, treaty or
governmental rule, regulation or order, or any change
in the interpretation, administration or application
thereof, such Lender is no longer properly entitled to
deliver forms, certificates or other evidence at a
subsequent date establishing the fact that such Lender
is not subject to withholding as described in
subsection 2.7B(iii)(a).
C. Capital Adequacy Adjustment. If any Lender shall
have determined that the adoption, effectiveness, phase-in or
applicability after the date hereof of any law, rule or regulation (or
any provision thereof) regarding capital adequacy, or any change
therein or in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by
any Lender (or its applicable lending office) with any guideline,
request or directive regarding capital adequacy (whether or not
having the force of law) of any such governmental authority, central
bank or comparable agency, has or would have the effect of
reducing the rate of return on the capital of such Lender or any
corporation controlling such Lender as a consequence of, or with
reference to, such Lender's Loans or Commitment or Letters of
Credit or participations therein or other obligations hereunder with
respect to the Loans or the Letters of Credit to a level below that
which such Lender or such controlling corporation could have
achieved but for such adoption, effectiveness, phase-in,
applicability, change or compliance (taking into consideration the
policies of such Lender or such controlling corporation with regard
to capital adequacy), then from time to time, within five Business
Days after receipt by Partnership from such Lender of the statement
referred to in the next sentence, Partnership shall pay to such
Lender such additional amount or amounts as will compensate such
Lender or such controlling corporation on an after-tax basis for such
reduction. Such Lender shall deliver to Partnership (with a copy to
Agent) a written statement, setting forth in reasonable detail the
basis of the calculation of such additional amounts, which statement
shall be conclusive and binding upon all parties hereto absent
manifest error.
2.8 Obligation of Lenders and Issuing Lender to Mitigate.
Each Lender and Issuing Lender agrees that, as
promptly as practicable after the officer of such Lender or Issuing
Lender responsible for administering the Loans or Letters of Credit
of such Lender or Issuing Lender, as the case may be, becomes
aware of the occurrence of an event or the existence of a condition
that would cause such Lender to become an Affected Lender or that
would entitle such Lender or Issuing Lender to receive payments
under subsection 2.7 or subsection 3.6, it will, to the extent not
inconsistent with the internal policies of such Lender or Issuing
Lender and any applicable legal or regulatory restrictions, use
reasonable efforts (i) to make, issue, fund or maintain the
Commitment of such Lender or the affected Loans or Letters of
Credit of such Lender or Issuing Lender through another lending or
letter of credit office of such Lender or Issuing Lender, or (ii) take
such other measures as such Lender or Issuing Lender may deem
reasonable, if as a result thereof the circumstances which would
cause such Lender to be an Affected Lender would cease to exist or
the additional amounts which would otherwise be required to be
paid to such Lender or Issuing Lender pursuant to subsection 2.7 or
subsection 3.6 would be materially reduced and if, as determined by
such Lender or Issuing Lender in its sole discretion, the making,
issuing, funding or maintaining of such Commitment or Loans or
Letters of Credit through such other lending or letter of credit office
or in accordance with such other measures, as the case may be,
would not otherwise materially adversely affect such Commitment
or Loans or Letters of Credit or the interests of such Lender or
Issuing Lender; provided that such Lender or Issuing Lender will
not be obligated to utilize such other lending or letter of credit
office pursuant to this subsection 2.8 unless Partnership agrees to
pay all incremental expenses incurred by such Lender or Issuing
Lender as a result of utilizing such other lending or letter of credit
office as described in clause (i) above. A certificate as to the
amount of any such expenses payable by Partnership pursuant to
this subsection 2.8 (setting forth in reasonable detail the basis for
requesting such amount) submitted by such Lender or Issuing
Lender to Partnership (with a copy to Agent) shall be conclusive
absent manifest error.
Section 3. LETTERS OF CREDIT
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein.
A. Letters of Credit. In addition to Partnership
requesting that Lenders make Loans pursuant to subsection 2.1A,
Partnership may request, in accordance with the provisions of this
subsection 3.1, from time to time during the period from the
Closing Date to but excluding the Commitment Termination Date,
that Issuing Lender issue Letters of Credit for the account of
Partnership for the purposes specified in the definition of Standby
Letters of Credit. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties
of the Loan Parties set forth in the Loan Documents, Issuing Lender
shall be obligated, as provided in subsection 3.1B(ii), to issue such
Letters of Credit in accordance with the provisions of this
subsection 3.1; provided that Partnership shall not request that
Issuing Lender issue (and Issuing Lender shall not issue):
(i) any Letter of Credit if, after giving effect to
such issuance, the Total Utilization of Commitments would
exceed the Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to
such issuance, the Letter of Credit Usage would exceed
$5,000,000;
(iii) any Standby Letter of Credit having an
expiration date later than the earlier of (a) the Commitment
Termination Date and (b) the date that is one year from the
date of issuance of such Standby Letter of Credit; provided
that the immediately preceding clause (b) shall not prevent
Issuing Lender from agreeing that a Standby Letter of Credit
will automatically be extended for one or more successive
periods not to exceed one year each unless Issuing Lender
elects not to extend for any such additional period; provided,
further that Issuing Lender shall deliver a written notice to
Agent setting forth the last day on which Issuing Lender may
give notice that it will not extend such Standby Letter of
Credit (the "Notification Date" with respect to such Standby
Letter of Credit) at least ten Business Days prior to such
Notification Date; and provided, further that, unless Lenders
otherwise consent, Issuing Lender shall give notice that it
will not extend such Standby Letter of Credit if it has
knowledge that an Event of Default has occurred and is
continuing on such Notification Date; or
(iv) any Letter of Credit denominated in a currency
other than Dollars.
B. Mechanics of Issuance.
(i) Notice of Issuance. Whenever Partnership
desires the issuance of a Letter of Credit, it shall deliver to
Agent a Notice of Issuance of Letter of Credit substantially
in the form of Exhibit III annexed hereto no later than 10:00
A.M. (Pacific time) at least 5 Business Days, or such shorter
period as may be agreed to by the Issuing Lender in any
particular instance, in advance of the proposed date of
issuance. The Notice of Issuance of Letter of Credit shall
specify (a) the proposed date of issuance (which shall be a
Business Day), (b) the face amount of the Letter of Credit,
(c) the expiration date of the Letter of Credit, (d) the name
and address of the beneficiary, and (e) the verbatim text of
the proposed Letter of Credit or the proposed terms and
conditions thereof, including a precise description of any
documents and the verbatim text of any certificates to be
presented by the beneficiary that, if presented by the
beneficiary prior to the expiration date of the Letter of
Credit, would require the Issuing Lender to make payment
under the Letter of Credit; provided that the Issuing Lender,
in its reasonable discretion, may require changes in the text
of the proposed Letter of Credit or any such documents or
certificates; and provided, further that no Letter of Credit
shall require payment against a conforming draft to be made
thereunder on the same business day (under the laws of the
jurisdiction in which the office of the Issuing Lender to
which such draft is required to be presented is located) that
such draft is presented if such presentation is made after
10:00 A.M. (in the time zone of such office of the Issuing
Lender) on such business day.
Partnership shall notify the Issuing Lender
prior to the issuance of any Letter of Credit in the event that
any of the matters to which Partnership is required to certify
in the applicable Notice of Issuance of Letter of Credit is no
longer true and correct as of the proposed date of issuance of
such Letter of Credit, and upon the issuance of any Letter of
Credit Partnership shall be deemed to have re-certified, as of
the date of such issuance, as to the matters to which
Partnership is required to certify in the applicable Notice of
Issuance of Letter of Credit.
(ii) Issuing Lender. Subject to the terms and
conditions hereof, upon receipt by Agent of a Notice of
Issuance of Letter of Credit pursuant to subsection 3.1B(i)
requesting the issuance of a Letter of Credit, Agent shall be
the Issuing Lender with respect thereto. Agent shall be
obligated to issue such Letter of Credit and shall be the
Issuing Lender with respect thereto, notwithstanding the fact
that the Letter of Credit Usage with respect to such Letter of
Credit and with respect to all other Letters of Credit issued
by Agent, when aggregated with Agent's outstanding Loans,
may exceed Agent's Commitment then in effect.
(iii) Issuance of Letter of Credit. Upon satisfaction
or waiver (in accordance with subsection 10.6) of the
conditions set forth in subsection 4.5, the Issuing Lender
shall issue the requested Letter of Credit in accordance with
the Issuing Lender's standard operating procedures.
(iv) Notification to Lenders. Upon the issuance of
any Letter of Credit the Issuing Lender shall promptly notify
each other Lender of such issuance, which notice shall be
accompanied by a copy of such Letter of Credit. Promptly
after receipt of such notice, Agent shall notify each Lender
of the amount of such Lender's respective participation in
such Letter of Credit, determined in accordance with
subsection 3.1C.
(v) Reports to Lenders. Within 15 days after the
end of each calendar quarter ending after the Closing Date,
so long as any Letter of Credit shall have been outstanding
during such calendar quarter, Issuing Lender shall deliver to
each other Lender a report setting forth the average for such
calendar quarter of the daily maximum amount available to
be drawn under the Letters of Credit issued by Issuing
Lender that were outstanding during calendar quarter.
C. Lenders' Purchase of Participations in Letters of
Credit. Immediately upon the issuance of each Letter of Credit,
each Lender (including the Lender that acts as Issuing Lender) shall
be deemed to, and hereby agrees to, have irrevocably purchased
from the Issuing Lender a participation in such Letter of Credit and
drawings thereunder in an amount equal to such Lender's Pro Rata
Share of the maximum amount which is or at any time may become
available to be drawn thereunder.
3.2 Letter of Credit Fees.
Partnership agrees to pay the following amounts to
Issuing Lender with respect to Letters of Credit issued by it:
(A) with respect to each Standby Letter of Credit,
a letter of credit fee (calculated, in the case of clause (i), on
the basis of a 360-day year and the actual number of days
elapsed) in an amount equal to the greater of (i) the product
of the maximum aggregate amount that is, or at any time,
may become available for drawing with respect to such
Letter of Credit multiplied by the All-In Eurodollar Rate
Margin and (ii) $500; which amount shall be payable in
advance upon issuance for the term of such Letter of Credit.
(B) with respect to the issuance, amendment or
transfer of each Letter of Credit and each drawing made
thereunder (in addition to the fees payable under clause (i)
above), documentary and processing charges in accordance
with Issuing Lender's standard schedule for such charges in
effect at the time of such issuance, amendment, transfer or
drawing, as the case may be.
Promptly upon receipt by Issuing Lender of any amount described
in clause (A) of this subsection 3.2, Issuing Lender shall distribute
to each other Lender its Pro Rata Share of such amount.
3.3 Drawings and Reimbursement of Amounts Drawn Under
Letters of Credit.
A. Responsibility of Issuing Lender With Respect to
Drawings. In determining whether to honor any drawing under any
Letter of Credit by the beneficiary thereof, the Issuing Lender shall
be responsible only to determine that the documents and certificates
required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements
of such Letter of Credit.
B. Reimbursement by Partnership of Amounts Drawn
Under Letters of Credit. In the event Issuing Lender has
determined to honor a drawing under a Letter of Credit issued by it,
Issuing Lender shall immediately notify Partnership and Agent, and
Partnership shall reimburse Issuing Lender on or before the
Business Day immediately following the date on which such
drawing is honored (the "Reimbursement Date") in an amount in
Dollars and in same day funds equal to the amount of such drawing;
provided that, anything contained in this Agreement to the contrary
notwithstanding, (i) unless Partnership shall have notified Agent and
Issuing Lender prior to 8:30 A.M. (Pacific time) on the date of
such drawing that Partnership intends to reimburse Issuing Lender
for the amount of such drawing with funds other than the proceeds
of Loans, Partnership shall be deemed to have given a timely
Notice of Borrowing to Agent requesting Lenders to make Loans
that are Base Rate Loans on the Reimbursement Date in an amount
in Dollars equal to the amount of such drawing and (ii) subject only
to satisfaction or waiver of the conditions specified in subsection
4.5B, Lenders shall, on the Reimbursement Date, make Loans that
are Base Rate Loans in the amount of such drawing, the proceeds of
which shall be applied directly by Agent to reimburse Issuing
Lender for the amount of such drawing; and provided, further that
if for any reason proceeds of Loans are not received by Issuing
Lender on the Reimbursement Date in an amount equal to the
amount of such drawing, Partnership shall reimburse Issuing
Lender, on demand, in an amount in same day funds equal to the
excess of the amount of such drawing over the aggregate amount of
such Loans, if any, that are so received. Nothing in this subsection
3.3B shall be deemed to relieve any Lender from its obligation to
make Loans on the terms and conditions set forth in this
Agreement, and Partnership shall retain any and all rights it may
have against any Lender resulting from the failure of such Lender to
make such Loans under this subsection 3.3B.
C. Payment by Lenders of Unreimbursed Drawings
Under Letters of Credit.
(i) Payment by Lenders. In the event that
Partnership shall fail for any reason to reimburse Issuing
Lender as provided in subsection 3.3B in an amount equal to
the amount of any drawing honored by Issuing Lender under
a Letter of Credit issued by it, Issuing Lender shall promptly
notify each other Lender of the unreimbursed amount of such
drawing and of such other Lender's respective participation
therein based on such Lender's Pro Rata Share. Each
Lender shall make available to Issuing Lender an amount
equal to its respective pro rata participation, in Dollars and
in same day funds, at the office of Issuing Lender specified
in such notice, not later than 1:30 P.M. (Pacific time) on the
first business day (under the laws of the jurisdiction in which
such office of Issuing Lender is located) after the date
notified by Issuing Lender. In the event that any Lender
fails to make available to Issuing Lender on such business
day the amount of such Lender's participation in such Letter
of Credit as provided in this subsection 3.3C, Issuing Lender
shall be entitled to recover such amount on demand from
such Lender together with interest thereon at the Federal
Funds Effective Rate for three Business Days and thereafter
at the Base Rate. Nothing in this subsection 3.3C shall be
deemed to prejudice the right of any Lender to recover from
Issuing Lender any amounts made available by such Lender
to Issuing Lender pursuant to this subsection 3.3C in the
event that it is determined by the final judgment of a court of
competent jurisdiction that the payment with respect to a
Letter of Credit by Issuing Lender in respect of which
payment was made by such Lender constituted gross
negligence or willful misconduct on the part of Issuing
Lender.
(ii) Distribution to Lenders of Reimbursements
Received From Partnership. In the event Issuing Lender
shall have been reimbursed by other Lenders pursuant to
subsection 3.3C(i) for all or any portion of any drawing
honored by Issuing Lender under a Letter of Credit issued by
it, Issuing Lender shall distribute to each other Lender which
has paid all amounts payable by it under subsection 3.3C(i)
with respect to such drawing such other Lender's Pro Rata
Share of all payments subsequently received by Issuing
Lender from Partnership in reimbursement of such drawing
within five (5) Business Days of the date when such
payments are received by Issuing Lender. Any such distri-
bution shall be made to a Lender at its primary address set
forth below its name on the appropriate signature page
hereof or at such other address as such Lender may request.
D. Interest on Amounts Drawn Under Letters of
Credit.
(i) Payment of Interest by Partnership.
Partnership agrees to pay to Issuing Lender, with respect to
drawings made under any Letters of Credit issued by it,
interest on the amount paid by Issuing Lender in respect of
each such drawing from and including the date of such
drawing to but excluding the date such amount is reimbursed
by Partnership (including any such reimbursement out of the
proceeds of Loans pursuant to subsection 3.3B) at a rate
equal to (a) for the period from the date of such drawing to
but excluding the Reimbursement Date, the rate then in
effect under this Agreement with respect to Loans that are
Base Rate Loans and (b) thereafter, a rate which is 2% per
annum in excess of the rate of interest otherwise payable
under this Agreement with respect to Loans that are Base
Rate Loans; provided that in no event shall interest accrue
for two days when a drawing and the reimbursement of
amounts paid in respect of such drawing occur on
consecutive days. Interest payable pursuant to this
subsection 3.3D(i) shall be computed on the basis of a 360-
day year for the actual number of days elapsed in the period
during which it accrues and shall be payable on demand or,
if no demand is made, on the date on which the related
drawing under a Letter of Credit is reimbursed in full.
(ii) Distribution of Interest Payments by Issuing
Lender. Promptly upon receipt by Issuing Lender of any
payment of interest pursuant to subsection 3.3D(i) with
respect to a drawing under a Letter of Credit issued by it, in
the event Issuing Lender shall have been reimbursed by other
Lenders pursuant to subsection 3.3C(i) for all or any portion
of such drawing, Issuing Lender shall distribute to each other
Lender which has paid all amounts payable by it under
subsection 3.3C(i) with respect to such drawing such other
Lender's proportionate share (based on the amount
reimbursed to the Issuing Lender pursuant to subsection
3.3C(i)) of any interest received by Issuing Lender in respect
of that portion of such drawing so reimbursed by other
Lenders for the period from the date on which Issuing
Lender was so reimbursed by other Lenders to and including
the date on which such portion of such drawing is
reimbursed by Partnership. Any such distribution shall be
made by Issuing Lender within five (5) Business Days of its
receipt of such payment from Partnership to a Lender at its
primary address set forth below its name on the appropriate
signature page hereof or at such other address as such
Lender may request.
3.4 Obligations Absolute.
The obligation of Partnership to reimburse Issuing
Lender for drawings made under the Letters of Credit issued by it
and to repay any Loans made by Lenders pursuant to subsection
3.3B and the obligations of Lenders under subsection 3.3C(i) shall
be unconditional and irrevocable and shall be paid strictly in
accordance with the terms of this Agreement under all
circumstances including, without limitation, the following
circumstances:
(i) any lack of validity or enforceability of any
Letter of Credit;
(ii) the existence of any claim, set-off, defense or
other right which Partnership or any Lender may have at any
time against a beneficiary or any transferee of any Letter of
Credit (or any Persons for whom any such transferee may be
acting), Issuing Lender or other Lender or any other Person
or, in the case of a Lender, against Partnership, whether in
connection with this Agreement, the transactions
contemplated herein or any unrelated transaction (including
any underlying transaction between Partnership or one of its
Subsidiaries and the beneficiary for which any Letter of
Credit was procured);
(iii) any draft, demand, certificate or other
document presented under any Letter of Credit proving to be
forged, fraudulent, invalid or insufficient in any respect or
any statement therein being untrue or inaccurate in any
respect;
(iv) payment by the Issuing Lender under any
Letter of Credit against presentation of a demand, draft or
certificate or other document which does not comply with the
terms of such Letter of Credit;
(v) any adverse change in the business, operations,
properties, assets, condition (financial or otherwise) or
prospects of Partnership or any of its Subsidiaries;
(vi) any breach of this Agreement or any other
Loan Document by any party thereto;
(vii) any other circumstance or happening
whatsoever, whether or not similar to any of the foregoing;
or
(viii) the fact that an Event of Default or a Potential
Event of Default shall have occurred and be continuing;
provided, in each case, that payment by the Issuing Lender under
the applicable Letter of Credit shall not have constituted gross
negligence or willful misconduct of Issuing Lender under the
circumstances in question (as determined by a final judgment of a
court of competent jurisdiction).
3.5 Indemnification; Nature of Issuing Lender's Duties.
A. Indemnification. In addition to amounts payable as
provided in subsection 3.6, Partnership hereby agrees to protect,
indemnify, pay and save harmless Issuing Lender from and against
any and all claims, demands, liabilities, damages, losses, costs,
charges and expenses (including reasonable fees, expenses and
disbursements of counsel and allocated costs of internal counsel)
which Issuing Lender may incur or be subject to as a consequence,
direct or indirect, of (i) the issuance of any Letter of Credit by
Issuing Lender, other than as a result of (a) the gross negligence or
willful misconduct of Issuing Lender as determined by a final
judgment of a court of competent jurisdiction or (b) subject to the
following clause (ii), the wrongful dishonor by Issuing Lender of a
proper demand for payment made under any Letter of Credit issued
by it or (ii) the failure of Issuing Lender to honor a drawing under
any such Letter of Credit as a result of any act or omission,
whether rightful or wrongful, of any present or future de jure or de
facto government or governmental authority (all such acts or
omissions herein called "Governmental Acts").
B. Nature of Issuing Lender's Duties. As between
Partnership and Issuing Lender, Partnership assumes all risks of the
acts and omissions of, or misuse of the Letters of Credit issued by
Issuing Lender by, the respective beneficiaries of such Letters of
Credit. In furtherance and not in limitation of the foregoing, but
subject to the last paragraph of this subsection 3.5, Issuing Lender
shall not be responsible for: (i) the form, validity, sufficiency,
accuracy, genuineness or legal effect of any document submitted by
any party in connection with the application for and issuance of any
such Letter of Credit, even if it should in fact prove to be in any or
all respects invalid, insufficient, inaccurate, fraudulent or forged;
(ii) the validity or sufficiency of any instrument transferring or
assigning or purporting to transfer or assign any such Letter of
Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for
any reason; (iii) failure of the beneficiary of any such Letter of
Credit to comply fully with any conditions required in order to
draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages,
by mail, cable, telegraph, telex or otherwise, whether or not they
be in cipher; (v) errors in interpretation of technical terms; (vi) any
loss or delay in the transmission or otherwise of any document
required in order to make a drawing under any such Letter of
Credit or of the proceeds thereof; (vii) the misapplication by the
beneficiary of any such Letter of Credit of the proceeds of any
drawing under such Letter of Credit; or (viii) any consequences
arising from causes beyond the control of Issuing Lender, including
without limitation any Governmental Acts, and none of the above
shall affect or impair, or prevent the vesting of, any of Issuing
Lender's rights or powers hereunder.
In furtherance and extension and not in limitation of
the specific provisions set forth in the first paragraph of this
subsection 3.5B, any action taken or omitted by Issuing Lender
under or in connection with the Letters of Credit issued by it or any
documents and certificates delivered thereunder, if taken or omitted
in good faith, shall not put Issuing Lender under any resulting
liability to Partnership.
Notwithstanding anything to the contrary contained in
this subsection 3.5, Partnership shall retain any and all rights it may
have against Issuing Lender for any liability arising solely out of the
gross negligence or willful misconduct of Issuing Lender, as
determined by a final judgment of a court of competent jurisdiction.
3.6 Increased Costs and Taxes Relating to Letters of Credit.
In the event that Issuing Lender or any Lender shall
determine (which determination shall be presumed to be correct)
that any law, treaty or governmental rule, regulation or order, or
any change therein or in the interpretation, administration or
application thereof (including the introduction of any new law,
treaty or governmental rule, regulation or order), or any
determination of a court or governmental authority, in each case
that becomes effective after the date hereof, or compliance by
Issuing Lender or any Lender with any guideline, request or
directive issued or made after the date hereof by any central bank or
other governmental or quasi-governmental authority (whether or not
having the force of law):
(i) subjects such Issuing Lender or Lender (or its
applicable lending or letter of credit office) to any additional
Tax (other than any Tax on the overall net income of such
Issuing Lender or Lender) with respect to the issuing or
maintaining of any Letters of Credit or the purchasing or
maintaining of any participations therein or any other
obligations under this Section 3, whether directly or by such
being imposed on or suffered by Issuing Lender;
(ii) imposes, modifies or holds applicable any
reserve (including without limitation any marginal,
emergency, supplemental, special or other reserve), special
deposit, compulsory loan, FDIC insurance or similar require-
ment in respect of any Letters of Credit issued by Issuing
Lender or participations therein purchased by any Lender; or
(iii) imposes any other condition (other than with
respect to a Tax matter) on or affecting such Issuing Lender
or Lender (or its applicable lending or letter of credit office)
regarding this Section 3 or any Letter of Credit or any
participation therein;
and the result of any of the foregoing is to increase the cost to such
Issuing Lender or Lender of agreeing to issue, issuing or
maintaining any Letter of Credit or agreeing to purchase,
purchasing or maintaining any participation therein or to reduce any
amount received or receivable by such Issuing Lender or Lender (or
its applicable lending or letter of credit office) with respect thereto;
then, in any case, Partnership shall promptly pay to such Issuing
Lender or Lender, upon receipt of the statement referred to in the
next sentence, such additional amount or amounts as may be neces-
sary to compensate such Issuing Lender or Lender for any such
increased cost or reduction in amounts received or receivable
hereunder. Such Issuing Lender or Lender shall deliver to
Partnership a written statement, setting forth in reasonable detail the
basis for calculating the additional amounts owed to such Issuing
Lender or Lender under this subsection 3.6, which statement shall
be conclusive and binding upon all parties hereto absent manifest
error.
Section 4. CONDITIONS TO LOANS AND LETTERS OF
CREDIT
The obligations of Lenders to make Loans and the
issuance of Letters of Credit hereunder are subject to the
satisfaction of the following conditions.
4.1 Conditions to Initial Loans.
The obligations of Lenders to make any Loans to be
made on the Closing Date are, in addition to satisfaction of the
conditions precedent specified in subsection 4.4, subject to prior or
concurrent satisfaction of the following conditions:
A. Partnership Documents. On or before the Closing
Date, Partnership shall deliver or cause to be delivered to Lenders
(or one originally executed copy to Agent and, in the case of the
Credit Agreement, sufficient originally executed copies for each
Lender to Agent) the following, each, unless otherwise noted, dated
the Closing Date:
(i) Copies of the Joint Venture Agreement
certified by an Executive Committee Signatory, together with
a certified fictitious business name statement from the
Secretary of State of Nevada, any recorded Statement of
Partnership filed with the county recorder for the County of
Washoe and, to the extent generally available, a certificate or
other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate
taxing authority of any state in which Partnership does
business, each dated a recent date prior to the Closing Date;
(ii) Resolutions of the Board of Directors of each
General Partner, in each case, in its capacity as a general
partner of Partnership, and of the Executive Committee, each
approving and authorizing the execution, delivery and perfor-
mance of this Agreement and the other Loan Documents to
which Partnership is a party, and the certificates and notices
related thereto or to be delivered thereunder on behalf of
Partnership, certified, in the case of each General Partner's
resolutions as of the Closing Date by such General Partner's
or its Manager's secretary or an assistant secretary and by an
Executive Committee Signatory, respectively, as being in full
force and effect without modification or amendment and, in
each case, copies so certified of resolutions authorizing each
General Partner or its Manager in its capacity as manager of
such General Partner to execute this Agreement and the other
Loan Documents to which Partnership is a party;
(iii) Signature and incumbency certificates of
officers of each General Partner or its Manager and
Executive Committee Signatories executing this Agreement,
the other Loan Documents and all certificates related thereto
or to be delivered thereunder to which Partnership is a party.
(iv) Executed originals of this Agreement, any
Notes, the Security Agreement, the Deed of Trust, the
Assignment of Rents and Revenues, the Collateral Account
Agreement, the Subordination and Debt Put Agreement and
the other Loan Documents to which Partnership is a party;
and
(v) Such other documents as Agent may
reasonably request.
B. Certain Partnership Parents' Documents. On or
before the Closing Date, each of Circus, Recreational Enterprises,
Hotel-Casino Management, Eldorado Hotel Associates and General
Partners shall deliver or cause to be delivered to Lenders (or to
Agent for Lenders) the following, each, unless otherwise noted,
dated the Closing Date:
(i) Certified copies of its Articles of Incorporation
or Organization or charter documents, together with, as
applicable, a good standing certificate from the Secretary of
State of the state of its incorporation or organization and
each other state in which it is qualified as a foreign
corporation, partnership or limited liability company to do
business and, to the extent generally available, a certificate
or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate
taxing authority of each of such states, each dated a recent
date prior to the Closing Date;
(ii) Copies of its Bylaws or Operating Agreement,
certified as of the Closing Date by its or its managing
general partner's secretary or an assistant secretary;
(iii) Resolutions of its or its managing general
partner's Board of Directors, approving and authorizing the
execution, delivery and performance of the Environmental
Indemnities and each other Loan Document to which it is a
party, certified as of the Closing Date by its or its managing
general partner's secretary or an assistant secretary as being
in full force and effect without modification or amendment;
(iv) Signature and incumbency certificates of
officers of its or its managing general partner executing the
Loan Documents to which it is a party;
(v) Executed originals of the Circus Completion
Guaranty, the Make-Well Agreement, the Eldorado
Completion Guaranty and/or the other Loan Documents to
which it is a party; and
(vi) An Officers' Certificate from Circus dated as
of the Closing Date attesting that attached thereto are true,
correct and complete copies of the Circus Revolving Loan
Agreements and all amendments thereto, supplements thereto
or modifications thereof.
C. Opinions of Loan Parties' Counsel. Lenders and
their respective counsel shall have received (i) originally executed
copies of one or more favorable written opinions of Fox,
Rothschild, O'Brien and Frankel, special counsel for Partnership
and Circus, Jones, Jones, Close & Brown, Chartered, Nevada
counsel for Partnership and Circus, and MacDonald Carano Wilson
McCune Bergin Frankovich & Hicks, counsel with respect to
certain zoning issues, for Partnership, dated as of the Closing Date
and setting forth substantially the matters in the opinions designated
in Exhibit VI annexed hereto and as to such other matters as Agent
acting on behalf of Lenders may reasonably request and
(ii) evidence satisfactory to Agent that Partnership has requested
such counsel to deliver such opinions to Lenders.
D. Opinions of Agent's Counsel. Lenders shall have
received originally executed copies of one or more favorable written
opinions of O'Melveny & Myers, counsel to Agent, dated as of the
Closing Date, substantially in the form of Exhibit VII annexed
hereto and as to such other matters as Agent acting on behalf of
Lenders may reasonably request.
E. Perfection of Security Interests. Partnership shall
have taken or caused to be taken such actions in such a manner so
that Agent, for the benefit of Lenders, has a valid and perfected
first priority security interest in all Collateral in which a Lien is
purported to be granted by the Collateral Documents or any of
them, executed as of the Closing Date. Such actions shall include,
without limitation: (i) the delivery to Agent of Uniform
Commercial Code financing statements, executed by Partnership as
to the Collateral granted by Partnership for all jurisdictions as may
be necessary or desirable to perfect Agent's security interest in such
collateral; (ii) evidence that counterparts of the Deed of Trust and
Assignment of Rents and Revenues were recorded in all locations to
the extent necessary or desirable, in the reasonable judgment of
Agent, effectively to create a valid and enforceable first priority
Lien (subject only to Permitted Encumbrances) on the Premises in
favor of Agent for the benefit of Lenders and (iii) evidence
reasonably satisfactory to Agent that all other filings, recordings
and other actions Agent deems necessary or advisable to establish,
preserve and perfect the first priority Liens (subject to the Liens
permitted under subsection 7.2) granted to Agent, for the benefit of
Lenders, in the Collateral shall have been made.
F. Title Policy. Agent and Lenders shall have received
an American Land Title Association ("ALTA") extended coverage
mortgagee form of title insurance policy (the "Title Policy") (with
proof of the payment of the premiums thereon) or commitment
therefor in form and substance acceptable to Lenders issued by a
title company approved by Lenders (the "Title Company"),
together with coinsurance and reinsurance from title insurance
companies approved by Lenders, insuring the lien of the Deed of
Trust to be a first lien against the Premises, free and clear of all
defects, encumbrances and exceptions, except those approved by
Lenders and its counsel, together with such affirmative insurance as
Lenders may require. The Title Policy shall contain, among other
things:
(i) full coverage against mechanic's liens (filed
and inchoate)
(ii) a foundation endorsement;
(iii) a contiguity endorsement;
(iv) a reference to the survey but no survey
exceptions except those theretofore approved in writing by
Agent and its counsel;
(v) Form 100, 116 and 116.1 endorsements;
(vi) an access to public streets endorsement;
(vii) a variable interest rate endorsement; and
(viii) a "revolving credit line endorsement".
G. Survey. Agent and Lenders shall have received a
current survey prepared by a surveyor acceptable to Lenders and
licensed as a land surveyor in the State of Nevada, that shall (a) be
satisfactory, in form, scope and substance, to Lenders, and
(b) contain the legal description of the Premises and certifications in
form, scope and substance satisfactory to Agent, from the surveyor
to Agent and the Title Company.
H. Flood Insurance. Agent shall have been provided
with satisfactory evidence, which may be in the form of a letter
from an insurance broker, municipal engineer, land surveyor or
other knowledgeable source unaffiliated with Partnership, as to
whether (a) the Premises is located in an area designated by the
Department of Housing and Urban Development as having special
flood or mudslide hazards, and (b) the community in which the
Project is located is participating in the National Flood Insurance
Program. If both of the aforesaid conditions exist, Agent shall
receive satisfactory policies of flood insurance covering the
Improvements as required by the Flood Act.
I. Equity Contribution. Agent shall have received an
Officers' Certificate from officers of each General Partner and
Executive Committee Signatories that attest to contributions to
Partnership by the General Partners in the form of Cash and the
Premises, with an aggregate value of not less than $130,000,000
(including as the value of the Premises the amount set forth therefor
in Section 2 of the Joint Venture Agreement as in effect as of the
Closing Date) to be used for the acquisition and development of the
Project, in exchange for any combination of partnership interests of
Partnership and General Partner Subordinated Debt, together with
copies of the Subordinated Debt Documents.
J. Governmental Authorizations. Agent shall have
received a certificate executed by Executive Committee Signatories
that Partnership has obtained all Governmental Authorizations
(including, without limitation, Governmental Authorizations from
Gaming Boards) necessary to permit the construction of the Project
to have progressed to the point reached by the Closing Date, to
permit such construction to continue unhindered from and after the
Closing Date and to ensure that operation of the Project, if
completed in accordance with the Plans, may commence upon
Completion of Construction.
K. Insurance. Agent shall have received evidence,
satisfactory to Agent, of insurance required to be procured and
maintained pursuant to subsection 6.4 hereof and Section 8 of the
Security Agreement and subsection 6 of the Deed of Trust
indicating that, with respect to casualty insurance, such policies of
insurance have been endorsed to name Agent, on behalf of Lenders,
as loss payee pursuant to a standard mortgagee clause and, with
respect to liability insurance, such policies of insurance name
Agent, on behalf of Lenders, as an additional insured.
L. Opinion from Architect. An opinion of the
Architect, or other person acceptable to Agent, in form and
substance satisfactory to Agent addressed to Agent and each Lender
that to the best of such Architect's knowledge and belief after
review of the Plans and all the drawings, plans, specifications and
other documents prepared in connection with all Change Orders:
(i) the Plans have been prepared in conformity
with all statutes, codes, rules, orders, ordinances, regulations
or requirements of any Governmental Authorities applicable
to the Improvements (including, but not limited to, zoning,
environmental, ecological, landmark and all other applicable
categories) and restrictions, covenants, leases and easements
affecting the Premises (collectively the "Requirements and
Restrictions") and the Project, if constructed in accordance
with the Plans, will not violate any of the Requirements and
Restrictions;
(ii) the Project, if constructed in accordance with
the Plans, can be constructed without zoning variances or
other extraordinary planning permits; and
(iii) the Project, if constructed in accordance with
the Plans, will comply with the Americans With Disabilities
Act.
Such opinion shall also contain such other matters as
Agent or its counsel may reasonably request.
M. UCC and Judgment Searches. Agent shall have
received current searches of the UCC filing offices and judgment
searches with the Offices of the Secretary of State of Nevada and
the local recorder's office in Washoe County and elsewhere
showing no security interests or judgments affecting the Premises,
the Project or Partnership other than those provided for herein.
N. Condemnation. Agent shall have received an
Officers' Certificate in form and substance satisfactory to it to the
effect that no condemnation proceedings shall be pending or
threatened by any representative of any condemning authority
against the Premises that would in any way impair the construction
or full utilization of the Project.
O. Appraisal. Agent shall have received the Appraisal
which shall demonstrate that the Commitments, as of the Closing
Date, do not exceed 75% of the stabilized value of the Project.
P. Necessary Consents. On or before the Closing Date,
each Loan Party shall have obtained all consents to the transactions
contemplated under this Agreement and the other Loan Documents,
of any Person required under any Contractual Obligation of any
Loan Party, including, without limitation, approval of the terms of
the Loans by the Executive Committee pursuant to subsection 5.9(c)
of the Joint Venture Agreement and by the General Partners, all of
the foregoing in form and substance satisfactory to Agent.
Q. Environmental Indemnities. Lenders shall have
received the Environmental Indemnities in form, scope and
substance satisfactory to Lenders.
R. Construction Consultant's Contract. Agent and
Lenders shall have received a copy of the Construction Consultant's
Contract.
S. Utility Services. Partnership shall have furnished
evidence satisfactory to the Lenders that all utility services required
for the Project are available and in adequate supply at the respective
connection points to the Project on or at the Premises.
T. The Budget. Agent and Lenders shall have received
and approved the Budget.
U. Construction Schedule. Agent and Lenders shall
have received and approved a detailed schedule for the construction
of the Project and corresponding expenditures (the "Construction
Schedule"), which Construction Schedule shall show, among other
things, a trade-by-trade breakdown of the estimated periods of
commencement and completion of the work of each such trade and
the Projected Completion of Construction Date.
V. Plans. Agent and Lenders shall have approved the
Plans for the Project, to the extent available as of the Closing Date.
The Plans shall be scheduled by sheet number, title, date and
revised date, which schedule shall be true and correct, and such
Plans will include the filed plans referred to in any site permit for
the Project and show the construction and labor, materials,
equipment and fixtures necessary to Finally Complete Construction.
W. Architect's Contract. Agent and Lenders shall have
received and approved a true, correct and complete copy of the
fully executed contract by and between Partnership and Architect.
X. General Contractor's Contract, Consultant's
Contracts and Change Orders. Agent and Lenders shall have
(a) received and approved (i) a list of all Contractors (1) who have
executed subcontracts or (2) who are conducting negotiations to
work on the Project and (ii) copies of the General Contractor's
Contract, the General Contractor's standard form subcontract and a
copy of the Consent to Assignment of General Contractor's
Contract executed by the General Contractor and (b) reviewed and
approved copies of each Change Order and pending Change Order
submitted to Partnership as of the Closing Date; provided however,
that Partnership need only deliver to Agent copies of the signature
page of such Change Orders and grid summary pages that set forth
the total amount approved by such Change Order. Partnership shall
have used its best efforts to obtain and deliver to Agent consents to
the assignment of the Consultant's Contracts pursuant to the
Security Agreement from each of the Consultants.
Y. Cost to Complete. Agent and Lenders shall have
determined in the exercise of their reasonable discretion that the
Project can be built for an amount less than or equal to the amount
specified therefor in the Budget.
Z. Auditor's Letter. Agent shall have received an
executed Auditor's Letter.
AA. Fees. Partnership shall have paid to Agent, for
distribution (as appropriate) to Agent and Lenders, the fees payable
on the Closing Date referred to in subsection 2.3.
BB. No Material Adverse Effect. Since December 31,
1994, no Material Adverse Effect (in the sole discretion of Agent
and Lenders) shall have occurred.
CC. Representations and Warranties; Performance of
Agreements. Partnership shall have delivered to Agent an Officers'
Certificate from each General Partner and Executive Committee
Signatories, in form and substance satisfactory to Agent, to the
effect that the representations and warranties in Section 5 hereof are
true, correct and complete on and as of the Closing Date to the
same extent as though made on and as of that date and that
Partnership shall have performed all agreements and satisfied all
conditions which this Agreement provides shall be performed or
satisfied by it on or before the Closing Date except as otherwise
disclosed to and agreed to in writing by Agent and Lenders.
DD. Completion of Proceedings. All corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not
previously found acceptable by Agent, acting on behalf of Lenders,
and its counsel shall be satisfactory in form and substance to Agent
and such counsel, and Agent and such counsel shall have received
all such counterpart originals or certified copies of such documents
as Agent may reasonably request.
4.2 Conditions to Subsequent Advances Under the Pre-
Conversion Loans.
The obligations of Lenders to make any Advances
(other than Advances that are Working Capital Loans which
Advances shall be made subject only to the provisions of
subsections 4.2A and 4.4) after the Closing Date but prior to the
Conversion Date are, in addition to satisfaction of the conditions
precedent specified in subsection 4.4, subject to the prior or
concurrent satisfaction of the following conditions:
A. General Conditions.
(i) Advances shall be made no more often than
weekly and not closer together than five (5) days after the
date of the immediately preceding Advance (unless the
Lenders otherwise shall consent) and shall be used for the
purposes set forth in subsection 2.5A(i).
(ii) Each Advance shall be in the amount requested
by Partnership subject to the minimum amounts set forth in
subsection 2.1B; provided that such amount shall not cause
the Total Utilization of Commitments to exceed the
Construction Costs Incurred after the Closing Date and
through the date of the Requisition with respect to such
Advance plus the Short Term General Partner Subordinated
Debt (other than Short Term General Partner Subordinated
Debt which is to be repaid with the proceeds of such
Advance) plus the aggregate amount of all Working Capital
Loans; provided further that Agent shall be satisfied that
there exists adequate Documentary Support for the amount
requested; provided further that the amount of any Advance
shall be reduced to the extent Agent reasonably determines
that amounts previously Advanced on the basis of one or
more previously delivered Requisitions exceed the amounts
for which there exists Documentary Support satisfactory to
Agent.
(iii) Prior to each Advance, Agent shall have
received from the Title Company an endorsement to the Title
Policy extending the coverage to be provided thereby to
include the date and the full amount of the requested
disbursement, without exception for mechanics' liens or
claims of liens, or any other matter not previously approved
by Agent in writing. Such endorsement shall insure the
Deed of Trust to be a first lien on the Project, subject only
to the Liens permitted to exist pursuant to the Deed of Trust
as at the Closing Date and Permitted Encumbrances.
(iv) The Project shall not have been materially
damaged by fire or other casualty, or if damaged, Agent as
loss payee shall have received insurance proceeds in the
manner, amount and as contemplated by subsection 7 of the
Deed of Trust and such proceeds shall be sufficient in the
judgment of Agent to effect the satisfactory restoration of the
Project and to permit the Completion of Construction to
occur prior to the Projected Completion of Construction Date
set forth on the Construction Schedule and in accordance
with all of the terms and provisions of this Agreement.
(v) Advances shall be payable within one (1)
Business Day after satisfaction of all conditions to the
requested disbursement.
B. Modifications to the Budget or Construction
Schedule. From time to time, Partnership or Lenders may
determine that modifications are necessary to the budget amounts
set forth in the Budget because of actual or anticipated changes in
Construction Costs or to the Construction Schedule because of
actual or anticipated changes to the timing set forth therein. If a
Material Overrun has at any time occurred and is continuing and
Partnership and Lenders do not agree on what modifications need to
be made to the Budget, the determination of Lenders shall control
for purposes of this Agreement, unless Partnership delivers a letter
of credit or other security acceptable to Lenders in its sole
discretion for the disputed amount. No changes shall be made to
the Construction Schedule that would postpone either the Projected
Completion of Construction Date or the Projected Final Completion
Date by more than 45 days, in either case without the consent of
Lenders.
C. Material Overrun. If a Material Overrun
occurs, Partners, Partnership Parents or any of them shall, within
ten days after such Material Overrun, contribute cash (the
"Overrun Contribution") to Partnership, in exchange for General
Partner Subordinated Debt, in an amount at least equal to the excess
necessary or projected as necessary to Finally Complete
Construction over the 10% threshold amount that triggers a Material
Overrun (the amount of such excess, the "Overrun Excess
Amount"); provided that if none of Partners, Partnership Parents or
any of them makes such contribution then Requisite Lenders may
elect not to make, and Partnership shall not be entitled to receive,
Loans or other disbursements pursuant hereto (excluding Loans for
interest drawn by and paid to Agent on behalf of Lenders or for the
purpose of reimbursing Issuing Lender for the amount of a drawing
under a Letter of Credit issued by it) and may exercise any of the
other remedies available to them under subsection 8.20; provided
further that this Agreement shall not obligate Eldorado Hotel
Associates, Recreational Enterprises or Hotel-Casino Management
to make such Overrun Contribution. The next Construction Costs
Incurred after such Material Overrun shall be paid from such
Overrun Contribution and no Construction Costs Incurred shall be
paid with the proceeds of the Loans until such Overrun Contribution
is exhausted.
D. Draw Request Documents. With each request
for an Advance, Partnership shall furnish to Agent and Agent shall
have received and approved of a Requisition, that includes or
attaches:
(i) a schedule that sets forth the Primary Items,
Construction Costs Incurred and paid against such Primary
Items to the date of such Requisition, estimated Construction
Costs to Finally Complete Construction, Construction Costs
for which Partnership is committed pursuant to contract to
the date of such Requisition, together with the break-out of
Primary Items (including Pre-Opening Expenses), all in
substantially the form prepared for internal Project funding
prior to the Closing Date;
(ii) a certification from Partnership that the
conditions of this subsection 4.2 have been complied with;
(iii) calculations showing whether a Material
Overrun has occurred;
(iv) a request for Lenders' consent to any changes
in the Budget or the Construction Schedule or in any other
item for which Lenders' consent is required but has not yet
been obtained;
(v) copies of Change Order signature pages and
grid summary pages that set forth the total amount approved
by all Change Orders since the immediately preceding
Requisition, a list of all Change Orders then contemplated or
under negotiation, and a representation by Partnership as to
whether Change Orders executed or to be executed after the
Closing Date that would cause the Primary Item entitled
"Base Building Construction" plus the Primary Item entitled
"Contingency" to exceed $263,359,608 by $25 million or
more individually or in the aggregate; and
(vi) to the extent requested by Agent, after
Advances have been decreased pursuant to subsection
4.2A(ii) by $10,000,000 or more in the aggregate or upon
the occurrence and during the continuation of an Event of
Default:
(a) Documentary Support;
(b) copies of all subcontracts, inspection or
test reports, licenses, permits, approvals, payment and
performance bonds and proofs of payment not
previously delivered to Agent;
(c) an updated list of the subcontractors
(and copies of their contracts) who will be working on
the Project; and
(d) As to a phase of construction that has
been completed, copies of any required reports or
approvals covering structural and mechanical work
and certifications or other appropriate written
statements from the Community Development
Services for the City of Reno, Nevada for electrical
work with respect to such phase.
E. Change Orders. Any non-material changes in
the Construction Contracts or Plans and specifications need not be
submitted to Agent for prior approval; provided, however, if (i)
Change Orders are executed or will be executed in addition to those
Change Orders that are accounted for in the Budget as of the
Closing Date either as (a) part of the General Contractor's Contract
or (b) within the contingency line item of the Budget ("New
Change Orders") and (ii) such New Change Orders individually or
in the aggregate, when added to any increase in Construction Costs
that were to be incurred as part of the General Contractor's
Contract as of the Closing Date but since have been contracted for
separately, will cause the Primary Item entitled "Base Building
Construction" plus the Primary Item entitled "Contingency" to
exceed $263,359,608 by $25 million or more, then, commencing
with the Change Order that will cause such aggregate total to
exceed $263,359,608 by $25 million or more, each subsequent
Change Order must be approved by Requisite Lenders prior to its
execution or commencement of any work pursuant to such Change
Order, which consent shall not be withheld unreasonably.
F. Conditions After Material Overrun. Upon
the occurrence and during the continuation of a Material Overrun:
(i) Agent and Consulting Engineer, if any, shall
have the right to review, and Agent or Requisite Lenders
shall have the right to approve or disapprove all Contractors
that will execute Construction Contracts prior to their
engagement.
(ii) All Governmental Authorizations from
Governmental Authorities necessary to complete the work
contemplated by the Plans shall be obtained and furnished to
Agent and Consulting Engineer, if any, as soon as available
and in any case within 5 days of receipt, and if Agent or
Requisite Lenders shall deem any such Governmental
Authorizations inadequate to complete the work contemplated
in the Plans, no Advances shall be made;
(iii) Agent, Lenders and Consulting Engineer, if
any, shall receive notice of all proposed revisions to the
Plans and, if Agent or Requisite Lenders so request, Agent
shall receive a letter from the Architect to the effect that any
proposed revision to the Plans not reviewed by the Architect
at the time of delivery of the Architect's Letter are in
conformity with the Plans, or, if not, an adequate description
of the variations from the Plans;
(iv) If requested by Agent or Requisite Lenders,
Agent and Lenders shall receive a report from Consulting
Engineer with respect to any proposed revision to the Plans,
the Budget or the Construction Schedule in form, scope and
substance satisfactory to Agent;
(v) If requested by Agent or Requisite Lenders,
Agent and Lenders shall receive completed form certificates
from General Contractor, and/or the Architect with respect
to the state of completion and, in the case of General
Contractor, the amounts paid to subcontractors at the
Premises within 5 days of such request; and
(vi) If necessary in the judgment of Agent or
Requisite Lenders or the Title Company, Partnership, within
thirty (30) days after written notice to Partnership, shall
furnish to Agent a survey certified to Agent and the Title
Company updated by inspection with respect to all relevant
requirements and information.
G. Advances Without Requests.
(i) Notwithstanding anything herein to the
contrary and without regard to the minimum Pre-Conversion
Loan amounts set forth in subsection 2.1B, Partnership
hereby authorizes Agent, acting at the direction of Requisite
Lenders, to disburse proceeds of the Loans to pay: (a) after
an Event of Default, interest and fees owing on the Loans on
the dates when interest and fees are due and owing in
accordance with the terms of any Notes and the other Loan
Documents; (b) all costs of title searches or abstracts,
document taxes, stamp taxes and recording expenses that
have not been paid directly by Partnership in a timely
manner; (c) after a Material Overrun, any Consulting
Engineer's fees and expenses incurred that have not been
paid directly by Partnership in a timely manner; (d) after an
Event of Default, fees and expenses for any services of any
Consulting Engineer that may be required in addition to
those normally contemplated by this Agreement; and
(e) notwithstanding that Partnership may not have requested
an Advance of such amount, after the occurrence of a
Potential Event of Default or an Event of Default and subject
to the further provisions of the Deed of Trust, all costs, fees
and expenses due to (A) contractors, subcontractors,
laborers, materialmen or other persons furnishing labor,
services or materials used or to be used on or in connection
with the Project, (B) taxing authorities or insurers in
payment of taxes or hazard, liability or title insurance
premiums when due, and/or (C) the holder of any Lien on
the Premises or Project or Partnership's interest therein, as
necessary to discharge such Lien. With the consent of
Requisite Lenders, Agent in its sole discretion without
Partnership's consent may make such Advances
notwithstanding the fact there has been a Material Overrun,
that a Potential Event of Default or an Event of Default
exists under the terms of this Agreement or any of the other
Loan Documents. The authorization hereby granted shall be
irrevocable, and no further direction or authorization from
Partnership shall be necessary for Agent to make such
disbursements. The provisions of this subsection 4.2G,
however, shall neither require Agent to make such
Advances, nor prevent Partnership from paying interest and
fees from its own funds. Any Pre-Conversion Loan so made
shall be deemed to be a Base Rate Loan made to and
received by Partnership and shall be added to the unpaid
principal balance of the Pre-Conversion Loans. Agent will
promptly advise Partnership of the making of any Loan
pursuant to this subsection 4.2G, and such notice shall set
forth, in detail, a description of those items that were paid
with the proceeds of such Loans.
(ii) If Lenders consider that Lenders' best interests
and the best interests of the Project lie in accelerating the
amounts to be advanced pursuant to this subsection 4.2 for
payment of Construction Costs Lenders shall be entitled to
do so and no person dealing with the Partnership or General
Contractor or any other person shall have standing to
demand any different performance from Lenders.
(iii) Notwithstanding the provisions of subsection
2.1C, disbursements may be made by Agent directly to the
third parties entitled to payment. All sums so advanced by
direct payment shall satisfy pro tanto the obligations of
Lenders under this Agreement; and Lenders shall have no
obligation to see to the disposition by any such Person of any
direct payments made to such Person.
4.3 Conditions to Advances under the Post-Conversion Loans.
The obligations of Lenders to make any Post-
Conversion Loans to be made on and after the Conversion Date are,
in addition to satisfaction of the conditions precedent specified in
subsection 4.4, subject to the prior or concurrent satisfaction of the
following conditions:
A. Conversion. Pre-Conversion Loan Commitments
shall have terminated and the Conversion shall have occurred.
B. Title Policy. Agent shall have received from the
Title Company an endorsement to the Title Policy extending the
coverage to be provided thereby to include the Conversion Date and
the full amount of the Post-Conversion Commitments, without
exception for mechanic's liens or clauses of liens, or any matter not
previously approved by Agent in writing. Such endorsement shall
insure the Deed of Trust to be a first lien on the Project, subject
only to the Liens permitted to exist pursuant to the Deed of Trust
and Permitted Encumbrances.
C. Lien Waivers. Partnership shall have obtained
Combined Lien Waivers with respect to all items of Direct Costs
and any other portion of Construction Costs payment of which is
secured, or with notice or passage of time or both could be secured,
by a mechanic's lien against the Premises that waive and release all
such liens conditioned only on receipt of a check for amounts
currently due and that unconditionally and fully waive and release
all mechanic's liens, or equitable liens and any bond rights in
connection therewith with respect to all amounts previously paid.
Partnership shall obtain all such Combined Lien Waivers with
respect to amounts distributed to the General Contractor no later
than concurrently with such distribution to the General Contractor
and with respect to amounts distributed to other Persons no later
than concurrently with such distribution to such Person.
Partnership shall have obtained Full and Final Lien Waivers with
respect to all Direct Costs and any portion of Construction Costs
payment of which is secured or with notice or passage of time or
both could be secured, by a mechanic's lien against the Premises
from all Persons against whom Partnership maintains no retention
of funds.
4.4 Conditions to All Loans.
The obligations of Lenders to make Loans on each
Funding Date are subject to the following further conditions
precedent:
A. Agent shall have received before that Funding
Date, in accordance with the provisions of subsection 2.1B, an
originally executed Notice of Borrowing, in each case signed by the
chief executive officer, the chief financial officer or the treasurer of
Managing Partner on behalf of Partnership or by any executive
officer of Managing Partner on behalf of Partnership designated by
any of the above-described officers on behalf of Partnership or by
two Executive Committee Signatories in a writing delivered to
Agent.
B. As of that Funding Date:
(i) The representations and warranties contained
herein and in the other Loan Documents shall be true,
correct and complete on and as of that Funding Date to the
same extent as though made on and as of that date, except to
the extent such representations and warranties specifically
relate to an earlier date, in which case such representations
and warranties shall have been true, correct and complete in
all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing
or would result from the consummation of the borrowing
contemplated by such Notice of Borrowing that would
constitute an Event of Default or a Potential Event of
Default;
(iii) Each Loan Party shall have performed in all
material respects all agreements and satisfied all conditions
which this Agreement provides shall be performed or
satisfied by it on or before that Funding Date;
(iv) No order, judgment or decree of any court,
arbitrator or governmental authority shall purport to enjoin
or restrain any Lender from making the Loans to be made by
it on that Funding Date;
(v) The making of the Loans requested on such
Funding Date shall not violate any law including, without
limitation, Regulation G, Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal
Reserve System; and
(vi) There shall not be pending or, to the knowl-
edge of any Senior Officer of Partnership or Executive
Committee Signatory, threatened, any action, suit, pro-
ceeding, governmental investigation or arbitration against or
affecting any Loan Party or any of its Subsidiaries or any
property of any Loan Party or any of its Subsidiaries that is
required to be disclosed but has not been disclosed by
Partnership in writing pursuant to subsection 5.6 or 6.1(x)
prior to the making of the last preceding Loans (or, in the
case of the initial Loans, prior to the execution of this
Agreement), and there shall have occurred no development
in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed by Partnership in
writing pursuant to subsection 5.6 or 6.1(x) prior to the
making of the last preceding Loans (or in the case of the
initial Loans, prior to the execution of this Agreement), that,
in either event, in the opinion of such Senior Officer or
Executive Committee Signatory could reasonably be expected
to have a Material Adverse Effect; and no injunction or other
restraining order shall have been issued and no hearing to
cause an injunction or other restraining order to be issued
shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain relief
as a result of, the transactions contemplated by this
Agreement or the making of Loans hereunder.
C. Since December 31, 1994, no Material Adverse Effect
(as determined in the reasonable discretion of Agent and Lenders)
shall have occurred.
4.5 Conditions to Letters of Credit.
The issuance of any Letter of Credit hereunder
(whether or not the Issuing Lender is obligated to issue such Letter
of Credit) is subject to the following conditions precedent:
A. On or before the date of issuance of the initial Letter
of Credit pursuant to this Agreement, the initial Loans shall have
been made.
B. On or before the date of issuance of such Letter of
Credit, Agent shall have received, in accordance with the provisions
of subsection 3.1B(i), an originally executed Notice of Issuance of
Letter of Credit, in each case signed by the chief executive officer,
the chief financial officer or the treasurer of Managing Partner on
behalf of Partnership or by any executive officer of Managing
Partner on behalf of Partnership designated by any of the above-
described officers or by two Executive Committee Signatories in a
writing delivered to Agent, together with all other information
specified in subsection 3.1B(i) and such other documents or
information as the Issuing Lender may reasonably require in
connection with the issuance of such Letter of Credit.
C. Since December 31, 1994, no Material Adverse Effect
(as determined in the reasonable discretion of Agent and Lenders)
shall have occurred.
D. On the date of issuance of such Letter of Credit, all
conditions precedent described in subsection 4.4B shall be satisfied
to the same extent as if the issuance of such Letter of Credit were
the making of a Loan and the date of issuance of such Letter of
Credit were a Funding Date.
Section 5. PARTNERSHIP'S REPRESENTATIONS AND
WARRANTIES
In order to induce Lenders to enter into this Agree-
ment and to make the Loans, to induce Issuing Lender to issue
Letters of Credit and to induce other Lenders to purchase
participations therein, Partnership represents and warrants to each
Lender, on the date of this Agreement, on each Funding Date and
on the date of issuance of each Letter of Credit, that the following
statements are true, correct and complete:
5.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries.
A. Organization and Powers. Partnership is a general
partnership duly organized, validly existing under the laws of the
State of Nevada. Partnership has all requisite partnership power
and authority to own and operate its properties, to carry on its
business as now conducted and as proposed to be conducted, to
enter into the Loan Documents and to carry out the transactions
contemplated thereby.
B. Qualification and Good Standing. Partnership is
qualified to do business in every jurisdiction where its assets are
located and wherever necessary to carry out its business and
operations, except in jurisdictions where the failure to be so
qualified or in good standing has not had and will not have a
Material Adverse Effect.
C. Conduct of Business. Partnership and its
Subsidiaries are engaged only in the businesses permitted to be
engaged in pursuant to subsection 7.13.
D. Subsidiaries. All of the Subsidiaries of Partnership
are identified in Schedule 5.1 annexed hereto, as said Schedule 5.1
may be supplemented from time to time pursuant to the provisions
of subsection 6.1(xvii). The capital stock of each of the
Subsidiaries of Partnership identified in Schedule 5.1 annexed
hereto (as so supplemented) is duly authorized, validly issued, fully
paid and nonassessable and none of such capital stock constitutes
Margin Stock. Each of the Subsidiaries of Partnership identified in
Schedule 5.1 annexed hereto (as so supplemented) is a corporation
duly organized, validly existing and in good standing under the laws
of its respective jurisdiction of incorporation set forth therein, has
all requisite corporate power and authority to own and operate its
properties and to carry on its business as now conducted and as
proposed to be conducted, and is qualified to do business and in
good standing in every jurisdiction where its assets are located and
wherever necessary to carry out its business and operations, in each
case except where failure to be so qualified or in good standing or a
lack of such corporate power and authority has not had and will not
have a Material Adverse Effect. Schedule 5.1 annexed hereto (as
so supplemented) correctly sets forth the ownership interest of
Partnership and each of its Subsidiaries in each of the Subsidiaries
of Partnership identified therein.
5.2 Authorization of Borrowing, etc.
A. Authorization of Borrowing. The execution,
delivery and performance of the Loan Documents have been duly
authorized by all necessary partnership action on the part of
Partnership.
B. No Conflict. The execution, delivery and perfor-
mance by Partnership of the Loan Documents and the Construction
Contracts to which it is a party and the consummation of the
transactions contemplated hereby and thereby do not and will not
(i) violate any provision of any law or any governmental rule or
regulation applicable to Partnership or any of its Subsidiaries which
violation or violations, in the aggregate, could not reasonably be
expected to have a Material Adverse Effect, (ii) violate the
Certificate or Articles of Incorporation or charter documents or
Bylaws or partnership agreement of Partnership or any of its
Subsidiaries or any order, judgment or decree of any court or other
agency of government binding on Partnership or any of its
Subsidiaries, (iii) conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any Con-
tractual Obligation of Partnership or any of its Subsidiaries,
(iv) result in or require the creation or imposition of any Lien upon
any of the properties or assets of Partnership or any of its Subsid-
iaries (other than any Liens created under any of the Loan
Documents in favor of Agent on behalf of Lenders), or (v) require
any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of Partnership or any of its
Subsidiaries, except for such approvals or consents which will be
obtained on or before the Closing Date and disclosed in writing to
Lenders.
C. Governmental Consents. The execution, delivery
and performance by Partnership of the Loan Documents and the
Construction Contracts to which it is a party and the consummation
of the transactions contemplated hereby and thereby do not and will
not require any registration with, consent or approval of, or notice
to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body except (i) those that have
been obtained and copies of which have been delivered to Agent
pursuant to subsection 4.1J or the absence of which Agent has
deemed satisfactory pursuant to subsection 4.1J, (ii) those notices or
informational filings or both that will be required to be given to the
Securities and Exchange Commission or any Gaming Board but that
are not yet due and (iii) any right of any Gaming Board to object to
any Lender or participant in the Loans at any future date.
D. Binding Obligation. Each of the Loan Documents
and the Construction Contracts to which it is a party has been duly
executed and delivered by Partnership and General Partners,
assuming due execution and delivery by the other parties thereto,
and is the legally valid and binding obligation of Partnership,
enforceable against Partnership in accordance with its respective
terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
E. Valid Issuance of General Partner Subordinated
Debt. Partnership has the partnership power and authority to issue
the General Partner Subordinated Debt. The General Partner
Subordinated Debt, when issued and paid for, will be the legally
valid and binding obligation of Partnership, enforceable against
Partnership in accordance with its terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability. The subordination
provisions of the General Partner Subordinated Debt will be
enforceable against the holders thereof and the Loans, Letter of
Credit reimbursement obligations pursuant to subsection 3.3 and all
other monetary Obligations hereunder are and will be within the
definition of "Senior Indebtedness" included in such provisions.
The General Partner Subordinated Debt, when issued and sold, will
either (a) have been registered or qualified under applicable federal
and state securities laws or (b) be exempt therefrom.
5.3 Financial Condition.
Partnership has heretofore delivered to Lenders, at
Lenders' request, an unaudited balance sheet of Partnership and its
Subsidiaries as at December 31, 1994. Such balance sheet was
prepared in conformity with GAAP and fairly presents the financial
position of the entities described in such financial statements as at
the date thereof. Partnership does not (and will not as a result of
the funding of the initial Loans) have any Contingent Obligation,
contingent liability or liability for taxes, long-term lease or unusual
forward or long-term commitment (other than for the construction,
operation and equipping of the Project or as otherwise permitted by
this Agreement) that is not reflected in the foregoing balance sheet
and which in any such case is material in relation to the business,
operations, properties, assets, condition (financial or otherwise) or
prospects of Partnership and its Subsidiaries taken as a whole.
5.4 No Material Adverse Change; No Restricted Junior
Payments.
Since December 31, 1994, no event or change has
occurred that has caused or evidences, either in any case or in the
aggregate, a Material Adverse Effect. Neither Partnership nor any
of its Subsidiaries has directly or indirectly declared, ordered, paid
or made, or set apart any sum or property for, any Restricted Junior
Payment or agreed to do so except as permitted by subsection 7.5.
5.5 Title to Properties; Liens; All Collateral.
Partnership and its Subsidiaries have (i) good,
sufficient and legal title to (in the case of fee interests in real
property and easement interests in the Skyway Easements), (ii) valid
leasehold interests in (in the case of leasehold interests in real or
personal property), or (iii) good title to (in the case of all other
personal property), all of their respective properties and assets
reflected in the financial statements referred to in subsection 5.3 or
in the most recent financial statements delivered pursuant to
subsection 6.1, in each case except for assets disposed of since the
date of such financial statements in the ordinary course of business
or as otherwise permitted under subsection 7.7. Except as
permitted or required by this Agreement, all such properties and
assets are free and clear of Liens. The Collateral constitutes all of
the assets of Partnership related to those portions of the Project
owned by or under the control of Partnership.
5.6 Litigation; Adverse Facts.
There are no actions, suits, proceedings, arbitrations
or governmental investigations (whether or not purportedly on
behalf of Partnership or any of its Subsidiaries) at law or in equity
or before or by any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality,
domestic or foreign, pending or, to the knowledge of any Senior
Officer of Partnership, threatened against or affecting Partnership or
any of its Subsidiaries or any property of Partnership or any of its
Subsidiaries that, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect. Neither
Partnership nor any of its Subsidiaries is (i) in violation of any
applicable laws that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect or
(ii) subject to or in default with respect to any final judgments,
writs, injunctions, decrees, rules or regulations of any court or any
federal, state, municipal or other governmental department,
commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect.
5.7 Payment of Taxes.
Except to the extent permitted by subsection 6.3, all
tax returns and reports of Partnership and its Subsidiaries required
to be filed by any of them have been timely filed, and all taxes,
assessments, fees and other governmental charges upon Partnership
and its Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have
been paid when due and payable. Partnership knows of no
proposed tax assessment against Partnership or any of its
Subsidiaries which is not being actively contested by Partnership or
such Subsidiary in good faith and by appropriate proceedings;
provided that such reserves or other appropriate provisions, if any,
as shall be required in conformity with GAAP shall have been made
or provided therefor.
5.8 Performance of Agreements; Materially Adverse
Agreements.
A. Neither Partnership nor any of its Subsidiaries
is in default in the performance, observance or fulfillment of any of
the obligations, covenants or conditions contained in any of its
Contractual Obligations or in any of the Construction Contracts, and
no condition exists that, with the giving of notice or the lapse of
time or both, would constitute such a default, except where the
consequences, direct or indirect, of such default or defaults, if any,
would not have a Material Adverse Effect.
B. Neither Partnership nor any of its Subsidiaries
is a party to or is otherwise subject to any agreements or
instruments or any charter or other internal restrictions which,
individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
5.9 Governmental Regulation.
Neither Partnership nor any of its Subsidiaries is
subject to regulation under the Public Utility Holding Company Act
of 1935, the Federal Power Act, the Interstate Commerce Act or
the Investment Company Act of 1940 or under any other federal or
state statute or regulation which may limit its ability to incur
Indebtedness (other than Gaming Laws) or which may otherwise
render all or any portion of the Obligations unenforceable.
5.10 Securities Activities.
A. Neither Partnership nor any of its Subsidiaries
is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of purchasing or
carrying any Margin Stock.
B. Following application of the proceeds of each
Loan, not more than 25% of the value of the assets (either of
Partnership only or of Partnership and its Subsidiaries on a
consolidated basis) subject to the provisions of subsection 7.2 or 7.7
or subject to any restriction contained in any agreement or
instrument, between Partnership and any Lender or any Affiliate of
any Lender, relating to Indebtedness and within the scope of
subsection 8.2, will be Margin Stock.
5.11 Employee Benefit Plans.
A. Partnership and each of its ERISA Affiliates
are in compliance with all applicable provisions and requirements of
ERISA and the regulations and published interpretations thereunder
with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan.
B. No ERISA Event has occurred or is reasonably
expected to occur with respect to Partnership or any or its ERISA
Affiliates.
C. Except to the extent required under
Section 4980B of the Internal Revenue Code, no Employee Benefit
Plan provides health or welfare benefits (through the purchase of
insurance or otherwise) for any retired or former employees of
Partnership or any of its ERISA Affiliates.
D. As of the most recent valuation date for any
Pension Plan, the amount of unfunded benefit liabilities (as defined
in Section 4001(a)(18) of ERISA), individually or in the aggregate
for all Pension Plans (excluding for purposes of such computation
any Pension Plans with respect to which assets exceed benefit
liabilities), does not exceed $5,000,000.
5.12 Certain Fees.
No broker's or finder's fee or commission will be
payable with respect to this Agreement or any of the transactions
contemplated hereby, and Partnership hereby indemnifies Lenders
against, and agrees that it will hold Lenders harmless from, any
claim, demand or liability for any such broker's or finder's fees
alleged to have been incurred in connection herewith or therewith
and any expenses (including reasonable fees, expenses and
disbursements of counsel) arising in connection with any such
claim, demand or liability.
5.13 Environmental Protection.
Except as set forth in Schedule 5.13 annexed hereto,
in each particular instance, with respect to the particular clause of
this subsection 5.13 to which such exception is taken:
(i) to the best knowledge of Partnership, the
operations of Partnership and of each of its Subsidiaries and
Partnership Parents (including, without limitation, all
operations and conditions at or in the Facilities) related to the
Project or Facilities comply in all material respects with all
Environmental Laws;
(ii) to the best knowledge of Partnership, each of
Partnership, its Subsidiaries and Partnership Parents has
obtained all Governmental Authorizations under
Environmental Laws necessary to its operations related to the
Project or Facilities, and all such Governmental
Authorizations are in good standing, and Partnership and
each of its Subsidiaries and Partnership Parents are in
compliance with all material terms and conditions of such
Governmental Authorizations;
(iii) neither Partnership nor any of its Subsidiaries
nor, to the best knowledge of Partnership, Partnership
Parents has received (a) any notice or claim to the effect that
it is or may be liable to any Person as a result of or in
connection with any Hazardous Material related to the
Project or Facilities or (b) any letter or request for
information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act
(42 U.S.C. section 9604) or comparable state laws, with respect to
the Project or Facilities and, to the best of Partnership's
Senior Officers' knowledge, none of the operations of
Partnership or any of its Subsidiaries or any Partnership
Parent is the subject of any federal or state investigation
relating to or in connection with any Hazardous Material at
any Facility or any Hazardous Material in any other manner
related to the Project;
(iv) neither of Partnership or any of its Subsidiaries
nor, to the best knowledge of Partnership, Partnership
Parents is a party to any judicial or administrative proceeding
alleging the violation of or liability under any Environmental
Laws which if adversely determined could reasonably be
expected to have a Material Adverse Effect;
(v) none of Partnership, any of its Subsidiaries,
any of their respective Facilities or operations or, to the best
knowledge of Partnership with respect to such Facilities or
operations, Partnership Parents is subject to any outstanding
written order or agreement with any governmental authority
or private party relating to (a) any Environmental Laws or
(b) any Environmental Claims;
(vi) to the best knowledge of Partnership, none of
Partnership, any of its Subsidiaries and Partnership Parents
has any contingent liability in connection with any Release of
any Hazardous Material related to the Project or Facilities
which could reasonably be expected to have a Material
Adverse Effect;
(vii) none of Partnership or any of its Subsidiaries,
and, to the best knowledge of Partnership, none of
Partnership Parents and, to the best knowledge of Senior
Officers of Partnership none of their respective predecessors
has filed any notice under any Environmental Law indicating
past or present treatment or Release of Hazardous Material at
any Facility and none of Partnership's or any of its
Subsidiaries' operations involves the generation,
transportation, treatment, storage or disposal of hazardous
waste, as defined under 40 C.F.R. Parts 260-270 or any
state equivalent;
(viii) no Hazardous Material exists on, under or
about any Facility in a manner that has a reasonable
possibility of giving rise to an Environmental Claim having a
Material Adverse Effect, and neither Partnership nor any of
its Subsidiaries nor, to the best knowledge of Partnership,
any of Partnership Parents has filed any notice or report of a
Release of any Hazardous Material that has a reasonable
possibility of giving rise to an Environmental Claim having a
Material Adverse Effect;
(ix) to the best knowledge of Partnership, none of
Partnership, any of its Subsidiaries, Partnership Parents and,
to the best knowledge of Senior Officers of Partnership, any
of their respective predecessors has disposed of any
Hazardous Material in a manner that has a reasonable
possibility of giving rise to an Environmental Claim having a
Material Adverse Effect;
(x) to the best knowledge of Partnership, no
underground storage tanks or surface impoundments are on
or at any Facility; and
(xi) no Lien in favor of any Person (including, to
the best knowledge of Partnership, Partnership Parents)
relating to or in connection with any Environmental Claim
has been filed or has been attached to any Facility.
5.14 Employee Matters.
There is no strike or work stoppage in existence or, to
the best knowledge of Senior Officers of Partnership, threatened
involving Partnership or any of its Subsidiaries that could
reasonably be expected to have a Material Adverse Effect.
5.15 Solvency.
Partnership is and, upon the incurrence of any
Obligations by Partnership on any date on which this representation
is made, will be, Solvent.
5.16 Disclosure.
No representation or warranty of Partnership or any
of its Subsidiaries contained in any Loan Document or in any other
document, certificate or written statement furnished to Lenders by
or on behalf of Partnership or any of its Subsidiaries for use in
connection with the transactions contemplated by this Agreement
contains any untrue statement of a material fact or omits to state a
material fact (known to Partnership, in the case of any document
not furnished by it) necessary in order to make the statements
contained herein or therein not misleading in light of the circum-
stances in which the same were made. Any projections and pro
forma financial information contained in such materials are based
upon good faith estimates and assumptions believed by Partnership
to be reasonable at the time made, it being recognized by Lenders
that such projections as to future events are not to be viewed as
facts and that actual results during the period or periods covered by
any such projections may differ from the projected results.
5.17 Representations and Warranties Incorporated
From the General Partner Subordinated Debt.
Each of the representations and warranties given by
Partnership in the documentation governing the General Partner
Subordinated Debt is true and correct in all material respects as of
the Closing Date, except for those specifically relating to another
time or times which were or will be true and correct in all material
respects as such time or times.
5.18 Compliance With Laws; Licenses, Permits and
Authorizations.
Each of Partnership and its Subsidiaries is in
compliance with the requirements of all applicable laws, rules,
regulations, ordinances and orders (including, without limitation,
Gaming Laws), noncompliance with which would, individually or in
the aggregate, materially adversely affect the ability of any such
party to complete or operate those portions of the Project owned by
or under the control of Partnership or would, individually or in the
aggregate, materially adversely affect the ability of any of
Partnership and its Subsidiaries to perform its obligations under the
Loan Documents to which it is a party. The planned use of those
portions of the Project owned by or under the control of Partnership
complies with applicable zoning ordinances, regulations and
restrictive covenants affecting the Premises as well as all ecological,
landmark, and other applicable laws and regulations (including,
without limitation, Gaming Laws), noncompliance with which
would, individually or in the aggregate, materially adversely affect
the ability of any of Partnership and its Subsidiaries to complete or
operate those portions of the Project owned by or under the control
of Partnership or would, individually or in the aggregate, materially
adversely affect the ability of any of Partnership and its Subsidiaries
to perform its obligations under the Loan Documents to which it is
a party; and all requirements for such use have been satisfied.
Those portions of the Project owned by or under the control of
Partnership are in compliance, at all times during construction and
when completed in accordance with the Plans, will comply with all
applicable laws, ordinances, regulations, restrictive covenants and
agreements and requirements of Governmental Authorities
(including, without limitation, Gaming Laws, zoning laws and
environmental regulations), noncompliance with which would,
individually or in the aggregate, materially adversely affect the
ability of any of Partnership and its Subsidiaries to complete or
operate those portions of the Project owned by or under the control
of Partnership or would, individually or in the aggregate, materially
adversely affect the ability of any of Partnership and its Subsidiaries
to perform its obligations under the Loan Documents to which it is
a party. Except to the extent set forth on Schedule 5.18, all
authorizations, plot plan approval, subdivision approval, sewer
permits and zoning variances, if any, building and other material
permits and Governmental Authorizations required by any
Governmental Authority for the construction, use, occupancy and
operation of the Premises and/or those portions of the Project
owned by or under the control of Partnership for the purposes
contemplated herein and by the Plans have been obtained or there is
no impediment to obtaining them; and all requirements for such use
have been satisfied or there is no impediment to satisfying them.
Except to the extent set forth on Schedule 5.18, all construction, if
any, already performed on those portions of the Project owned by
or under the control of Partnership has been performed in
accordance with the Plans and with all applicable laws, rules,
regulations, ordinances, orders and any restrictive covenants or
agreements applicable thereto. Except to the extent set forth on
Schedule 5.18, there are no structural defects in those portions of
the Project owned by or under the control of Partnership or
violations of any requirement of any Governmental Authorities with
respect thereto. There are no violations of any permits, approvals,
licenses or other requirements of any Governmental Authority with
respect to those portions of the Project owned by or under the
control of Partnership or the Premises. To the knowledge of Senior
Officers of Partnership, all authorizations, plot plan approvals,
subdivision approvals, sewer permits, zoning variances, building
and other material permits and all requirements for use listed on
Schedule 5.18 will be obtained prior to the date on which failure by
Partnership to have any such authorization, approval, permit,
variance or other requirement could constitute a violation of any
applicable laws, rules, regulations, ordinances, orders and any
restrictive covenants or agreements applicable thereto.
5.19 Plans.
The Plans have been approved (to the extent approval
thereof is so required), and all amendments and supplements to the
Plans that are required to be approved will be approved, by all
Governmental Authorities with jurisdiction over the Project,
General Contractor and the beneficiary of any restrictive covenant
requiring such approval. The Plans conform with generally
acceptable building construction practice, including architectural,
structural, mechanical and electrical aspects thereof, and the Plans
comply with applicable building, height, setback, floor area and
zoning laws and regulations and all variances, permits and
approvals issued by Governmental Authorities with respect to the
Project.
5.20 Budget and Schedule.
The Budget accurately reflects in all material respects,
the Construction Costs that reasonably are expected as of the
Closing Date to be incurred by Partnership in the acquisition,
development, equipping, opening and construction of those portions
of the Project owned by or under the control of Partnership and is
realistic and feasible. On the Closing Date, it is Partnership's
reasonable expectation that the Project will be completed
substantially in accordance with the Construction Schedule.
5.21 Requisitions.
All representations contained in each Requisition
presented to Agent, including those that incorporate the
representations and warranties set forth herein, constitute a
representation of Partnership for purposes of Sections 5 and 8 as of
the date of the Requisition.
5.22 Streets and Utilities.
All utility services necessary for the construction of
those portions of the Project owned by or under the control of
Partnership and the operation thereof for its intended purposes are
available at the boundaries of the Premises, including water supply,
fire protection, storm and sanitary sewer, gas, electric power and
telephone facilities. There is lawful, adequate, unobstructed and
unimpaired access to public streets from the Premises.
5.23 Subcontracts.
Subcontracts are in effect that provide for the
construction of those portions of the Project owned by or under the
control of Partnership in accordance with the Plans, Budget and
Schedule.
5.24 Intangible Property.
Each of Partnership and its Subsidiaries is the sole
and exclusive owner or licensee of all trade names, unregistered
trademarks and service marks, brand names, patents, registered and
unregistered copyrights, registered trademarks and service marks,
and all applications for any of the foregoing, and all permits, grants
and licenses or other rights with respect thereto, the absence of
which would materially adversely affect its business, operations,
properties or financial condition or the construction, use, occupancy
or operation of those portions of the Project owned by or under the
control of Partnership. Schedule 5.24 annexed hereto sets forth a
true and complete list of all service marks and registered trademarks
(or trademarks for which registration is pending) of Partnership and
its Subsidiaries. None of Partnership and its Subsidiaries has been
charged with any material infringement of any intangible property
of the character described above or been notified or advised of any
material claim of any other Person relating to any of the intangible
property.
5.25 Rights to Project Agreements, Permits and
Licenses.
From and after the Closing Date, Partnership will be
the true owner of all rights in and to all existing agreements,
permits and licenses relating to the Project (other than rights of
third parties under leases and agreements permitted hereunder), and
will be the true owner of all rights in and to all future agreements,
permits and licenses relating to the Project (other than rights of
third parties under leases and agreements permitted hereunder).
Partnership's interest in all such agreements, permits, and licenses
will not be subject to any matured claim (other than under the Loan
Documents), set-off or deduction other than in the ordinary course
of business.
Section 6. PARTNERSHIP'S AFFIRMATIVE COVENANTS
Partnership, and for purposes of subsection 6.10, each
General Partner, covenants and agrees that, so long as the
Commitments hereunder shall remain in effect and until payment in
full of all of the Loans and other Obligations and the cancellation or
expiration of all Letters of Credit, unless Lenders shall otherwise
give prior written consent, Partnership shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this
Section 6 and each General Partner shall perform its covenants to
the extent thereof set forth in subsection 6.10.
6.1 Financial Statements and Other Reports.
Partnership will maintain, and cause each of its
Subsidiaries to maintain, a system of accounting established and
administered in accordance with sound business practices to permit
preparation of financial statements in conformity with GAAP.
Partnership will deliver to Agent and Lenders:
(i) Monthly Financials: as soon as available and
in any event within 45 days after the end of each month
ending after the Closing Date and prior to the Final
Completion Date, (a) the balance sheet of Partnership as at
the end of such month and the related statements of income,
partners' equity and cash flows of Partnership for such
month and for the period from the beginning of the then
current Fiscal Year to the end of such month, setting forth in
each case in comparative form the corresponding figures for
the corresponding periods of the previous Fiscal Year and
the corresponding figures from the plan and financial
forecast for the current Fiscal Year delivered pursuant to
subsection 6.1(xiii), to the extent prepared on a monthly
basis, all in reasonable detail and certified by the chief
financial officer of Managing Partner on behalf of
Partnership that they fairly present the financial condition of
Partnership as at the dates indicated and the results of its
operations and its cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end
adjustments, and (b) a narrative report, if any is prepared for
presentation to senior management, describing the operations
of Partnership in the form so prepared for such month and
for the period from the beginning of the then current Fiscal
Year to the end of such month;
(ii) Quarterly Financials: as soon as available and
in any event within 60 days after the end of each of the first
three Fiscal Quarters of each Fiscal Year and, with respect
to the fourth Fiscal Quarter of each Fiscal Year,
concurrently with the delivery of financial statements
pursuant to subdivision (iii) below, (a) the balance sheet of
Partnership as at the end of such Fiscal Quarter and the
related statements of income, partners' equity and cash flows
of Partnership for such Fiscal Quarter and for the period
from the beginning of the then current Fiscal Year to the end
of such Fiscal Quarter, setting forth in each case in
comparative form the corresponding figures for the
corresponding periods of the previous Fiscal Year and the
corresponding figures from the plan and financial forecast
for the current Fiscal Year delivered pursuant to subsection
6.1(xiii), all in reasonable detail and certified by the chief
financial officer of Managing Partner on behalf of
Partnership that they fairly present the financial condition of
Partnership as at the dates indicated and the results of its
operations and its cash flows for the periods indicated,
subject to changes resulting from audit and normal year-end
adjustments, and (b) a narrative report, if any is prepared for
presentation to senior management, describing the operations
of Partnership in the form so prepared for such Fiscal
Quarter and for the period from the beginning of the then
current Fiscal Year to the end of such Fiscal Quarter;
(iii) Year-End Financials: as soon as available and
in any event within 100 days after the end of each Fiscal
Year, (a) the balance sheet of Partnership as at the end of
such Fiscal Year and the related statements of income,
partners' equity and cash flows of Partnership for such Fiscal
Year, setting forth in each case in comparative form the
corresponding figures for the previous Fiscal Year and, when
available, the corresponding figures from the plan and
financial forecast delivered pursuant to subsection 6.1(xiii)
for the Fiscal Year covered by such financial statements, all
in reasonable detail and certified by the chief financial
officer of Managing Partner on behalf of Partnership that
they fairly present the financial condition of Partnership as at
the dates indicated and the results of its operations and its
cash flows for the periods indicated, (b) a narrative report, if
any is prepared for presentation to senior management,
describing the operations of Partnership in the form so
prepared for such Fiscal Year, and (c) in the case of such
financial statements, a report thereon of Arthur Andersen
LLP or other independent certified public accountants of
recognized national standing selected by Partnership and
satisfactory to Agent, which report shall be without
qualification as to the scope of the audit, shall express no
doubts about the ability of Partnership to continue as a going
concern, and shall state that financial statements fairly
present the financial position of Partnership as at the dates
indicated and the results of its operations and its cash flows
for the periods indicated in conformity with GAAP applied
on a basis consistent with prior years (except as otherwise
disclosed in such financial statements) and that the
examination by such accountants in connection with such
financial statements has been made in accordance with
generally accepted auditing standards;
(iv) Officers' and Compliance Certificates:
(a) together with each delivery of financial statements of
Partnership pursuant to subdivisions (ii) and (iii) above, an
Officers' Certificate of Partnership stating that the signers
have reviewed the terms of this Agreement and have made,
or caused to be made under their supervision, a review in
reasonable detail of the transactions and condition of
Partnership during the accounting period covered by such
financial statements and that such review has not disclosed
the existence during or at the end of such accounting period,
and that the signers do not have knowledge of the existence
as at the date of such Officers' Certificate, of any condition
or event that constitutes an Event of Default or Potential
Event of Default, or, if any such condition or event existed
or exists, specifying the nature and period of existence
thereof and what action Partnership has taken, is taking and
proposes to take with respect thereto; and (b) together with
each delivery of financial statements of Partnership pursuant
to subdivision (ii) above, a Compliance Certificate
demonstrating in reasonable detail compliance during and at
the end of the applicable accounting periods with the restric-
tions contained in Subsections 7.6 and 7.8;
(v) Reconciliation Statements: if, as a result of
any change in accounting principles and policies from those
used in the preparation of the audited financial statements
referred to in subsection 5.3, the financial statements of
Partnership delivered pursuant to subdivisions (i), (ii), (iii)
or (xiii) of this subsection 6.1 will differ in any material
respect from the financial statements that would have been
delivered pursuant to such subdivisions had no such change
in accounting principles and policies been made, then
(a) together with the first delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiii) of this
subsection 6.1 following such change, financial statements of
Partnership for (y) the current Fiscal Year to the effective
date of such change and (z) the two full Fiscal Years
immediately preceding the Fiscal Year in which such change
is made, in each case prepared on a pro forma basis as if
such change had been in effect during such periods, and
(b) together with each delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiii) of this
subsection 6.1 following such change, a written statement of
the chief accounting officer or chief financial officer of
Managing Partner on behalf of Partnership setting forth the
differences which would have resulted if such financial
statements had been prepared without giving effect to such
change;
(vi) Accountants' Certification: together with each
delivery of financial statements of Partnership pursuant to
subdivision (iii) above, a written statement by the
independent certified public accountants giving the report
thereon (a) stating that their audit has included a review of
the terms of this Agreement and the other Loan Documents
as they relate to accounting matters, (b) stating whether, in
connection with their audit, any condition or event that
constitutes an Event of Default or Potential Event of Default
has come to their attention and, if such a condition or event
has come to their attention, specifying the nature and period
of existence thereof; provided that such accountants shall not
be liable by reason of any failure to obtain knowledge of any
such Event of Default or Potential Event of Default that
would not be disclosed in the course of their audit and their
report may state that their audit was not directed toward
obtaining such knowledge, and (c) stating that based on their
audit nothing has come to their attention that causes them to
believe either or both that the information contained in the
certificates delivered therewith pursuant to subdivision (iv)
above is not correct or that the matters set forth in the
Compliance Certificates delivered therewith pursuant to
clause (b) of subdivision (iv) above for the applicable Fiscal
Year are not stated in accordance with the terms of this
Agreement;
(vii) Accountants' Reports: promptly upon receipt
thereof, but in no case later than concurrently with each
delivery of financial statements of Partnership pursuant to
subdivisions (ii) and (iii) above (unless restricted by
applicable professional standards), copies of all reports
submitted to Partnership by independent certified public
accountants in connection with each annual, interim or
special audit of the financial statements of Partnership made
by such accountants, including, without limitation, any
comment letter submitted by such accountants to management
in connection with their annual audit;
(viii) SEC Filings and Press Releases: promptly
upon their becoming available, and, with respect to (a) and
(b) below, at and after the time Partnership or a Subsidiary
of Partnership becomes subject to the reporting requirements
under Section 13 or Section 15(d) of the Securities Exchange
Act of 1934, copies of (a) all financial statements, reports,
notices and proxy statements sent or made available
generally by Partnership to its security holders or by any
Subsidiary of Partnership to its security holders other than
Partnership or another Subsidiary of Partnership, (b) all
regular and periodic reports and all registration statements
(other than on Form S-8 or a similar form) and prospectuses,
if any, filed by Partnership or any of Partnership's Subsidi-
aries with any securities exchange or with the Securities and
Exchange Commission or any governmental or private
regulatory authority, and (c) all press releases and other
statements made available generally by or on behalf of
Partnership or any of Partnership's Subsidiaries to the public
concerning material developments in the business of
Partnership or any of Partnership's Subsidiaries;
(ix) Events of Default, etc.: promptly upon any
Senior Officer of any General Partner or any Executive
Committee member obtaining knowledge, but in no case later
than concurrently with each delivery of financial statements
of Partnership pursuant to subdivisions (ii) and (iii) above,
(a) of any condition or event that constitutes an Event of
Default or Potential Event of Default, or becoming aware
that any Lender has given any notice (other than to Agent) or
taken any other action with respect to a claimed Event of
Default or Potential Event of Default, (b) that any Person
has given any notice to Partnership or any of its Subsidiaries
or taken any other action with respect to a claimed default or
event or condition of the type referred to in subsection 8.2,
(c) of the occurrence of any event or change that has caused
or evidences, either in any case or in the aggregate, a
Material Adverse Effect, (d) that any Gaming Board has
indicated its intent to consider or act upon a License
Revocation or a fine or penalty of $1,000,000 or more with
respect to Partnership or any of its Subsidiaries, or (e) any
material default under the General Contractor's Contract, an
Officers' Certificate specifying the nature and period of
existence of such condition, event or change, or specifying
the notice given or action taken by any such Person and the
nature of such claimed Event of Default, Potential Event of
Default, default, event or condition, and what action
Partnership has taken, is taking and proposes to take with
respect thereto;
(x) Litigation or Other Proceedings: (a) promptly
upon any officer of Partnership obtaining knowledge of, but
in no case later than concurrently with each delivery of
financial statements of Partnership pursuant to subdivisions
(ii) and (iii) above, (X) the institution of any action, suit,
proceeding (whether administrative, judicial or otherwise),
governmental investigation or arbitration against or affecting
Partnership or any of its Subsidiaries or any property of
Partnership or any of its Subsidiaries (collectively,
"Proceedings") not previously disclosed in writing by
Partnership to Lenders or (Y) any material development in
any Proceeding that, in any case:
(1) if adversely determined, has a
reasonable possibility of giving rise to a Material
Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the
consummation of, or to recover any damages or
obtain relief as a result of, the transactions
contemplated hereby;
written notice thereof together with such other information as
may be reasonably available to Partnership to enable Lenders
and their counsel to evaluate such matters; and (b) together
with each delivery of financial statements pursuant to
subdivision (ii) above, a schedule of all Proceedings
involving an alleged liability of, or claims against or
affecting, Partnership or any of its Subsidiaries equal to or
greater than $5,000,000, and promptly after request by
Agent such other information as may be reasonably requested
by Agent to enable Agent and its counsel to evaluate any of
such Proceedings;
(xi) ERISA Events: promptly upon becoming
aware of the occurrence of or forthcoming occurrence of any
ERISA Event with respect to Partnership or any of its
ERISA Affiliates, but in no case later than concurrently with
each delivery of financial statements of Partnership pursuant
to subdivisions (ii) and (iii) above, a written notice specify-
ing the nature thereof, what action Partnership or any of its
ERISA Affiliates has taken, is taking or proposes to take
with respect thereto and, when known, any action taken or
threatened by the Internal Revenue Service, the Department
of Labor or the PBGC with respect thereto;
(xii) ERISA Notices: together with each delivery of
financial statements of Partnership pursuant to subdivision
(ii) above, copies of (a) each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) filed by
Partnership or any of its ERISA Affiliates with the Internal
Revenue Service with respect to each Pension Plan since the
last such delivery of financial statements; (b) all notices
received by Partnership or any of its ERISA Affiliates from
a Multiemployer Plan sponsor concerning an ERISA Event
since the last such delivery of financial statements; and
(c) such other documents or governmental reports or filings
relating to any Employee Benefit Plan as Agent shall
reasonably request;
(xiii) Financial Plans: concurrent with delivery
thereof pursuant to subsection 5.2 (or any successor
provision) of the Joint Venture Agreement, and in any event
no later than 90 days after the end of each Fiscal Year, a
copy of the "Annual Business Plan" (as such term is defined
in subsection 5.2 (or any successor provision) of the Joint
Venture Agreement) as approved by the Executive
Committee pursuant to such subsection 5.2;
(xiv) Insurance: as soon as practicable and in any
event no later than 90 days after the end of each Fiscal Year,
a report in form and substance satisfactory to Agent outlining
all material insurance coverage maintained as of
the date of such report by Partnership and its Subsidiaries and all
material insurance coverage planned to be maintained by
Partnership and its Subsidiaries in the immediately succeeding
Fiscal Year to the extent not included in the information delivered
pursuant to subsection 6.1(xiii);
(xv) Environmental Audits and Reports: promptly
upon receipt thereof, but in no case later than concurrently
with each delivery of financial statements of Partnership
pursuant to subdivisions (ii) and (iii) above, copies of all
environmental audits and reports, whether prepared by
personnel of Partnership or its Subsidiaries or by independent
consultants, with respect to significant environmental matters
at any Facility, that could result in a Material Adverse
Effect;
(xvi) Certain Changes Within Partnership; Events of
Bankruptcy: with reasonable promptness, but in no case
later than concurrently with each delivery of financial
statements of Partnership pursuant to Subdivision (ii) and
(iii) above, written notice of (a) any change or proposed
change in Managing Partner or any change in "General
Manager" (as such term is used in the Joint Venture
Agreement) or (b) the occurrence of any event or action that,
with the passage of time, would become an "Event of
Bankruptcy" (as such term is defined in subsection 14.1 of
the Joint Venture Agreement as in effect as of the Closing
Date);
(xvii) Formation of Subsidiary; Circus Revolving
Loan Agreements: together with each delivery of financial
statements of Partnership pursuant to subdivision (ii) and (iii)
above, (a) a written notice with respect to any Person that
has become a Subsidiary of Partnership since the last such
delivery of financial statements, setting forth (1) the date on
which such Person became a Subsidiary of Partnership and
(2) all of the data required to be set forth in Schedule 5.1
annexed hereto with respect to all Subsidiaries of Partnership
(it being understood that such written notice shall be deemed
to supplement Schedule 5.1 annexed hereto for all purposes
of this Agreement) and (b) copies of any amendment,
supplement or modification of the Circus Revolving Loan
Agreements since September 30, 1993 that have not
previously been delivered;
(xviii) Other Information: with reasonable prompt-
ness, such other information and data with respect to
Partnership or any of its Subsidiaries as from time to time
may be reasonably requested by any Lender;
(xix) Regulation 6.090 Reports: Promptly after the
same are available, but in no case later than concurrently
with each delivery of the financial statements of Partnership
pursuant to subdivisions (ii) and (iii) above, copies of the
Nevada "Regulation 6.090 Report" and "6-A Report" and
copies of any written communication to Partnership or any of
its Subsidiaries from any Gaming Board advising it of a
violation of or non-compliance with, any Gaming Law by
Partnership or any of its Subsidiaries; and
(xx) Final Completion Date. Following Conversion
and until the Final Completion Date, upon Agent's or
Requisite Lenders' reasonable request, together with each
delivery of financial statements of Partnership pursuant to
subdivision (i) above, (a) copies of the Budget, the
Construction Schedule and the Plans, in each case, to the
extent modified since the last delivery thereof, (b) a written
calculation showing whether there is a Material Overrun,
(c) to the extent not provided to Agent previously, copies of
Documentary Support, Change Order signature pages and
grid summary pages and other documents as would be
required to be delivered under subsection 4.2D pursuant to
request of the Agent or otherwise as set forth in such
subsection 4.2D, and (d) any other documents or information
related to construction of the Project that Agent or Requisite
Lenders reasonably request.
6.2 Partnership or Corporate Existence, etc.
Except as permitted under subsection 7.7, Partnership
will, and will cause each of its Subsidiaries to, at all times preserve
and keep in full force and effect its partnership or corporate
existence, as applicable, and all rights and franchises material to its
business.
6.3 Payment of Taxes and Claims; Tax Consolidation.
A. Partnership will, and will cause each of its
Subsidiaries to, pay all taxes, assessments and other governmental
charges imposed upon it or any of its properties or assets or in
respect of any of its income, businesses or franchises before any
penalty accrues thereon, and all claims (including, without
limitation, claims for labor, services, materials and supplies) for
sums that have become due and payable and that by law have or
may become a Lien upon any of its properties or assets, prior to the
time when any penalty or fine shall be incurred with respect
thereto; provided that no such charge or claim need be paid if being
contested in good faith by appropriate proceedings promptly
instituted and diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in conformity
with GAAP shall have been made therefor.
B. Partnership will not, nor will it permit any of
its Subsidiaries to, file or consent to the filing of any consolidated
income tax return with any Person (other than Partnership or any of
its Subsidiaries).
6.4 Maintenance of Properties; Insurance.
Partnership will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair,
working order and condition, ordinary wear and tear excepted, all
material properties used or owned by Partnership and useful in the
business of Partnership and its Subsidiaries (including, without
limitation, maintenance of Intellectual Property) and from time to
time will make or cause to be made all appropriate repairs,
renewals and replacements thereof and will comply fully with the
terms and conditions of the subsection 4 of the Deed of Trust.
Partnership will maintain or cause to be maintained, with financially
sound and reputable insurers, insurance with respect to its
properties and business and the properties and businesses of its
Subsidiaries against loss or damage of the kinds customarily carried
or maintained under similar circumstances by Persons of established
reputation engaged in similar businesses and will otherwise comply
fully with the terms and conditions of subsection 6 of the Deed of
Trust. Each such policy of insurance shall name Agent for the
benefit of Lenders as the loss payee thereunder for amounts in
excess of $1,000,000 and shall provide for at least 30 days prior
written notice to Agent of any modification or cancellation of such
policy.
6.5 Inspection; Lender Meeting.
To the extent not prohibited by applicable law,
Partnership shall, and shall cause each of its Subsidiaries to, permit
any authorized representatives designated by any Lender to visit and
inspect any of the properties of Partnership or any of its
Subsidiaries, including its and their financial and accounting records
and any Documentary Support (for the purposes of subsection
4.2A(ii)), and to make copies and take extracts therefrom, and to
discuss its and their affairs, finances and accounts with its and their
officers and independent public accountants (provided that
Partnership may, if it so chooses, be present at or participate in any
such discussion), all upon reasonable notice and at such reasonable
times during normal business hours and as often as may be
reasonably requested. Without in any way limiting the foregoing,
Partnership will, upon the request of Agent or Lenders, participate
in a meeting of Agent and Lenders once during each Fiscal Year to
be held at Partnership's principal offices (or such other location as
may be agreed to by Partnership and Agent) at such time as may be
agreed to by Partnership and Agent.
6.6 Compliance with Laws, etc.
Partnership shall, and shall cause each of its
Subsidiaries to, comply with the requirements of all applicable laws,
rules, regulations and orders of any governmental authority,
including, without limitation, all Gaming Laws, and to obtain and
keep in full force and effect any permit, license, consent, or
approval required under this Agreement or in order to complete the
Project in accordance with the Plans, in each case, if such
noncompliance or failure to obtain and keep in full force and effect
could reasonably be expected to cause a Material Adverse Effect.
Partnership shall and shall cause each of its Subsidiaries to comply
with the requirements of all Gaming Laws applicable to such
Person.
6.7 Environmental Disclosure and Inspection.
A. Partnership shall, and shall cause each of its
Subsidiaries to, exercise due diligence in order to comply and use
its best efforts to cause (i) all tenants under any leases or occupancy
agreements affecting any portion of the Facilities and (ii) all other
Persons on or occupying such property, to comply with all
Environmental Laws.
B. Partnership agrees that Agent may, from time
to time and in its sole and absolute discretion, retain, at
Partnership's expense, an independent professional consultant to
review any report relating to Hazardous Material prepared by or for
Partnership and, whether or not any such report exists, upon
reasonable notice to Partnership, to conduct its own investigation of
any Facility currently or previously owned, leased, operated or used
by Partnership or any of its Subsidiaries, and Partnership agrees to
use its best efforts to obtain permission for Agent's professional
consultant to conduct its own investigation of any Facility
previously owned, leased, operated or used by Partnership or any of
its Subsidiaries. Partnership hereby grants to Agent and its agents,
employees, consultants and contractors the right to enter into or on
to the Facilities currently owned, leased, operated or used by
Partnership or any of its Subsidiaries to perform such tests on such
property as are reasonably necessary to conduct such a review
and/or investigation. Any such investigation of any Facility shall be
conducted, unless otherwise agreed to by Partnership and Agent,
during normal business hours and, to the extent reasonably
practicable, shall be conducted with prior notice and so as not to
interfere with the ongoing operations at any such Facility or to
cause any damage or loss to any property at such Facility.
Partnership and Agent hereby acknowledge and agree that any
report of any investigation conducted at the request of Agent
pursuant to this subsection 6.7B will be obtained and shall be used
by Agent and Lenders for the purposes of Lenders' internal credit
decisions, to monitor and police the Loans and to protect Lenders'
security interests, if any, created by the Loan Documents. Agent
agrees to deliver a copy of any such report to Partnership promptly
after its completion, and Partnership acknowledges and agrees that
(i) it will indemnify and hold harmless Agent and each Lender from
any costs, losses or liabilities relating to Partnership's use of or
reliance on any such report, (ii) neither Agent nor any Lender
makes any representation or warranty with respect to any such
report, and (iii) by delivering such report to Partnership, neither
Agent nor any Lender is requiring or recommending the
implementation of any suggestions or recommendations contained in
any such report; provided, however, that Agent shall not be
required by this subsection 6.7B to deliver any such report to
Partnership that is protected by the attorney-client privilege or other
privilege if and to the extent that to do so could reasonably be
expected to result in the waiver or loss of that privilege.
C. Partnership shall promptly advise Lenders in
writing and in reasonable detail of (i) any Release of any Hazardous
Material required to be reported to any federal, state or local
governmental or regulatory agency under any applicable
Environmental Laws, (ii) any and all written communications with
respect to any Environmental Claims that have a reasonable
possibility of giving rise to a Material Adverse Effect or with
respect to any Release of Hazardous Material required to be
reported to any federal, state or local governmental or regulatory
agency, (provided, however, that Partnership shall not be required
by this subsection 6.7C to advise Lenders of the contents of any
written communication that is protected by the attorney-client or
other privilege if and to the extent that to do so could reasonably be
expected to result in the waiver or loss of that privilege), (iii) any
remedial action taken by Partnership or any other Person in
response to (x) any Hazardous Material on, under or about any
Facility, the existence of which has a reasonable possibility of
resulting in an Environmental Claim having a Material Adverse
Effect, or (y) any Environmental Claim that reasonably could have
a Material Adverse Effect, (iv) Partnership's discovery of any
occurrence or condition on any real property adjoining or in the
vicinity of any Facility that reasonably could cause such Facility or
any part thereof to be subject to (x) any restrictions on the
ownership or transferability thereof or (y) any material restriction
on the occupancy or use thereof under any Environmental Laws
which restriction on occupancy or use could reasonably be expected
to result in a Material Adverse Effect, and (v) any request for
information from any governmental agency that indicates such
agency is investigating whether Partnership or any of its
Subsidiaries may be potentially responsible for a Release of
Hazardous Material.
D. Partnership shall promptly notify Lenders of
(i) any proposed acquisition of stock, assets, or property by
Partnership or any of its Subsidiaries that could reasonably be
expected to expose Partnership or any of its Subsidiaries to, or
result in, Environmental Claims that could have a Material Adverse
Effect or that could reasonably be expected to have a material
adverse effect on any Governmental Authorization then held by
Partnership or any of its Subsidiaries and (ii) any action that
Partnership or any of its Subsidiaries proposes to take to commence
manufacturing, industrial or other operations that reasonably could
be expected to subject Partnership or any of its Subsidiaries to laws,
rules or regulations (including, without limitation, laws, rules and
regulations requiring additional environmental permits or licenses)
not theretofore applicable to the Project, Facilities or operations of
Partnership or any of its Subsidiaries.
E. Partnership shall, at its own expense, provide
copies of such documents or information as Agent may reasonably
request in relation to any matters disclosed pursuant to this
subsection 6.7 (provided, however, that Partnership shall not be
required by the provisions of this subsection 6.7E to provide
documents or information that is protected by the attorney-client or
other privilege if and to the extent that to do so could reasonably be
expected to result in the waiver or loss of that privilege).
6.8 Partnership's Remedial Action Regarding Hazardous
Material.
Partnership shall promptly take, and shall cause each
of its Subsidiaries promptly to take, any and all necessary remedial
action in connection with the presence, storage, use, disposal,
transportation or Release of any Hazardous Material on, under or
about any Facility in order to comply with all applicable
Environmental Laws and Governmental Authorizations. In the
event Partnership or any of its Subsidiaries undertakes any remedial
action with respect to any Hazardous Material on, under or about
any Facility, Partnership or such Subsidiary shall conduct and
complete such remedial action in compliance with all applicable
Environmental Laws and other applicable legal requirements
(including lawful policies, orders and directives of federal, state and
local governmental authorities).
6.9 Completion of Construction.
A. Partnership shall Complete Construction on or
before the Projected Completion of Construction Date and shall
Finally Complete Construction on or before the Projected Final
Completion Date; provided that Partnership shall be deemed not to
be in default under this subsection 6.9 for such period as Circus
and/or Eldorado Hotel Associates or their respective Affiliates
diligently is proceeding to Complete Construction or Finally
Complete Construction in accordance with the terms of the Circus
Completion Guaranty or the Eldorado Completion Guaranty, as the
case may be, including, without limitation, performance by Circus
or Eldorado Hotel Associates or their respective Affiliates within
the Time for Performance (as defined in the Circus Completion
Guaranty and the Eldorado Completion Guaranty, respectively) and
neither Partnership nor Circus shall be required to Complete
Construction or Finally Complete Construction with respect to any
Collateral sold to any Person that is not an Affiliate of Agent or any
Lender by Agent under its rights of foreclosure under the Loan
Documents.
B. Partnership shall deliver to Agent the
Completion of Construction Certificate promptly upon Completion
of Construction, but in no case later than concurrently with the next
delivery of financial statements pursuant to subsection 6.1(i) above.
6.10 Material Overruns.
If a Material Overrun occurs, General Partners,
Partnership Parents or any of them shall, within ten days after such
Material Overrun occurs, make an Overrun Contribution to
Partnership, in exchange for General Partner Subordinated Debt, in
an amount at least equal to the Overrun Excess Amount, provided
that this Agreement shall not obligate Eldorado Hotel Associates,
Recreational Enterprises or Hotel Casino-Management to make such
Overrun Contribution. If Eldorado Hotel Associates, Recreational
Enterprises or Hotel-Casino Management or any Affiliate of
Galleon, Inc. fails to make such Overrun Contribution, Galleon,
Inc. shall do so.
Section 7. PARTNERSHIP'S NEGATIVE COVENANTS
Partnership covenants and agrees that, so long as the
Commitments hereunder shall remain in effect and until payment in
full of all of the Loans and other Obligations and the cancellation or
expiration of all Letters of Credit, unless Lenders shall otherwise
give prior written consent, Partnership shall perform, and shall
cause each of its Subsidiaries to perform, all covenants in this
Section 7.
7.1 Indebtedness.
Until the first day of the fourth full Fiscal Quarter
following the Conversion Date, Partnership shall not, and shall not
permit any of its Subsidiaries to, directly or indirectly, create,
incur, assume or guaranty, or otherwise become or remain directly
or indirectly liable with respect to, any Indebtedness, except:
(i) Partnership may become and remain liable with
respect to the Obligations;
(ii) Partnership may become and remain liable with
respect to Contingent Obligations permitted by subsection 7.4
and, upon any matured obligations actually arising pursuant
thereto, the Indebtedness corresponding to the Contingent
Obligations so extinguished;
(iii) Partnership may become and remain liable with
respect to Indebtedness in respect of Capital Leases in an
aggregate principal amount not to exceed $15,000,000;
provided that such Capital Leases are not prohibited under
the terms of subsection 7.8; provided, further that all such
Indebtedness incurred pursuant to in this clause (iii) of this
subsection 7.1 shall reduce the Other Permitted Indebtedness
permitted in clause (vi) of this subsection 7.1;
(iv) Partnership may become and remain liable with
respect to Indebtedness to any of its wholly-owned
Subsidiaries, and any wholly-owned Subsidiary of
Partnership may become and remain liable with respect to
Indebtedness to Partnership; provided that (a) all such
intercompany Indebtedness shall be evidenced by promissory
notes, (b) all such intercompany Indebtedness owed by
Partnership to any of its Subsidiaries shall be subordinated in
right of payment to the payment in full of the Obligations
pursuant to the terms of the applicable promissory notes or
an intercompany subordination agreement, and (c) any
payment by any Subsidiary of Partnership under any
guaranty of the Obligations shall result in a pro tanto
reduction of the amount of any intercompany Indebtedness
owed by such Subsidiary to Partnership or to any of its
Subsidiaries for whose benefit such payment is made;
(v) Partnership may become and remain liable with
respect to the General Partner Subordinated Debt and the
Short Term General Partner Subordinated Debt; and
(vi) Partnership may become and remain liable with
respect to other Indebtedness in an aggregate principal
amount not to exceed $15,000,000 at any time outstanding
minus the amount of Indebtedness outstanding under clause
(iii) above.
Thereafter, Partnership may become and remain liable with
respect to any Indebtedness (i) if the incurrence thereof would not
cause an Event of Default or Potential Event of Default under any
other subsection of this Agreement (including, without limitation
subsection 7.6B) and (ii) after Partnership delivers to Agent an
Officers' Certificate that demonstrates, on a pro forma basis (taking
into account the incurrence of such Indebtedness) compliance with
subsection 7.6B.
7.2 Liens and Related Matters.
A. Prohibition on Liens. Partnership shall not,
and shall not permit any of its Subsidiaries to, directly or indirectly,
create, incur, assume or permit to exist any Lien on or with respect
to any property or asset of any kind (including any document or
instrument in respect of goods or accounts receivable) of
Partnership or any of its Subsidiaries, whether now owned or
hereafter acquired, or any income or profits therefrom, or file or
permit the filing of, or permit to remain in effect, any financing
statement or other similar notice of any Lien with respect to any
such property, asset, income or profits under the Uniform
Commercial Code of any State or under any similar recording or
notice statute, except:
(i) Permitted Encumbrances;
(ii) Liens described in Schedule 7.2 annexed
hereto;
(iii) Liens granted pursuant to the Collateral
Documents;
(iv) Liens securing Indebtedness permitted under
subsection 7.1(iii); provided that such Liens relate solely to
the property financed with such Indebtedness;
(v) Liens securing Indebtedness permitted under
subsection 7.1(vi); provided that such Liens relate solely to
the property financed with such Indebtedness;
(vi) Liens created by or resulting from litigation or
a legal proceeding against Partnership or any of its
Subsidiaries or both in the ordinary course of business which
litigation or legal proceeding currently is being contested in
good faith by appropriate proceedings and which litigation or
legal proceeding does not result in an Event of Default under
subsection 8.8; provided that such Lien shall be bonded or
foreclosure of such Lien stayed by order of a court of
competent jurisdiction and; provided further, that any such
Lien shall cease to be a permitted exception to this
subsection 7.2 if any attempt to foreclose thereon could
reasonably be expected to occur within the next 60 days;
(vii) Liens granted to any Lender that becomes a
counterparty to any Contingent Obligation permitted under
subsection 7.4(ii) to the extent of such Contingent
Obligation; provided that such Liens shall rank pari passu
with the Liens that secure the Obligations; provided further
that prior to the incurrence of such Indebtedness creditors
holding such Liens shall enter into intercreditor agreements
pursuant to which such creditors agree that their right with
respect to the Collateral shall be limited to the right to
receive a share of the proceeds of the Collateral and that
Lenders shall have the right to make all determinations with
respect to the exercise of remedies with respect to the
Collateral until payment in full of all of the Loans and other
Obligations and the cancellation or expiration of all Letters
of Credit; and
(viii) Liens securing the General Partner
Subordinated Debt pursuant to the Subordinated Loan
Documents.
B. Equitable Lien in Favor of Lenders. If Partnership
or any of its Subsidiaries shall create or assume any Lien upon any
of its properties or assets, whether now owned or hereafter
acquired, other than Liens excepted by the provisions of subsection
7.2A, it shall make or cause to be made effective provision whereby
the Obligations will be secured by such Lien equally and ratably
with any and all other Indebtedness secured thereby as long as any
such Indebtedness shall be so secured; provided that, notwithstand-
ing the foregoing, this covenant shall not be construed as a consent
by Lenders to the creation or assumption of any such Lien not
permitted by the provisions of subsection 7.2A.
C. No Further Negative Pledges. Except with respect
to (i) specific property encumbered pursuant to subsection 7.2A(iv)
or (v) to secure payment of particular Indebtedness, (ii) specific
property to be sold pursuant to an executed agreement with respect
to an Asset Sale or (iii) a Lien created in favor of Agent pursuant to
the Collateral Documents, neither Partnership nor any of its
Subsidiaries shall enter into any agreement prohibiting the creation
or assumption of any Lien upon any of its respective properties or
assets, whether now owned or hereafter acquired.
D. No Restrictions on Subsidiary Distributions to
Partnership or Other Subsidiaries. Except as provided herein,
Partnership will not, and will not permit any of its Subsidiaries to,
create or otherwise cause or suffer to exist or become effective any
consensual encumbrance or restriction of any kind on the ability of
any such Subsidiary to (i) pay dividends or make any other
distributions on any of such Subsidiary's capital stock owned by
Partnership or any other Subsidiary of Partnership, (ii) repay or
prepay any Indebtedness owed by such Subsidiary to Partnership or
any other Subsidiary of Partnership, (iii) make loans or advances to
Partnership or any other Subsidiary of Partnership, or (iv) transfer
any of its property or assets to Partnership or any other Subsidiary
of Partnership.
7.3 Investments.
Partnership shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, make or own any Investment
in any Person, including any Joint Venture, except:
(i) Partnership and its Subsidiaries may make and
own Investments in Cash Equivalents;
(ii) Partnership and its wholly-owned Subsidiaries
may create, and make and own Investments in, wholly-
owned Subsidiaries engaged in operations reasonably
necessary for the business of Partnership with respect to the
Project; provided, however, that (a) the aggregate of all such
Investments (without duplication in the case of Investments
through multiple tiers of Subsidiaries) may not exceed
$10,000,000, (b) no such Subsidiary may (1) create, incur,
assume or guarantee, or otherwise become or remain directly
or indirectly liable with respect to, any Indebtedness (other
than Indebtedness permitted under clause (iv) of subsection
7.1), (2) create, incur, assume or permit to exist any Lien on
or with respect to any property or asset of any kind of such
Subsidiary (other than Permitted Encumbrances and Liens
granted pursuant to the Collateral Documents), or (3) create
or become or remain liable with respect to any Contingent
Obligation (other than Contingent Obligations under any
guarantee of the Obligations);
(iii) Partnership and its Subsidiaries may make
Consolidated Capital Expenditures permitted by subsection
7.8; and
(iv) Partnership and its Subsidiaries may make
advances to customers in the ordinary course of business
substantially consistent with the practice of other gaming
institutions in connection with their gaming operations in the
State of Nevada.
7.4 Contingent Obligations.
Partnership shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, create or become or remain
liable with respect to any Contingent Obligation, except:
(i) Partnership may become and remain liable with
respect to Contingent Obligations in respect of Letters of
Credit;
(ii) Partnership may become and remain liable with
respect to Interest Rate Agreements; provided that the
aggregate notional amount with respect to such Interest Rate
Obligations shall not exceed at any time the aggregate
amount, without duplication, of the Commitments and the
Loans then in effect or outstanding;
(iii) Partnership may become and remain liable with
respect to Contingent Obligations pursuant to indemnity
obligations with respect to taxes of Partnership, the
Environmental Indemnity, workers compensation for
Partnership's employees, a title policy and other indemnity
obligations incurred in the ordinary course of business; and
(iv) Partnership may become and remain liable with
respect to indemnity obligations necessary to obtain payment
and performance bonds required to Finally Complete
Construction.
7.5 Restricted Junior Payments.
Partnership shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, declare, order or pay any sum
for any Restricted Junior Payment; provided that so long as no
Event of Default or Potential Event of Default shall have occurred
and be continuing or occurs as a result thereof:
(i) after the first four full Fiscal Quarters
immediately following the Conversion Date, Partnership may
make principal and interest payments on the General Partner
Subordinated Debt from Consolidated Available Cash Flow;
provided that (i) any such interest payments are paid at a rate
less than or equal to 10% per annum and (ii) until the first
eight full Fiscal Quarters immediately following the
Conversion Date have elapsed, the aggregate of all such
principal payments does not exceed, for any Fiscal Year, the
aggregate of one-tenth of the original principal amount of
each tranche of General Partner Subordinated Debt as of the
date Partnership issued such tranche of General Partner
Subordinated Debt, respectively, for all such tranches of
General Partner Subordinated Debt;
(ii) following the Conversion Date, Partnership
may make Tax Distributions to General Partners in
proportion to their Percentage Interests;
(iii) after the first eight full Fiscal Quarters
immediately following the Conversion Date, Partnership may
make Other Partnership Distributions in a cumulative amount
of up to 50% of Consolidated Available Cash Flow after the
Closing Date (calculated without reduction for such Other
Partnership Distribution);
(iv) if, after the first eight full Fiscal Quarters
immediately following the Conversion Date, the Leverage
Ratio for the Fiscal Quarter immediately preceding the date
of such proposed Other Partnership Distribution is less than
or equal to 2.50:1.00, then, without including Other
Partnership Distributions permitted under clause (iii) above,
Partnership may make Other Partnership Distributions in a
cumulative amount of up to 75% of Consolidated Available
Cash Flow since the end of such eight full Fiscal Quarters
(calculated without reduction for such Other Partnership
Distributions made under clause (iii) above or proposed to be
made under this clause (iv)); provided that if Partnership
makes other Partnership Distributions pursuant to this clause
(iv) it may not also make other Partnership Distributions
under clause (iii) above for the same period; and
(v) Partnership may make payments of principal
and interest on Short Term General Partner Subordinated
Debt with the proceeds of Pre-Conversion Loans; provided
that no such payments may be made that would cause the
outstanding principal amount of all General Partner
Subordinated Debt plus the value of the Premises (as set
forth in the Joint Venture Agreement) plus the cash
contributed to the Partnership in exchange for partnership
interests therein to be less than $130,000,000.
Neither Partnership nor any of its Subsidiaries may directly or
indirectly declare, order, pay or make, or set apart any sum or
property for, any Restricted Junior Payment or agree to do so
except as permitted by this subsection 7.5.
7.6 Financial Covenants.
A. Minimum Coverage Ratio. Partnership shall not
permit the ratio of (i) Consolidated Adjusted EBITDA minus Tax
Distributions made pursuant to subsection 7.5(ii) minus Other
Partnership Distributions made pursuant to subsection 7.5(iii) or
7.5(iv) minus Consolidated Capital Expenditures to (ii) Scheduled
Facility Reductions plus Consolidated Cash Interest Expense plus
Permitted General Partner Subordinated Debt Payments plus Other
Permitted Indebtedness Payments, in each case for or actually made
during the periods after the Conversion Date set forth below, to be
less than the correlative ratio indicated:
Fiscal Quarter after Conversion Date
Minimum Coverage Ratio
First through sixth
1.05:1.00
Seventh through twelfth
1.10:1.00
Thirteenth and all full Fiscal Quarters
1.15:1.00
thereafter through the Commitment
Termination Date
; provided that amounts shall be calculated for (a) in the case of the
first full Fiscal Quarter after the Conversion Date, the three-month
period commencing with the first day of the first full Fiscal Quarter
after the Conversion Date (b) in the case of the second full Fiscal
Quarter after the Conversion Date, the six-month period
commencing with the first day of the first full Fiscal Quarter after
the Conversion Date; (c) in the case of the third full Fiscal Quarter
after the Conversion Date, the nine-month period, commencing with
the first day of the first full Fiscal Quarter after the Conversion
Date and (d) in the case of the fourth full Fiscal Quarter after the
Conversion Date and each subsequent full Fiscal Quarter, the four
consecutive Fiscal Quarter period ending as of the last day of such
Fiscal Quarter of Partnership; provided further that Partnership
shall be deemed not to be in default under this subsection 7.6A
during the period from the first Fiscal Quarter after the Conversion
Date through the sixth Fiscal Quarter after the Conversion Date so
long as Circus and its Affiliates timely make any Additional
Contribution (as that term is defined in the Make-Well Agreement)
pursuant to the terms of the Make-Well Agreement; provided
further that any contribution of cash to Partnership by Circus in
exchange for equity of Partnership or General Partner Subordinated
Debt shall be included, without duplication, in Consolidated Net
Income for the Fiscal Quarter in which such contribution is made
(or, if made within 10 calendar days of the end of a Fiscal Quarter,
for such Fiscal Quarter immediately ended if Circus notifies Agent
in writing at the time of such contribution that such contribution is
to be so credited) for purposes of determining whether there is an
Event of Default under this subsection 7.6A; provided further that,
if there has been a change in Managing Partner, no change in the
performance standard required of Partnership under this subsection
7.6A that would increase the amount required to be paid by Circus
to fulfill the "Make-Well Obligations" under and as defined in the
Make-Well Agreement, shall be effective to cause such increase
unless Circus shall have received prior notice of such change.
B. Maximum Leverage Ratio. Partnership shall not
permit the Leverage Ratio for any four consecutive Fiscal Quarter
period ending as of the last day of any full Fiscal Quarter after the
Conversion Date of Partnership set forth below to exceed the
correlative ratio indicated:
Fiscal Quarter Maximum Leverage Ratio
Fourth and fifth
4.75:1.00
Sixth and seventh
4.25:1.00
Eighth and ninth
4.00:1.00
Tenth through twelfth
3.50:1.00
Thirteenth through fifteenth
3.00:1.00
Sixteenth and all full
2.75:1.00
Fiscal Quarters thereafter
through the Commitment Termination Date
7.7 Restriction on Fundamental Changes; Asset Sales and
Acquisitions.
Partnership shall not, and shall not permit any of its
Subsidiaries to, alter the corporate, partnership, capital or legal
structure of Partnership or any of its Subsidiaries, or enter into any
transaction of merger or consolidation, or liquidate, wind-up or
dissolve itself (or suffer any liquidation or dissolution), or convey,
sell, lease, sub-lease, transfer or otherwise dispose of, in one
transaction or a series of transactions, all or any part of its
business, property or fixed assets, whether now owned or hereafter
acquired, or acquire by purchase or otherwise all or substantially all
the business, property or fixed assets of, or stock or other evidence
of beneficial ownership of, any Person or any division or line of
business of any Person, except:
(i) any Subsidiary of Partnership may be merged
with or into Partnership or any wholly-owned Subsidiary of
Partnership, or be liquidated, wound up or dissolved, or all
or any part of its business, property or assets may be
conveyed, sold, leased, transferred or otherwise disposed of,
in one transaction or a series of transactions, to Partnership
or any wholly-owned Subsidiary of Partnership; provided
that, in the case of such a merger, Partnership or such
wholly-owned Subsidiary shall be the continuing or surviving
Person;
(ii) Partnership and its Subsidiaries may make
Consolidated Capital Expenditures permitted under
subsection 7.8;
(iii) Partnership and its Subsidiaries may sell or
otherwise dispose of assets in transactions that do not
constitute Asset Sales; provided that the consideration
received for such assets shall be in an amount at least equal
to the fair market value thereof;
(iv) Partnership and its Subsidiaries may, in the
ordinary course of business, sell for cash, equipment that is
obsolete or in need of replacement and no longer used or
useful in its business;
(v) Partnership may dispose of personal property
to customers or potential customers in connection with
promotions in the ordinary course of business substantially
consistent with the practice of other gaming institutions in
connection with their gaming operations in the State of
Nevada; and
(vi) Partnership and its wholly-owned Subsidiaries
may make Investments permitted by subsection 7.3(ii).
7.8 Consolidated Capital Expenditures.
Partnership shall not, and shall not permit its
Subsidiaries to, make or incur Consolidated Capital Expenditures,
in any calendar year indicated below, in an aggregate amount in
excess of the corresponding amount (the "Maximum Consolidated
Capital Expenditure Amount") set forth below opposite such
calendar year.
Maximum Consolidated
Calendar Year Capital Expenditures
Calendar 1996 $5,000,000
Calendar 1997 5,000,000
Calendar 1998 7,000,000
Each calendar year thereafter 7,000,000
; provided that if any portion of the Maximum Consolidated Capital
Expenditure Amount for any calendar year (the "Reference
Period") has not been incurred within such Reference Period (the
unutilized portion of such Maximum Consolidated Capital
Expenditure Amount being referred to as the "Unutilized
Amount"), Partnership and its Subsidiaries may, in the calendar
year immediately following the Reference Period, make additional
Consolidated Capital Expenditures in an amount not to exceed the
lesser of (i) the Unutilized Amount and (ii) an amount that will not
cause the aggregate Consolidated Capital Expenditures for such
calendar year to exceed $10,000,000. In determining any amount
pursuant to the foregoing clauses (i) or (ii) permitted to be carried
forward as Consolidated Capital Expenditures to be made in a
succeeding calendar year, such amount shall be determined solely
on the basis of the Maximum Consolidated Capital Expenditure
Amount permitted for that Reference Period and shall not include
any Unutilized Amount from any prior period. Notwithstanding the
foregoing, in addition to such Maximum Consolidated Capital
Expenditure Amount and additional Consolidated Capital
Expenditures, Partnership and its Subsidiaries may make additional
Consolidated Capital Expenditures of up to $7,500,000 for purposes
of initial construction of (but not subsequent improvement of) the
Attraction.
7.9 Sales and Lease-Backs.
Partnership shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, become or remain liable as
lessee or as a guarantor or other surety with respect to any lease,
whether an Operating Lease or a Capital Lease, of any property
(whether real, personal or mixed), whether now owned or hereafter
acquired, (i) which Partnership or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than
Partnership or any of its Subsidiaries) or (ii) which Partnership or
any of its Subsidiaries intends to use for substantially the same
purpose as any other property which has been or is to be sold or
transferred by Partnership or any of its Subsidiaries to any Person
(other than Partnership or any of its Subsidiaries) in connection with
such lease.
7.10 Sale or Discount of Receivables.
Partnership shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, sell with recourse, or discount
or otherwise sell for less than the face value thereof, any of its
notes or accounts receivable (other than settlements in the ordinary
course of business and substantially consistent with the practice at
other gaming institutions in connection with their gaming operations
in the State of Nevada with payors of such notes or accounts
receivable reached to facilitate collection from such payor of such
notes or accounts receivable).
7.11 Transactions with Shareholders and Affiliates.
Partnership shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly, enter into or permit to exist
any transaction (including, without limitation, the purchase, sale,
lease or exchange of any property or the rendering of any service)
with any holder of 5% or more of any class of equity Securities of
Partnership or with any Affiliate of Partnership or of any such
holder; provided that the foregoing restriction shall not apply to
(i) any transaction between Partnership and any of its wholly-owned
Subsidiaries or between any of its wholly-owned Subsidiaries,
(ii) reasonable and customary management fees and reimbursements
of expenses paid to Managing Partner pursuant to the terms of the
Joint Venture Agreement, (iii) other payments permitted by the
Joint Venture Agreement as in effect at the Closing Date and not
otherwise prohibited or restricted by the terms of this Agreement,
(iv) the General Partner Subordinated Debt, (v) the Eldorado
Completion Guaranty, the Circus Completion Guaranty or the
Make-Well Agreement, or (vi) transactions between Partnership and
its Affiliates necessary to the operation of the Project that the
Executive Committee has determined in good faith are conducted on
terms no less favorable than could be obtained from a third party in
an arm's-length transaction.
7.12 Disposal of Subsidiary Stock.
Partnership shall not:
(i) directly or indirectly sell, assign, pledge or
otherwise encumber or dispose of any shares of capital stock
or other equity Securities of any of its Subsidiaries, except to
qualify directors if required by applicable law; or
(ii) permit any of its Subsidiaries directly or
indirectly to sell, assign, pledge or otherwise encumber or
dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries (including such
Subsidiary), except to Partnership, another Subsidiary of
Partnership, or to qualify directors if required by applicable
law.
7.13 Conduct of Business.
From and after the Closing Date, Partnership shall
not, and shall not permit any of its Subsidiaries to, engage in any
business other than (i) the businesses engaged in and anticipated on
the Closing Date to be engaged in by Partnership and its
Subsidiaries as evidenced by the Plans, and similar or related
businesses and (ii) such other lines of business as may be consented
to by Lenders.
7.14 Amendments of Related Documents.
A. Partnership shall not, and shall not permit any
of its Subsidiaries to, amend or otherwise change the terms of any
Subordinated Indebtedness, or make any payment consistent with an
amendment thereof or change thereto, if the effect of such
amendment or change is to increase the interest rate on such
Subordinated Indebtedness, change (to earlier dates) any dates upon
which payments of principal or interest are due thereon, change any
event of default or condition to an event of default with respect
thereto (other than to eliminate any such event of default), change
the redemption, prepayment or defeasance provisions thereof,
change the subordination provisions thereof (or of any guaranty
thereof), or change any collateral therefor (other than to release
such collateral), or if the effect of such amendment or change,
together with all other amendments or changes made, is to increase
materially the obligations of the obligor thereunder or to confer any
additional rights on the holders of such Subordinated Indebtedness
(or a trustee or other representative on their behalf) which would be
materially adverse to Partnership or adverse to Lenders.
B. Partnership shall not amend or otherwise
change the terms of the Joint Venture Agreement if the effect of
such amendment or change, together with all other amendments or
changes made, is to increase the obligations of the Partnership
thereunder or to confer any additional rights on the other parties
thereto that in either case would be materially adverse to
Partnership or adverse to Lenders.
7.15 Fiscal Year.
Partnership shall not change its Fiscal Year-end from
December 31 without giving notice to Agent at least 30 days in
advance of such change.
7.16 Transfer of Partnership Interests.
No General Partner shall transfer all or any portion of
its interest in Partnership or any rights therein except as permitted
pursuant to subsection 12.4 of the Joint Venture Agreement as in
effect as of the Closing Date; provided that the provisions of this
subsection shall not limit the operation of subsection 8.12.
7.17 Loan to Value Ratio.
Partnership shall not permit the ratio of Total
Utilization of Commitments less the principal amount of all
outstanding Working Capital Loans to the Construction Costs set
forth in the Budget, to exceed 0.70:1.00 at any time.
Section 8. EVENTS OF DEFAULT
If any of the following conditions or events ("Events
of Default") shall occur:
8.1 Failure to Make Payments When Due.
(a) Failure by Partnership to pay any installment
of principal of any Loan when due, whether at stated maturity, by
acceleration, by notice of voluntary prepayment (unless such notice
is revoked by Partnership and would not result in the incurrence of
any costs by Agent or any Lender or, if incurred, such costs are
reimbursed by Partnership) by mandatory prepayment or otherwise;
(b) Failure by Partnership to pay when due any
amount payable to an Issuing Lender in reimbursement of any
drawing under a Letter of Credit; or
(c) Failure by Partnership to pay any interest on
any Loan or any fee or any other amount due under this Agreement
within five days after the date due; or
8.2 Default in Other Agreements.
A. Partnership's Agreements
(i) Failure of Partnership or any of its Subsidiaries
to pay when due (a) any principal of or interest on any
Indebtedness (other than Indebtedness referred to in
subsection 8.1) in an individual principal amount of
$2,500,000 or more or any items of Indebtedness with an
aggregate principal amount of $5,000,000 or more or (b) any
Contingent Obligation in an individual principal amount of
$2,500,000 or more or any Contingent Obligations with an
aggregate principal amount of $5,000,000 or more, in each
case beyond the end of any grace period provided therefor;
or (ii) breach or default by Partnership or any of its
Subsidiaries with respect to any other material term of
(a) any evidence of any Indebtedness in an individual
principal amount of $2,500,000 or more or any items of
Indebtedness with an aggregate principal amount of
$5,000,000 or more or any Contingent Obligation in an
individual principal amount of $2,500,000 or more or any
Contingent Obligations with an aggregate amount of
$5,000,000 or more or (b) any loan agreement, mortgage,
indenture or other agreement relating to such Indebtedness or
Contingent Obligations(s), if the effect of such breach or
default is to cause, or to permit the holder or holders of that
Indebtedness or Contingent Obligation(s) (or a trustee on
behalf of such holder or holders) to cause, that Indebtedness
or Contingent Obligation(s) to become or be declared due
and payable prior to its stated maturity or the stated maturity
or any underlying obligation, as the case may be (upon the
giving or receiving of notice, lapse of time, both, or
otherwise); or
B. Circus Revolving Loan Agreements.
The occurrence of (i) any default (or in the case of
amendment, supplementation, other modification or
termination of either of the Circus Revolving Loan
Agreements after the Closing Date, the occurrence of any
event that would have been a default had such amendment,
supplementation, modification or termination not occurred)
under subsections 6.3, 9.1(a), 9.1(b), 9.1(c), 9.1(g), 9.1(k)
or 9.1(p) of either of the Circus Revolving Loan
Agreements, whether or not such default is later cured or
waived (except any waiver given to permit the acquisition by
Circus of the group known as Gold Strike Resorts) or
(ii) any default under either of the Circus Revolving Loan
Agreements if, as a result thereof, the lenders thereunder
elect the remedies described in subsection 9.2(a)(2) thereof.
8.3 Breach of Certain Covenants.
Failure of Partnership or Partners to perform or
comply with any term or condition contained in subsection 2.4A,
2.4B(iii), 2.5, 6.1(ix), 6.2, 6.6, 6.10 or Section 7 of this
Agreement; or
8.4 Breach of Warranty.
Any representation, warranty, certification or other
statement made by any Loan Party or by any of Partnership Parents
in any Loan Document or in any statement or certificate at any time
given by any of them in writing pursuant hereto or thereto or in
connection herewith or therewith shall be false in any material
respect on the date as of which made; or
8.5 Other Defaults Under Loan Documents.
Any Loan Party or Circus or Eldorado Hotel
Associates shall default in the performance of or compliance with
any term contained in this Agreement or any of the other Loan
Documents to be complied with by such Person, other than any
such term referred to in any other subsection of this Section 8, and
such default shall not have been remedied or waived within 15 days
after receipt by Partnership of notice from Agent or any Lender of
such default; or
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) A court having jurisdiction in the premises
shall enter a decree or order for relief in respect of any Loan Party
in an involuntary case under the Bankruptcy Code or under any
other applicable bankruptcy, insolvency or similar law now or
hereafter in effect, which decree or order is not stayed; or any other
similar relief shall be granted under any applicable federal or state
law; or (ii) an involuntary case shall be commenced against any
Loan Party under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in
effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over any
Loan Party, or over all or a substantial part of its property, shall
have been entered; or there shall have occurred the involuntary
appointment of an interim receiver, trustee or other custodian of
any Loan Party for all or a substantial part of its property; or a
warrant of attachment, execution or similar process shall have been
issued against any substantial part of the property of any Loan
Party, and any such event described in this clause (ii) shall continue
for 60 days unless dismissed, bonded or discharged; or
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc.
(i) Any Loan Party shall have an order for relief
entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy,
insolvency or similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or
to the conversion of an involuntary case to a voluntary case, under
any such law, or shall consent to the appointment of or taking
possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or any Loan Party shall make any
assignment for the benefit of creditors; or (ii) any Loan Party shall
be unable, or shall fail generally, or shall admit in writing its
inability, to pay its debts as such debts become due; or the Board of
Directors of any Loan Party (or any committee thereof) shall adopt
any resolution or otherwise authorize any action to approve any of
the actions referred to in clause (i) above or this clause (ii); or
8.8 Judgments and Attachments.
Any money judgment, writ or warrant of attachment
or similar process involving (i) in any individual case an amount in
excess of $2,500,000 or (ii) in the aggregate at any time an amount
in excess of $5,000,000 (in either case not adequately covered by
insurance as to which a solvent and unaffiliated insurance company
has acknowledged coverage) shall be entered or filed against any
Loan Party or any of their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of 60
days (or in any event later than five days prior to the date of any
proposed sale thereunder); or
8.9 Dissolution.
(i) Any order, judgment or decree shall be entered
against any Loan Party decreeing the dissolution or split up of such
Loan Party and such order shall remain undischarged or unstayed
for a period in excess of 30 days; or
(ii) the occurrence of any "Liquidating Event" (as
such term is defined in subsection 13.1 (or any successor provision)
of the Joint Venture Agreement).
8.10 Employee Benefit Plans.
There shall occur one or more ERISA Events which
individually or in the aggregate results in or might reasonably be
expected to result in liability of Partnership or any of its ERISA
Affiliates in excess of $5,000,000 during the term of this
Agreement; or there shall exist an amount of unfunded benefit
liabilities (as defined in Section 4001(a)(18) of ERISA), individually
or in the aggregate for all Pension Plans sponsored by Partnership
or any of its ERISA Affiliates (excluding for purposes of such
computation any Pension Plans with respect to which assets exceed
benefit liabilities), which exceeds $5,000,000; or
8.11 Material Adverse Effect.
Any event or change shall occur that has caused or
evidences, either in any case or in the aggregate, a Material
Adverse Effect; or
8.12 Change in Control.
General Partners or their Affiliates on the Closing
Date shall cease to beneficially own and control all of the
partnership interests in Partnership or Circus and its Affiliates shall
cease to beneficially own and control at least 50% of the
partnership interests in the Partnership; or
8.13 Invalidity of Environmental Indemnities or Guaranties.
Any Environmental Indemnity or any guaranty of the
Obligations, including, without limitation, (i) the Circus Completion
Guaranty prior to the Final Completion Date, (ii) the Make-Well
Agreement and (iii) the Eldorado Completion Guaranty, for any
reason, other than the satisfaction in full of all Obligations, ceases
to be in full force and effect or is declared to be null and void, or
any guarantor or indemnitor, including Circus and Eldorado Hotel
Associates, denies that it has any further liability, including, without
limitation, with respect to future advances by Lenders, under any
indemnity or guaranty or under any make-well agreement, including
the Make-Well Agreement, or under any Environmental Indemnity
or gives notice to such effect, in each case, to the extent it relates to
the Obligations; or
8.14 Impairment of Collateral.
(A) A judgment creditor of any Loan Party or any
of their respective Subsidiaries shall obtain possession of any
material portion of the Collateral under the Collateral Documents by
any means, including, without limitation, levy, distraint, replevin or
self-help, (B) any substantial portion of the Collateral shall be taken
by eminent domain or condemnation, (C) any of the Collateral
Documents shall cease for any reason to be in full force and effect,
or any party thereto shall purport to disavow its obligations
thereunder or shall declare that it does not have any further
obligations thereunder or shall contest the validity or enforceability
thereof or Lenders shall cease to have a valid and perfected first
priority security interest in any material Collateral therein except as
permitted under the terms of such Collateral Document, or
(D) Agent's security interests or Liens, in each case on behalf of
Lenders, on any material portion of the Collateral under the
Collateral Documents shall become otherwise impaired or
unenforceable; or
8.15 Completion of Construction.
Partnership shall not have (i) Completed Construction
on or prior to the Projected Completion of Construction Date or
(ii) Finally Completed Construction on or prior to the Projected
Final Completion Date; provided that Partnership shall be deemed
not to be in default under this subsection 8.15 for such period as
Circus and/or Eldorado Hotel Associates or their respective
Affiliates diligently is proceeding to Complete Construction or
Finally Complete Construction in accordance with the terms of the
Circus Completion Guaranty or the Eldorado Completion Guaranty
as the case may be, including, without limitation, performance by
Circus or Eldorado Hotel Associates or their respective Affiliates
within the Time for Performance (as defined in the Circus
Completion Guaranty and the Eldorado Completion Guaranty,
respectively); or
8.16 Loss of Governmental Authorizations.
Any Governmental Authorization that is material to
the ownership, use, construction or operation of the Project ceases
to be valid and in full force or effect or to be held by the Person
required to hold such Governmental Authorization for more than
five (5) calendar days; or
8.17 Gaming License.
The occurrence of a License Revocation that
continues for at least five (5) calendar days; or
8.18 Encroachments.
Prior to the Final Completion Date there shall be any
material encroachment onto the Premises (an "Unauthorized
Encroachment"); provided, however, that if such Encroachment is
curable within thirty (30) days (or such longer period as Requisite
Lenders shall have expressly approved in writing) and does not
relate, in the reasonable judgment of Requisite Lenders, to matters
that require immediate correction or are otherwise of an emergency
nature, it shall not constitute a default if corrective action
satisfactory to Agent is commenced within five (5) days after
written notice from Agent, and such Unauthorized Encroachment is
in fact cured within thirty (30) days after such notice (or within
such longer period as is approved in writing by Requisite Lenders);
or
8.19 Work Stoppage.
Work on the Project shall cease prior to the Final
Completion Date for twenty (20) or more consecutive days without
the prior written consent of Requisite Lenders;
8.20 Remedies.
THEN
(A) prior to the Final Completion Date:
(a) With the consent of Requisite Lenders, Agent
shall have the right to cause an independent contractor
selected by Agent to enter into possession of the Premises
and to perform any and all work and labor necessary for the
completion of the Project substantially in accordance with the
Plans and to perform Partnership's construction obligations
under this Agreement. All sums reasonably expended by
Agent for such purposes shall be deemed to have been
disbursed to and borrowed by Partnership and shall be
deemed to be Obligations secured by the Collateral
Documents.
(b) Partnership hereby constitutes and appoints
Agent, or an independent contractor selected by Agent, as its
true and lawful attorney-in-fact with full power of
substitution to Finally Complete Construction and to perform
Partnership's construction obligations under this Agreement
in the name of Partnership, and hereby empowers said
attorney-in-fact to do any or all of the following upon the
occurrence of an Event of Default:
(i) to use any of the funds of Partnership,
including any balance of the Loans and any funds that
may be held by Agent for Partnership, for the purpose
of effecting completion of the Project in the manner
called for by the Plans;
(ii) to make such additions, changes and
corrections in the Plans as shall be necessary or
desirable to Finally Complete Construction in
substantially the manner contemplated by the Plans;
(iii) to employ any contractors,
subcontractors, agents, architects and inspectors
required for said purposes;
(iv) to employ attorneys to defend against
attempts to interfere with the exercise of the powers
granted hereby;
(v) to pay, settle or compromise all existing
bills and claims that are or may be Liens against the
Premises or the Project or may be necessary or
desirable to Finally Complete Construction or to clear
objections to or encumbrances on title;
(vi) to execute all applications and
certificates in the name of Partnership that may be
required by any Construction Contract or contract
necessary or desirable to Finally Complete
Construction;
(vii) to prosecute and defend all actions or
proceedings in connection with the Project and to take
such action, require such performance and do any act
as is deemed necessary to Finally Complete
Construction that Partnership might do on its own
behalf;
(viii) to let new or additional contracts with
the same contractor(s) or others to the extent not
prohibited by their existing contracts;
(ix) to employ watchmen and erect security
fences to protect the Project from injury; and
(x) to take such action and require such
performance as it deems necessary under any of the
bonds or insurance policies to be furnished hereunder,
to make settlements and compromises with the
sureties or insurers thereunder, and in connection
therewith to execute instruments of release and
satisfaction. It is understood and agreed that the
foregoing power of attorney shall be deemed to be a
power coupled with an interest that cannot be revoked
until such time as Partnership, Circus or such
attorney-in-fact is able to Finally Complete
Construction or to cause such events to occur.
(c) Agent may exercise all rights of Agent under
the Circus Completion Guaranty and the Eldorado
Completion Guaranty.
(B) at any time, (i) upon the occurrence of any
Event of Default described in subsection 8.6 or 8.7, each of (a) the
unpaid principal amount of and accrued interest on the Loans,
(b) an amount equal to the maximum amount that may at any time
be drawn under all Letters of Credit then outstanding (whether or
not any beneficiary under any such Letter of Credit shall have
presented, or shall be entitled at such time to present, the drafts or
other documents or certificates required to draw under such Letter
of Credit), and (c) all other Obligations shall automatically become
immediately due and payable, without presentment, demand, protest
or other requirements of any kind, all of which are hereby expressly
waived by Partnership, and the obligation of each Lender to make
any Loan, the obligation of Agent to issue any Letter of Credit and
the right of any Lender to issue any Letter of Credit hereunder shall
thereupon automatically terminate, and (ii) upon the occurrence and
during the continuation of any other Event of Default, Agent shall,
upon the written request or with the written consent of Requisite
Lenders, by written notice to Partnership, declare all or any portion
of the amounts described in clauses (a) through (c) above to be, and
the same shall forthwith become, immediately due and payable, and
the obligation of each Lender to make any Loan, the obligation of
Agent to issue any Letter of Credit and the right of any Lender to
issue any Letter of Credit hereunder shall thereupon terminate;
provided that the foregoing shall not affect in any way the
obligations of Lenders under subsection 3.3C(i). No remedy
conferred in this Agreement upon any Lender is intended to be
exclusive of any other remedy, and each and every such remedy
shall be cumulative and shall be in addition to every other remedy
conferred herein or now or hereafter existing at law or in equity or
by statute or otherwise.
Any amounts described in clause (b) of subsection
8.20B, when received by Agent, shall be held by Agent pursuant to
the terms of the Collateral Account Agreement and shall be applied
as therein provided.
Notwithstanding anything contained in the second
preceding paragraph, if at any time within 60 days after an
acceleration of the Loans pursuant to such paragraph Partnership
shall pay all arrears of interest and all payments on account of
principal which shall have become due otherwise than as a result of
such acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this
Agreement) and all Events of Default and Potential Events of
Default (other than non-payment of the principal of and accrued
interest on the Loans, in each case which is due and payable solely
by virtue of acceleration) shall be remedied or waived pursuant to
subsection 10.6, then Supermajority Lenders, by written notice to
Partnership, may at their option rescind and annul such acceleration
and its consequences; but such action shall not affect any
subsequent Event of Default or Potential Event of Default or impair
any right consequent thereon. The provisions of this paragraph are
intended to bind all Lenders to a decision that may be made at the
election of Supermajority Lenders and are not intended to benefit
Partnership and do not grant Partnership the right to require
Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
Section 9. AGENT
9.1 Appointment.
FIB is hereby appointed Agent hereunder and under
the other Loan Documents and each Lender hereby authorizes
Agent to act as its agent in accordance with the terms of this
Agreement and the other Loan Documents. Agent agrees to act
upon the express conditions contained in this Agreement and the
other Loan Documents, as applicable. The provisions of this
Section 9 are solely for the benefit of Agent, Managing Agents and
Lenders and Partnership shall have no rights as a third party
beneficiary of any of the provisions thereof. In performing its
functions and duties under this Agreement, Agent shall act solely as
an agent of Lenders and does not assume and shall not be deemed
to have assumed any obligation towards or relationship of agency or
trust with or for Partnership or any of its Subsidiaries other than as
set forth in subsection 2.1D(v).
9.2 Powers; General Immunity.
A. Duties Specified. Each Lender irrevocably authorizes
Agent to take such action on such Lender's behalf and to exercise
such powers hereunder and under the other Loan Documents as are
specifically delegated to Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto.
Agent shall have only those duties and responsibilities that are ex-
pressly specified in this Agreement and the other Loan Documents
and it may perform such duties by or through its agents or
employees. No Managing Agent shall have any duty or
responsibility under this Agreement or any Loan Document in its
capacity as Managing Agent. Neither Agent nor Managing Agents
shall have, by reason of this Agreement or any of the other Loan
Documents, a fiduciary relationship in respect of any Lender; and
nothing in this Agreement or any of the other Loan Documents,
expressed or implied, is intended to or shall be so construed as to
impose upon Agent or Managing Agents any obligations in respect
of this Agreement or any of the other Loan Documents except, with
respect to Agent, as expressly set forth herein or therein.
B. No Responsibility for Certain Matters. Agent shall
not be responsible to any Lender for the execution, effectiveness,
genuineness, validity, enforceability, collectibility or sufficiency of
this Agreement or any other Loan Document or for any
representations, warranties, recitals or statements made herein or
therein or made in any written or oral statements or in any financial
or other statements, instruments, reports or certificates or any other
documents furnished or made by Agent to Lenders or by or on
behalf of Partnership to Agent or any Lender in connection with the
Loan Documents and the transactions contemplated thereby or for
the financial condition or business affairs of Partnership or any
other Person liable for the payment of any Obligations, nor shall
Agent be required to ascertain or inquire as to the performance or
observance of any of the terms, conditions, provisions, covenants or
agreements contained in any of the Loan Documents or as to the use
of the proceeds of the Loans or the use of the Letters of Credit or
as to the existence or possible existence of any Event of Default or
Potential Event of Default. Anything contained in this Agreement
to the contrary notwithstanding, Agent shall not have any liability
arising from confirmations of the amount of outstanding Loans or
the Letter of Credit Usage or the component amounts thereof.
C. Exculpatory Provisions. Neither Agent nor any of
its officers, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by Agent under or in connection
with any of the Loan Documents except to the extent caused by
Agent's gross negligence or willful misconduct. If Agent shall
request instructions from Lenders with respect to any act or action
(including the failure to take an action) in connection with this
Agreement or any of the other Loan Documents, Agent shall be
entitled to refrain from such act or taking such action unless and
until Agent shall have received instructions from Requisite Lenders,
Supermajority Lenders or all Lenders if unanimity is required
hereunder. Without prejudice to the generality of the foregoing,
(i) Agent shall be entitled to rely, and shall be fully protected in
relying, upon any communication, instrument or document
reasonably believed by it to be genuine and correct and to have
been signed or sent by the proper person or persons, and shall be
entitled to rely and shall be protected in relying on opinions and
judgments of attorneys (who may be attorneys for Partnership and
its Subsidiaries), accountants, experts and other professional
advisors reasonably selected by it; and (ii) no Lender shall have any
right of action whatsoever against Agent as a result of Agent acting
or (where so instructed) refraining from acting under this
Agreement or any of the other Loan Documents in accordance with
the instructions of Requisite Lenders or all Lenders as required or
permitted by this Agreement. Agent shall be entitled to refrain
from exercising any power, discretion or authority vested in it
under this Agreement or any of the other Loan Documents unless
and until it has obtained the instructions of Requisite Lenders.
D. Agent Entitled to Act as Lender. The agency
hereby created shall in no way impair or affect any of the rights and
powers of, or impose any duties or obligations upon, Agent in its
individual capacity as a Lender hereunder. With respect to its par-
ticipation in the Loans and the Letters of Credit, Agent shall have
the same rights and powers hereunder as any other Lender and may
exercise the same as though it were not performing the duties and
functions delegated to it hereunder, and the term "Lender" or
"Lenders" or any similar term shall, unless the context clearly
otherwise indicates, include Agent in its individual capacity. Agent
and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of banking, trust, financial advisory or
other business with Partnership or any of its Affiliates as if it were
not performing the duties specified herein, and may accept fees and
other consideration from Partnership for services in connection with
this Agreement and otherwise without having to account for the
same to Lenders.
9.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness.
Each Lender represents and warrants that it has made
its own independent investigation of the financial condition and
affairs of Partnership and its Subsidiaries in connection with the
making of the Loans and the issuance of Letters of Credit hereunder
and that it has made and shall continue to make its own appraisal of
the creditworthiness of Partnership and its Subsidiaries. Agent shall
not have any duty or responsibility, either initially or on a continu-
ing basis, to make any such investigation or any such appraisal on
behalf of Lenders or to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession
before the making of the Loans or at any time or times thereafter,
and Agent shall not have any responsibility with respect to the
accuracy of or the completeness of any information provided to
Lenders.
9.4 Right to Indemnity.
Each Lender, in proportion to its Pro Rata Share,
severally agrees to indemnify Agent, to the extent that Agent shall
not have been reimbursed by Partnership, or Partnership Parents or
another Loan Party, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and
disbursements) or disbursements of any kind or nature whatsoever
which may be imposed on, incurred by or asserted against Agent in
performing its duties hereunder or under the other Loan Documents
or otherwise in its capacity as Agent in any way relating to or
arising out of this Agreement or the other Loan Documents;
provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from
Agent's gross negligence or willful misconduct; provided, further,
that if Agent is subsequently reimbursed by Partnership, or
Partnership Parents or any other Loan Party for any such liabilities,
losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements in an amount that, together with amounts
paid to Agent by Lenders under this subsection 9.4, exceeds the
amount actually expended by Agent therefor, Agent shall promptly
disburse such excess amount to those Lenders that made payments
under this subsection 9.4 in proportion to their payments hereunder.
If any indemnity furnished to Agent for any purpose shall, in the
opinion of Agent, be insufficient or become impaired, Agent may
call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished.
9.5 Successor Agent.
Agent may resign at any time by giving 30 days'
prior written notice thereof to Lenders and Partnership, and Agent
may be removed at any time with or without cause by an instrument
or concurrent instruments in writing delivered to Partnership and
Agent and signed by Requisite Lenders (determined without giving
effect to Agent's Loan Exposure). Upon any such notice of
resignation or any such removal, Lenders shall have the right, with
the consent of Partnership (which consent shall not be withheld
unreasonably), to appoint a successor Agent provided that such
Requisite Lenders may proceed without Partnership's consent if
Partnership refuses to consent to one of two successive nominees
for successor Agent who are Lenders on the Closing Date. Upon
the acceptance of any appointment as Agent hereunder by a
successor Agent, that successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties
of the retiring or removed Agent and the retiring or removed Agent
shall be discharged from its duties and obligations under this Agree-
ment. After any retiring or removed Agent's resignation or
removal hereunder as Agent, the provisions of this Section 9 shall
inure to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement.
9.6 Collateral Documents.
Each Lender hereby further authorizes Agent to enter
into the Collateral Documents as secured party on behalf of and for
the benefit of each Lender and agrees to be bound by the terms of
the Collateral Documents; provided that Agent shall not enter into
or consent to any amendment, modification, termination or waiver
of any provision contained in the Collateral Documents except as
set forth in subsection 10.6. Anything contained in any of the Loan
Documents to the contrary notwithstanding, each Lender agrees that
no Lender shall have any right individually to realize upon any of
the collateral under the Collateral Documents, it being understood
and agreed that all rights and remedies under the Collateral
Documents may be exercised solely by Agent for the benefit of
Lenders in accordance with the terms thereof.
Section 10. MISCELLANEOUS
10.1 Assignments and Participations in Loans and Letters of
Credit.
A. General. Each Lender shall have the right at any
time to (i) sell, assign or transfer to any Eligible Assignee, or
(ii) sell participations to any Person in, all or any part of its
Commitment or any Loan or Loans made by it or its Letters of
Credit or participations therein or any other interest herein or in any
other Obligations owed to it; provided that no such sale,
assignment, transfer or participation shall, without the consent of
Partnership, require Partnership to file a registration statement with
the Securities and Exchange Commission or apply to qualify such
sale, assignment, transfer or participation under the securities laws
of any state; provided, further that no such sale, assignment or
transfer described in clause (i) above shall be effective unless and
until an Assignment Agreement effecting such sale, assignment or
transfer shall have been accepted by Agent and recorded in the
Register as provided in subsection 10.1B(ii); provided, further that
no such sale, assignment, transfer or participation of any Letter of
Credit or any participation therein may be made separately from a
sale, assignment, transfer or participation of a corresponding
interest in the Commitment and the Loans of the Lender effecting
such sale, assignment, transfer or participation; and provided
further that no such sale, assignment, transfer or participation of
any Letter of Credit or any participation therein shall be required to
the extent it would be prohibited by any Gaming Law. Except as
otherwise provided in this subsection 10.1, no Lender shall, as
between Partnership and such Lender, be relieved of any of its
obligations hereunder as a result of any sale, assignment or transfer
of, or any granting of participations in, all or any part of its
Commitment or the Loans, the Letters of Credit or participations
therein, or the other Obligations owed to such Lender.
B. Assignments.
(i) Amounts and Terms of Assignments. Each
Commitment, Loan, Letter of Credit or participation therein, or
other Obligation may (a) be assigned in any amount to another
Lender, or to an Affiliate of the assigning Lender or another
Lender, with the giving of notice to Partnership and Agent or (b) be
assigned in an aggregate amount of not less than $10,000,000 (or
such lesser amount as shall constitute the aggregate amount of the
Commitment, Loans, Letters of Credit and participations therein,
and other Obligations of the assigning Lender) to any other Eligible
Assignee described in clause (A) of the definition of "Eligible
Assignee" provided that any such assignment in accordance with
either clause (a) or clause (b) above shall effect a pro rata
assignment of the Loans, Letters of Credit (or participations therein)
and commitment of the assigning Lender. To the extent of any
such assignment in accordance with either clause (a) or (b) above,
the assigning Lender shall be relieved of its obligations with respect
to its Commitment, Loans, Letters of Credit or participations
therein, or other Obligations or the portion thereof so assigned.
The parties to each such assignment shall execute and deliver to
Agent, for its acceptance and recording in the Register, an
Assignment Agreement, together with a processing and recordation
fee of $2,500 and such forms, certificates or other evidence, if any,
with respect to United States federal income tax withholding matters
as the assignee under such Assignment Agreement may be required
to deliver to Agent pursuant to subsection 2.7B(iii)(a). Upon such
execution, delivery, acceptance and recordation, from and after the
effective date specified in such Assignment Agreement, (y) the
assignee thereunder shall be a party hereto and, to the extent that
rights and obligations hereunder have been assigned to it pursuant to
such Assignment Agreement, shall have the rights and obligations
of a Lender hereunder and (z) the assigning Lender thereunder
shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment Agreement, relinquish
its rights and be released from its obligations under this Agreement
(and, in the case of an Assignment Agreement covering all or the
remaining portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party
hereto). The Commitments hereunder shall be modified to reflect
the Commitment of such assignee and any remaining Commitment
of such assigning Lender and, if any such assignment occurs after
the issuance of any Notes hereunder, the assigning Lender shall,
upon the effectiveness of such assignment or as promptly thereafter
as practicable, surrender its Note, if any, to Agent for cancellation,
and thereupon new Notes shall, if so requested by the assignee
and/or the assigning Lender in accordance with subsection 2.1E, be
issued to the assignee and/or to the assigning Lender, substantially
in the form of Exhibit IV annexed hereto with appropriate
insertions, to reflect the new Commitments of the assignee and/or
the assigning Lender.
(ii) Acceptance by Agent; Recordation in Register. Upon
its receipt of an Assignment Agreement executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee,
together with the processing and recordation fee referred to in
subsection 10.1B(i) and any forms, certificates or other evidence
with respect to United States federal income tax withholding matters
that such assignee may be required to deliver to Agent pursuant to
subsection 2.7B(iii)(a), Agent shall, if such Assignment Agreement
has been completed and is in substantially the form of Exhibit VIII
hereto, (a) accept such Assignment Agreement by executing a
counterpart thereof as provided therein (which acceptance shall
evidence any required consent of Agent to such assignment),
(b) record the information contained therein in the Register, and
(c) give prompt notice thereof to Partnership. Agent shall maintain
a copy of each Assignment Agreement delivered to and accepted by
it as provided in this subsection 10.1B(ii).
C. Participations. The holder of any participation, other
than an Affiliate of the Lender granting such participation, shall not
be entitled to require such Lender to take or omit to take any action
hereunder except action directly affecting (i) the extension of the
scheduled final maturity date of any Loan allocated to such partici-
pation or (ii) a reduction of the principal amount of or the rate of
interest payable on any Loan allocated to such participation, and all
amounts payable by Partnership hereunder (including without
limitation amounts payable to such Lender pursuant to subsections
2.6D, 2.7 and 3.6) shall be determined as if such Lender had not
sold such participation. Partnership and each Lender hereby
acknowledge and agree that, solely for purposes of subsections 10.4
and 10.5, (a) any participation will give rise to a direct obligation
of Partnership to the participant and (b) the participant shall be con-
sidered to be a "Lender".
D. Assignments to Federal Reserve Banks. In addition
to the assignments and participations permitted under the foregoing
provisions of this subsection 10.1, any Lender may assign and
pledge all or any portion of its Loans, the other Obligations owed to
such Lender, and its Note to any Federal Reserve Bank as collateral
security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such
Federal Reserve Bank; provided that (i) no Lender shall, as between
Partnership and such Lender, be relieved of any of its obligations
hereunder as a result of any such assignment and pledge and (ii) in
no event shall such Federal Reserve Bank be considered to be a
"Lender" or be entitled to require the assigning Lender to take or
omit to take any action hereunder.
E. Information. Each Lender may furnish any informa-
tion concerning Partnership and its Subsidiaries in the possession of
that Lender from time to time to assignees and participants
(including prospective assignees and participants), subject to
subsection 10.20.
10.2 Expenses.
Whether or not the transactions contemplated hereby
shall be consummated, Partnership agrees to pay promptly (i) all the
actual and reasonable costs and expenses of preparation of the Loan
Documents; (ii) all the costs of furnishing all opinions by counsel
for Partnership and any other Loan Party (including without
limitation any opinions requested by Lenders as to any legal matters
arising hereunder) and of each Loan Party's performance of and
compliance with all agreements and conditions on its part to be
performed or complied with under this Agreement and the other
Loan Documents including, without limitation, with respect to
confirming compliance with environmental and insurance
requirements; (iii) the reasonable fees, expenses and disbursements
of counsel to Agent in connection with the negotiation, preparation,
execution and administration of the Loan Documents and the Loans
and any consents, amendments, waivers or other modifications
hereto or thereto and any other documents or matters requested by
Partnership or any other Loan Party; (iv) after a Material Overrun,
all costs and expenses incurred by Agent to retain a Consulting
Engineer; (v) all other actual and reasonable costs and expenses
incurred by Agent in connection with the syndication of the
Commitments prior to the Closing Date and the negotiation,
preparation and execution of the Loan Documents and the transac-
tions contemplated hereby and thereby; and (vi) after the occurrence
of an Event of Default, all costs and expenses, including reasonable
attorneys' fees (including allocated costs of internal counsel) and
costs of settlement, incurred by Agent and Lenders in enforcing any
Obligations of or in collecting any payments due from Partnership
or any other Loan Party hereunder or under the other Loan
Documents by reason of such Event of Default or in connection
with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings; provided that
the costs, fees, expenses and disbursements under clause (iii) (other
than with respect to administration of the Loan Documents after the
Closing Date) shall not exceed a maximum amount agreed upon in
writing by Partnership and Agent's counsel.
10.3 Indemnity.
In addition to the payment of expenses pursuant to
subsection 10.2, whether or not the transactions contemplated
hereby shall be consummated, Partnership agrees to defend,
indemnify, pay and hold harmless Agent and Lenders, and the
officers, directors, employees, agents and affiliates of Agent and
Lenders (collectively called the "Indemnitees") from and against
any and all other liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, claims, costs, expenses and disbursements
of any kind or nature whatsoever (including without limitation the
reasonable fees and disbursements of counsel for such Indemnitees
in connection with any investigative, administrative or judicial
proceeding commenced or threatened by any Person, whether or not
any such Indemnitee shall be designated as a party or a potential
party thereto), whether direct, indirect or consequential and whether
based on any federal, state or foreign laws, statutes, rules or
regulations (including without limitation securities and commercial
laws, statutes, rules or regulations and Environmental Laws), on
common law or equitable cause or on contract or otherwise, that
may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of this
Agreement or the other Loan Documents or the transactions
contemplated hereby or thereby (including without limitation
Lenders' agreement to make the Loans hereunder or the use or
intended use of the proceeds of any of the Loans or the issuance of
Letters of Credit hereunder or the use or intended use of any of the
Letters of Credit) or the statements contained in the commitment
letter delivered by any Lender to Partnership with respect thereto
(collectively called the "Indemnified Liabilities"); provided that
Partnership shall not have any obligation to an Indemnitee
hereunder with respect to any Indemnified Liabilities to the extent
such Indemnified Liabilities arise solely from the gross negligence
or willful misconduct of that Indemnitee as determined by a final
judgment of a court of competent jurisdiction. To the extent that
the undertaking to defend, indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is
violative of any law or public policy, Partnership shall contribute
the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them.
10.4 Set-Off; Security Interest in Deposit Accounts.
In addition to any rights now or hereafter granted
under applicable law and not by way of limitation of any such
rights, upon the occurrence of any Event of Default each Lender
(with the consent of Requisite Lenders) is hereby authorized by
Partnership at any time or from time to time, without notice to
Partnership or to any other Person, any such notice being hereby
expressly waived, to set off and to appropriate and to apply any and
all deposits (general or special, including, but not limited to, Indebt-
edness evidenced by certificates of deposit, whether matured or
unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender to or for the
credit or the account of Partnership against and on account of the
obligations and liabilities of Partnership to that Lender under this
Agreement, the Letters of Credit and participations therein and the
other Loan Documents, including, but not limited to, all claims of
any nature or description arising out of or connected with this
Agreement, the Letters of Credit and participations therein or any
other Loan Document, irrespective of whether or not (i) that Lender
shall have made any demand hereunder or (ii) the principal of or
the interest on the Loans or any amounts in respect of the Letters of
Credit or any other amounts due hereunder shall have become due
and payable pursuant to Section 8 and although said obligations and
liabilities, or any of them, may be contingent or unmatured.
Partnership hereby further grants to Agent and each Lender a
security interest in all deposits and accounts maintained with Agent
or such Lender as security for the Obligations.
10.5 Ratable Sharing.
Lenders hereby agree among themselves that if any of
them shall, whether by voluntary payment, by realization upon
security, through the exercise of any right of set-off or banker's
lien, by counterclaim or cross action or by the enforcement of any
right under the Loan Documents or otherwise, or as adequate
protection of a deposit treated as cash collateral under the
Bankruptcy Code, receive payment or reduction of a proportion of
the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and
owing to that Lender hereunder or under the other Loan Documents
(collectively, the "Aggregate Amounts Due" to such Lender) which
is greater than the proportion received by any other Lender in
respect of the Aggregate Amounts Due to such other Lender, then
the Lender receiving such proportionately greater payment shall
(i) notify Agent and each other Lender of the receipt of such
payment and (ii) apply a portion of such payment to purchase
participations (which it shall be deemed to have purchased from
each seller of a participation simultaneously upon the receipt by
such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of
Aggregate Amounts Due shall be shared by all Lenders in propor-
tion to the Aggregate Amounts Due to them; provided that if all or
part of such proportionately greater payment received by such
purchasing Lender is thereafter recovered from such Lender upon
the bankruptcy or reorganization of Partnership or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to
the extent of such recovery. Partnership expressly consents to the
foregoing arrangement and agrees that any holder of a participation
so purchased may exercise any and all rights of banker's lien, set-
off or counterclaim with respect to any and all monies owing by
Partnership to that holder with respect thereto as fully as if that
holder were owed the amount of the participation held by that
holder.
10.6 Amendments and Waivers; Release of Collateral.
A. No amendment, modification, termination or waiver
of any provision of this Agreement, the Notes or any other Loan
Documents, or consent to any departure by Partnership therefrom,
shall in any event be effective without the written concurrence of
Requisite Lenders; provided that any such amendment,
modification, termination, waiver or consent which: increases the
amount of any of the Commitments or reduces the principal amount
of any of the Loans; increases the maximum amount of Letters of
Credit; changes any Lender's Pro Rata Share; changes in any
manner the definition of "Lenders", "Requisite Lenders" or
"Supermajority Lenders"; changes in any manner any provision of
this Agreement which, by its terms, expressly requires the approval
or concurrence of all Lenders; postpones the scheduled final
maturity date of any of the Loans; postpones the date or reduces the
amount of any scheduled reduction of the Commitments; postpones
the date on which any interest or any fees are payable; decreases
the interest rate borne by any of the Loans (other than any waiver
of any increase in the interest rate applicable to any of the Loans
pursuant to subsection 2.2E) or the amount of any fees payable
hereunder; increases the maximum duration of Interest Periods
permitted hereunder; reduces the amount or postpones the due date
of any amount payable in respect of, or extends the required
expiration date of, any Letter of Credit; changes in any manner the
obligations of Lenders relating to the purchase of participations in
Letters of Credit; or changes in any manner the provisions
contained in subsection 8.1(a) or (b) or this subsection 10.6; or
changes any of the terms of or releases the Make-Well Agreement,
the Eldorado Completion Guaranty, the Circus Completion
Guaranty or any of the Environmental Indemnities shall be effective
only if evidenced by a writing signed by or on behalf of all Lenders
and; provided, further, that no provision of this Agreement that, by
its terms, expressly requires approval or action of Supermajority
Lenders, may be amended, modified or waived except with the
consent of Supermajority Lenders; provided further that if there has
been a change in Managing Partner, no amendment to the
performance standard required of Partnership under subsection 7.6A
that would increase the amount required to be paid to fulfill the
"Make-Well Obligations" under and as defined in the Make-Well
Agreement, shall be effective to cause such increase unless Circus
shall have received prior notice of such change. In addition, (i) any
material amendment, modification, termination or waiver of any of
the provisions contained in Section 4 shall be effective only if
evidenced by a writing signed by or on behalf of Agent and
Requisite Lenders, (ii) no amendment, modification, termination or
waiver of any provision of any Note shall be effective without the
written concurrence of the Lender which is the holder of that Note,
and (iii) no amendment, modification, termination or waiver of any
provision of Section 3 or Section 9 or of any other provision of this
Agreement which, by its terms, expressly requires the approval or
concurrence of Agent shall be effective without the written
concurrence of Agent. Agent may, but shall have no obligation to,
with the concurrence of any Lender, execute amendments,
modifications, waivers or consents on behalf of that Lender. Any
waiver or consent shall be effective only in the specific instance and
for the specific purpose for which it was given. No notice to or
demand on Partnership in any case shall entitle Partnership to any
other or further notice or demand in similar or other circumstances.
Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.6 shall be binding
upon each Lender at the time outstanding, each future Lender and,
if signed by Partnership, on Partnership. No amendment,
modification, termination or waiver of subsection 6.9 shall be
effective without the written consent of Circus and Eldorado Hotel
Associates or their respective successors and assigns under the
Circus Completion Guaranty and the Eldorado Completion
Guaranty, respectively. No amendment, modification, termination
or waiver of subsection 7.6A shall be effective without the written
consent of Circus or its successors and assigns under the Make-Well
Agreement.
B. Agent may release personal property Collateral
without the consent of any Lender to the extent sold or disposed of
by Partnership in a transaction or series of transactions that do not
constitute Asset Sales. In addition: (i) Agent may release personal
property Collateral subject to the Security Agreement having a fair
market less than $100,000 with the consent of Requisite Lenders;
and (ii) Agent shall not release any personal property Collateral
having a fair market value in excess of $100,000 or any other
Collateral without the consent of all Lenders.
10.7 Independence of Covenants.
All covenants hereunder shall be given independent
effect so that if a particular action or condition is not permitted by
any of such covenants, the fact that it would be permitted by an
exception to, or would otherwise be within the limitations of,
another covenant shall not avoid the occurrence of an Event of
Default or Potential Event of Default if such action is taken or
condition exists.
10.8 Notices.
Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or
sent by telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex prior to 5:00
p.m. (Pacific time) on a Business Day or three Business Days after
depositing it in the United States mail with postage prepaid and
properly addressed; provided that notices to Agent shall not be
effective until received. For the purposes hereof, the address of
each party hereto shall be as set forth under such party's name on
the signature pages hereof or (i) as to Partnership and Agent, such
other address as shall be designated by such Person in a written
notice delivered to the other parties hereto and (ii) as to each other
party, such other address as shall be designated by such party in a
written notice delivered to Agent.
10.9 Survival of Representations, Warranties and Agreements.
A. All representations, warranties and agreements made
herein shall survive the execution and delivery of this Agreement
and the making of the Loans and the issuance of the Letters of
Credit hereunder.
B. Notwithstanding anything in this Agreement or
implied by law to the contrary, the agreements of Partnership set
forth in subsections 2.6D, 2.7, 3.5A, 3.6, 10.2 and 10.3 and the
agreements of Lenders set forth in subsections 9.2C, 9.4 and 10.5
shall survive the payment of the Loans, the cancellation or
expiration of the Letters of Credit and the reimbursement of any
amounts drawn thereunder, and the termination of this Agreement.
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative.
No failure or delay on the part of Agent or any
Lender in the exercise of any power, right or privilege hereunder or
under any other Loan Document shall impair such power, right or
privilege or be construed to be a waiver of any default or
acquiescence therein, nor shall any single or partial exercise of any
such power, right or privilege preclude other or further exercise
thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan
Documents are cumulative to, and not exclusive of, any rights or
remedies otherwise available.
10.11 Marshalling; Payments Set Aside.
Neither Agent nor any Lender shall be under any
obligation to marshal any assets in favor of Partnership or any other
party or against or in payment of any or all of the Obligations. To
the extent that Partnership makes a payment or payments to Agent
or Lenders (or to Agent for the benefit of Lenders), or Agent or
Lenders enforce any security interests or exercise their rights of set-
off, and such payment or payments or the proceeds of such
enforcement or set-off or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside
and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, any other state or federal law, common
law or any equitable cause, then, to the extent of such recovery, the
obligation or part thereof originally intended to be satisfied, and all
Liens, rights and remedies therefor or related thereto, shall be
revived and continued in full force and effect as if such payment or
payments had not been made or such enforcement or set-off had not
occurred.
10.12 Severability.
In case any provision in or obligation under this
Agreement or the Notes shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or obliga-
tion in any other jurisdiction, shall not in any way be affected or
impaired thereby.
10.13 Obligations Several; Independent Nature of Lenders'
Rights.
The obligations of Lenders hereunder are several and
no Lender shall be responsible for the obligations or Commitment
of any other Lender hereunder. Nothing contained herein or in any
other Loan Document, and no action taken by Lenders pursuant
hereto or thereto, shall be deemed to constitute Lenders as a part-
nership, an association, a joint venture or any other kind of entity.
The amounts payable at any time hereunder to each Lender shall be
a separate and independent debt, and each Lender shall be entitled
to protect and enforce its rights arising out of this Agreement and it
shall not be necessary for any other Lender to be joined as an
additional party in any proceeding for such purpose.
10.14 Headings.
Section and subsection headings in this Agreement are
included herein for convenience of reference only and shall not
constitute a part of this Agreement for any other purpose or be
given any substantive effect.
10.15 Applicable Law.
THIS AGREEMENT SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEVADA, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
10.16 Successors and Assigns.
This Agreement shall be binding upon the parties
hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns of
Lenders (it being understood that Lenders' rights of assignment are
subject to subsection 10.1). Neither Partnership's rights or
obligations hereunder nor any interest therein may be assigned or
delegated by Partnership without the prior written consent of all
Lenders.
10.17 Consent to Jurisdiction and Service of Process.
ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST PARTNERSHIP ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT OR ANY OBLIGATION MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEVADA, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT
PARTNERSHIP ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS AND WAIVES ANY DEFENSE
OF FORUM NON CONVENIENS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS AGREEMENT,
SUCH OTHER LOAN DOCUMENT OR SUCH OBLIGATION.
Partnership hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified
mail, return receipt requested, to Partnership at its address provided
in subsection 10.8, such service being hereby acknowledged by
Partnership to be sufficient for personal jurisdiction in any action
against Partnership in any such court and to be otherwise effective
and binding service in every respect. Nothing herein shall affect
the right to serve process in any other manner permitted by law.
10.18 Waiver of Jury Trial.
EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS LOAN
TRANSACTION OR THE LENDER/BORROWER
RELATIONSHIP THAT IS BEING ESTABLISHED. The scope
of this waiver is intended to be all-encompassing of any and all
disputes that may be filed in any court and that relate to the subject
matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims and all other common law
and statutory claims. Each party hereto acknowledges that this
waiver is a material inducement to enter into a business
relationship, that each has already relied on this waiver in entering
into this Agreement, and that each will continue to rely on this
waiver in their related future dealings. Each party hereto further
warrants and represents that it has reviewed this waiver with its
legal counsel and that it knowingly and voluntarily waives its jury
trial rights following consultation with legal counsel. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE
OTHER LOAN DOCUMENTS OR TO ANY OTHER
DOCUMENTS OR AGREEMENTS RELATING TO THE
LOANS MADE HEREUNDER. In the event of litigation, this
Agreement may be filed as a written consent to a trial by the court.
10.19 Confidentiality.
Each Lender shall hold all non-public information
obtained pursuant to the requirements of this Agreement which has
been identified as confidential by Partnership in accordance with
such Lender's customary procedures for handling confidential
information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by Partnership
that in any event a Lender may make disclosures reasonably
required by any bona fide assignee, transferee or participant in
connection with the contemplated assignment or transfer by such
Lender of any Loans or any participation therein or as required or
requested by any governmental agency or representative thereof or
pursuant to legal process; provided that, unless specifically
prohibited by applicable law or court order, each Lender shall
notify Partnership of any request by any governmental agency or
representative thereof (other than any such request in connection
with any examination of the financial condition of such Lender by
such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and provided,
further that in no event shall any Lender be obligated or required to
return any materials furnished by Partnership or any of its
Subsidiaries.
10.20 Counterparts; Effectiveness.
This Agreement and any amendments, waivers,
consents or supplements hereto or in connection herewith may be
executed in any number of counterparts and by different parties
hereto in separate 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; signature
pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are
physically attached to the same document. This Agreement shall
become effective upon the execution of a counterpart hereof by each
of the parties hereto and receipt by Partnership and Agent of written
or telephonic notification of such execution and authorization of
delivery thereof.
10.21 Non-Recourse to General Partners.
Notwithstanding any term or provision of the Loan
Documents or of applicable law to the contrary, the holders of the
Obligations shall not have recourse to the General Partners (or
either of them) for payment thereof, provided that this subsection
10.21 shall not limit or impair (i) recourse to the General Partners
(or either of them) by the holders of the Obligations for any fraud,
gross negligence, or willful misconduct of the General Partners (or
either of them), (ii) any cause of action such holders may have
other than an action to collect the Obligations, (iii) the exercise or
enforcement of rights and remedies in respect of any Collateral
granted under the Loan Documents, including, without limitation,
any collateral rights granted to Lenders in any claims or causes of
action of Partnership against the General Partners (or either of
them), (iv) the terms and provisions of any Subordinated
Indebtedness issued to General Partners (or either of them) and
(v) the terms of the Environmental Indemnities to which the General
Partners are party.
10.22 Cooperation With Gaming Boards. Agent and each
Lender agree to cooperate with all Gaming Boards in connection
with the administration of their regulatory jurisdiction over any
Loan Party, including the provision of such documents or other
information as may be requested by any such Gaming Board
relating to any Loan Party or to the Loan Documents.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date first
written above.
PARTNERSHIP:
CIRCUS AND ELDORADO
JOINT VENTURE
By: GALLEON, INC.
Its: Managing Partner
By:
Title:
Notice Address:
c/o Circus Circus
Enterprises, Inc.
2880 Las Vegas
Boulevard South
Las Vegas, Nevada
89109
Attention: General
Counsel
By: ELDORADO LIMITED
LIABILITY COMPANY
Its: General Partner
By: ELDORADO
HOTEL ASSOCIATES
Its: Manager
By: RECREATIONAL
ENTERPRISES,
INC.
Its: general partner
By:
Title:
and
By: HOTEL-CASINO
MANAGEMENT,
INC.
Its: general partner
By:
Title:
Notice Address:
c/o Eldorado Hotel Casino
345 N. Virginia Street
P.O. Box 3399
Reno, Nevada 89508
Attention: General
Counsel
<PAGE>
EXECUTIVE
COMMITTEE
By:
_____________________________
Title:
_____________________________
By:
_____________________________
Title:
_____________________________
<PAGE>
GALLEON, INC. (as to Section 6.10):
GALLEON, INC.
By:
_____________________________
Title:
_____________________________
LENDERS:
FIRST INTERSTATE BANK
OF NEVADA, N.A.,
individually, as Agent, as a
Managing Agent and as a Lender
By:
Title:
Notice Address:
3800 Howard Hughes
Parkway
Suite 400
Las Vegas, Nevada
89109
Attention: Steve Byrne
THE LONG-TERM CREDIT
BANK OF JAPAN, LTD., LOS
ANGELES AGENCY, as a
Managing Agent and as a Lender
By:
Title:
Notice Address:
444 South Flower Street,
Suite 3700
Los Angeles, CA 90071
Attention: Paul B.
Clifford
SOCIETE GENERALE, as a
Managing Agent and as a Lender
By:
Title:
Notice Address:
2029 Century Park East,
Suite 2900
Los Angeles, CA 90067
Attention: Don Schubert
BANK OF AMERICA, NT &
SA, as a Co-Agent and as a
Lender
By:
Title:
Notice Address:
555 South Flower Street,
10th Floor
Unit #3283
Los Angeles, CA 90071
Attention: Jon Varnall
CIBC INC., as a Co-Agent and
as a Lender
By:
Title:
Notice Address:
300 S. Grand Avenue,
Suite 2700
Los Angeles, CA 90071
Attention: Paul J.
Chakmak
CREDIT LYONNAIS, LOS
ANGELES BRANCH, as a Co-
Agent and a Lender
By:
Title:
Notice Address:
Credit Lyonnais, Los
Angeles Branch
515 South Flower Street
Los Angeles, CA 90071
Attention: David Miller
CREDIT LYONNAIS,
CAYMAN ISLAND BRANCH,
as a Lender
By:
Title:
Notice Address:
Credit Lyonnais, Cayman
Island Branch
c/o Credit Lyonnais Los
Angeles Branch
515 South Flower Street
Los Angeles, CA 90071
Attention: David Miller
THE DAIWA BANK,
LIMITED, as Lender
By:
Title:
By:
Title:
Notice Address:
800 West Sixth Street,
Suite 950
Los Angeles, CA 90017
Attention: David
Lawrence
FIRST SECURITY BANK OF
IDAHO, N.A.,
as Lender
By:
Title:
Notice Address:
119 North 9th Street
Boise, Idaho 83702
Attention: Victor W.
Gillett
THE INDUSTRIAL BANK OF
JAPAN, LIMITED,
Los Angeles Agency, as
Lender
By:
Title:
Notice Address:
350 South Grand Ave.,
Suite 1500
Los Angeles, CA 90071
Attention: Vicente
Timiraos
MIDLANTIC BANK, N.A., as
Lender
By:
Title:
Notice Address:
6000 Midlantic Drive
Mt. Laurel, NJ 08054
Attention: Denise D.
Killen
NIPPON CREDIT BANK,
LTD.,
Los Angeles Agency, as
Lender
By:
Title:
Notice Address:
550 S. Hope Street, Suite
2500
Los Angeles, CA 90071
Attention: Jay Schwartz
U.S. BANK OF NEVADA, as
Lender
By:
Title:
Notice Address:
1 East Liberty Street, 2nd
Floor
Reno, NV 89501
Attention: Kurt Imerman
WESTDEUTSCHE
LANDESBANK
GIROZENTRALE, as Lender
By:
Title:
By:
Title:
Notice Address:
633 West 5th Street, Suite
6750
Los Angeles, CA 90071
1211 Avenue of the
Americas, 23rd Floor
New York, NY 10036
Attention: Molly A.
McGill
With a copy to:
633 West 5th Street, Suite
6750
Los Angeles, CA 90071
Attention: R. J. Cruz
<PAGE>
SCHEDULE 1.1
INTEREST RATE MARGINS
(All tabular margin amounts expressed in basis points)
If Leverage Ratio is < 3.00:1.00, the Leverage Increment is 25
basis points:
Circus' Funded
Debt/Ratio
Circus' Senior
Debt Rating*
Applicable
Eurodollar Rate
Margin
All-In
Eurodollar
Rate Margin
Applicable
Base Rate
Margin
< 1.00x
A or A2
37.50
62.50
00.00
>1.00x but <2.00x
A- or A3
50.00
75.00
00.00
>2.00x but <2.50x
BBB or Baa2
62.50
87.50
00.00
>2.50x but <3.00x
BB or Ba2
100.00
125.00
25.00
>3.00x
N/A
150.00
175.00
75.00
* Standard & Poor's Ratings Group and Moody's Investor Services,
respectively.
In the case of a split rating, the more creditworthy rating shall apply.
As between Circus' Funded Debt Ratio and Circus' Senior Debt Rating,
the less creditworthy of such pricing criteria shall govern the determination
of Applicable
Eurodollar Rate Margin.
If the Leverage Ratio is >3.00:1.00, the Leverage Increment is 50
basis points:
Circus' Funded
Debt/Ratio
Circus' Senior
Debt Rating*
Applicable
Eurodollar Rate
Margin
All-In
Eurodollar
Rate Margin
Applicable
Base Rate
Margin
< 1.00x
A or A2
37.50
87.5
00.00
>1.00x but <2.00x
A- or A3
50.00
100.00
00.00
>2.00x but <2.50x
BBB or Baa2
62.50
112.50
12.50
>2.50x but <3.00x
BB or Ba2
100.00
150.00
50.00
>3.00x
N/A
150.00
200.00
100.00
*Standard & Poor's Ratings Group and Moody's Investor Services, respectively.
In the case of a split rating, the more creditworthy rating shall apply.
As between Circus' Funded Debt Ratio and Circus' Senior Debt Rating, the less
creditworthy of such pricing criteria shall govern the determination of
Applicable Eurodollar Rate Margin.
SCHEDULE 2.1
LENDERS' COMMITMENTS
Bank
Amount of Commitment
First Interstate Bank of Nevada, N.A. $
34,200,000
The Long-Term Credit Bank of Japan, Ltd.,
33,900,000
Los Angeles Agency
Societe Generale
33,900,000
Bank of America, N.T. & S.A.
17,000,000
Credit Lyonnais, Los Angeles Branch
17,000,000
and Credit Lyonnais, Cayman Island Branch
CIBC Inc.
17,000,000
The Daiwa Bank Limited
11,000,000
First Security Bank of Idaho, N.A.
11,000,000
The Industrial Bank of Japan, Limited, Los Angeles Agency
11,000,000
Midlantic Bank, N.A.
11,000,000
Nippon Credit Bank, Ltd., Los Angeles Agency
11,000,000
U.S. Bank of Nevada
11,000,000
Westdeutsche Landesbank Girozentrale
11,000,000
________________
Total
$230,000,000
<PAGE>
SCHEDULE 5.1
SUBSIDIARIES
Partnership has no Subsidiaries
<PAGE>
SCHEDULE 5.13
ENVIRONMENTAL MATTERS
[To be provided by Partnership]
<PAGE>
SCHEDULE 5.18
PERMITS AND AUTHORIZATIONS
None
<PAGE>
SCHEDULE 5.24
TRADEMARKS
<PAGE>
SCHEDULE 7.2
CERTAIN EXISTING LIENS
None<PAGE>
SCHEDULE A
PREMISES
[Parcels 1-16]
[Reciprocal Easements re Bridges from Premises to Circus-Circus
and Eldorado.]
[Easements or the equivalent from the City for relevant Bridge
Rights and Tunnel Rights over and under Sierra Street]
<PAGE>
CREDIT AGREEMENT
DATED AS OF May 30, 1995
AMONG
CIRCUS AND ELDORADO JOINT VENTURE,
as Borrower,
THE LENDERS LISTED HEREIN,
as Lenders,
FIRST INTERSTATE BANK OF NEVADA, N.A.,
THE LONG-TERM CREDIT BANK OF JAPAN, LTD., LOS
ANGELES AGENCY
and SOCIETE GENERALE,
as Managing Agents,
and
BANK OF AMERICA, N.T. & S.A.,
CIBC INC., and
CREDIT LYONNAIS,
as Co-Agents,
and
FIRST INTERSTATE BANK OF NEVADA, N.A.,
as Arranger and Administrative Agent
<PAGE>
CIRCUS AND ELDORADO JOINT VENTURE
CREDIT AGREEMENT
TABLE OF CONTENTS
Page
Section 1. DEFINITIONS . . . . . . . . . . . . . . 1
1.1 Certain Defined Terms. . . . . . . . . . . . 1
1.2 Accounting Terms; Utilization of GAAP for
Purposes of Calculations Under Agreement . 34
1.3 Other Definitional Provisions. . . . . . . . 34
Section 2. AMOUNTS AND TERMS OF
COMMITMENTS AND LOANS . . . . . . . . . . . . . 34
2.1 Commitments; Making of Loans; the Register;
Optional Notes . . . . . . . . . . . . . . 34
2.2 Interest on the Loans. . . . . . . . . . . . 39
2.3 Fees . . . . . . . . . . . . . . . . . . . . 44
2.4 Prepayments and Reductions in Commitments;
General Provisions Regarding Payments. . . 44
2.5 Use of Proceeds. . . . . . . . . . . . . . . 49
2.6 Special Provisions Governing Eurodollar Rate
Loans. . . . . . . . . . . . . . . . . . . 49
2.7 Increased Costs; Taxes; Capital Adequacy . . 52
2.8 Obligation of Lenders and Issuing Lender to
Mitigate . . . . . . . . . . . . . . . . . 56
Section 3. LETTERS OF CREDIT . . . . . . . . . . . 57
3.1 Issuance of Letters of Credit and Lenders'
Purchase of Participations Therein . . . . 57
3.2 Letter of Credit Fees. . . . . . . . . . . . 59
3.3 Drawings and Reimbursement of Amounts
Drawn Under Letters of Credit. . . . . . . 60
3.4 Obligations Absolute . . . . . . . . . . . . 62
3.5 Indemnification; Nature of Issuing Lender's
Duties . . . . . . . . . . . . . . . . . . 64
3.6 Increased Costs and Taxes Relating to Letters
of Credit. . . . . . . . . . . . . . . . . 65
Section 4. CONDITIONS TO LOANS AND LETTERS
OF CREDIT . . . . . . . . . . . . . . . . . . . 66
4.1 Conditions to Initial Loans. . . . . . . . . 66
4.2 Conditions to Subsequent Advances Under the
Pre-Conversion Loans . . . . . . . . . . . 73
4.3 Conditions to Advances under the Post-
Conversion Loans . . . . . . . . . . . . . 79
4.4 Conditions to All Loans. . . . . . . . . . . 79
4.5 Conditions to Letters of Credit. . . . . . . 81
Section 5. PARTNERSHIP'S REPRESENTATIONS
AND WARRANTIES. . . . . . . . . . . . . . . . . 82
5.1 Organization, Powers, Qualification, Good
Standing, Business and Subsidiaries. . . . 82
5.2 Authorization of Borrowing, etc. . . . . . . 83
5.3 Financial Condition. . . . . . . . . . . . . 84
5.4 No Material Adverse Change; No Restricted
Junior Payments. . . . . . . . . . . . . . 84
5.5 Title to Properties; Liens; All Collateral . 85
5.6 Litigation; Adverse Facts. . . . . . . . . . 85
5.7 Payment of Taxes . . . . . . . . . . . . . . 85
5.8 Performance of Agreements; Materially
Adverse Agreements . . . . . . . . . . . . 86
5.9 Governmental Regulation. . . . . . . . . . . 86
5.10 Securities Activities. . . . . . . . . . . . 86
5.11 Employee Benefit Plans . . . . . . . . . . . 87
5.12 Certain Fees . . . . . . . . . . . . . . . . 87
5.13 Environmental Protection . . . . . . . . . . 87
5.14 Employee Matters . . . . . . . . . . . . . . 89
5.15 Solvency . . . . . . . . . . . . . . . . . . 89
5.16 Disclosure . . . . . . . . . . . . . . . . . 89
5.17 Representations and Warranties Incorporated
From the General Partner Subordinated Debt 90
5.18 Compliance With Laws; Licenses, Permits and
Authorizations . . . . . . . . . . . . . . 90
5.19 Plans. . . . . . . . . . . . . . . . . . . . 91
5.20 Budget and Schedule. . . . . . . . . . . . . 92
5.21 Requisitions . . . . . . . . . . . . . . . . 92
5.22 Streets and Utilities. . . . . . . . . . . . 92
5.23 Subcontracts . . . . . . . . . . . . . . . . 92
5.24 Intangible Property. . . . . . . . . . . . . 92
5.25 Rights to Project Agreements, Permits and
Licenses . . . . . . . . . . . . . . . . . 93
Section 6. PARTNERSHIP'S AFFIRMATIVE
COVENANTS . . . . . . . . . . . . . . . . . . . 93
6.1 Financial Statements and Other Reports . . . 93
6.2 Partnership or Corporate Existence, etc. . . 100
6.3 Payment of Taxes and Claims; Tax
Consolidation. . . . . . . . . . . . . . . 100
6.4 Maintenance of Properties; Insurance . . . . 101
6.5 Inspection; Lender Meeting . . . . . . . . . 101
6.6 Compliance with Laws, etc. . . . . . . . . . 102
6.7 Environmental Disclosure and Inspection. . . 102
6.8 Partnership's Remedial Action Regarding
Hazardous Material . . . . . . . . . . . . 104
6.9 Completion of Construction.. . . . . . . . . 104
6.10 Material Overruns. . . . . . . . . . . . . . 105
Section 7. PARTNERSHIP'S NEGATIVE
COVENANTS . . . . . . . . . . . . . . . . . . . 105
7.1 Indebtedness . . . . . . . . . . . . . . . . 105
7.2 Liens and Related Matters. . . . . . . . . . 106
7.3 Investments. . . . . . . . . . . . . . . . . 108
7.4 Contingent Obligations . . . . . . . . . . . 109
7.5 Restricted Junior Payments . . . . . . . . . 109
7.6 Financial Covenants. . . . . . . . . . . . . 111
7.7 Restriction on Fundamental Changes; Asset
Sales and Acquisitions . . . . . . . . . . 112
7.8 Consolidated Capital Expenditures. . . . . . 113
7.9 Sales and Lease-Backs. . . . . . . . . . . . 114
7.10 Sale or Discount of Receivables. . . . . . . 114
7.11 Transactions with Shareholders and Affiliates115
7.12 Disposal of Subsidiary Stock . . . . . . . . 115
7.13 Conduct of Business. . . . . . . . . . . . . 115
7.14 Amendments of Related Documents. . . . . . . 116
7.15 Fiscal Year. . . . . . . . . . . . . . . . . 116
7.16 Transfer of Partnership Interests. . . . . . 116
7.17 Loan to Value Ratio. . . . . . . . . . . . . 116
Section 8. EVENTS OF DEFAULT . . . . . . . . . . . 117
8.1 Failure to Make Payments When Due. . . . . . 117
8.2 Default in Other Agreements. . . . . . . . . 117
8.3 Breach of Certain Covenants. . . . . . . . . 118
8.4 Breach of Warranty . . . . . . . . . . . . . 118
8.5 Other Defaults Under Loan Documents. . . . . 118
8.6 Involuntary Bankruptcy; Appointment of
Receiver, etc. . . . . . . . . . . . . . . 118
8.7 Voluntary Bankruptcy; Appointment of
Receiver, etc. . . . . . . . . . . . . . . 119
8.8 Judgments and Attachments. . . . . . . . . . 119
8.9 Dissolution. . . . . . . . . . . . . . . . . 120
8.10 Employee Benefit Plans . . . . . . . . . . . 120
8.11 Material Adverse Effect. . . . . . . . . . . 120
8.12 Change in Control. . . . . . . . . . . . . . 120
8.13 Invalidity of Environmental Indemnities or
Guaranties . . . . . . . . . . . . . . . . 120
8.14 Impairment of Collateral . . . . . . . . . . 121
8.15 Completion of Construction . . . . . . . . . 121
8.16 Loss of Governmental Authorizations. . . . . 121
8.17 Gaming License . . . . . . . . . . . . . . . 121
8.18 Encroachments. . . . . . . . . . . . . . . . 122
8.19 Work Stoppage. . . . . . . . . . . . . . . . 122
8.20 Remedies . . . . . . . . . . . . . . . . . . 122
Section 9. AGENT . . . . . . . . . . . . . . . . . 125
9.1 Appointment. . . . . . . . . . . . . . . . . 125
9.2 Powers; General Immunity . . . . . . . . . . 125
9.3 Representations and Warranties; No
Responsibility For Appraisal of Credit-
worthiness . . . . . . . . . . . . . . . . 127
9.4 Right to Indemnity . . . . . . . . . . . . . 127
9.5 Successor Agent. . . . . . . . . . . . . . . 128
9.6 Collateral Documents . . . . . . . . . . . . 128
Section 10. MISCELLANEOUS . . . . . . . . . . . . . 128
10.1 Assignments and Participations in Loans and
Letters of Credit. . . . . . . . . . . . . 128
10.2 Expenses . . . . . . . . . . . . . . . . . . 131
10.3 Indemnity. . . . . . . . . . . . . . . . . . 132
10.4 Set-Off; Security Interest in Deposit Accounts133
10.5 Ratable Sharing. . . . . . . . . . . . . . . 133
10.6 Amendments and Waivers; Release of
Collateral . . . . . . . . . . . . . . . . 134
10.7 Independence of Covenants. . . . . . . . . . 135
10.8 Notices. . . . . . . . . . . . . . . . . . . 135
10.9 Survival of Representations, Warranties and
Agreements . . . . . . . . . . . . . . . . 136
10.10 Failure or Indulgence Not Waiver; Remedies
Cumulative . . . . . . . . . . . . . . . . 136
10.11 Marshalling; Payments Set Aside . . . . 136
10.12 Severability. . . . . . . . . . . . . . 137
10.13 Obligations Several; Independent Nature of
Lenders' Rights. . . . . . . . . . . . . . 137
10.14 Headings. . . . . . . . . . . . . . . . 137
10.15 Applicable Law. . . . . . . . . . . . . 137
10.16 Successors and Assigns. . . . . . . . . 137
10.17 Consent to Jurisdiction and Service of Process138
10.18 Waiver of Jury Trial. . . . . . . . . . 138
10.19 Confidentiality . . . . . . . . . . . . 139
10.20 Counterparts; Effectiveness . . . . . . 139
10.21 Non-Recourse to General Partners. . . . 139
10.22 Cooperation With Gaming Boards. . . . . 140
Signature pages S-1
<PAGE>
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF
CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER
OF CREDIT
IV FORM OF NOTE
V FORM OF COMPLIANCE CERTIFICATE
VI FORM OF OPINION OF PARTNERSHIP'S
COUNSEL
VII FORM OF OPINION OF O'MELVENY & MYERS
VIII FORM OF ASSIGNMENT AGREEMENT
IX FORM OF AUDITOR'S LETTER
X FORM OF CERTIFICATE RE NON-BANK
STATUS
XI FORM OF COLLATERAL ACCOUNT
AGREEMENT
XII FORM OF SECURITY AGREEMENT
XIII-A FORM OF CIRCUS COMPLETION GUARANTY
XIII-B FORM OF ELDORADO COMPLETION
GUARANTY
XIV FORM OF MAKE-WELL AGREEMENT
XV FORM OF DEED OF TRUST
XVI FORM OF REQUISITION
XVII FORM OF ENVIRONMENTAL INDEMNITIES
XVIII FORM OF GENERAL PARTNER
SUBORDINATED DEBT
XIX FORM OF CONSENT TO ASSIGNMENT OF
GENERAL CONTRACTOR'S CONTRACT
XX FORM OF COMPLETION CERTIFICATES
XXI FORM OF ASSIGNMENT OF RENTS AND
REVENUES
XXII FORM OF SUBORDINATION AND DEBT PUT
AGREEMENT
<PAGE>
SCHEDULES
1.1 INTEREST RATE MARGINS
2.1 LENDERS' COMMITMENTS
5.1 SUBSIDIARIES
5.13 ENVIRONMENTAL MATTERS
5.18 PERMITS AND AUTHORIZATIONS
5.24 TRADEMARKS
7.2 CERTAIN EXISTING LIENS
A. PREMISES
EXHIBIT I
[FORM OF NOTICE OF BORROWING]
NOTICE OF BORROWING
Pursuant to that certain Credit Agreement dated as of
May 30, 1995, as amended, supplemented or otherwise modified to
the date hereof (said Credit Agreement, as so amended, supplemented
or otherwise modified, being the "Credit Agreement", the terms
defined therein and not otherwise defined herein being used herein as
therein defined), by and among CIRCUS AND ELDORADO JOINT
VENTURE, a Nevada general partnership ("Partnership"), FIRST
INTERSTATE BANK OF NEVADA, N.A., as arranger and
administrative agent ("Agent"), the financial institutions listed therein
as Lenders ("Lenders"), FIRST INTERSTATE BANK OF
NEVADA, N.A., THE LONG-TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY, and SOCIETE GENERALE,
collectively, as managing agents, and BANK OF AMERICA, CIBC
INC., and CREDIT LYONNAIS, LOS ANGELES BRANCH,
collectively, as co-agents for Lenders, this represents Partnership's
request to borrow on _____________, ____ (the "Funding Date")
from Lenders, in accordance with their applicable Pro Rata Shares,
$______________ in Loans as [Base/Eurodollar] Rate Loans. [The
initial Interest Period for such Loans is requested to be a
[one/two/three/six] month period.] The proceeds of such Loans are
to be deposited in Partnership's account at Agent.
Each of the undersigned are either officers of Partnership
or Executive Committee Signatories and each certifies, to the best of
his or her knowledge that:
(i)The representations and warranties contained in the
Credit Agreement and the other Loan Documents are true,
correct and complete on and as of the Funding Date to the
same extent as though made on and as of the Funding Date,
except to the extent such representations and warranties
specifically relate to an earlier date, in which case such
representations and warranties were true, correct and
complete in all material respects on and as of such earlier
date;
(ii) No event has occurred and is continuing or would
result from the consummation of the borrowing
contemplated hereby that would constitute an Event of
Default or a Potential Event of Default;
(iii) Partnership has performed in all material respects all
agreements and satisfied all conditions which the Credit
Agreement provides shall be performed or satisfied by it on
or before the date hereof;
(iv) No order, judgment or decree of any court, arbitrator
or governmental authority purports to enjoin or restrain any
Lender from making the Loans to be made by it on the
Funding Date;
(v) The making of the Loans requested on the Funding
Date will not violate any law including, without limitation,
Regulation G, Regulation T, Regulation U or Regulation X
of the Board of Governors of the Federal Reserve System;
(vi) There is not pending nor, to the knowledge of the
undersigned officer or Executive Committee Signatory, or
any other Senior Officer or other Executive Committee
Signatory or Partnership, threatened, any action, suit, pro-
ceeding, governmental investigation or arbitration against or
affecting any Loan Party or any of their Subsidiaries or any
property of any Loan Party or any of their Subsidiaries that
is required to be disclosed but has not been disclosed by
Partnership in writing pursuant to subsections 5.6 or 6.1(x)
of the Credit Agreement prior to the making of the last
preceding Loans (or in the case of initial Loans, prior to the
execution of the Credit Agreement), and there has occurred
no development in any such action, suit, proceeding,
governmental investigation or arbitration so disclosed by
Partnership in writing pursuant to subsection 5.6 or 6.1(x)
of the Credit Agreement prior to the making of the last
preceding Loans (or in the case of initial Loans, prior to
execution of the Credit Agreement), that, in either event, in
the opinion of any such Senior Officer or Executive
Committee Signatory, could reasonably be expected to have
a Material Adverse Effect; and no injunction or other
restraining order has been issued and no hearing to cause an
injunction or other restraining order to be issued is pending
or noticed with respect to any action, suit or proceeding
seeking to enjoin or otherwise prevent the consummation of,
or to recover any damages or obtain relief as a result of, the
transactions contemplated by the Credit Agreement or the
making of Loans thereunder.
(vii) Since December 31, 1994, no Material Adverse
Effect has occurred[; and][.]
(viii) After giving effect to the requested borrowing
hereunder, the Total Utilization of Commitments will not
exceed the Commitments then in effect [; and]
[Insert for Working Capital Loans:]
[(ix) The Loan requested pursuant to this Notice of
Borrowing is a Working Capital Loan and the proceeds of
this Advance will be used for working capital purposes.
The total amount of all outstanding Working Capital Loans,
does not, and upon funding of the Loan requested
hereunder, will not exceed $10,000,000.]
[Insert for Post-Conversion Loans made prior to Final
Completion of Construction:]
[(x) As of the Funding Date, which will be prior to the
Final Completion of Construction, Partnership has obtained
all (i) preliminary Lien Waivers with respect to Construction
Costs Incurred and paid and (ii) final Lien Waivers with
respect to Construction Costs paid with proceeds of the last
preceding Post-Conversion Loan; it being understood that no
Construction Costs will be considered paid to the extent
funds due from Partnership for such Construction Costs are
then retained by Partnership.]
[Insert for Loans made prior to the Conversion Date:]
[(xi) As of the Funding Date, which will be prior to the
Conversion Date, the Advance made pursuant to this Notice
of Borrowing will not cause the Total Utilization of
Commitments to exceed the Construction Costs Incurred
after the Closing Date and through the date hereof plus
Short Term General Partner Subordinated Debt (other than
Short Term General Partner Subordinated Debt to be repaid
with the proceeds of such Advance) plus the aggregate
amount of all Working Capital Loans; and
(xii) [$________ of] The proceeds of the Loans requested
pursuant to this Notice of Borrowing will [not] be used to
reimburse Short Term General Partner Subordinated Debt.]
<PAGE>
DATED: _______________
CIRCUS AND ELDORADO JOINT VENTURE
By:
Title:
By:
Title:
EXHIBIT II
[FORM OF NOTICE OF CONVERSION/CONTINUATION]
NOTICE OF CONVERSION/CONTINUATION
Pursuant to that certain Credit Agreement dated as of
May 30, 1995, as amended, supplemented or otherwise modified to
the date hereof (said Credit Agreement, as so amended, supplemented
or otherwise modified, being the "Credit Agreement", the terms
defined therein and not otherwise defined herein being used herein as
therein defined), by and among CIRCUS AND ELDORADO JOINT
VENTURE, a Nevada general partnership ("Partnership"), FIRST
INTERSTATE BANK OF NEVADA, N.A., as arranger and
administrative agent ("Agent"), the financial institutions listed therein
as Lenders, FIRST INTERSTATE BANK OF NEVADA, N.A.,
THE LONG-TERM CREDIT BANK OF JAPAN, LTD., LOS
ANGELES AGENCY and SOCIETE GENERALE, collectively, as
managing agents, and BANK OF AMERICA, N.T. & S.A., CIBC
INC. and CREDIT LYONNAIS, LOS ANGELES BRANCH,
collectively, as co-agents, this represents Partnership's request to
[Select A or B with appropriate insertions and deletions: [A:
convert $_________ in principal amount of presently outstanding
Loans that are [Base/Eurodollar] Rate Loans [having an Interest Period
that expires on _____________, ____] to [Base/Eurodollar] Rate
Loans on ____________, ____. [The initial Interest Period for such
Eurodollar Rate Loans is requested to be a [one/two/three/six] month
period.]] [B: continue as Eurodollar Rate Loans $_________ in
principal amount of presently outstanding Loans having an Interest
Period that expires on ____________, ____. The Interest Period for
such Eurodollar Rate Loans commencing on _____________, ____ is
requested to be a [one/two/three/six] month period.]]
[For Conversions to or Continuations of Eurodollar
Rate Loans Only: Each of the undersigned officer and Executive
Committee Signatories, to the best of his or her knowledge, and
Partnership certify that no Event of Default or Potential Event of
Default has occurred and is continuing under the Credit Agreement.]
DATED: ____________________ CIRCUS AND ELDORADO JOINT
VENTURE
By:
Title:
By:
Title: Executive Committee Signatory
EXHIBIT III
[FORM OF NOTICE OF ISSUANCE OF LETTER OF
CREDIT]
NOTICE OF ISSUANCE OF LETTER OF CREDIT
Pursuant to that certain Credit Agreement dated as of
May 30, 1995, as amended, supplemented or otherwise modified to
the date hereof (said Credit Agreement, as so amended,
supplemented or otherwise modified, being the "Credit
Agreement", the terms defined therein and not otherwise defined
herein being used herein as therein defined), by and among
CIRCUS AND ELDORADO JOINT VENTURE, a Nevada
general partnership ("Partnership"), FIRST INTERSTATE
BANK OF NEVADA, N.A., as arranger and administrative agent
("Agent"), the financial institutions listed therein as Lenders
("Lenders"), FIRST INTERSTATE BANK OF NEVADA, N.A.,
THE LONG-TERM CREDIT BANK OF JAPAN, LTD., LOS
ANGELES AGENCY and SOCIETE GENERALE, collectively,
as managing agents, and BANK OF AMERICA, N.T. & S.A.,
CIBC INC. and CREDIT LYONNAIS, LOS ANGELES
BRANCH, collectively, as co-agents, this represents Partnership's
request that Issuing Lender issue a Standby Letter of Credit on
__________, ____ (the "Issuance Date")in the face amount of
$__________ with an expiration date of ____________, ____. The
beneficiary of such proposed Letter of Credit shall be
________________________________________ and such Person's
address is _____________________________________. Attached
hereto is [the verbatim text of such proposed Letter of Credit] [a
description of the proposed terms and conditions of such Letter of
Credit, including a precise description of any documents and the
verbatim text of any certificates to be presented by the beneficiary
which, if presented by the beneficiary prior to the expiration date of
such Letter of Credit, would require the Issuing Lender to make
payment under such Letter of Credit].
Each of the undersigned are either officers of
Partnership or Executive Committee Signatories and each certifies,
to the best of his or her knowledge that:
(i) The representations and warranties contained in the
Credit Agreement and the other Loan Documents are true,
correct and complete on and as of the Issuance Date to the
same extent as though made on and as of the Issuance
Date, except to the extent such representations and
warranties specifically relate to an earlier date, in which
case such representations and warranties were true,
correct and complete in all material respects on and as of
such earlier date;
(ii) No event has occurred and is continuing or would
result from the issuance of the Letter of Credit
contemplated hereby that would constitute an Event of
Default or a Potential Event of Default;
(iii) Partnership has performed in all material respects
all agreements and satisfied all conditions which the
Credit Agreement provides shall be performed or satisfied
by it on or before the date hereof;
(iv) No order, judgment or decree of any court,
arbitrator or governmental authority purports to enjoin or
restrain the Issuing Lender from issuing the requested
Letter of Credit on the Issuance Date;
(v) The issuance of the Letter of Credit requested on
such Issuance Date will not violate any law including,
without limitation, Regulation G, Regulation T,
Regulation U or Regulation X of the Board of Governors
of the Federal Reserve System;
(vi) There is not pending or, to the knowledge of the
undersigned officer or Executive Committee Signatory or,
any other Senior Officer or Executive Committee
Signatory or Partnership, threatened, any action, suit,
proceeding, governmental investigation or arbitration
against or affecting any Loan Party or any of their
Subsidiaries or any property of any Loan Party or any of
their Subsidiaries that is required to be disclosed but has
not been disclosed by Partnership in writing pursuant to
subsections 5.6 or 6.1(x) of the Credit Agreement prior to
the issuance of the last Letter of Credit issued before the
Letter of Credit requested hereby or the making of the last
Loan made before the issuance of the Letter of Credit
requested hereby (or in the case of the initial issuance of a
Letter of Credit, prior to the execution of the Credit
Agreement), and there has not occurred any development
in any such action, suit, proceeding, governmental
investigation or arbitration so disclosed by Partnership in
writing pursuant to subsection 5.6 or 6.1(x) of the Credit
Agreement prior to making of the last preceding Loans
(or in the case of initial Loans, prior to execution of the
Credit Agreement), that, in either event, in the opinion of
any such Senior Officer of Executive Committee
Signatory, could reasonably be expected to have a
Material Adverse Effect; and no injunction or other
restraining order has been issued and no hearing to cause
an injunction or other restraining order to be issued is
pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the
consummation of, or to recover any damages or obtain
relief as a result of, the transactions contemplated by the
Credit Agreement or the issuance of the Letter of Credit
hereunder;
(vii) Since December 31, 1994, no Material Adverse
Effect has occurred;
(viii) After giving effect to the issuance of the requested
Letter of Credit, the Total Utilization of Commitments
will not exceed the Commitments then in effect; and
(ix) After giving effect to the issuance of the requested
Letter of Credit, the Letter of Credit Usage will not
exceed $5,000,000.
DATED: ____________________
CIRCUS AND ELDORADO JOINT
VENTURE
By:
Title:
By:
Title Executive Committee Signatory
EXHIBIT IV
[FORM OF NOTE]
CIRCUS AND ELDORADO JOINT VENTURE
PROMISSORY NOTE
$_______________ May 30, 1995
Reno, Nevada
FOR VALUE RECEIVED, CIRCUS AND ELDORADO
JOINT VENTURE, a Nevada general partnership ("Partnership"),
promises to pay to the order of _______________________ ("Payee")
or its registered assigns, on or before the Commitment Termination
Date, the lesser of (x) ____________________________________
($_______________) and (y) the unpaid principal amount of all
advances made by Payee to Partnership as Loans under the Credit
Agreement referred to below.
Partnership also promises to pay interest on the unpaid
principal amount hereof, from the date hereof until paid in full, at the
rates and at the times which shall be determined in accordance with
the provisions of that certain Credit Agreement dated as of May 30,
1995 by and among Partnership, FIRST INTERSTATE BANK OF
NEVADA, N.A., as arranger and administrative agent ("Agent"), the
financial institutions listed therein as Lenders, FIRST INTERSTATE
BANK OF NEVADA, N.A., THE LONG- TERM CREDIT BANK
OF JAPAN, LTD., LOS ANGELES AGENCY and SOCIETE
GENERALE, collectively, as managing agents, and BANK OF
AMERICA, N.T. & S.A., CIBC INC. and CREDIT LYONNAIS,
LOS ANGELES BRANCH, collectively, as co-agents (said Credit
Agreement, as it may be amended, supplemented or otherwise
modified from time to time, being the "Credit Agreement", the terms
defined therein and not otherwise defined herein being used herein as
therein defined).
This Note is one of Partnership's "Notes" in the aggregate
principal amount of $230,000,000 and is issued pursuant to and
entitled to the benefits of the Credit Agreement, to which reference is
hereby made for a more complete statement of the terms and
conditions under which the Loans evidenced hereby were made and
are to be repaid.
All payments of principal and interest in respect of this
Note shall be made in lawful money of the United States of America
in same day funds at the Funding and Payment Office or at such other
place as shall be designated in writing for such purpose in accordance
with the terms of the Credit Agreement. Unless and until an
Assignment Agreement effecting the assignment or transfer of this
Note shall have been accepted by the Agent and recorded in the
Register as provided in subsection 10.1B(ii) of the Credit Agreement,
Partnership and Agent shall be entitled to deem and treat Payee as the
owner and holder of this Note and the Loans evidenced hereby. Payee
hereby agrees, by its acceptance hereof, that before disposing of this
Note or any part hereof it will make a notation hereon of all principal
payments previously made hereunder and of the date to which interest
hereon has been paid; provided, however, that the failure to make a
notation of any payment made on this Note shall not limit, increase or
otherwise affect the obligations of Partnership with respect to
payments of principal of or interest on this Note.
Whenever any payment on this Note shall be stated to be
due on a day that is not a Business Day, such payment shall be made
on the next succeeding Business Day and such extension of time shall
be included in the computation of the payment of interest on this Note;
provided, however, that if the day on which any payment relating to
a Eurodollar Rate Loan is due is not a Business Day but is a day of
the month after which no further Business Day occurs in such month,
then the due date thereof shall be the next preceding Business Day.
The holders of the Obligations do not have recourse to the
General Partners (or either of them) for payment thereof other than as
specifically set forth in the Credit Agreement.
This Note is subject to mandatory prepayment as provided
in subsection 2.4B(iii) of the Credit Agreement and to prepayment at
the option of Partnership as provided in subsection 2.4B(i) of the
Credit Agreement.
THE CREDIT AGREEMENT AND THIS NOTE
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEVADA, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
Upon the occurrence of an Event of Default, the unpaid
balance of the principal amount of this Note, together with all accrued
and unpaid interest thereon, may become, or may be declared to be,
due and payable in the manner, upon the conditions and with the effect
provided in the Credit Agreement.
The terms of this Note are subject to amendment only in
the manner provided in the Credit Agreement.
This Note is subject to restrictions on transfer or
assignment as provided in subsections 10.1 and 10.16 of the Credit
Agreement.
No reference herein to the Credit Agreement and no
provision of this Note or the Credit Agreement shall alter or impair
the obligations of Partnership, which are absolute and unconditional,
to pay the principal of and interest on this Note at the place, at the
respective times, and in the currency herein prescribed.
Partnership promises to pay all costs and expenses,
including reasonable attorneys' fees, all as provided in subsection 10.2
of the Credit Agreement, incurred in the collection and enforcement
of this Note. Partnership and any endorsers of this Note hereby
consent to renewals and extensions of time at or after the maturity
hereof, without notice, and hereby waive diligence, presentment,
protest, demand and notice of every kind and, to the full extent
permitted by law, the right to plead any statute of limitations as a
defense to any demand hereunder.
IN WITNESS WHEREOF, Partnership has caused this
Note to be duly executed and delivered by an officer of its Managing
Partner duly authorized as of the date and at the place first written
above.
CIRCUS AND ELDORADO JOINT
VENTURE
By: GALLEON, INC.
Its: Managing Partner
By:
Title:
By:
ELDORADO LIMITED LIABILITY COMPANY
Its: General Partner
By:
ELDORADO HOTEL ASSOCIATES LIMITED PARTNERSHIP, a Nevada Limited
Partnership
Its:
manager
By:
HOTEL-CASINO MANAGEMENT, INC., a Nevada corporation
Its: general partner
By:
Title:
By:
RECREATIONAL ENTERPRISES, INC., a Nevada corporation
Its:
general partner
By:
Title:
By:
EXECUTIVE COMMITTEE
By:
Title:
By:
Title:
<PAGE>
TRANSACTIONS
ON
NOTE
Date<PAGE>
Type of
Loan Made
This Date<PAGE>
Amount of
Loan Made
This Date<PAGE>
Amount of
Principal
Paid
This Date <PAGE>
Outstanding
Principal
Balance
This Date <PAGE>
Notation
Made By<PAGE>
EXHIBIT V
[FORM OF COMPLIANCE CERTIFICATE]
COMPLIANCE CERTIFICATE
THE UNDERSIGNED HEREBY CERTIFY THAT:
(1) We are [the duly elected [Title] [and Title of] [and]
duly authorized Executive Committee Signator[y][ies] for]
CIRCUS AND ELDORADO JOINT VENTURE, a
Nevada general partnership ("Partnership");
(2) We have reviewed the terms of that certain Credit
Agreement dated as of May 30, 1995, as amended,
supplemented or otherwise modified to the date hereof (said
Credit Agreement, as so amended, supplemented or
otherwise modified, being the "Credit Agreement", the
terms defined therein and not otherwise defined in this
Certificate (including Attachment No. 1 annexed hereto and
made a part hereof) being used in this Certificate as therein
defined), by and among Partnership, FIRST INTERSTATE
BANK OF NEVADA N.A., as arranger and administrative
agent ("Agent"), the financial institutions listed therein as
Lenders, FIRST INTERSTATE BANK OF NEVADA
N.A., THE LONG TERM CREDIT BANK OF JAPAN,
LTD., LOS ANGELES AGENCY and SOCIETE
GENERALE, collectively, as managing agents, and BANK
OF AMERICA, N.T. & S.A., CIBC INC. and CREDIT
LYONNAIS, LOS ANGELES BRANCH, collectively, as
co-agents, and the terms of the other Loan Documents, and
we have made, or have caused to be made under our
supervision, a review in reasonable detail of the transactions
and condition of Partnership during the accounting period
covered by the attached financial statements; and
(3) The examination described in paragraph (2) above did
not disclose, and we have no knowledge of, the existence of
any condition or event which constitutes an Event of Default
or Potential Event of Default during or at the end of the
accounting period covered by the attached financial
statements or as of the date of this Certificate[, except as set
forth below].
[Set forth [below] [in a separate attachment to this
Certificate] are all exceptions to paragraph (3) above listing, in detail,
the nature of the condition or event, the period during which it has
existed and the action which Partnership has taken, is taking, or
proposes to take with respect to each such condition or event:
]
The foregoing certifications, together with the
computations set forth in Attachment No. 1 annexed hereto and made
a part hereof and the financial statements delivered with this
Certificate in support hereof, are made and delivered this __________
day of _____________, ____ pursuant to subsection 6.1(iv) of the
Credit Agreement.
CIRCUS AND ELDORADO JOINT
VENTURE
By:
Title:
By:
Title: Executive Committee Signatory<PAGE>
TO COMPLIANCE CERTIFICATE
This Attachment No. 1 is attached to and made a part
of a Compliance Certificate dated as of ____________, ____ and
pertains to the period from ____________, ____ to ____________,
____. Subsection references herein relate to subsections of the
Credit Agreement.
A. Minimum Coverage Ratio (for the [one/two/three/four] -
Fiscal Quarter(s)
ending _____________, ____)
A. Consolidated Net Income:$_____________
B. Consolidated Interest Expense:$_____________
C. Provisions for taxes based on income:$_____________
D. Total depreciation expense:$_____________
E. Total amortization expense:$_____________
F. Other non-cash items reducing Consolidated
Net Income: $_____________
G.
Pre-Opening Expenses to the extent
they reduce Consolidated EBITDA: $_____________
H.Other non-cash items increasing Consolidated
Net Income: $_____________
I. Consolidated Adjusted EBITDA
([1+2+3+4+5+6+7]-8): $_____________
J. Tax Distributions:$_____________
K. Other Partnership Distributions:$_____________
L. Consolidated Capital Expenditures:$_____________
M. Numerator of Coverage Ratio
(9-10-11-12): $_____________
N.
Scheduled Facility Reductions: $_____________
O.
Consolidated Cash Interest Expense: $_____________
P.Permitted General Partner Subordinated
Debt Payments: $_____________
Q.Other Permitted Indebtedness Payments:$_____________
R. Denominator of Coverage Ratio
(14+15+16+17): $_____________
S. Coverage Ratio (13):(18):____:1.00
T. Minimum ratio required under subsection 7.6A:____:1.00
B. Maximum Leverage Ratio (for the four-Fiscal Quarter
period
ending _____________, (the "Determination Date")
1.Total Utilization of Commitments as
of the Determination Date: $_____________
2. Other Permitted Indebtedness as
of the Determination Date: $_____________
3. Capital Leases outstanding as of
the Determination Date: $_____________
4. Numerator of Leverage Ratio
(1+2+3): $_____________
5.Consolidated Adjusted EBITDA
(9 from Section A above): $_____________
6.Leverage Ratio ((4):(5)):$_____________
7.Maximum Leverage Ratio permitted under
subsection 7.6B: ____:1.00
C. Consolidated Capital Expenditures
1.Consolidated Capital Expenditures for calendar
year-to-date: $_____________
2.
Unutilized Amount from previous calendar year:$_____________
3.Maximum amount of Consolidated Capital
Expenditures permitted under subsection 7.8
for calendar year plus Unutilized Amount
from previous calendar year (2 from this
Section C above) but in no event greater
than $10,000,000: $_____________
<PAGE>
<PAGE>
EXHIBIT VI
[FORM OF OPINION OF PARTNERSHIP'S
COUNSEL]
EXHIBIT VII
[FORM OF OPINION OF O'MELVENY &
MYERS]
EXHIBIT VIII
[FORM OF ASSIGNMENT
AGREEMENT]
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT (this
"Agreement") is entered into by and between the parties designated
as Assignor ("Assignor") and Assignee ("Assignee") above the
signatures of such parties on the Schedule of Terms attached hereto
and hereby made an integral part hereof (the "Schedule of Terms")
and relates to that certain Credit Agreement described in the
Schedule of Terms (said Credit Agreement, as amended,
supplemented or otherwise modified to the date hereof and as it
may hereafter be amended, supplemented or otherwise modified
from time to time, being the "Credit Agreement", the terms
defined therein and not otherwise defined herein being used herein
as therein defined).
IN CONSIDERATION of the agreements, provisions
and covenants herein contained, the parties hereto hereby agree as
follows:
SECTION 1. Assignment and Assumption.
(a) Effective upon the Settlement Date specified in Item
4 of the Schedule of Terms (the "Settlement Date"), Assignor
hereby sells and assigns to Assignee, without recourse,
representation or warranty (except as expressly set forth herein),
and Assignee hereby purchases and assumes from Assignor, that
percentage interest in all of Assignor's rights and obligations as a
Lender arising under the Credit Agreement and the other Loan
Documents with respect to Assignor's Commitment and outstanding
Loans, if any, which represents, as of the Settlement Date, the
percentage interest specified in Item 3 of the Schedule of Terms of
all rights and obligations of Lenders arising under the Credit
Agreement and the other Loan Documents with respect to the
Commitments and any outstanding Loans (the "Assigned Share").
Without limiting the generality of the foregoing, the parties hereto
hereby expressly acknowledge and agree that any assignment of all
or any portion of Assignor's rights and obligations relating to
Assignor's Commitment shall include (i) in the event Assignor is an
Issuing Lender with respect to any outstanding Letters of Credit
(any such Letters of Credit being "Assignor Letters of Credit"),
the sale to Assignee of a participation in the Assignor Letters of
Credit and any drawings thereunder as contemplated by subsection
3.1C of the Credit Agreement and (ii) the sale to Assignee of a
ratable portion of any participations previously purchased by
Assignor pursuant to said subsection 3.1C with respect to any
Letters of Credit other than the Assignor Letters of Credit.
(b) In consideration of the assignment described above,
Assignee hereby agrees to pay to Assignor, on the Settlement Date,
the principal amount of any outstanding Loans included within the
Assigned Share, such payment to be made by wire transfer of
immediately available funds in accordance with the applicable
payment instructions set forth in Item 5 of the Schedule of Terms.
(c) Assignor hereby represents and warrants that Item 3
of the Schedule of Terms correctly sets forth the amount of the
Commitment and the Pro Rata Share of Assignee after giving effect
to the assignment and assumption described above.
(d) Assignor and Assignee hereby agree that, upon
giving effect to the assignment and assumption described above,
(i) Assignee shall be a party to the Credit Agreement and shall have
all of the rights and obligations under the Loan Documents, and
shall be deemed to have made all of the covenants and agreements
contained in the Loan Documents, arising out of or otherwise
related to the Assigned Share, and (ii) Assignor shall be absolutely
released from any of such obligations, covenants and agreements
assumed or made by Assignee in respect of the Assigned Share.
Assignee hereby acknowledges and agrees that the agreement set
forth in this Section 1(d) is expressly made for the benefit of
Partnership, Agent, Managing Agents, Assignor and the other
Lenders and their respective successors and permitted assigns.
(e) Assignor and Assignee hereby acknowledge and
confirm their understanding and intent that (i) this Agreement shall
effect the assignment by Assignor and the assumption by Assignee
of Assignor's rights and obligations with respect to the Assigned
Share, (ii) any other assignments by Assignor of a portion of its
rights and obligations with respect to the Commitments and any
outstanding Loans shall have no effect on the Commitment and the
Pro Rata Share of Assignee set forth in Item 3 of the Schedule of
Terms or on the interest of Assignee in any outstanding Loans
corresponding thereto, and (iii) from and after the Settlement Date,
Agent shall make all payments under the Credit Agreement in
respect of the Assigned Share (including without limitation all
payments of principal and accrued but unpaid interest, commitment
fees and letter of credit fees with respect thereto) (A) in the case of
any such interest and fees that shall have accrued prior to the
Settlement Date, to Assignor, and (B) in all other cases, to
Assignee; provided that Assignor and Assignee shall make payments
directly to each other to the extent necessary to effect any
appropriate adjustments in any amounts distributed to Assignor
and/or Assignee by Agent under the Loan Documents in respect of
the Assigned Share in the event that, for any reason whatsoever, the
payment of consideration contemplated by Section 1(b) occurs on a
date other than the Settlement Date.
SECTION 2. Certain Representations, Warranties
and Agreements.
(a) Assignor represents and warrants that it is the legal
and beneficial owner of the Assigned Share, free and clear of any
adverse claim.
(b) Assignor shall not be responsible to Assignee for the
execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of any of the Loan Documents or for
any representations, warranties, recitals or statements made therein
or made in any written or oral statements or in any financial or
other statements, instruments, reports or certificates or any other
documents furnished or made by Assignor to Assignee or by or on
behalf of Partnership to Assignor or Assignee in connection with the
Loan Documents and the transactions contemplated thereby or for
the financial condition or business affairs of Partnership or any
other Person liable for the payment of any Obligations, nor shall
Assignor be required to ascertain or inquire as to the performance
or observance of any of the terms, conditions, provisions, covenants
or agreements contained in any of the Loan Documents or as to the
use of the proceeds of the Loans or the use of the Letters of Credit
or as to the existence or possible existence of any Event of Default
or Potential Event of Default.
(c) Assignee represents and warrants that it is an
Eligible Assignee; that it has experience and expertise in the making
of loans such as the Loans; that it has acquired the Assigned Share
for its own account and not with any present intention of selling all
or any portion of such interest; and that it has received, reviewed
and approved a copy of the Credit Agreement (including all
Exhibits and Schedules thereto).
(d) Assignee represents and warrants that it has received
from Assignor such financial information regarding Partnership as is
available to Assignor and as Assignee has requested, that it has
made its own independent investigation of the financial condition
and affairs of Partnership in connection with the assignment
evidenced by this Agreement, and that it has made and shall
continue to make its own appraisal of the creditworthiness of
Partnership. Assignor shall have no duty or responsibility, either
initially or on a continuing basis, to make any such investigation or
any such appraisal on behalf of Assignee or to provide Assignee
with any other credit or other information with respect thereto,
whether coming into its possession before the making of the initial
Loans or at any time or times thereafter, and Assignor shall not
have any responsibility with respect to the accuracy of or the
completeness of any information provided to Assignee.
(e) Each party to this Agreement represents and
warrants to the other party hereto that it has full power and
authority to enter into this Agreement and to perform its obligations
hereunder in accordance with the provisions hereof, that this
Agreement has been duly authorized, executed and delivered by
such party and that this Agreement constitutes a legal, valid and
binding obligation of such party, enforceable against such party in
accordance with its terms, except as enforceability may be limited
by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting creditors' rights generally and by
general principles of equity.
SECTION 3. Miscellaneous.
(a) Each of Assignor and Assignee hereby agrees from
time to time, upon request of the other such party hereto, to take
such additional actions and to execute and deliver such additional
documents and instruments as such other party may reasonably
request to effect the transactions contemplated by, and to carry out
the intent of, this Agreement.
(b) Neither this Agreement nor any term hereof may be
changed, waived, discharged or terminated, except by an instrument
in writing signed by the party (including, if applicable, any party
required to evidence its consent to or acceptance of this Agreement)
against whom enforcement of such change, waiver, discharge or
termination is sought.
(c) Unless otherwise specifically provided herein, any
notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telexed or
sent by telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex, or three
Business Days after depositing it in the United States mail with
postage prepaid and properly addressed; provided that notices to
Agent shall not be effective until received. For the purposes
hereof, the notice address of each of Assignor and Assignee shall be
as set forth on the Schedule of Terms or, as to either such party,
such other address as shall be designated by such party in a written
notice delivered to the other such party. In addition, the notice
address of Assignee set forth on the Schedule of Terms shall serve
as the initial notice address of Assignee for purposes of subsection
10.8 of the Credit Agreement.
(d) In case any provision in or obligation under this
Agreement shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or impaired
thereby.
(e) ALL JUDICIAL PROCEEDINGS ARISING OUT
OF OR RELATING TO THIS AGREEMENT MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF NEVADA,
AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT EACH OF THE PARTIES HERETO ACCEPTS
FOR ITSELF AND IN CONNECTION WITH ITS PROPER-
TIES, GENERALLY AND UNCONDITIONALLY, THE
EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS
AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT. Each of the parties
hereto hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified
mail, return receipt requested, to its address provided in the
Schedule of Terms, such service being hereby acknowledged by
each of the parties hereto to be sufficient for personal jurisdiction in
any action against it in any such court and to be otherwise effective
and binding service in every respect. Nothing herein shall affect
the right to serve process in any other manner permitted by law or
shall limit the right of any party hereto to bring proceedings against
the others in the courts of any other jurisdiction.
(f) EACH OF THE PARTIES TO THIS
AGREEMENT HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to
be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of
duty claims and all other common law and statutory claims. Each
party hereto acknowledges that this waiver is a material inducement
to enter into a business relationship, that each has already relied on
this waiver in entering into this Agreement, and that each will
continue to rely on this waiver in their related future dealings.
Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly
and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS AGREEMENT. In the event of litigation, this Agreement
may be filed as a written consent to a trial by the court.
(g) This Agreement shall be binding upon, and shall
inure to the benefit of, the parties hereto and their respective
successors and assigns.
(h) This Agreement may be executed in one or more
counterparts and by different parties hereto in separate 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; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart
so that all signature pages are physically attached to the same
document.
(i) This Agreement shall become effective upon the date
(the "Effective Date") upon which all of the following conditions
are satisfied: (i) the execution of a counterpart hereof by each of
Assignor and Assignee, (ii) the receipt by Agent of the processing
and recordation fee referred to in subsection 10.1B(i) of the Credit
Agreement, (iii) in the event Assignee is a Non-US Lender (as
defined in subsection 2.7B(iii)(a) of the Credit Agreement), the
delivery by Assignee to Agent of such forms, certificates or other
evidence with respect to United States federal income tax
withholding matters as Assignee may be required to deliver to
Agent pursuant to said subsection 2.7B(iii)(a), (iv) the receipt by
Agent of originals or telefacsimiles of the counterparts described
above and authorization of delivery thereof, and (v) the recordation
by Agent in the Register of the pertinent information regarding the
assignment effected hereby in accordance with subsection 10.1B(ii)
of the Credit Agreement.
IN WITNESS WHEREOF, the parties hereto have
caused this Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized, such execution being
made as of the Effective Date in the applicable spaces provided on
the Schedule of Terms.
[Remainder of page intentionally left blank]
SCHEDULE OF TERMS
1. Borrower: CIRCUS AND ELDORADO JOINT VENTURE
2. Name and Date of Credit Agreement: Credit Agreement dated as of
May 30, 1995 by
and among CIRCUS AND ELDORADO JOINT VENTURE, FIRST INTERSTATE
BANK OF NEVADA, N.A., as arranger and administrative agent, the financial
institutions listed therein as Lenders, FIRST INTERSTATE BANK OF NEVADA,
N.A., THE LONG-TERM CREDIT BANK OF JAPAN, LTD., LOS ANGELES
AGENCY and SOCIETE GENERALE, collectively, as managing agents, and BANK
OF AMERICA, N.T. & S.A., CIBC INC. and CREDIT LYONNAIS, LOS
ANGELES BRANCH, collectively, as co-agents.
3. Amounts:
(a) Aggregate Commitments of all Lenders: $________
(b) Assigned Share/Pro Rata Share: _____%
(c) Amount of Assigned Share of Commitments: $________
4. Settlement Date: ____________, ____
5. Payment Instructions:
ASSIGNOR: ASSIGNEE:
Attention: Attention:
Reference: Reference:
6. Notice Addresses:
ASSIGNOR: ASSIGNEE:
7. Signatures:
[NAME OF ASSIGNOR], [NAME OF ASSIGNEE],
as Assignor as Assignee
By: By:
Title: Title:
EXHIBIT IX
[FORM OF AUDITOR'S LETTER]
February __, 1996
Circus and Eldorado Joint Venture
175 West Sixth Street
3rd Floor
Reno, Nevada 89505
Gentlemen:
Our Firm has been engaged to audit the financial statements of Circus and
Eldorado Joint Venture, a Nevada general partnership (the Partnership ) as
of and for the year ended December 31, 1995. In this regard, we understand
and acknowledge (a) that the Partnership plans to provide Bank of Nevada, N.A.
(the Bank ) with a copy of the 1995 financial stateme thereon, (b) that the
Bank has informed you that Lenders (as defined below) inreport in connection
with decisions made after the date thereof regarding th______________, 1995,
among the Partnership, lenders listed therein ( Lenders
Bank of Nevada, N.A., The Long Term Credit Bank of Japan, Ltd., Los Angeles
Agency and Societe
Generale as managing agents, and First Interstate Bank of Nevada, N.A. as
arranger and administrative
agent and (c) that you intend for the Lenders to so rely.
Our audit will be conducted in accordance with generally accepted auditing
standards, the objective of
which is to form an opinion as to whether the financial statements, which
are the responsibility and
representations of management of the Partnership, present fairly, in all
material respects, the
Partnership's financial position, results of operations and cash flows in
conformity with generally
accepted accounting principles. Under those standards, we have the
responsibility, within the inherent
limitations of the auditing process, to plan and perform the audit to obtain
reasonable assurance about
whether the financial statements are free of material misstatement. The
concept of selective testing of
the data being audited, which involves judgment both as to the number of
transactions to be audited
and as to the areas to be tested, has been generally accepted as a valid and
sufficient basis for an
auditor to express an opinion on financial statements. Thus, our audit,
based on the concept of
selective testing, is subject to the inherent risk that material misstatements,
if any, will not be detected.
In addition, our audit will not address future events or the possibility that
material misstatements may
occur in the future.
Also, our use of professional judgment and the assessment of materiality for
the purpose of our work
means that matters may have existed that would have been assessed differently
by others, including the
Bank, in connection with the Loan Agreement.
Our audit of the Partnership's 1995 financial statements will be made for the
purpose stated above and,
therefore, items of possible interest to the Bank may not be specifically
addressed. Accordingly, our
audit should not be taken to supplant the inquiries and procedures that the
Bank should undertake for
the purpose of satisfying itself as to the Partnership's credit worthiness or
compliance with the
provisions of the Loan Agreement referred to above. We trust that the Bank
has
conducted its own
due diligence investigation of the Partnership and will continue to do so in
the future, including an
analysis of the Partnership's current business activities, discussions with
Partnership management, and
any other procedures it deems appropriate.
It is management's responsibility to adopt sound accounting policies, to
maintain an adequate and
effective system of accounts, and to devise an internal control structure
that will, among other things,
provide reasonable, but not absolute, assurance that assets are safeguarded
against loss from
unauthorized use or disposition, and that transactions are executed in
accordance with management's
authorization and recorded properly to permit the preparation of financial
statements in conformity
with generally accepted accounting principles.
This letter is issued in connection with our report on the Partnership's 1995
financial statements. Our
understanding and acknowledgment referred to above does not extend to other
agreements or reports,
if any, that might be rendered in connection with future engagements.
Very truly yours,
By
Copy to: First Interstate Bank of Nevada, N.A.
EXHIBIT X
[FORM OF CERTIFICATE RE NON-BANK STATUS]
CERTIFICATE RE NON-BANK STATUS
Reference is hereby made to that certain Credit Agreement dated as of May 30,
1995 (said Credit Agreement, as amended, supplemented or otherwise modified to
the date hereof, being the "Credit Agreement") by and among CIRCUS AND
ELDORADO JOINT VENTURE, a Nevada general partnership, FIRST INTERSTATE BANK
OF NEVADA, N.A., as arranger and administrative agent, the financial
institutions listed therein as Lenders,
FIRST INTERSTATE BANK OF NEVADA, N.A., THE LONG- TERM CREDIT BANK
OF JAPAN, LTD., LOS ANGELES AGENCY, and SOCIETE GENERALE, collectively,
as managing agents, and BANK OF AMERICA, N.T. & S.A., CIBC INC. and CREDIT
LYONNAIS, LOS ANGELES BRANCH, collectively, as co-agents. Pursuant to
subsection 2.7B(iii) of the Credit Agreement, the undersigned hereby
certifies that it is not a "bank" or other Person described in Section
881(c)(3) of the Internal Revenue Code of 1986, as amended.
[NAME OF LENDER]
By:
Title:
EXHIBIT XI
[FORM OF COLLATERAL ACCOUNT AGREEMENT]
COLLATERAL ACCOUNT AGREEMENT
This COLLATERAL ACCOUNT AGREEMENT (this
"Agreement") is dated as of May 30, 1995 and entered into by and
between CIRCUS AND ELDORADO JOINT VENTURE, a
Nevada general partnership ("Pledgor"), and FIRST
INTERSTATE BANK OF NEVADA N.A., as agent for and
representative of (in such capacity herein called "Secured Party"),
and the financial institutions ("Lenders") party to the Credit
Agreement (as hereinafter defined).
PRELIMINARY STATEMENTS
A. Secured Party, The Long-Term Credit Bank of Japan,
Ltd., Los Angeles Agency, Societe Generale, as managing agents,
Bank of America, N.T. & S.A., CIBC Inc. and Credit Lyonnais,
Los Angeles Branch, collectively, as co-agents, and Lenders have
entered into a Credit Agreement dated as of even date herewith
(said Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the
"Credit Agreement", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with Pledgor
pursuant to which Lenders have made certain commitments, subject
to the terms and conditions set forth in the Credit Agreement, to
extend certain credit facilities to Pledgor.
B. It is a condition precedent to the initial extensions of
credit by Lenders under the Credit Agreement that Pledgor shall
have granted the security interests and undertaken the obligations
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and
in order to induce Lenders to make Loans and issue Letters of
Credit under the Credit Agreement and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, Pledgor hereby agrees with Secured Party as
follows:
SECTION 1. Certain Definitions. The following terms
used in this Agreement shall have the following meanings:
"Collateral" means (i) the Collateral Account, (ii) all
amounts on deposit from time to time in the Collateral Account,
(iii) all interest, cash, instruments, securities and other property
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of the Collateral, and (iv) to
the extent not covered by clauses (i) through (iii) above, all
proceeds of any or all of the foregoing Collateral.
"Collateral Account" means the restricted deposit account
established and maintained by Pledgor with Secured Party pursuant
to Section 2(a).
"Secured Obligations" means all obligations and liabilities
of every nature of Pledgor now or hereafter existing under or
arising out of or in connection with the Credit Agreement and the
other Loan Documents and all extensions or renewals thereof,
whether for principal, interest (including without limitation interest
that, but for the filing of a petition in bankruptcy with respect to
Pledgor, would accrue on such obligations), reimbursement of
amounts drawn under Letters of Credit, fees, expenses, indemnities
or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time
decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid,
to the extent all or any part of such payment is avoided or
recovered directly or indirectly from Secured Party or any Lender
as a preference, fraudulent transfer or otherwise, and all obligations
of every nature of Pledgor now or hereafter existing under this
Agreement.
SECTION 2. Establishment and Operation of Collateral
Account.
(a) Pledgor hereby authorizes and directs Secured Party
to establish and maintain at its Funding and Payment Office, as a
blocked account in the name of Pledgor but under the sole dominion
and control of Secured Party, a restricted deposit account designated
as the "Circus and Eldorado Joint Venture Collateral Account".
(b) The Collateral Account shall be operated in
accordance with the terms of this Agreement.
(c) Secured Party shall be fully protected and shall suffer
no liability in acting in accordance with any written instructions
reasonably believed by it to have been given by Pledgor with
respect to any aspect of the operation of the Collateral Account.
(d) Anything contained herein to the contrary
notwithstanding, the Collateral Account shall be subject to such
applicable laws, and such applicable regulations of the Board of
Governors of the Federal Reserve System and of any other
appropriate banking or governmental authority, as may now or
hereafter be in effect.
SECTION 3. Deposits of Cash Collateral.
(a) All deposits of funds in the Collateral Account shall
be made by wire transfer (or, if applicable, by intra-bank transfer
from another account of Pledgor) of immediately available funds, in
each case addressed as follows:
Account No.:
ABA No.:
Reference:
Attention:
Pledgor shall, promptly after initiating a transfer of funds to the
Collateral Account, give notice to Secured Party by telefacsimile of
the date, amount and method of delivery of such deposit.
(b) If an Event of Default has occurred and is continuing
and, in accordance with Section 8 of the Credit Agreement, Pledgor
is required to pay to Secured Party an amount (the "Aggregate
Available Amount") equal to the maximum amount that may at any
time be drawn under all Letters of Credit then outstanding under the
Credit Agreement, Pledgor shall deliver funds in such an amount
for deposit in the Collateral Account in accordance with Section
3(a). If for any reason the aggregate amount delivered by Pledgor
for deposit in the Collateral Account as aforesaid is less than the
Aggregate Available Amount, the aggregate amount so delivered by
Pledgor shall be apportioned among all outstanding Letters of Credit
for purposes of this Section 3(b) in accordance with the ratio of the
maximum amount available for drawing under each such Letter of
Credit (as to such Letter of Credit, the "Maximum Available
Amount") to the Aggregate Available Amount. Upon any drawing
under any outstanding Letter of Credit in respect of which Pledgor
has deposited in the Collateral Account any amounts described
above, Secured Party shall apply such amounts to reimburse the
Issuing Lender for the amount of such drawing. In the event of
cancellation or expiration of any Letter of Credit in respect of
which Pledgor has deposited in the Collateral Account any amounts
described above, or in the event of any reduction in the Maximum
Available Amount under such Letter of Credit, Secured Party shall
apply the amount then on deposit in the Collateral Account in
respect of such Letter of Credit (less, in the case of such a
reduction, the Maximum Available Amount under such Letter of
Credit immediately after such reduction) first, to the payment of
any amounts payable to Secured Party pursuant to Section 13,
second, to the extent of any excess, to the cash collateralization
pursuant to the terms of this Agreement of any outstanding Letters
of Credit in respect of which Pledgor has failed to pay all or a
portion of the amounts described above (such cash collateralization
to be apportioned among all such Letters of Credit in the manner
described above), third, to the extent of any further excess, to the
payment of any other outstanding Secured Obligations, and fourth,
to the extent of any further excess, to the payment to whomsoever
shall be lawfully entitled to receive such funds.
SECTION 4. Pledge of Security for Secured Obligations.
Pledgor hereby pledges and assigns to Secured Party, and hereby
grants to Secured Party a security interest in, all of Pledgor's right,
title and interest in and to the Collateral as collateral security for
the prompt payment or performance in full when due, whether at
stated maturity, by required prepayment, declaration, acceleration,
demand or otherwise (including the payment of amounts that would
become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. section 362(a)), of all
Secured Obligations.
SECTION 5. No Investment of Amounts in the
Collateral Account; Interest on Amounts in the Collateral
Account.
(a) Cash held by Secured Party in the Collateral Account
shall not be invested by Secured Party but instead shall be
maintained as a cash deposit in the Collateral Account pending
application thereof as elsewhere provided in this Agreement.
(b) To the extent permitted under Regulation Q of the
Board of Governors of the Federal Reserve System, any cash held
in the Collateral Account shall bear interest at the standard rate paid
by Secured Party to its customers for deposits of like amounts and
terms.
(c) Subject to Secured Party's rights under Section 12,
any interest earned on deposits of cash in the Collateral Account in
accordance with Section 5(b) shall be deposited directly in, and held
in the Collateral Account and applied in accordance with Section
3(b).
SECTION 6. Representations and Warranties. Pledgor
represents and warrants as follows:
(a) Ownership of Collateral. Pledgor is (or at the time
of transfer thereof to Secured Party will be) the legal and beneficial
owner of the Collateral from time to time transferred by Pledgor to
Secured Party, free and clear of any Lien except for the security
interest created by this Agreement.
(b) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for either
(i) the grant by Pledgor of the security interest granted hereby,
(ii) the execution, delivery or performance of this Agreement by
Pledgor, or (iii) the perfection of or the exercise by Secured Party
of its rights and remedies hereunder (except as may have been taken
by or at the direction of Pledgor).
(c) Perfection. The pledge and assignment of the
Collateral pursuant to this Agreement creates, to the extent
permitted by applicable law, a valid and perfected first priority
security interest in the Collateral, securing the payment of the
Secured Obligations.
(d) Other Information. All information heretofore,
herein or hereafter supplied to Secured Party by or on behalf of
Pledgor with respect to the Collateral is accurate and complete in all
respects.
SECTION 7. Further Assurances. Pledgor agrees that
from time to time, at the expense of Pledgor, Pledgor will promptly
execute and deliver all further instruments and documents, and take
all further action, that may be necessary or desirable, or that
Secured Party may request, in order to perfect and protect any
security interest granted or purported to be granted hereby or to
enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the
generality of the foregoing, Pledgor will: (a) execute and file such
financing or continuation statements, or amendments thereto, and
such other instruments or notices, as may be necessary or desirable,
or as Secured Party may request, in order to perfect and preserve
the security interests granted or purported to be granted hereby and
(b) at Secured Party's request, appear in and defend any action or
proceeding that may affect Pledgor's title to or Secured Party's
security interest in all or any part of the Collateral.
SECTION 8. Transfers and other Liens. Pledgor agrees
that it will not (a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral or (b) create or suffer to
exist any Lien upon or with respect to any of the Collateral, except
for the security interest under this Agreement.
SECTION 9. Secured Party Appointed Attorney-in-Fact.
Pledgor hereby irrevocably appoints Secured Party as Pledgor's
attorney-in-fact, with full authority in the place and stead of Pledgor
and in the name of Pledgor, Secured Party or otherwise, from time
to time in Secured Party's discretion to take any action and to
execute any instrument that Secured Party may deem necessary or
advisable to accomplish the purposes of this Agreement, including
without limitation to file one or more financing or continuation
statements, or amendments thereto, relative to all or any part of the
Collateral without the signature of Pledgor.
SECTION 10. Secured Party May Perform. If Pledgor
fails to perform any agreement contained herein, Secured Party may
itself perform, or cause performance of, such agreement, and the
expenses of Secured Party incurred in connection therewith shall be
payable by Pledgor under Section 13.
SECTION 11. Standard of Care. The powers conferred
on 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. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, Secured Party shall have
no duty as to any Collateral, it being understood that Secured Party
shall have no responsibility for (a) taking any necessary steps (other
than steps taken in accordance with the standard of care set forth
above to maintain possession of the Collateral) to preserve rights
against any parties with respect to any Collateral or (b) taking any
necessary steps to collect or realize upon the Secured Obligations or
any guarantee therefor, or any part thereof, or any of the Collateral.
Secured Party shall be deemed to have exercised reasonable care in
the custody and preservation of Collateral in its possession if such
Collateral is accorded treatment substantially equal to that which
Secured Party accords its own property of like kind.
SECTION 12. Remedies.
(a) If any Event of Default or Potential Event of Default
shall have occurred and be continuing, Secured Party may (i) transfer
any or all of the Collateral to an account established in Secured
Party's name (whether at Secured Party or otherwise) or (ii) otherwise
register title to any Collateral in the name of Secured Party or one of
its nominees or agents, without reference to any interest of Pledgor.
(b) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the Collateral,
in addition to all other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured
party on default under the Uniform Commercial Code as in effect in
any relevant jurisdiction (the "Code") (whether or not the Code
applies to the affected Collateral).
(c) If the proceeds of any disposition of the Collateral
are insufficient to pay all the Secured Obligations, Pledgor shall be
liable for the deficiency and the fees of any attorneys employed by
Secured Party to collect such deficiency.
(d) Anything contained herein to the contrary
notwithstanding, any of the Collateral consisting of cash held by
Secured Party in the Collateral Account shall be subject to Secured
Party's rights of set-off under subsection 10.4 of the Credit
Agreement.
SECTION 13. Indemnity and Expenses.
(a) Pledgor agrees to indemnify Secured Party and each
Lender from and against any and all claims, losses and liabilities in
any way relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including,
without limitation, enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from Secured
Party's or such Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) Pledgor shall pay to Secured Party upon demand the
amount of any and all costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that
Secured Party may incur in connection with (i) the administration of
this Agreement, (ii) the custody, preservation, use or operation of,
or the sale of, collection from, or other realization upon, any of the
Collateral, (iii) the exercise or enforcement of any of the rights of
Secured Party hereunder, or (iv) the failure by Pledgor to perform
or observe any of the provisions hereof.
SECTION 14. Continuing Security Interest; Transfer of
Loans. This Agreement shall create a continuing security interest
in the Collateral and shall (a) remain in full force and effect until
the indefeasible payment in full of the Secured Obligations, the
cancellation or termination of the Commitments and the cancellation
or expiration of all outstanding Letters of Credit, (b) be binding
upon Pledgor, its successors and assigns, and (c) inure, together
with the rights and remedies of Secured Party hereunder, to the
benefit of Secured Party and its successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 10.1 of the Credit
Agreement, any Lender may assign or otherwise transfer any Loans
held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof
granted to Lenders herein or otherwise. Upon the indefeasible
payment in full of all Secured Obligations, the cancellation or
termination of the Commitments and the cancellation or expiration
of all outstanding Letters of Credit, the security interest granted
hereby shall terminate and all rights to the Collateral shall revert to
Pledgor. Upon any such termination Secured Party shall, at
Pledgor's expense, execute and deliver to Pledgor such documents
as Pledgor shall reasonably request to evidence such termination and
Pledgor shall be entitled to the return, upon its request and at its
expense, against receipt and without recourse to Secured Party, of
such of the Collateral as shall not have been otherwise applied
pursuant to the terms hereof.
SECTION 15. Secured Party as Agent.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders. Secured Party shall be obligated, and
shall have the right hereunder, to make demands, to give notices, to
exercise or refrain from exercising any rights, and to take or refrain
from taking any action (including, without limitation, the release or
substitution of Collateral), solely in accordance with this Agreement
and the Credit Agreement.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of
resignation by Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute notice of resignation as Secured
Party under this Agreement; removal of Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute removal
as Secured Party under this Agreement; and appointment of a
successor Agent pursuant to subsection 9.5 of the Credit Agreement
shall also constitute appointment of a successor Secured Party under
this Agreement. Upon the acceptance of any appointment as Agent
under subsection 9.5 of the Credit Agreement by a successor Agent,
that successor Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring or
removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly
(i) transfer to such successor Secured Party all sums held by
Secured Party hereunder (which shall be deposited in a new
Collateral Account established and maintained by such successor
Secured Party), together with all records and other documents
necessary or appropriate in connection with the performance of the
duties of the successor Secured Party under this Agreement, and
(ii) execute and deliver to such successor Secured Party such
amendments to financing statements, and take such other actions, as
may be necessary or appropriate in connection with the assignment
to such successor Secured Party of the security interests created
hereunder, whereupon such retiring or removed Secured Party shall
be discharged from its duties and obligations under this Agreement.
After any retiring or removed Agent's resignation or removal
hereunder as Secured Party, the provisions of this Agreement shall
inure to its benefit as to any actions taken or omitted to be taken by
it under this Agreement while it was Secured Party hereunder.
SECTION 16. Amendments; Etc. No amendment or
waiver of any provision of this Agreement, or consent to any
departure by Pledgor herefrom, shall in any event be effective
unless the same shall be in writing and signed by Secured Party,
and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was
given.
SECTION 17. Notices. Unless otherwise specifically
provided herein, any notice or other communication herein required
or permitted to be given shall be in writing and may be personally
served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when
delivered in person or by courier service, upon receipt of
telefacsimile or telex by 5:00 P.M (Pacific Time) on a Business
Day, or three Business Days after depositing it in the United States
mail with postage prepaid and properly addressed; provided that
notices to Secured Party shall not be effective until received. For
the purposes hereof, the address of each party hereto shall be as set
forth under such party's name on the signature pages hereof or, as
to either party, such other address as shall be designated by such
party in a written notice delivered to the other party hereto.
SECTION 18. Failure or Indulgence Not Waiver;
Remedies Cumulative. No failure or delay on the part of Secured
Party in the exercise of any power, right or privilege hereunder
shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single
or partial exercise of any such power, right or privilege preclude
any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement
are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
SECTION 19. Severability. In case any provision in or
obligation under this Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
SECTION 20. Headings. Section and subsection headings
in this Agreement are included herein for convenience of reference
only and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.
SECTION 21. Governing Law; Terms. THIS
AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEVADA,
WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE
PROVIDES THAT THE VALIDITY OR PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEVADA.
Unless otherwise defined herein or in the Credit Agreement, terms
used in Articles 8 and 9 of the Uniform Commercial Code in the
State of Nevada are used herein as therein defined.
SECTION 22. Consent to Jurisdiction and Service of
Process. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST PLEDGOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN
THE STATE OF NEVADA, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT PLEDGOR ACCEPTS
FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT. Pledgor hereby
agrees that service of all process in any such proceeding in any such
court may be made by registered or certified mail, return receipt
requested, to Pledgor at its address provided in Section 17, such
service being hereby acknowledged by Pledgor to be sufficient for
personal jurisdiction in any action against Pledgor in any such court
and to be otherwise effective and binding service in every respect.
Nothing herein shall affect the right to serve process in any other
manner permitted by law.
SECTION 23. Waiver of Jury Trial. PLEDGOR AND
SECURED PARTY HEREBY AGREE TO WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to
be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of
duty claims, and all other common law and statutory claims.
Pledgor and Secured Party each acknowledge that this waiver is a
material inducement for Pledgor and Secured Party to enter into a
business relationship, that Pledgor and Secured Party have already
relied on this waiver in entering into this Agreement and that each
will continue to rely on this waiver in their related future dealings.
Pledgor and Secured Party further warrant and represent that each
has reviewed this waiver with its legal counsel, and that each
knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a
trial by the court.
SECTION 24. Counterparts. This Agreement may be
executed in one or more counterparts and by different parties hereto
in separate 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; signature
pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are
physically attached to the same document.
[Remainder of page intentionally left blank]
IN WITNESS WHEREOF, Pledgor and Secured Party have
caused this Agreement to be duly executed and delivered by their
respective officers thereunto duly authorized as of the date first
written above.
CIRCUS AND ELDORADO JOINT VENTURE,
a Nevada general partnership
By: GALLEON, INC.,
a Nevada corporation
Its: Managing General Partner
By:
Title:
Notice Address: c/o Circus Circus Enterprises, Inc.
2880 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Attention: General Counsel
By: ELDORADO LIMITED LIABILITY
COMPANY
Its: General Partner
By: ELDORADO HOTEL ASSOCIATES LIMITED
PARTNERSHIP, a Nevada Limited Partnership
Its: manager
By: HOTEL-CASINO MANAGEMENT, INC.,
a Nevada corporation
Its: general partner
By:
Title:
By: RECREATIONAL ENTERPRISES, INC., a
Nevada corporation
Its: general partner
By:
Title:
Notice Address: c/o Eldorado Hotel Casino
345 N. Virginia Street
P.O. Box 3399
Reno, Nevada 89508
Attention: General Counsel
<PAGE>
By: EXECUTIVE COMMITTEE
By:
Title:
By:
Title:
FIRST INTERSTATE BANK OF NEVADA, N.A.
By:
Title:
Notice Address: Suite 400
3800 Howard Hughes Parkway
Las Vegas, Nevada 89109
Attention: Steve Byrne
EXHIBIT XII
[FORM OF SECURITY AGREEMENT]
SECURITY AGREEMENT
This SECURITY AGREEMENT (this "Agreement") is
dated as of May 30, 1995 and entered into by and between
CIRCUS AND ELDORADO JOINT VENTURE, a Nevada
general partnership ("Grantor"), and FIRST INTERSTATE
BANK OF NEVADA, N.A., as agent for and representative of (in
such capacity herein called "Secured Party") the financial
institutions ("Lenders") party to the Credit Agreement (as
hereinafter defined) ("Secured Party").
PRELIMINARY STATEMENTS
A. Secured Party, The Long Term Credit Bank of Japan,
Ltd., Los Angeles Agency, Societe Generale, as managing agents,
Bank of America, N.T. & S.A., CIBC Inc. and Credit Lyonnais,
Los Angeles Branch, collectively, as co-agents, and Lenders have
entered into a Credit Agreement dated as of even date herewith
(said Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the
"Credit Agreement", the terms defined therein and not otherwise
defined herein being used herein as therein defined) with Grantor,
pursuant to which Lenders have made certain commitments, subject
to the terms and conditions set forth in the Credit Agreement, to
extend certain credit facilities to Grantor.
B. It is a condition precedent to the initial extensions of
credit by Lenders under the Credit Agreement that Grantor shall
have granted the security interests and undertaken the obligations
contemplated by this Agreement.
NOW, THEREFORE, in consideration of the premises and
in order to induce Lenders to make Loans and other extensions of
credit under the Credit Agreement and for other good and valuable
consideration, the receipt and adequacy of which are hereby
acknowledged, Grantor hereby agrees with Secured Party as
follows:
SECTION 1. Grant of Security. Grantor hereby assigns
to Secured Party, and hereby grants to Secured Party a security
interest in, all of Grantor's right, title and interest in and to the
following, in each case whether now or hereafter existing or in
which Grantor now has or hereafter acquires an interest and
wherever the same may be located (the "Collateral"):
(a) all present and future chattels, furniture, furnishings,
goods, equipment, fixtures and all other tangible personal property,
of whatever kind and nature, now or hereafter used in connection
with or placed or located in or on any part of the Premises
(including, without limitation, any building or structure that is now
or that may hereafter be erected on the Premises, and including any
of the foregoing owned by Grantor and placed or located in the
Skyways), including, but not limited to, machinery, materials,
goods and equipment now or hereafter used in the construction or
operation of the Project (including, without limitation, air
conditioning, heating, electrical, lighting, fire fighting and fire
prevention, food and beverage service, laundry, plumbing,
refrigeration, security, sound, signaling, telephone, television,
window washing and other equipment and fixtures, of whatever
kind or nature, including generators, transformers, switching gear,
boilers, burners, furnaces, piping, sprinklers, sinks, tubs, valves,
compressors, motors, carts, dumb waiters, elevators and other lifts,
floor coverings, hardware, keys, locks, organs, pianos, planters,
railings, scales, shelving, signs, tools, machinery, molds, dies,
drills, presses, planers, saws, furniture, business fixtures, trade
fixtures, electric, gas and other motor vehicles, uniforms, vacuum
cleaners, hotel furniture, furnishings and equipment, bathroom
furniture and furnishings (including towels, bathmats, hamperettes,
shower curtains and other bath linens), beds and bedding (including
mattresses, springs, pillows, bed pads, sheets, blankets, comforters,
spreads and other bed linens and furnishings), bric-a-brac, chairs,
chests, vanities, secretaries, bureaus, chiffonniers, love seats,
benches, costumers, smoking stands, sand jars, desks, dressers,
hangings, paintings, pictures, frames, sculptures, lamps, light bulbs,
mirrors, night stands, ornaments, radios, stereo equipment, sofas,
statuary, tables, telephones, televisions, vases, window coverings,
foodstuffs, beverages (including beer, wine, liquor and other
alcoholic beverages), and other consumables (including soap,
shampoo, cleaning supplies and paper goods), cutlery, cooking,
baking and other kitchen utensils and apparatus (including crockery,
fryers, grills, kettles, mixers, pots, pans, pails, racks, steamers and
toasters), china and other dishes, flatware, glassware, hollowware,
serving pieces, trays, table linens, washers, dryers, irons, ironing
boards and other ironing equipment, cables, outlets, plugs, wiring
and related apparatus and fixtures, card readers, cash registers,
adding machines, calculators, computers, keyboards, monitors,
printers, printing equipment, envelopes, stationary, posting
machines, blank forms, typewriters, typewriter stands, other office
and accounting equipment and supplies, time stamps, time
recorders, bookkeeping machines, checking machines, payroll
machines, computer reservations systems, equipment used in the
operation of casinos on the Premises (including but not limited to,
gaming devices and associated equipment (as defined in Nevada
Revised Statutes Chapter 463), including but not limited to, slot
machines, cards, poker chips and gaming tables) and all other
goods, equipment, furnishings, apparatus and fixtures that are now
or may hereafter be located at or used at or in connection with the
Premises) and all other tangible personal property used or to be
used at or in connection with, or placed or to be placed in, rooms,
halls, lounges, offices, lobbies, lavatories, basements, cellars, vaults
or other portions of the Project or of any other building or buildings
hereafter constructed or erected thereon, whether herein enumerated
or not, and whether or not contained in any such building, and
which are used or to be used or useful in the operation and
maintenance thereof, or in any bar, casino, hotel, restaurant, store,
health spa, salon or other business conducted thereon, together with
all replacements and substitutions for any and all personal property
in which Grantor has an interest, including without limitation such
goods and equipment as shall from time to time be located, placed,
installed or used in or upon, or procured for use, or to be used or
useful in connection with the operation of the whole, or any part of,
the Project and all parts thereof and all accessions thereto (any and
all such equipment, replacements, substitutions, parts and accessions
being the "Equipment");
(b) all present and future inventory and merchandise in
all of its forms (including, but not limited to, (i) all goods held by
Grantor for sale or lease or to be furnished under contracts of
service or so leased or furnished, (ii) all raw materials, work in
process, finished goods, and materials used or consumed in the
manufacture, packing, shipping, advertising, selling, leasing,
furnishing or production of such inventory or otherwise used or
consumed in Grantor's business, (iii) all goods in which Grantor has
an interest in mass or a joint or other interest or right of any kind,
(iv) all goods that are returned to or repossessed by Grantor, and
(v) all packing materials, supplies and containers relating to or used
in connection with any of the foregoing, and all accessions thereto
and products thereof (all such inventory, accessions and products
being the "Inventory") and all negotiable documents of title
(including without limitation warehouse receipts, dock receipts and
bills of lading) issued by any person covering any of the foregoing
(any such negotiable document of title being a "Negotiable
Document of Title");
(c) all present and future accounts, accounts receivable,
rentals, revenues, receipts, payments, and income of any nature
whatsoever derived from or received with respect to hotel rooms,
banquet facilities, convention facilities, retail premises, bars,
restaurants, casinos and any other facilities on the Premises and any
facilities in the Skyways leased by Grantor, agreements, contracts,
leases, contract rights, rights to payment (including, without
limitation, rights to payment under the Make-Well Agreement),
instruments, documents, chattel paper, security agreements,
guaranties, undertakings, surety bonds, insurance policies,
condemnation deposits and awards, notes and drafts, securities,
certificates of deposit and the right to receive all payments thereon
or in respect thereof (whether principal, interest, fees or otherwise),
contract rights (other than rights under contracts or governmental
permits that may not be transferred by law), including, without
limitation, rights to all deposits from tenants and other users of the
Project or facilities in the Skyways leased by Grantor, rights under
all contracts relating to the construction, renovation or restoration of
any of the improvements now or hereafter located on the Premises
or the financing thereof and all rights under payment or
performance bonds, warranties, and guaranties, and all rights to
payment from any credit/charge card organization or entity such as
or similar to, and including, without limitation, the organizations or
entities that sponsor and administer, respectively, the American
Express Card, the Carte Blanche Card, the Diners Club Card, the
Discover Card, the MasterCard and the Visa Card, books of
account, and principal, interest and payments due on account of
goods sold, services rendered, loans made or credit extended, on or
in connection with the Project and all forms of obligations owing to
and rights of Grantor or in which Grantor may have any interest,
however created or arising (any and all such accounts, contract
rights, chattel paper, documents, instruments, general intangibles
and other obligations being the "Accounts", and any and all such
security agreements, leases and other contracts being the "Related
Contracts");
(d) the agreements listed in Schedule I annexed hereto, as
each such agreement may be amended, supplemented or otherwise
modified from time to time (said agreements, as so amended,
supplemented or otherwise modified, being referred to herein
individually as an "Assigned Agreement" and collectively as the
"Assigned Agreements"), including without limitation (i) all rights
of Grantor to receive moneys due or to become due under or
pursuant to the Assigned Agreements, (ii) all rights of Grantor to
receive proceeds of any insurance, indemnity, warranty or guaranty
with respect to the Assigned Agreements, (iii) all claims of Grantor
for damages arising out of any breach of or default under the
Assigned Agreements, and (iv) all rights of Grantor to terminate,
amend, supplement, modify or exercise rights or options under the
Assigned Agreements, to perform thereunder and to compel
performance and otherwise exercise all remedies thereunder;
(e) all present and future right, title and interest of
Grantor in and to all leases, subleases, licenses, concessions,
franchises and other use or occupancy agreements (except,
however, agreements made by Grantor in the ordinary course of
business for short-term use by members of the public of guest
rooms and public rooms, including banquet and meeting facilities,
located in the Improvements, and any amendments, modifications,
extensions or renewals thereof (collectively, "Leases"), whether or
not specifically herein described, that now or may hereafter pertain
to or affect the Premises or any portion thereof, or the Skyways,
and all amendments to the same, including, but not limited to, the
following: (i) all payments due and to become due under such
Leases, whether as rent, damages, insurance payments,
condemnation awards, or otherwise; (ii) all claims, rights, powers,
privileges and remedies under such Leases; and (iii) all rights of the
Grantor under such Leases to exercise any election or option, or to
give or receive any notice, consent, waiver or approval, or to
accept any surrender of the premises or any part thereof, together
with full power and authority in the name of the Grantor, or
otherwise, to demand and receive, enforce, collect, and receipt for
any or all of the foregoing, to endorse or execute any checks or any
instruments or orders, to file any claims, and to take any other
action that Secured Party may deem necessary or advisable in
connection therewith;
(f) all present and future deposit accounts of Grantor,
including, without limitation, the Circus and Eldorado Joint Venture
Account maintained at the office of Secured Party, any demand,
time, savings, passbook or like account maintained by Grantor with
any bank, savings and loan association, credit union or like
organization, and all money, cash and cash equivalents of Grantor,
whether or not deposited in any such deposit account;
(g) all shares of, and all securities convertible into and
warrants, options and other rights to purchase or otherwise acquire,
stock of any Person that, after the date of this Agreement, becomes,
as a result of any occurrence, a direct Subsidiary of Grantor (the
"Pledged Shares"), the certificates or other instruments
representing such shares, securities, warrants, options or other
rights and any interest of Grantor in the entries on the books of any
financial intermediary pertaining to such shares, and all dividends,
cash, warrants, rights, instruments and other property or proceeds
from time to time received, receivable or otherwise distributed in
respect of or in exchange for any or all of such shares, securities,
warrants, options or other rights;
(h) all indebtedness from time to time owed to Grantor
by any Person that, after the date of this Agreement, becomes, as a
result of any occurrence, an Affiliate or a direct or indirect
Subsidiary of Grantor, and all interest, cash, instruments and other
property or proceeds from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of
such indebtedness (the "Pledged Debt");
(i) all present and future general intangibles (including
but not limited to all governmental permits relating to construction
or other activities on the premises), all tax refunds of every kind
and nature to which Grantor now or hereafter may become entitled,
however arising, all other refunds, and all deposits, goodwill,
choses in action, rights to payment or performance, gambling debts
or gaming debts owed to Grantor by Grantor's patrons (whether or
not evidenced by a note), judgments taken on any rights or claims
included in the Collateral, trade secrets, computer programs,
software, customer lists, business names, trademarks, trade names
and service marks (including, but not limited to: "Silver Legacy
Hotel Casino" and any derivation thereof, including any and all
state and federal applications and registrations thereof), patents,
patent applications, licenses, copyrights, technology, processes,
proprietary information and insurance proceeds;
(j) all present and future books and records, including,
without limitation, books of account and ledgers of every kind and
nature, ledger cards, computer programs, tapes, disks and other
information storage devices, all related data processing software,
and all electronically recorded data relating to Grantor or its
business or the Project, all receptacles and containers for such
records, and all files and correspondence;
(k) all present and future maps, plans, specifications,
surveys, studies, reports, data and drawings (including, without
limitation, architectural, structural, mechanical and engineering
plans and specifications, studies, data and drawings) prepared for or
relating to the development of the Project or the construction,
renovation or restoration of any improvements on the Premises and
the Skyways or the extraction of minerals, sand, gravel or other
valuable substances from the Premises, together with all
amendments and modifications thereto;
(l) all present and future licenses, permits, variances,
special permits, franchises, certificates, rulings, certifications,
validations, exemptions, filings, registrations, authorizations,
consents, approvals, waivers, orders, rights and agreements
(including options, option rights and contract rights), other than
those (including non-transferrable gaming permits) that may not be
transferred by law, now or hereafter obtained by Grantor from any
governmental authority having or claiming jurisdiction over the
Project, the Premises or the Skyways or any other element of the
Collateral or providing access thereto, or the operation of any
business on, at, or from the Project or the Skyways;
(m) all present and future goods, including, without
limitation, all consumer goods, inventory, equipment, and other
supplies, of whatever kind or nature, and any and all other goods,
wherever located, used or to be used in connection with or in the
conduct of Grantor's business;
(n) all present and future stocks, bonds, debentures,
securities, subscription rights, options, warrants, puts, calls,
certificates, partnership interests, joint venture interests,
investments, brokerage accounts and all rights, preferences,
privileges, dividends, distributions, redemption payments and
liquidation payments received or receivable with respect thereto;
(o) all present and future accessions, appurtenances,
components, repairs, repair parts, spare parts, replacements,
substitutions, additions, issue and improvements to or of or with
respect to any of the foregoing;
(p) all other fixtures and storage and office facilities, and
all accessions thereto and products thereof and all water stock
relating to the Premises;
(q) all other tangible and intangible personal property of
Grantor;
(r) all rights, remedies, powers and privileges of Grantor
with respect to any of the foregoing; and
(s) any and all proceeds, products, rents, income and
profits of any of the foregoing, including, without limitation, all
money, accounts, general intangibles, deposit accounts, documents,
instruments, chattel paper, goods, insurance proceeds (whether or
not the Secured Party is the loss payee), and any other tangible or
intangible property received upon the sale or disposition of any of
the foregoing (it being agreed, for purposes hereof, that the term
"proceeds" includes whatever is receivable or received when any of
the Collateral is sold, collected, exchanged or otherwise disposed
of, whether such disposition is voluntary or involuntary).
Notwithstanding anything to the contrary contained herein,
Secured Party acknowledges that it has no security interest in
(i) any Equipment pledged to secure Other Permitted Indebtedness
incurred to finance the purchase of such Equipment pursuant to a
pledge in form, scope and substance satisfactory to Secured Party,
(ii) any cash of Partnership described in clauses (f), (i) and (n)
above, to the extent such a security interest is prohibited by any
Gaming Laws or (iii) in any deposit account described in clause (f)
above to the extent such a security interest is prohibited by
applicable law.
SECTION 2. Security for Obligations. This Agreement
secures, and the Collateral is collateral security for, the prompt
payment or performance in full when due, whether at stated
maturity, by required prepayment, declaration, acceleration, demand
or otherwise (including the payment of amounts that would become
due but for the operation of the automatic stay under Section 362(a)
of the Bankruptcy Code, 11 U.S.C. section 362(a)), of all obligations and
liabilities of every nature of Grantor now or hereafter existing under
or arising out of or in connection with the Credit Agreement and
the other Loan Documents and all extensions or renewals thereof,
whether for principal, interest (including without limitation interest
that, but for the filing of a petition in bankruptcy with respect to
Grantor, would accrue on such obligations), reimbursement of
amounts drawn under Letters of Credit, fees, expenses, indemnities
or otherwise, whether voluntary or involuntary, direct or indirect,
absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time
decreased or extinguished and later increased, created or incurred,
and all or any portion of such obligations or liabilities that are paid,
to the extent all or any part of such payment is avoided or
recovered directly or indirectly from Secured Party or any Lender
as a preference, fraudulent transfer or otherwise (all such
obligations and liabilities being the "Underlying Debt"), and all
obligations of every nature of Grantor now or hereafter existing
under this Agreement (all such obligations of Grantor, together with
the Underlying Debt, being the "Secured Obligations").
SECTION 3. Grantor Remains Liable. Anything
contained herein to the contrary notwithstanding, (a) Grantor shall
remain liable under any contracts and agreements 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 Secured Party of any of
its rights hereunder shall not release Grantor from any of its duties
or obligations under the contracts and agreements included in the
Collateral, and (c) Secured Party shall not have any obligation or
liability under any contracts and agreements included in the
Collateral by reason of this Agreement or otherwise, nor shall
Secured Party be obligated to perform any of the obligations or
duties of Grantor thereunder or to take any action to collect or
enforce any claim for payment assigned hereunder.
SECTION 4. Representations and Warranties. Grantor
represents and warrants as follows:
(a) Ownership of Collateral. Except for the security
interest created by this Agreement and any Liens permitted pursuant
to the Credit Agreement, Grantor owns the Collateral free and clear
of any Lien. Except such as may have been filed in favor of
Secured Party relating to this Agreement, no effective financing
statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any filing or recording office.
(b) Location of Equipment and Inventory. All of the
Equipment and Inventory is, as of the date hereof, located at the
places specified in Schedule II annexed hereto.
(c) Office Locations; Other Names. The chief place of
business, the chief executive office and the office where Grantor
keeps its records regarding the Accounts and all originals of all
chattel paper that evidence Accounts is, and has been for the four
month period preceding the date hereof, located at 430 North
Virginia Street, Reno, Nevada. Grantor has not in the past done,
and does not now do, business under any other name (including any
trade-name or fictitious business name) except Silver Legacy Hotel
& Casino.
(d) Governmental Authorizations. No authorization,
approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body is required for either
(i) the grant by Grantor of the security interest granted hereby,
(ii) the execution, delivery or performance of this Agreement by
Grantor, or (iii) the perfection of or the exercise by Secured Party
of its rights and remedies hereunder (except (i) authorization from
any Gaming Boards for the exercise by Secured Party of certain of
its rights and remedies hereunder; (ii) the filing of Uniform
Commercial Code financing statements with the office of the
Secretary of State of the State of Nevada and (iii) as has been
previously taken by or at the direction of Grantor).
(e) Perfection. This Agreement, together with the filing
of a UCC-1 financing statement describing the Collateral with the
Secretary of State of Nevada and the Deed of Trust with the
Washoe County Recorder which have been made, creates a valid,
perfected, enforceable and first priority security interest in the
Collateral, securing the payment of the Secured Obligations, and all
filings and other actions necessary or desirable to perfect and
protect such security interest have been duly made or taken.
(f) Other Information. All information heretofore,
herein or hereafter supplied to Secured Party by or on behalf of
Grantor with respect to the Collateral is accurate and complete in all
material respects.
SECTION 5. Further Assurances.
(a) Grantor agrees that from time to time, at the expense
of Grantor, Grantor will promptly execute and deliver all further
instruments and documents, and take all further action, that may be
necessary or desirable, or that Secured Party reasonably may
request, in order to perfect and protect any security interest granted
or purported to be granted hereby or to enable Secured Party to
exercise and enforce its rights and remedies hereunder with respect
to any Collateral. Without limiting the generality of the foregoing,
Grantor will: (i) at the request of Secured Party mark
conspicuously each item of chattel paper included in the Accounts,
each Related Contract and, at the request of Secured Party, each of
its records pertaining to the Collateral, with a legend, in form and
substance satisfactory to Secured Party, indicating that such
Collateral is subject to the security interest granted hereby, (ii) at
the request of Secured Party, deliver and pledge to Secured Party
hereunder all promissory notes and other instruments (including
checks) and all original counterparts of chattel paper constituting
Collateral, duly endorsed and accompanied by duly executed
instruments of transfer or assignment, all in form and substance
satisfactory to Secured Party, (iii) execute and file such financing or
continuation statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as
Secured Party may request, in order to perfect and preserve the
security interests granted or purported to be granted hereby, (iv) at
any reasonable time, upon request by Secured Party, exhibit the
Collateral to and allow inspection of the Collateral by Secured
Party, or persons designated by Secured Party, and (v) at Secured
Party's request, appear in and defend any action or proceeding that
may affect Grantor's title to or Secured Party's security interest in
all or any significant part of the Collateral.
(b) Grantor hereby authorizes Secured Party to file one
or more financing or continuation statements, and amendments
thereto, relative to all or any part of the Collateral without the
signature of Grantor. Grantor agrees that a carbon, photographic or
other reproduction of this Agreement or of a financing statement
signed by Grantor shall be sufficient as a financing statement and
may be filed as a financing statement in any and all jurisdictions.
(c) Grantor will furnish to 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 Secured Party may reasonably request, all in reasonable detail.
(d) Grantor agrees, after an Event of Default or Potential
Event of Default, in the event that Secured Party shall apply for or
appoint an agent to apply for a gaming or liquor license with any
Gaming Board or any Governmental Authority or seek to obtain
consent from any Gaming Board to foreclose on the Collateral
(including all gaming permits) and operate the Premises or
otherwise seek to enforce its rights hereunder, Grantor shall provide
such cooperation as is necessary in order for Secured Party to
obtain the full benefits of this Agreement. Without limiting the
generality of the foregoing, if any Gaming Board or any
Governmental Authority shall require any amendments to the
Collateral Documents or require Grantor to execute such other
documents as a condition to or as a part of such approval process,
Grantor shall consent to such amendments and/or execute such
documents promptly.
SECTION 6. Certain Covenants of Grantor. Grantor
shall:
(a) not use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or any
applicable statute, regulation or ordinance or any policy of
insurance covering the Collateral;
(b) notify Secured Party of any change in Grantor's
name, identity or general partnership structure within 15 days of
such change;
(c) give Secured Party 30 days' prior written notice of
any change in Grantor's chief place of business, chief executive
office or residence or the office where Grantor keeps its records
regarding the Accounts and all originals of all chattel paper that
evidence Accounts;
(d) if Secured Party gives value to enable Grantor to
acquire rights in or the use of any Collateral, use such value for
such purposes; and
(e) pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and
all claims (including claims for labor, materials and supplies)
against, the Collateral, except to the extent the validity thereof is
being contested in good faith and for which adequate reserves have
been established; provided that Grantor shall in any event pay such
taxes, assessments, charges, levies or claims not later than five days
prior to the date of any proposed sale under any judgement, writ or
warrant of attachment entered or filed against Grantor or any of the
Collateral as a result of the failure to make such payment.
SECTION 7. Special Covenants With Respect to
Equipment and Inventory. Grantor shall:
(a) keep the Equipment and Inventory at the places
therefor specified on Schedule II annexed hereto or, upon 30 days'
prior written notice to Secured Party, at such other places in
jurisdictions where all action that may be necessary or desirable, or
that Secured Party may request, in order to perfect and protect any
security interest granted or purported to be granted hereby, or to
enable Secured Party to exercise and enforce its rights and remedies
hereunder, with respect to such Equipment and Inventory shall have
been taken;
(b) cause the Equipment to be maintained and preserved
in the same condition, repair and working order as when new,
ordinary wear and tear excepted, and, and shall forthwith, or, in the
case of any loss or damage to any of the Equipment when
subsection (c) of Section 8 is not applicable, as quickly as
practicable after the occurrence thereof, make or cause to be made
all repairs, replacements and other improvements in connection
therewith that are necessary or desirable to such end. Grantor shall
promptly furnish to Secured Party a statement respecting any
material loss or damage to any of the Equipment (the requirements
under this subsection 7(b) being supplemental to and not exclusive
of the requirements under Section 6.4 of the Credit Agreement
relating to maintenance of property);
(c) provide prompt written notice to Secured Party of any
material breach or default by any party to any Assigned Agreement;
(d) notify Secured Party of the establishment after the
date hereof of any deposit accounts in which Secured Party may
take a security interest pursuant to applicable law and take such
steps as may be requested by Secured Party to perfect Secured
Party's lien therein;
(e) perform all acts that are necessary or desirable to
cause all licenses, permits, variances, special permits, franchises,
certificates, rulings, certifications, validations, exemptions, filings,
registrations, authorizations, consents, approvals, waivers, orders,
rights, and agreements in which a security interest has been
conveyed to Secured Party pursuant to subsection 1(h) to remain in
full force and effect;
(f) keep correct and accurate records of the Inventory,
itemizing and describing the kind, type and quantity of Inventory,
Grantor's cost therefor and (where applicable) the current list prices
for the Inventory substantially consistent with the practice of other
gaming institutions in connection with their gaming operations in
the State of Nevada;
(g) upon the occurrence of an Event of Default, if any
Inventory is in possession or control of any of Grantor's agents or
processors, instruct such agent or processor to hold all such
Inventory for the account of Secured Party and subject to the
instructions of Secured Party; and
(h) promptly upon the issuance and delivery to Grantor
of any Negotiable Document of Title, deliver such Negotiable
Document of Title to Secured Party.
SECTION 8. Insurance.
(a) Grantor shall, at its own expense, maintain insurance
with respect to the Equipment and Inventory in accordance with the
terms of the Credit Agreement, this Section 8 and the Deed of
Trust. Such insurance shall include, without limitation, property
damage insurance and liability insurance. Each policy for property
damage insurance shall provide for all losses to be paid directly to
Secured Party as provided in clause (c)(ii) below. Each policy shall
in addition name Grantor and Secured Party as insured parties
thereunder (without any representation or warranty by or obligation
upon Secured Party) as their interests may appear and have attached
thereto a loss payable clause acceptable to Secured Party that shall
(i) contain an agreement by the insurer that any loss thereunder
shall be payable to Secured Party notwithstanding any action,
inaction or breach of representation or warranty by Grantor,
(ii) provide that there shall be no recourse against Secured Party for
payment of premiums or other amounts with respect thereto, and
(iii) provide that at least 30 days' prior written notice of
cancellation, material amendment, reduction in scope or limits of
coverage or of lapse shall be given to Secured Party by the insurer.
Grantor shall, if so requested by Secured Party, deliver to Secured
Party original or duplicate policies of such insurance and, as often
as Secured Party may reasonably request, a report of a reputable
insurance broker with respect to such insurance. Further, Grantor
shall, at the request of Secured Party, duly execute and deliver
instruments of assignment of such insurance policies to comply with
the requirements of subsection 5(a) and cause the respective insurers
to acknowledge notice of such assignment. The requirements under
this subsection 8(a) shall be supplemental to and not exclusive of
the requirements under Section 6.4 of the Credit Agreement relating
to insurance.
(b) Reimbursement under any liability insurance
maintained by Grantor pursuant to this Section 8 may be paid
directly to the Person who shall have incurred liability covered by
such insurance. In case of any loss involving damage to Equipment
or Inventory when subsection (c) of this Section 8 is not applicable,
Grantor shall make or cause to be made the necessary repairs to or
replacements of such Equipment or Inventory, and any proceeds of
insurance maintained by Grantor pursuant to this Section 8 shall be
paid to Grantor as reimbursement for the costs of such repairs or
replacements.
(c) Upon (i) the occurrence and during the continuation
of any Event of Default or (ii) the actual or constructive loss (in
excess of $1,000,000 per occurrence) of any Equipment or
Inventory, all insurance payments in respect of such Equipment or
Inventory shall be paid to and applied by Secured Party as specified
in Section 19.
SECTION 9. Special Covenants with respect to Accounts
and Related Contracts.
(a) Grantor shall keep its chief place of business and
chief executive office and the office where it keeps its records
concerning the Accounts and Related Contracts, and all originals of
all chattel paper that evidence Accounts, at the location therefor
specified in Section 4 or, upon 30 days' prior written notice to
Secured Party, at such other location in a jurisdiction where all
action that may be necessary or desirable, or that Secured Party
may request, in order to perfect and protect any security interest
granted or purported to be granted hereby, or to enable Secured
Party to exercise and enforce its rights and remedies hereunder,
with respect to such Accounts and Related Contracts shall have been
taken. Grantor will hold and preserve such records and chattel
paper and will permit representatives of Secured Party at any time
during normal business hours to inspect and make abstracts from
such records and chattel paper, and Grantor agrees to render to
Secured Party, at Grantor's cost and expense, such clerical and
other assistance as may be reasonably requested with regard thereto.
Promptly upon the request of Secured Party, Grantor shall deliver
to Secured Party complete and correct copies of each Related
Contract.
(b) Grantor shall, for not less than 5 years from the date
on which such Account arose, maintain (i) complete records of each
Account, including records of all payments received, credits granted
and merchandise returned, and (ii) all documentation relating
thereto.
(c) Except as otherwise provided in this subsection (c),
Grantor shall continue to collect, at its own expense, all amounts
due or to become due to Grantor under the Accounts (but, other
than with respect to security deposits, in no event more than one
month in advance) and Related Contracts. In connection with such
collections, Grantor may take (and, at Secured Party's direction,
shall take) such action as Grantor or Secured Party may deem
necessary or advisable to enforce collection of amounts due or to
become due under the Accounts; provided, however, that Secured
Party shall have the right at any time, upon the occurrence and
during the continuation of an Event of Default or a Potential Event
of Default and upon written notice to Grantor of its intention to do
so, to notify the account debtors or obligors under any Accounts of
the assignment of such Accounts to Secured Party and to direct such
account debtors or obligors to make payment of all amounts due or
to become due to Grantor thereunder directly to Secured Party, to
notify each Person maintaining a lockbox or similar arrangement to
which account debtors or obligors under any Accounts have been
directed to make payment to remit all amounts representing
collections on checks and other payment items from time to time
sent to or deposited in such lockbox or other arrangement directly
to Secured Party and, upon such notification and at the expense of
Grantor, to enforce collection of any such Accounts and to adjust,
settle or compromise the amount or payment thereof, in the same
manner and to the same extent as Grantor might have done. After
receipt by Grantor of the notice from Secured Party referred to in
the proviso to the preceding sentence, (i) all amounts and proceeds
(including checks and other instruments) received by Grantor in
respect of the Accounts and the Related Contracts shall be received
in trust for the benefit of Secured Party hereunder, shall be
segregated from other funds of Grantor and shall be forthwith paid
over or delivered to Secured Party in the same form as so received
(with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 19, and (ii) Grantor shall not adjust,
settle or compromise the amount or payment of any Account, or
release wholly or partly any account debtor or obligor thereof, or
allow any credit or discount thereon (other than settlements in the
ordinary course of business and substantially consistent with the
practice at other gaming institutions in connection with their gaming
operations in the State of Nevada with payors of such Accounts
reached to facilitate collection from such payors of such Accounts).
SECTION 10. Special Provisions With Respect to the
Assigned Agreements.
(a) Grantor shall at its expense:
(i) perform and observe all terms and provisions
of the Assigned Agreements, as permitted to be amended or
otherwise modified pursuant to clause (b)(ii) below, to be
performed or observed by it, maintain the Assigned Agreements
in full force and effect, enforce the Assigned Agreements in
accordance with their terms, and take all such action to such end
as may be from time to time requested by Secured Party; and
(ii) furnish to Secured Party, promptly upon
receipt thereof, copies of all notices of default received by
Grantor under or pursuant to the Assigned Agreements, and from
time to time (A) furnish to Secured Party such information and
reports regarding the Assigned Agreements as Secured Party may
reasonably request and (B) upon request of Secured Party make
to the appropriate counterparty to an Assigned Agreement such
demands and requests for information and reports or for action as
Grantor is entitled to make under the Assigned Agreements.
(b) Grantor shall not:
(i) cancel or terminate any of the Assigned
Agreements or consent to or accept any cancellation or
termination thereof in any case with respect to the General
Contractor's Contract and, with respect to the other Assigned
Agreements, if such cancellation or termination, together with all
other such cancellations or terminations, could reasonably be
expected to result in a Material Adverse Effect;
(ii) amend or otherwise modify the Assigned
Agreements or give any consent, waiver or approval thereunder
if the effect of such amendment or modification, together with all
other amendments, modifications, consents, waivers or approvals
made or consents, waivers or approvals given, is to increase
materially the obligations of Partnership thereunder or to confer
any additional rights on the counterparties to such Assigned
Agreements which could reasonably be expected to be materially
adverse to Partnership or Lenders;
(iii) waive any default under or breach of the
Assigned Agreements if such waiver, together with all other such
waivers could reasonably be expected to result in a Material
Adverse Effect;
(vi) consent to or permit or accept any prepayment
of amounts to become due under or in connection with the
Assigned Agreements, except as expressly provided therein; or
(v) take any other action in connection with the
Assigned Agreements that would impair the value of the interest
or rights of Grantor thereunder or that would impair the interest
or rights of Secured Party in any case with respect to he General
Contractor's Contract and, with respect to the other Assigned
Agreements if such impairment could reasonably be expected to
result in a Material Adverse Effect.
SECTION 11. Voting Rights; Dividends; Etc.
(a) So long as no Event of Default shall have occurred
and be continuing:
(i) Grantor shall be entitled to exercise any and
all voting and other consensual rights pertaining to the Pledged
Shares or Pledged Debt or any part thereof for any purpose not
inconsistent with the terms of this Agreement; provided,
however, that Grantor shall not exercise or refrain from
exercising any such right if Secured Party shall have notified
Grantor that, in Secured Party's judgment, such action would
have a material adverse effect on the value of the Pledged Shares
or Pledged Debt or any part thereof; and provided, further, that
Grantor shall give Secured Party at least five Business Days'
prior written notice of the manner in which it intends to exercise,
or the reasons for refraining from exercising, any such right. It
is understood, however, that neither (A) the voting by Grantor of
any Pledged Shares for or Grantor's consent to the election of
directors at a regularly scheduled annual or other meeting of
stockholders or with respect to incidental matters at any such
meeting nor (B) Grantor's consent to or approval of any action
otherwise permitted under this Agreement shall be deemed
inconsistent with the terms of this Agreement within the meaning
of this subsection 11(a)(i), and no notice of any such voting or
consent need be given to Secured Party.
(ii) Grantor shall be entitled to receive and retain,
and to utilize free and clear of the lien of this Agreement, any
and all dividends and interest paid in respect of the Pledged
Shares or Pledged Debt; provided, however, that any and all
(A) dividends and interest paid or payable other
than in cash in respect of, and instruments and other
property received, receivable or otherwise distributed in
respect of, or in exchange for, any Pledged Shares or
Pledged Debt,
(B) dividends and other distributions paid or
payable in cash in respect of any Pledged Shares or Pledged
Debt in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital,
capital surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
respect of principal or in redemption of or in exchange for
any Pledged Shares or Pledged Debt,
shall be, and shall forthwith be delivered to Secured Party to
hold as, Collateral and shall, if received by Grantor, be received
in trust for the benefit of Secured Party, be segregated from the
other property or funds of Grantor and be forthwith delivered to
Secured Party as Pledged Shares or Pledged Debt, as the case
may be, in the same form as so received (with all necessary
indorsements).
(iii) Secured Party shall promptly execute and
deliver (or cause to be executed and delivered) to Grantor all
such proxies, dividend payment orders and other instruments as
Grantor may from time to time reasonably request for the
purpose of enabling Grantor to exercise the voting and other
consensual rights which it is entitled to exercise pursuant to
paragraph (i) above and to receive the dividends, principal or
interest payments which it is authorized to receive and retain
pursuant to paragraph (ii) above.
(b) Upon the occurrence and during the continuation of
an Event of Default:
(i) Upon written notice from Secured Party to
Grantor, all rights of Grantor to exercise the voting and other
consensual rights which it would otherwise be entitled to exercise
pursuant to subsection 11(a)(i) shall cease, and all such rights
shall thereupon become vested in Secured Party who shall
thereupon have the sole right to exercise such voting and other
consensual rights.
(ii) All rights of Grantor to receive the dividends
and interest payments which it would otherwise be authorized to
receive and retain pursuant to subsection 11(a)(ii) shall
automatically cease, and all such rights shall thereupon become
vested in Secured Party who shall thereupon have the sole right
to receive and hold as Collateral such dividends and interest
payments.
(iii) All dividends, principal and interest payments
which are received by Grantor contrary to the provisions of
paragraph (ii) of this subsection 11(b) shall be received in trust
for the benefit of Secured Party, shall be segregated from other
funds of Grantor and shall forthwith be paid over to Secured
Party as Collateral in the same form as so received (with any
necessary indorsements).
(c) In order to permit Secured Party to exercise the
voting and other consensual rights which it may be entitled to
exercise pursuant to subsection 11(b)(i) and to receive all dividends
and other distributions which it may be entitled to receive under
subsection 11(a)(ii) or subsection 11(b)(ii), (i) Grantor shall
promptly execute and deliver (or cause to be executed and
delivered) to Secured Party all such proxies, dividend payment
orders and other instruments as Secured Party may from time to
time reasonably request and (ii) without limiting the effect of the
immediately preceding clause (i), Grantor hereby grants to Secured
Party an irrevocable proxy to vote the Pledged Shares and to
exercise all other rights, powers, privileges and remedies to which a
holder of the Pledged Shares would be entitled (including, without
limitation, giving or withholding written consents of shareholders,
calling special meetings of shareholders and voting at such
meetings), which proxy shall be effective, automatically and without
the necessity of any action (including any transfer of any Pledged
Shares on the record books of the issuer thereof) by any other
Person (including the issuer of the Pledged Shares or any officer or
agent thereof), upon the occurrence of an Event of Default and
which proxy shall only terminate upon the payment in full of the
Secured Obligations.
SECTION 12. Deposit Accounts. Upon the occurrence
and during the continuation of an Event of Default, Secured Party
and each Lender may exercise dominion and control over, and
refuse to permit further withdrawals (whether of money, securities,
instruments or other property) from any deposit accounts maintained
with Secured Party or such Lender constituting part of the
Collateral.
SECTION 13. License of Patents, Trademarks,
Copyrights, etc. Grantor hereby assigns, transfers and conveys to
Secured Party, effective upon the occurrence of any Event of
Default, the nonexclusive right and license to use all trademarks,
tradenames, copyrights, customers lists, patents or technical
processes owned or used by Grantor that relate to the Collateral and
any other collateral granted by Grantor as security for the Secured
Obligations, together with any goodwill associated therewith, all to
the extent necessary to enable Secured Party to use, possess and
realize on the Collateral and to enable any successor or assign to
enjoy the benefits of the Collateral. This right and license shall
inure to the benefit of all successors, assigns and transferees of
Secured Party and its successors, assigns and transferees, whether
by voluntary conveyance, operation of law, assignment, transfer,
foreclosure, deed in lieu of foreclosure or otherwise. Such right
and license is granted free of charge, without requirement that any
monetary payment whatsoever be made to Grantor.
SECTION 14. Transfers and Other Liens. Grantor shall
not:
(a) sell, assign (by operation of law or otherwise) or
otherwise dispose of any of the Collateral, except as permitted by
the Credit Agreement; or
(b) except for the security interest created by this
Agreement or as permitted by the Credit Agreement, create or
suffer to exist any Lien upon or with respect to any of the
Collateral to secure the indebtedness or other obligations of any
Person.
SECTION 15. Secured Party Appointed Attorney-in-
Fact. Grantor hereby irrevocably appoints Secured Party as
Grantor's attorney-in-fact, with full authority in the place and stead
of Grantor and in the name of Grantor, Secured Party or otherwise,
from time to time in Secured Party's discretion to take any action
not prohibited by the Credit Agreement and to execute any
instrument that Secured Party may deem necessary or advisable to
accomplish the purposes of this Agreement, including without
limitation:
(a) to obtain and adjust insurance required to be
maintained by Grantor or paid to Secured Party pursuant to Section
8;
(b) to ask for, demand, collect, sue for, recover,
compound, receive and give acquittance and receipts for moneys
due and to become due under or in respect of any of the Collateral;
(c) to receive, endorse and collect any drafts or other
instruments, documents and chattel paper in connection with clauses
(a) and (b) above;
(d) to file any claims or take any action or institute any
proceedings (including, without limitation, any proceeding before
any Gaming Board) that Secured Party may deem necessary or
desirable for the collection of any of the Collateral or otherwise to
enforce the rights of Secured Party with respect to any of the
Collateral;
(e) to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or
placed upon or threatened against the Collateral, the legality or
validity thereof and the amounts necessary to discharge the same to
be determined by Secured Party in its sole discretion, any such
payments made by Secured Party to become obligations of Grantor
to Secured Party, due and payable immediately without demand;
(f) to sign and endorse any invoices, freight or express
bills, bills of lading, storage or warehouse receipts, drafts against
debtors, assignments, verifications and notices in connection with
Accounts and other documents relating to the Collateral; and
(g) upon the occurrence and during the continuation of an
Event of Default, generally to sell, transfer, pledge, make any
agreement with respect to or otherwise deal with any of the
Collateral as fully and completely as though Secured Party were the
absolute owner thereof for all purposes, and to do, at Secured
Party's option and Grantor's expense, at any time or from time to
time, all acts and things that Secured Party deems necessary to
protect, preserve or realize upon the Collateral and Secured Party's
security interest therein in order to effect the intent of this
Agreement, all as fully and effectively as Grantor might do.
SECTION 16. Secured Party May Perform. If Grantor
fails to perform any agreement contained herein, Secured Party may
itself perform, or cause performance of, such agreement, and the
expenses of Secured Party incurred in connection therewith shall be
payable by Grantor under Section 20.
SECTION 17. Standard of Care. The powers conferred
on 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. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for
moneys actually received by it hereunder, Secured Party shall have
no duty as to any Collateral or as to the taking of any necessary
steps to preserve rights against prior parties or any other rights
pertaining to any Collateral. Secured Party shall be deemed to have
exercised reasonable care in the custody and preservation of
Collateral in its possession if such Collateral is accorded treatment
substantially equal to that which Secured Party accords its own
property.
SECTION 18. Remedies.
(a) Notwithstanding any other provision hereof, if
Secured Party elects, upon any Event of Default, to sell real
property and any of the Collateral together under the Deed of
Trust and applicable law, then the terms of the Deed of Trust
shall, with respect to such sale and Collateral, control and
supersede any terms in this Agreement with respect to such sale
and Collateral; provided that Secured Party's election to exercise
remedies under the Deed of Trust shall have no effect on the
terms contained in this Agreement with respect to any Collateral
as to which Secured Party has not so elected.
(b) If any Event of Default shall have occurred and be
continuing, Secured Party may exercise in respect of the
Collateral, in addition to all other rights and remedies provided
for herein or otherwise available to it, all the rights and remedies
of a secured party on default under the Uniform Commercial
Code as in effect in any relevant jurisdiction (the "Code")
(whether or not the Code applies to the affected Collateral), and
also may (i) require Grantor to, and Grantor hereby agrees that it
will at its expense and upon request of Secured Party forthwith,
assemble all or part of the Collateral as directed by Secured
Party and make it available to Secured Party at a place to be
designated by Secured Party that is reasonably convenient to both
parties, (ii) enter onto the property where any Collateral is
located and take possession thereof with or without judicial
process, (iii) prior to the disposition of the Collateral, store,
process, repair or recondition the Collateral or otherwise prepare
the Collateral for disposition in any manner to the extent Secured
Party deems appropriate, (iv) take possession of Grantor's
premises or place custodians in exclusive control thereof, remain
on such premises and use the same and any of Grantor's
equipment for the purpose of completing any work in process,
taking any actions described in the preceding clause (iii) and
collecting any Secured Obligation, and (v) without notice except
as specified below, sell the Collateral or any part thereof in one
or more parcels at public or private sale, at any of Secured
Party's offices or elsewhere, for cash, on credit or for future
delivery, at such time or times and at such price or prices and
upon such other terms as Secured Party may deem commercially
reasonable. Secured Party or any Lender may be the purchaser
of any or all of the Collateral at any such sale and Secured Party,
as agent for and representative of Lenders (but not any Lender or
Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing), shall be
entitled, for the purpose of bidding and making settlement or
payment of the purchase price for all or any portion of the
Collateral sold at any such public sale, to use and apply any of
the Secured Obligations as a credit on account of the purchase
price for any Collateral payable by Secured Party at such sale.
Each purchaser at any such sale shall hold the property sold
absolutely free from any claim or right on the part of Grantor,
and Grantor hereby waives (to the extent permitted by applicable
law) all rights of redemption, stay and/or appraisal which it now
has or may at any time in the future have under any rule of law
or statute now existing or hereafter enacted. Grantor agrees that,
to the extent notice of sale shall be required by law, at least ten
days' notice to Grantor of the time and place of any public sale
or the time after which any private sale is to be made shall
constitute reasonable notification. Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of
sale having been given. Secured Party may adjourn any public
or private sale from time to time by announcement at the time
and place fixed therefor, and such sale may, without further
notice, be made at the time and place to which it was so
adjourned. Grantor hereby waives any claims against Secured
Party arising by reason of the fact that the price at which any
Collateral may have been sold at such a private sale was less
than the price which might have been obtained at a public sale,
even if Secured Party accepts the first offer received and does
not offer such Collateral to more than one offeree. If the
proceeds of any sale or other disposition of the Collateral are
insufficient to pay all the Secured Obligations, Grantor shall be
liable for the deficiency and the fees of any attorneys employed
by Secured Party to collect such deficiency.
Notwithstanding anything to the contrary contained herein,
if, upon an Event of Default hereunder or under the Credit
Agreement and foreclosure upon any gaming permits pledged and
assigned herein, Secured Party is not qualified under the Gaming
Laws to hold such gaming permits, then Secured Party shall
designate an appropriately qualified third party to which an
assignment of such gaming permits can be made in compliance
with the Gaming Laws.
SECTION 19. Application of Proceeds. Except as
expressly provided elsewhere in this Agreement, all proceeds
received by Secured Party in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral may, in
the discretion of Secured Party, be held by Secured Party as
Collateral for, and/or then, or at any other time thereafter, applied
in full or in part by Secured Party against, the Secured Obligations
in the following order of priority:
FIRST: To the payment of all costs and expenses of such
sale, collection or other realization, including costs and expenses
of Secured Party and its agents and counsel, and all other
expenses, liabilities and advances made or incurred by Secured
Party in connection therewith, and all amounts for which Secured
Party is entitled to indemnification hereunder and all advances
made by Secured Party hereunder for the account of Grantor, and
to the payment of all costs and expenses paid or incurred by
Secured Party in connection with the exercise of any right or
remedy hereunder, all in accordance with Section 20;
SECOND: To the payment of all other Secured Obligations
(for the ratable benefit of the holders thereof) in such order as
Secured Party shall elect; and
THIRD: To the payment to or upon the order of Grantor,
or to whomsoever may be lawfully entitled to receive the same
or as a court of competent jurisdiction may direct, of any surplus
then remaining from such proceeds.
SECTION 20. Indemnity and Expenses.
(a) Grantor agrees to indemnify Secured Party and each
Lender from and against any and all claims, losses and liabilities in
any way relating to, growing out of or resulting from this
Agreement and the transactions contemplated hereby (including,
without limitation, enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from Secured
Party's or such Lender's gross negligence or willful misconduct as
finally determined by a court of competent jurisdiction.
(b) Grantor shall pay to Secured Party upon demand the
amount of any and all costs and expenses, including the reasonable
fees and expenses of its counsel and of any experts and agents, that
Secured Party may incur in connection with (i) the administration of
this Agreement, (ii) the custody, preservation, use or operation of,
or the sale of, collection from, or other realization upon, any of the
Collateral, (iii) the exercise or enforcement of any of the rights of
Secured Party hereunder, or (iv) the failure by Grantor to perform
or observe any of the provisions hereof.
SECTION 21. Continuing Security Interest; Transfer of
Loans. This Agreement shall create a continuing security interest
in the Collateral and shall (a) remain in full force and effect until
the indefeasible payment in full of the Secured Obligations, the
cancellation or termination of the Commitments and the cancellation
or expiration of all outstanding Letters of Credit, (b) be binding
upon Grantor, its successors and assigns, and (c) inure, together
with the rights and remedies of Secured Party hereunder, to the
benefit of Secured Party and its successors, transferees and assigns.
Without limiting the generality of the foregoing clause (c), but
subject to the provisions of subsection 10.1 of the Credit
Agreement, any Lender may assign or otherwise transfer any Loans
held by it to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof
granted to Lenders herein or otherwise. Upon the indefeasible
payment in full of all Secured Obligations, the cancellation or
termination of the Commitments and the cancellation or expiration
of all outstanding Letters of Credit, the security interest granted
hereby shall terminate and all rights to the Collateral shall revert to
Grantor. Upon any such termination Secured Party will, at
Grantor's expense, execute and deliver to Grantor such documents
as Grantor shall reasonably request to evidence such termination.
SECTION 22. Secured Party as Agent.
(a) Secured Party has been appointed to act as Secured
Party hereunder by Lenders. Secured Party shall be obligated, and
shall have the right hereunder, to make demands, to give notices, to
exercise or refrain from exercising any rights, and to take or refrain
from taking any action (including, without limitation, the release or
substitution of Collateral), solely in accordance with this Agreement
and the Credit Agreement.
(b) Secured Party shall at all times be the same Person
that is Agent under the Credit Agreement. Written notice of
resignation by Agent pursuant to subsection 9.5 of the Credit
Agreement shall also constitute notice of resignation as Secured
Party under this Agreement; removal of Agent pursuant to
subsection 9.5 of the Credit Agreement shall also constitute removal
as Secured Party under this Agreement; and appointment of a
successor Agent pursuant to subsection 9.5 of the Credit Agreement
shall also constitute appointment of a successor Secured Party under
this Agreement. Upon the acceptance of any appointment as Agent
under subsection 9.5 of the Credit Agreement by a successor Agent,
that successor Agent shall thereupon succeed to and become vested
with all the rights, powers, privileges and duties of the retiring or
removed Secured Party under this Agreement, and the retiring or
removed Secured Party under this Agreement shall promptly
(i) transfer to such successor Secured Party all sums, securities and
other items of Collateral held hereunder, together with all records
and other documents necessary or appropriate in connection with
the performance of the duties of the successor Secured Party under
this Agreement, and (ii) execute and deliver to such successor
Secured Party such amendments to financing statements, and take
such other actions, as may be necessary or appropriate in
connection with the assignment to such successor Secured Party of
the security interests created hereunder, whereupon such retiring or
removed Secured Party shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed
Agent's resignation or removal hereunder as Secured Party, the
provisions of this Agreement shall inure to its benefit as to any
actions taken or omitted to be taken by it under this Agreement
while it was Secured Party hereunder.
SECTION 23. Amendments; Etc. No amendment or
waiver of any provision of this Agreement, or consent to any
departure by Grantor herefrom, shall in any event be effective
unless the same shall be in writing and signed by Secured Party,
and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was
given.
SECTION 24. Notices. Any notice or other
communication herein required or permitted to be given shall be in
writing and may be personally served, telexed or sent by
telefacsimile or United States mail or courier service and shall be
deemed to have been given when delivered in person or by courier
service, upon receipt of telefacsimile or telex prior to 5:00 p.m. on
a Business Day, or three Business Days after depositing it in the
United States mail with postage prepaid and properly addressed;
provided that notices to Secured Party shall only be effective upon
receipt. For the purposes hereof, the address of each party hereto
shall be as set forth under such party's name on the signature pages
hereof or, as to either party, such other address as shall be
designated by such party in a written notice delivered to the other
party hereto.
SECTION 25. Failure or Indulgence Not Waiver;
Remedies Cumulative. No failure or delay on the part of Secured
Party in the exercise of any power, right or privilege hereunder
shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single
or partial exercise of any such power, right or privilege preclude
any other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement
are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
SECTION 26. Severability. In case any provision in or
obligation under this Agreement shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations, or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
SECTION 27. Headings. Section and subsection headings
in this Agreement are included herein for convenience of reference
only and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.
SECTION 28. Governing Law; Terms. THIS
AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH,
THE INTERNAL LAWS OF THE STATE OF NEVADA,
WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES, EXCEPT TO THE EXTENT THAT THE CODE
PROVIDES THAT THE VALIDITY OR PERFECTION OF
THE SECURITY INTEREST HEREUNDER, OR REMEDIES
HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEVADA.
Unless otherwise defined herein or in the Credit Agreement, terms
used in Articles 8 and 9 of the Uniform Commercial Code in the
State of Nevada are used herein as therein defined.
SECTION 29. Consent to Jurisdiction and Service of
Process. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST GRANTOR ARISING OUT OF OR RELATING TO
THIS AGREEMENT MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN
THE STATE OF NEVADA, AND BY EXECUTION AND
DELIVERY OF THIS AGREEMENT GRANTOR ACCEPTS
FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS AGREEMENT. Grantor hereby
agrees that service of all process in any such proceeding in any such
court may be made by registered or certified mail, return receipt
requested, to Grantor at its address provided in Section 24, such
service being hereby acknowledged by Grantor to be sufficient for
personal jurisdiction in any action against Grantor in any such court
and to be otherwise effective and binding service in every respect.
Nothing herein shall affect the right to serve process in any other
manner permitted by law.
SECTION 30. Waiver of Jury Trial. GRANTOR AND
SECURED PARTY HEREBY AGREE TO WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to
be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of
duty claims, and all other common law and statutory claims.
Grantor and Secured Party each acknowledge that this waiver is a
material inducement for Grantor and Secured Party to enter into a
business relationship, that Grantor and Secured Party have already
relied on this waiver in entering into this Agreement and that each
will continue to rely on this waiver in their related future dealings.
Grantor and Secured Party further warrant and represent that each
has reviewed this waiver with its legal counsel, and that each
knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a
trial by the court.
SECTION 31. Counterparts. This Agreement may be
executed in one or more counterparts and by different parties hereto
in separate 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; signature
pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are
physically attached to the same document.
[Remainder of page intentionally left blank] IN WITNESS WHEREOF,
Grantor and Secured Party have caused this Agreement to be duly executed
and delivered by their respective officers thereunto duly authorized as
of the date first written above.
CIRCUS AND ELDORADO JOINT
VENTURE,
a Nevada general partnership
By: GALLEON, INC.,
a Nevada corporation
Its: Managing Partner
By:
Title:
Notice Address: c/o Circus Circus
Enterprises, Inc.
2880 Las Vegas
Boulevard South
Las Vegas,
Nevada 89109
Attention:
General Counsel
By: ELDORADO LIMITED LIABILITY COMPANY
Its: General Partner
By: ELDORADO HOTEL ASSOCIATES
LIMITED PARTNERSHIP, a Nevada
Limited Partnership
Its: manager
By HOTEL-CASINO MANAGEMENT, INC.,
a Nevada corporation
Its: general partner
By:_____________________
Title:__________________
By: RECREATIONAL ENTERPRISES,
INC., a Nevada
corporation
Its: general partner
By:_____________________
Title:__________________
Notice Address: c/o Eldorado Hotel Casino
345 N. Virginia Street
P.O. Box 3399
Reno, Nevada 89508
Attention: General Counsel
By: EXECUTIVE COMMITTEE
By:
Title:
By:
Title:
FIRST INTERSTATE BANK OF NEVADA, N.A., as
Agent
By:
Title:
Notice Address: 3800 Howard Hughes Parkway
Suite 400
Las Vegas, Nevada 89109
Attention: Steve Byrne
SCHEDULE I
TO SECURITY AGREEMENT
Assigned Agreements
1. Contract for Construction, dated as of February 7, 1994, by
and between Perini Building Company and Circus and
Eldorado Joint Venture as amended by Change Order Nos.
1-10, as amended, supplemented or otherwise modified from
time to time.
2. Agreement Between Owner and Architect, dated as of
February 1994, by and between Mitchell Cohen Architects,
Inc. and Circus and Eldorado Joint Venture, as assigned to
Urban Design Group, P.C. pursuant to that undated
Assignment by and among Circus and Eldorado Joint
Venture, Mitchell Cohan Architects, Inc., UDG, Inc. d/b/a
Urban Design Group, Inc. and Urban Design Group, P.C.
as it may be amended, supplemented or otherwise modified
from time to time.
3. Letter agreement, dated November 18, 1993, by and
between Smith-Casino Advisory and Circus and Eldorado
Joint Venture as amended by Addendum One to Letter
Agreement for Project C dated as of January 24, 1995, as
amended by Addendum Two to Letter Agreement for Silver
Legacy dated as of March 10, 1995, as it may be amended,
supplemented or otherwise modified from time to time.
SCHEDULE II
TO SECURITY AGREEMENT
Locations of Equipment:
430 North Virginia Street, Reno, Nevada, 89501
Locations of Inventory:
430 North Virginia Street, Reno, Nevada, 89501
EXHIBIT XIII-A
[FORM OF CIRCUS COMPLETION GUARANTY]
CIRCUS COMPLETION GUARANTY
This CIRCUS COMPLETION GUARANTY is entered
into as of May 30, 1995 by CIRCUS CIRCUS ENTERPRISES,
INC., a Nevada corporation ("Guarantor"), in favor of FIRST
INTERSTATE BANK OF NEVADA, N.A., as agent for and
representative of (in such capacity herein called "Agent") the
financial institutions ("Lenders") party to the Credit Agreement (as
hereinafter defined), for the benefit of Agent and Lenders, and
CIRCUS AND ELDORADO JOINT VENTURE, a Nevada
general partnership (as an express third-party beneficiary of this
Guaranty) ("Partnership").
RECITALS
A. Partnership (the general partners of which are
Galleon, Inc., a Nevada corporation and a wholly-owned subsidiary
of Guarantor ("Galleon"), and Eldorado Limited Liability
Company, a Nevada limited liability company of which Eldorado
Hotel Associates, a Nevada limited partnership is the managing
member which has Recreational Enterprises, Inc., a Nevada
subchapter S corporation and Hotel-Casino Management, Inc., a
Nevada subchapter S corporation as its general partners), has
entered into that certain Credit Agreement dated as of even date
herewith with Lenders, Agent, as arranger and administrative agent,
FIRST INTERSTATE BANK OF NEVADA, N.A., THE LONG-
TERM CREDIT BANK OF JAPAN, LTD., LOS ANGELES
AGENCY and SOCIETE GENERALE, collectively, as managing
agents ("Managing Agents"), and BANK OF AMERICA, N.T. &
S.A., CIBC INC., and CREDIT LYONNAIS, LOS ANGELES
BRANCH, collectively, as co-Agents ("Co-Agents") (said Credit
Agreement, as it may hereafter be amended, supplemented or
otherwise modified from time to time, being the "Credit
Agreement"; capitalized terms defined therein and not otherwise
defined herein being used herein as therein defined).
B. It is a condition precedent to the making of the initial
Loans under the Credit Agreement that prompt and timely
completion of the Project, including, without limitation, the Later
Opening Rooms, but not including the Eldorado Bridge or the
Attraction, funded thereby be guarantied by Guarantor.
C. Guarantor is willing irrevocably and unconditionally
to guaranty such prompt and timely completion of the Project,
including, without limitation, the Later Opening Rooms, but not
including the Eldorado Bridge or the Attraction, in accordance with
the Plans (as the same may hereafter be amended, supplemented or
otherwise modified from time to time in accordance with the Credit
Agreement).
NOW, THEREFORE, based upon the foregoing and for
other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and in order to induce Lenders,
Managing Agents, Co-Agents and Agent to enter into the Credit
Agreement and to make the Loans thereunder, Guarantor hereby
agrees as follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms. As used in this Guaranty, the
following terms shall have the following meanings unless the
context otherwise requires:
"Guarantied Obligations" has the meaning assigned to that
term in subsection 2.1.
"Guaranty" means, as of any date, this Circus Completion
Guaranty, as it may be amended, supplemented or otherwise
modified from time to time through such date.
"Obligations" has the meaning assigned such term in the
Credit Agreement and shall also include, without limitation,
Partnership's performance of the obligations thereunder,
including without limitation, its obligation under subsection 6.9
thereof to Complete Construction and to Finally Complete
Construction at the times and in the manner set forth in the
Credit Agreement but, in each case, not including the Eldorado
Bridge or the Attraction.
"payment in full", "paid in full" or any similar term means
indefeasible payment in full of the obligations referenced
including, without limitation, all principal, interest, costs, fees,
expenses and indemnities (including, without limitation, legal
fees and expenses) of Lenders, Managing Agents, Co-Agents and
Agent as required under the Loan Documents.
"Time for Performance" has the meaning assigned such
term in subsection 2.16.
1.2 Interpretation.
(a) References to "Sections" and "subsections" shall be
to Sections and subsections, respectively, of this Guaranty unless
otherwise specifically provided.
(b) In the event of any conflict or inconsistency between
the terms, conditions and provisions of this Guaranty and the
terms, conditions and provisions of the Credit Agreement, the
terms, conditions and provisions of this Guaranty shall prevail.
SECTION 2. THE GUARANTY
2.1 Guaranty of the Guarantied Obligations. Guarantor
hereby irrevocably and unconditionally guaranties, as primary
obligor and not merely as surety, the prompt and complete
performance of Partnership's obligations under subsection 6.9 of the
Credit Agreement to Complete Construction on or before the
Projected Completion of Construction Date and to Finally Complete
Construction on or before the Projected Final Completion Date, all
in the manner and in accordance with the terms, provisions and
conditions set forth in the Credit Agreement, except, in each case
with respect to the Eldorado Bridge and the Attraction (the
"Guarantied Obligations").
Guarantor's obligation to perform hereunder shall be enforceable
irrespective of whether any claims made by mechanics, laborers or
materialmen require performance, are liquidated or unliquidated,
absolute or contingent, and irrespective of whether the obligations
of Partnership are joint or several, secured or unsecured, or
hereafter become barred by any statute of limitation. Guarantor
shall be obligated to perform irrespective of whether such
obligations of Partnership may be or hereafter become otherwise
unenforceable for any reason including insolvency, death,
dissolution or incompetency. Guarantor further agrees that it shall
promptly, fully and faithfully perform and discharge all of the
Guarantied Obligations.
2.2 Liability of Guarantor Absolute. Guarantor agrees that its
obligations hereunder are irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance that
constitutes a legal or equitable discharge of a guarantor or surety
other than either (but not both) of (a) prompt and complete payment
and performance of the Guarantied Obligations or, without
duplication, and (b) payment in full by Guarantor, Partnership or
otherwise of all Obligations, the termination of all Commitments,
and the expiration or cancellation of all Letters of Credit and, in
each case, payment in full of all other payment obligations (other
than the Guarantied Obligations) of Guarantor hereunder. In
furtherance of the foregoing and without limiting the generality
thereof, Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment and
performance (as described in the immediately preceding
paragraph) and not of collectibility and is not conditioned or
contingent upon the genuineness, validity, regularity or
enforceability of the Loan Documents, any Construction Contract
or other instruments relating to the creation or performance of
the Guarantied Obligations or the pursuit by Agent of any
remedies that it now has or may hereafter have with respect
thereto under the Loan Documents, at law, in equity or
otherwise.
(b) Agent may enforce this Guaranty upon the occurrence
of an Event of Default or Potential Event of Default under the
Loan Documents with respect to the Guarantied Obligations even
if the Partnership, any Loan Party or any Partnership Parent
disputes the existence of such Event of Default or Potential Event
of Default.
(c) The obligations of Guarantor hereunder are
independent of the obligations of Partnership under the Loan
Documents and the obligations of any other guarantor of the
obligations of Partnership under the Loan Documents, and a
separate action or actions may be brought and prosecuted against
Guarantor whether or not any action is brought against
Partnership or any of such other guarantors and whether or not
Partnership is joined in any such action or actions.
(d) Guarantor's payment or performance of a portion, but
not all, of the Guarantied Obligations shall in no way limit,
affect, modify or abridge Guarantor's liability for any portion of
the Guarantied Obligations that has not been paid or performed.
Without limiting the generality of the foregoing, if Agent is
awarded a judgment in any suit brought to enforce Guarantor's
covenant to pay or perform a portion of the Guarantied
Obligations, such judgment shall not be deemed to release
Guarantor from its covenant to pay or perform the portion of the
Guarantied Obligations that is not the subject of such suit.
(e) Agent, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of Guarantor's
liability hereunder, from time to time may (i) renew, extend,
accelerate, increase the rate of interest on, or otherwise change
the time, place, manner or terms of payment or performance of
the Obligations, (ii) settle, compromise, release or discharge, or
accept or refuse any offer of performance with respect to, or
substitutions for, the Obligations or the Guarantied Obligations or
any agreement relating thereto and/or subordinate the payment or
performance of the same to the payment of any other obligations;
(iii) request and accept other guaranties of the Obligations or the
performance of subsection 6.9 of the Credit Agreement and take
and hold security for the payment or performance of this
Guaranty or the Guarantied Obligations; (iv) release, surrender,
exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any
security for payment or performance of the Obligations, any
other guaranties of the Obligations, or any other obligation of
any Person with respect to the Obligations or the performance of
subsection 6.9 of the Credit Agreement; (v) enforce and apply
any security now or hereafter held by or for the benefit of Agent
or any Lender in respect of this Guaranty or the performance of
subsection 6.9 of the Credit Agreement or the Obligations and
direct the order or manner of sale thereof, or exercise any other
right or remedy that Agent or Lenders, or any of them, may
have against any such security, as Agent in its discretion may
determine consistent with the Credit Agreement (including
subsection 6.9 thereof) and any applicable security agreement,
including foreclosure on any such security pursuant to one or
more judicial or nonjudicial sales, whether or not every aspect of
any such sale is commercially reasonable, and even though such
action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of
Guarantor against Partnership or any security for the Obligations
(and Guarantor hereby waives any defense to liability it might
otherwise have, absent such waiver, resulting from such
impairment or extinguishment); and (vi) exercise any other rights
available to it under the Loan Documents.
(f) This Guaranty and the obligations of Guarantor
hereunder shall be valid and enforceable and shall not be subject
to any reduction, limitation, impairment, discharge or
termination for any reason (other than either (but not both)
(a) prompt and complete payment and performance of the
Guarantied Obligations or, without duplication, (b) the payment
in full by Guarantor, Partnership or otherwise of all Obligations,
the termination of all Commitments, and the expiration or
cancellation of all Letters of Credit and, in each case, payment in
full of all other payment obligations (other than the Guarantied
Obligations) of Guarantor hereunder), including without
limitation the occurrence of any of the following, whether or not
Guarantor shall have had notice or knowledge of any of them:
(i) any failure or omission to assert or enforce or agreement or
election not to assert or enforce, or the stay or enjoining, by
order of court, by operation of law or otherwise, of the exercise
or enforcement of, any claim or demand or any right, power or
remedy (whether arising under the Loan Documents, at law, in
equity or otherwise) with respect to the Obligations, Guarantied
Obligations or any agreement relating thereto, or with respect to
any other guaranty of or security for the payment of the
Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the
terms or provisions (including without limitation provisions
relating to events of default) of the Credit Agreement, any of the
other Loan Documents or any agreement or instrument executed
pursuant thereto, or of any other guaranty or security for the
Obligations, in each case whether or not in accordance with the
terms of the Credit Agreement or such Loan Document or any
agreement relating to such other guaranty or security; (iii) the
Obligations, the Construction Contracts or any agreement relating
to the Obligations, at any time being found to be illegal, invalid
or unenforceable in any respect; (iv) the application of payments
received from any source to the payment of indebtedness other
than the Obligations, even though Agent or Lenders, or any of
them, might have elected to apply such payment to any part or
all of the Obligations; (v) any Lender's or Agent's consent to the
change, reorganization or termination of the legal structure or
existence of Partnership or any of its Subsidiaries and to any
corresponding restructuring of the Obligations; (vi) any failure to
perfect or continue perfection of a security interest in any
collateral that secures any of the Obligations; (vii) any defenses,
set-offs or counterclaims Partnership may allege or assert against
Agent or any Lender in respect of the Obligations, including but
not limited to failure of consideration, breach of warranty,
payment, statute of frauds, statute of limitations, accord and
satisfaction and usury; and (viii) any other act or thing or
omission, or delay to do any other act or thing, that may or
might in any manner or to any extent vary the risk of Guarantor
as an obligor in respect of the Guarantied Obligations.
(g) Guarantor acknowledges and agrees that Guarantor
may be required to perform the Guarantied Obligations in
accordance with the terms hereof notwithstanding the fact that the
Loans have been accelerated, that the outstanding principal
balance thereof is fully due and payable, that Partnership is in
default of its obligation to pay the full amount due under the
Credit Agreement and that no Advances are available under the
Credit Agreement due to the occurrence and continuation of an
Event of Default.
2.3 Waivers by Guarantor. Guarantor hereby waives, for the
benefit of Lenders and Agent:
(a) any right to require Agent or Lenders, as a condition
of payment or performance by Guarantor, to (i) proceed against
Partnership, any other guarantor of the Obligations or any other
Person, (ii) proceed against or exhaust any security held from
Partnership, any other guarantor of the Obligations or any other
Person, (iii) proceed against or have resort to any balance of any
deposit account or credit on the books of Agent or any Lender in
favor of Partnership or any other Person, or (iv) pursue any
other remedy in the power of Agent or any Lender whatsoever;
(b) any defense arising by reason of the incapacity, lack
of authority or any disability or other defense of Partnership
including, without limitation, any defense based on or arising out
of the lack of validity or the unenforceability of the Obligations,
any Construction Contract or any agreement or instrument
relating to the Obligations or by reason of the cessation of the
liability of Partnership from any cause other than prompt and
complete performance of the Guarantied Obligations;
(c) any defense based upon any statute or rule of law that
provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the
principal;
(d) any defense based upon Agent's or any Lender's
errors or omissions in the administration of the Obligations,
except for behavior which amounts to gross negligence or willful
misconduct;
(e) (i) any principles or provisions of law, statutory or
otherwise, that are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of Guarantor's
obligations hereunder, (ii) the benefit of any statute of limitations
affecting Guarantor's liability hereunder or the enforcement
hereof, (iii) any rights to set-offs, recoupments and
counterclaims, and (iv) promptness, diligence and any
requirement that Agent or any Lender protect, secure, perfect or
insure any security interest or lien or any property subject
thereto;
(f) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guaranty, notices of default under
the Credit Agreement or any agreement or instrument related
thereto, notices of any renewal, extension or modification of the
Obligations or any agreement related thereto, notices of any
Advance or any Notice of Borrowing received by Agent or any
Lender, any extension of credit to Partnership and notices of any
of the matters referred to in subsection 2.2 of this Guaranty and
any right to consent to any thereof; and
(g) any defenses or benefits that may be derived from or
afforded by law that limit the liability of or exonerate guarantors
or sureties, or that may conflict with the terms of this Guaranty,
including without limitation the provisions of Nevada Revised
Statutes Sections 40.430-40.459, 40.475 and 40.485 as permitted
by Nevada Revised Statutes Section 40.495, and any successor
provisions.
2.4 Guarantor's Rights of Subrogation, Contribution,
Etc. Until the earlier to occur of the time when (a) the Guarantied
Obligations shall have been promptly and fully paid and performed,
and (b) the Obligations shall have been paid in full and completely
performed by Guarantor, Partnership or otherwise and the
Commitments shall have terminated and all Letters of Credit shall
have expired or been cancelled, and, in each case, Guarantor shall
have paid in full all payment obligations (other than payment of the
Guarantied Obligations) of Guarantor hereunder, Guarantor shall
withhold exercise of (a) any claim, right or remedy, direct or
indirect, that Guarantor now has or may hereafter have against
Partnership or any of its assets in connection with this Guaranty or
the performance by Guarantor of its obligations hereunder, in each
case whether such claim, right or remedy arises in equity, under
contract, by statute, including without limitation under Nevada
Revised Statues Section 40.475 or 40.485 as permitted by Nevada
Revised Statutes Section 40.495, under common law or otherwise
and including without limitation (i) any right of subrogation,
reimbursement or indemnification that Guarantor now has or may
hereafter have against Partnership, (ii) any right to enforce, or to
participate in, any claim, right or remedy that Agent or any Lender
now has or may hereafter have against Partnership, and (iii) any
benefit of, and any right to participate in, any collateral or security
now or hereafter held by Agent or any Lender, and (b) any right of
contribution Guarantor may have against any other guarantor of the
Obligations. Guarantor further agrees that, to the extent the
agreement to withhold the exercise of its rights of subrogation,
reimbursement, indemnification and contribution as set forth herein
is found by a court of competent jurisdiction to be void or voidable
for any reason, any rights of subrogation, reimbursement or
indemnification Guarantor may have against Partnership or against
any collateral or security, and any rights of contribution Guarantor
may have against any such other guarantor, shall be junior and
subordinate to any rights Agent or Lenders may have against
Partnership, to all right, title and interest Agent or Lenders may
have in any such collateral or security, and to any right Agent or
Lenders may have against such other guarantor; provided, however,
that until an Event of Default, Guarantor shall be entitled (subject to
subsection 7.5 of the Credit Agreement) to such reimbursement as
is permitted pursuant to the documentation evidencing General
Partner Subordinated Debt issued to Guarantor. Agent, on behalf
of Lenders, may use, sell or dispose of any item of collateral or
security as it sees fit without regard to any subrogation rights
Guarantor may have, and upon any such disposition or sale any
rights of subrogation Guarantor may have shall terminate. If any
amount shall be paid to Guarantor on account of any such
subrogation, reimbursement or indemnification rights at any time
when all Obligations shall not have been paid in full or completely
performed, such amount shall be held in trust for Agent on behalf
of Lenders and shall forthwith be paid over to Agent for the benefit
of Lenders to be credited and applied against the Guarantied
Obligations, whether matured or unmatured, in accordance with the
terms hereof. Notwithstanding anything to the contrary in the
foregoing paragraph, Guarantor shall retain its rights under any
Construction Contracts assigned pursuant to the Security Agreement
for so long as Guarantor is diligently performing its obligations
hereunder and the time periods for performance thereof set forth in
subsection 2.16 have not passed.
2.5 Real Property Security. Guarantor agrees that, if all or a
portion of the Obligations or any other guaranty of all or a portion
of the Obligations are at any time secured by a deed of trust or
mortgage covering interests in real property, Agent or its designee,
in its sole discretion, without notice or demand and without
affecting the liability of Guarantor, may foreclose, pursuant to the
terms of the Loan Documents or otherwise in accordance with
applicable law, on any such deed of trust or mortgage and the
property described therein by nonjudicial or other sale in
accordance with applicable law; provided however that no right of
foreclosure shall arise as a result of a default with respect to
subsection 6.9 of the Credit Agreement if Guarantor diligently is
pursuing Completion of Construction or Final Completion of
Construction under the terms of this Guaranty. Without limiting
any of the waivers contained elsewhere herein, Guarantor hereby
waives any defense to liability arising by reason of the exercise by
Lenders or Agent, or any of them, of any right or remedy contained
in any such deed of trust or mortgage or any of the other Loan
Documents. Guarantor hereby authorizes and empowers Agent and
any Lender to exercise, in its sole discretion, any rights or
remedies, or any combination thereof, that then may be available,
since it is the intent and purpose of Guarantor that its obligations
hereunder shall be absolute, independent and unconditional under
any and all circumstances. Notwithstanding any foreclosure of the
lien of any such deed of trust or mortgage, whether by the exercise
of the power of sale contained therein, by an action for judicial
foreclosure, or by acceptance of a deed in lieu of foreclosure,
Guarantor shall remain bound under this Guaranty.
2.6 Expenses. Guarantor agrees to pay, or cause to be paid, on
demand, and to save Agent and Lenders harmless against liability
for, any and all costs and expenses (including fees and
disbursements of counsel and allocated costs of internal counsel)
incurred or expended by Agent or any Lender in connection with
the enforcement of or preservation of any rights under this
Guaranty.
2.7 Continuing Guaranty; Termination of Guaranty. This
Guaranty is a continuing guaranty and shall remain in effect until
the earlier of either (but not both) (a) prompt and complete payment
and performance of all of the Guarantied Obligations or, without
duplication, (b) the payment in full by Guarantor, Partnership or
otherwise of all Obligations, the termination of all Commitments
and the expiration or cancellation of all Letters of Credit, and, in
each case, payment in full of all other payment obligations (other
than the guarantied Obligations) of Guarantor hereunder, and
Guarantor's liability under this Guaranty shall not be reduced by
virtue of any payment by Partnership of any amounts due under the
Credit Agreement or under any of the Loan Documents or by
Agent's or Lenders' recourse to any collateral or security.
Guarantor hereby irrevocably waives any right to revoke this
Guaranty as to future transactions giving rise to any Guarantied
Obligations.
2.8 Authority of Guarantor or Partnership. It is not
necessary for Lenders or Agent to inquire into the capacity or
powers of Guarantor or Partnership or the officers, directors or any
agents acting or purporting to act on behalf of any of them.
2.9 Financial Condition of Partnership. Any Loans may be
granted to Partnership or continued from time to time without
notice to or authorization from Guarantor regardless of the financial
or other condition of Partnership at the time of any such grant or
continuation. Lenders and Agent shall have no obligation to
disclose or discuss with Guarantor their assessment, or Guarantor's
assessment, of the financial condition of Partnership. Guarantor has
adequate means to obtain information from Partnership on a
continuing basis concerning the financial condition of Partnership
and its ability to perform its obligations under the Loan Documents
(including, without limitation, its obligations under subsection 6.9
of the Credit Agreement), and Guarantor assumes the responsibility
for being and keeping informed of the financial condition of
Partnership and of all circumstances bearing upon the risk of
nonpayment or nonperformance of the Obligations. Guarantor
hereby waives and relinquishes any duty on the part of Agent or
any Lender to disclose any matter, fact or thing relating to the
business, operations or conditions of Partnership now known or
hereafter known by Agent or any Lender.
2.10 Rights Cumulative. The rights, powers and
remedies given to Lenders and Agent by this Guaranty are
cumulative and shall be in addition to and independent of all rights,
powers and remedies given to Lenders and Agent by virtue of any
statute or rule of law or in any of the other Loan Documents or any
agreement between Guarantor and Lenders and/or Agent or between
Partnership and Lenders and/or Agent. Any forbearance or failure
to exercise, and any delay by any Lender or Agent in exercising,
any right, power or remedy hereunder shall not impair any such
right, power or remedy or be construed to be a waiver thereof, nor
shall it preclude the further exercise of any such right, power or
remedy.
2.11 Cooperation With Gaming Boards. Guarantor
agrees that it shall cooperate with Agent and Lenders to fulfill the
requirements of any Gaming Board with respect to the rights of
Agent and Lenders to enforce and apply any security now or
hereafter held by or for the benefit of Agent or any Lender in
respect of the Guarantied Obligations, or to exercise any other right
or remedy that Agent or Lenders, or any of them, may have against
any such party.
2.12 Bankruptcy; Post-Petition Interest; Reinstatement
of Guaranty.
(a) So long as any Obligations remain outstanding,
Guarantor shall not, without the prior written consent of Agent in
accordance with the terms of the Credit Agreement, commence or
join with any other Person in commencing any bankruptcy,
reorganization or insolvency proceedings of or against Partnership.
The obligations of Guarantor under this Guaranty shall not be
reduced, limited, impaired, discharged, deferred, suspended or
terminated by any proceeding, voluntary or involuntary, involving
the bankruptcy, insolvency, receivership, reorganization, liquidation
or arrangement of Partnership or by any defense that Partnership
may have by reason of the order, decree or decision of any court or
administrative body resulting from any such proceeding.
(b) Guarantor acknowledges and agrees that any interest
on any portion of the Guarantied Obligations that accrues after the
commencement of any proceeding referred to in clause (a) above
(or, if interest on any portion of the Guarantied Obligations ceases
to accrue by operation of law by reason of the commencement of
said proceeding, such interest as would have accrued on such
portion of the Guarantied Obligations if said proceedings had not
been commenced) shall be included in the Guarantied Obligations
because it is the intention of Guarantor and Agent that the
Guarantied Obligations that are guarantied by Guarantor pursuant to
this Guaranty should be determined without regard to any rule of
law or order that may relieve Partnership of any portion of such
Guarantied Obligations. Guarantor will permit any trustee in
bankruptcy, receiver, debtor in possession, assignee for the benefit
of creditors or similar person to pay Agent, or allow the claim of
Agent in respect of, any such interest accruing after the date on
which such proceeding is commenced.
(c) In the event that all or any portion of the Guarantied
Obligations are paid by Partnership, the obligations of Guarantor
hereunder shall continue and remain in full force and effect or be
reinstated, as the case may be, in the event that all or any part of
such payment(s) are rescinded or recovered directly or indirectly
from Agent or any Lender as a preference, fraudulent transfer or
otherwise, and any such payments that are so rescinded or
recovered shall constitute Guarantied Obligations for all purposes
under this Guaranty.
2.13 Notice of Events. As soon as Guarantor obtains
knowledge thereof, Guarantor shall give Agent written notice of any
condition or event that has resulted in (a) a material adverse change
in the financial condition of Guarantor or Partnership or (b) a
breach of or noncompliance with any term, condition or covenant
contained herein or in the Circus Revolving Loan Agreements, the
Credit Agreement, any other Loan Document or any other
document delivered pursuant hereto or thereto or a material breach
of or material noncompliance with any term, condition or covenant
contained in the General Contractor's Contract.
2.14 Completion.
(a) Upon the occurrence of an Event of Default under the
Loan Documents, in addition to the exercise of all of Lenders'
other rights and remedies hereunder and under the Loan
Documents, Agent (acting at the direction of Requisite Lenders)
shall have the option, to be exercised in their sole discretion, to
require Guarantor to Complete Construction or Finally Complete
Construction (in each case, except with respect to the Eldorado
Bridge and the Attraction), as the case may be, within the Time
for Performance and in the manner and in accordance with all of
the terms, conditions and provisions of the Credit Agreement.
After and only after Agent so requires Guarantor to Complete
Construction or Finally Complete construction, to the extent
Guarantor does not diligently pursue or is unable to accomplish
such Completion of Construction or Final Completion of
Construction (in each case, except with respect to the Eldorado
Bridge and the Attraction) within the Time for Performance and
in the manner and in accordance with all of the terms, conditions
and provisions of the Credit Agreement, then, in addition to the
exercise of all of Lenders' other rights and remedies hereunder
and under the Loan Documents, Agent (acting at the direction of
Requisite Lenders) shall have the option, to be exercised in their
sole discretion to (i) Complete Construction or Finally Complete
Construction (in each case, except with respect to the Eldorado
Bridge and the Attraction), as the case may be, in the manner
and in accordance with all of the terms, conditions and
provisions of the Credit Agreement itself at Guarantor's expense
or (ii) cause a third party to Complete Construction or Finally
Complete Construction (in each case, except with respect to the
Eldorado Bridge and the Attraction), as the case may be, in the
manner and in accordance with all of the terms, conditions and
provisions of the Credit Agreement at the expense of Guarantor.
Nothing in this subsection 2.14(a) shall (A) require Guarantor to
Complete Construction or Finally Complete Construction or pay
the costs thereof with respect to any Collateral sold to any Person
that is not an Affiliate of Agent or any Lender by Agent under its
rights of foreclosure or (B) release Agent or any Lender from the
limitations on the exercise of its rights of foreclosure set forth in
subsection 2.5 hereof.
(b)(i) Without limiting the generality of subsection 2.6, if
Agent (acting at the direction of Requisite Lenders) elects
pursuant to subsection 2.14(a) (after Guarantor has had the
opportunity to perform as set forth therein) to Complete
Construction or Finally Complete Construction or to have a third
party Complete Construction or Finally Complete Construction,
Guarantor shall reimburse Agent and Lenders immediately on
demand for all costs and expenses, including, without limitation,
reasonable attorneys' fees, that Agent and Lenders may incur in
performing such obligations or causing such obligations to be
performed (including, without limitation, costs and expenses
incurred to correct defects in construction, incurred as a result of
delays in construction, incurred to ensure timely Completion of
Construction or Final Completion of Construction, as the case
may be, and incurred because it was necessary to engage new or
different contractors to Complete Construction or Finally
Complete Construction, as the case may be), together with
interest on those sums from and after the date they are incurred
at the rate set forth in subsection 2.2E of the Credit Agreement.
(ii) Agent may bring any action at law or in equity or
both on behalf of itself and Lenders to compel Guarantor to
perform or pay for performance of the Guarantied Obligations,
or to recover all of Lenders' and Agent's losses, costs, damages,
injuries and expenses that may be sustained or incurred by Agent
or Lenders as a direct or indirect consequence of Guarantor's
failure to perform the Guarantied Obligations, including without
limitation, the total costs that would be incurred to Complete
Construction or Finally Complete Construction, as the case may
be (in each case, except with respect to the Eldorado Bridge and
the Attraction), if Completion of Construction or Final
Completion of Construction, as the case may be (in each case,
except with respect to the Eldorado Bridge and the Attraction),
were attained (including costs to correct defects in construction),
and direct damages that arise from delays in Completion of
Construction or Final Completion of Construction (in each case,
except with respect to the Eldorado Bridge and the Attraction), as
the case may be, together with interest on such amounts at the
rate set forth in subsection 2.2E of the Credit Agreement.
Guarantor agrees that such losses, costs, damages, injuries and
expenses shall be calculated without regard to whether
Completion of Construction or Final Completion of Construction,
as the case may be (in each case, except with respect to the
Eldorado Bridge and the Attraction), will result in an increased
stabilized value of the Project and without reference to the value
of the Project in its condition existing at the time of the Event of
Default giving rise to an action under this Guaranty, it being
expressly acknowledged and agreed to by Guarantor that Agent
and Lenders have bargained for Guarantor's agreement to
guaranty Completion of Construction and Final Completion of
Construction (in each case, except with respect to the Eldorado
Bridge and the Attraction) and the payment of any amounts
necessary to Complete Construction and Finally Complete
Construction (in each case, except with respect to the Eldorado
Bridge and the Attraction). Agent may from time to time bring
such an action regardless of whether Agent or Lenders have
exhausted any or all security for the Loans or commenced any
work on the Project.
2.15 Set Off. In addition to any other rights any Lender
or Agent may have under law or in equity, if any amount shall at
any time be due and owing by Guarantor to any Lender or Agent
under this Guaranty, such Lender or Agent is authorized at any time
or from time to time, without notice (any such notice being hereby
expressly waived), to set off and to appropriate and to apply any
and all deposits (general or special, including but not limited to
indebtedness evidenced by certificates of deposit, whether matured
or unmatured; but excluding deposits that represent proceeds of an
advance under the Circus Revolving Loan Agreements) and any
other indebtedness of any Lender or Agent owing to Guarantor and
any other property of Guarantor held by any Lender or Agent to or
for the credit or the account of Guarantor against and on account of
the Guarantied Obligations and liabilities of Guarantor to any
Lender or Agent under this Guaranty.
2.16 Time for Performance.
(a) Guarantor shall have the following time to perform
the Guarantied Obligations ("Time for Performance"):
(i) in the case of failure by Partnership to Complete
Construction (except with respect to the Eldorado Bridge and
the Attraction) on or before the Projected Completion of
Construction Date, a period commencing with the Projected
Completion of Construction Date and ending on that date
that is three (3) months later, and
(ii) in the case of failure by Partnership to Finally Complete
Construction (except with respect to the Eldorado Bridge and
the Attraction) on or before the Projected Final Completion
Date, a period commencing with the Projected Final
Completion of Date and ending on that date that is six (6)
months later;
provided that, in each case, the final date of the Time for
Performance shall be any earlier date upon which Guarantor
ceases to use its best efforts diligently to commence and
prosecute Completion of Construction or Final Completion of
Construction, as the case may be (in each case, except with
respect to the Eldorado Bridge and the Attraction), in the manner
and in accordance with all of the terms, conditions and
provisions of the Credit Agreement and in the most time efficient
manner.
(b) If Guarantor is delayed from Completion of
Construction or Final Completion of Construction, as the case
may be, within the Time for Performance, solely by an act or
omission of the Lenders or their agents other than as permitted
by the Loan Documents, or by unavoidable labor disputes, fire
not caused by Guarantor, unavoidable delays in transportation,
adverse weather conditions not reasonably foreseeable by
Guarantor, unavoidable casualties, or by any other causes that
Requisite Lenders deem justifies the delay, then the Time for
Performance may be extended by Agent and Requisite Lenders,
in their reasonable discretion, by the amount of time (in any case
not to exceed 180 days) of such delay that is caused by such
event. Guarantor shall use its best efforts to remedy the situation
that causes any delay to minimize such delay. Without limiting
the generality of the foregoing, Guarantor acknowledges that
obtaining permits, Guarantor-caused strikes, labor stoppages,
sequencing of Project construction, customary coordination with
Consulting Engineer, if any, customary coordination with any
contractors or subcontractors hired by Partnership or Lenders,
acts and omissions of Guarantor's subcontractors and suppliers,
delays to non-critical path items and any delays that are the fault
of Guarantor or its agents, employees or Affiliates are not cause
for an extension of the Time for Performance.
(c) Written notice that Guarantor's performance of the
Guarantied Obligations will be delayed shall be given to the
Lenders not more than fifteen days after Guarantor becomes
aware of the commencement of the delay. Such notice shall
include a written report of the full impact of the delay on the
time in which Guarantor will Complete Construction or Finally
Complete Construction, as the case may be. The failure of
Guarantor to give such notice within such time shall render any
delay non-excusable and shall not result in any extension of the
Time for Performance. Guarantor shall deliver periodic reports
to Agent describing the current condition of the circumstance
causing delay for so long as such circumstance prevents the
performance of the Guarantied Obligations.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and Agent to accept this
Guaranty and to enter into the Credit Agreement and to make the
Loans thereunder, Guarantor hereby represents and warrants to
Lenders that the following statements are true and correct:
3.1 Each of the representations and warranties given by
Guarantor in the Circus Revolving Loan Agreements is true, correct
and complete in all material respects as of the date hereof as if
made originally as of the date hereof other than those
representations and warranties set forth in subsections 4.2, 4.2, 4.4
and 4.11 thereof.
3.2 Authorization of Borrowing, etc.
(a) Authorization of Borrowing. The execution,
delivery and performance of the Loan Documents to which it is a
party have been duly authorized by all necessary corporate action
on the part of Guarantor.
(b) No Conflict. The execution, delivery and
performance by Guarantor of the Loan Documents to which it is
a party and the consummation of the transactions contemplated
by the Loan Documents do not and will not (i) violate any
provision of any law or any governmental rule or regulation
applicable to Guarantor or any of its Subsidiaries, the Certificate
of Incorporation or Bylaws of Guarantor or any of its
Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Guarantor or any of its
Subsidiaries, (ii) conflict with, result in a breach of or constitute
(with due notice or lapse of time or both) a default under any
Contractual Obligation of Guarantor or any of its Subsidiaries,
(iii) result in or require the creation or imposition of any Lien
upon any of the properties or assets of Guarantor or any of its
Subsidiaries (other than any Liens created under any of the Loan
Documents in favor of Agent on behalf of Lenders), or
(iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of
Guarantor or any of its Subsidiaries.
(c) Governmental Consents. The execution, delivery
and performance by Guarantor of the Loan Documents to which
it is a party and the consummation of the transactions
contemplated by the Loan Documents do not and will not require
any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other
governmental authority or regulatory body, except (i) those
notices or informational filings or both that will be required to be
given to the Securities and Exchange Commission or any Gaming
Board but that are not yet due and (ii) any right of any Gaming
Board to object to any Lender or participant in the Loans at any
future date.
(d) Binding Obligation. Each of the Loan Documents to
which it is a party has been duly executed and delivered by
Guarantor and is the legally valid and binding obligation of
Guarantor, enforceable against Guarantor in accordance with its
respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating
to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
SECTION 4. AFFIRMATIVE COVENANTS.
Guarantor covenants and agrees that, unless and until the
earlier of either (but not both) (a) prompt and complete payment
and performance of all of the Guarantied Obligations and payment
in full of all payment obligations of Guarantor hereunder or,
without duplication, (b) the payment in full by Guarantor,
Partnership or otherwise of the Obligations, the termination of the
Commitments and the expiration or cancellation of all Letters of
Credit, and, in each case, payment in full of all other payment
obligations (other than the Guarantied Obligations) of Guarantor
hereunder, unless Requisite Lenders shall otherwise consent in
writing:
4.1 Covenants in Circus Revolving Loan Agreements.
Guarantor shall at all times perform all of its affirmative covenants
set forth in Article 5 of the Circus Revolving Loan Agreements for
the benefit of the financial institutions party thereto.
4.2 Reporting Requirements. As soon as possible after the
same are available to Guarantor, and in any event within the time
set for such delivery in the Circus Revolving Loan Agreements,
Guarantor will deliver to Lenders copies of the documents required
to be delivered under subsections 7.1(a) and 7.2 of the Circus
Revolving Loan Agreements or any similar documents required to
be delivered pursuant to the Circus Revolving Loan Agreements as
in effect on the Closing Date notwithstanding any subsequent
amendment, modification or termination thereof. Circus will
promptly and in any event no later than concurrently with delivery
of financial statements pursuant to such subsection 7.1(a), deliver to
Lenders written notice of any change in the Senior Debt Rating (as
defined in the Circus Revolving Loan Agreements).
4.3 Bankruptcy. Guarantor agrees that it will not commence or
join with any other creditor of Partnership to commence any
bankruptcy, insolvency, reorganization or other similar proceedings
against Partnership.
SECTION 5. MISCELLANEOUS
5.1 Survival of Warranties. All agreements, representations
and warranties made herein shall survive the execution and delivery
of this Guaranty and the other Loan Documents and any increase in
the Commitments under the Credit Agreement.
5.2 Notices. Any communications between or among Agent,
Guarantor and Partnership and any notices or requests provided
herein to be given may be given by mailing the same, postage
prepaid, or by telex, facsimile transmission by 5:00 p.m. (Pacific
Time) on a Business Day or cable to each such party at its address
set forth in the Credit Agreement, on the signature pages hereof or
to such other addresses as each such party may in writing hereafter
indicate. Any notice, request or demand to or upon Agent or
Lenders or Guarantor or Partnership under or relating to this
Guaranty shall not be effective until received.
5.3 Severability. In case any provision in or obligation under
this Guaranty shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or impaired
thereby.
5.4 Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Guaranty, or consent
to any departure by Guarantor therefrom, shall in any event be
effective without the written concurrence of all Lenders under the
Credit Agreement. Any waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was
given.
5.5 Headings. Section and subsection headings in this Guaranty
are included herein for convenience of reference only and shall not
constitute a part of this Guaranty for any other purpose or be given
any substantive effect.
5.6 Applicable Law. THIS GUARANTY SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEVADA, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
5.7 Successors and Assigns. This Guaranty is a continuing
guaranty and shall be binding upon Guarantor and its successors and
assigns. This Guaranty shall inure to the benefit of Lenders, Agent,
Partnership and their respective successors and assigns. Guarantor
shall not assign this Guaranty or any of the rights or obligations of
Guarantor hereunder without the prior written consent of all
Lenders. Subject to subsection 10.1 of the Credit Agreement and
as part of an assignment, participation or any transfer of its interests
in any Loan, any Lender may, without notice or consent, assign its
interest in this Guaranty in whole or in part. The terms and
provisions of this Guaranty shall inure to the benefit of any
transferee or assignee of any Loan, and in the event of such transfer
or assignment the rights and privileges herein conferred upon
Lenders and Agent shall automatically extend to and be vested in
such transferee or assignee, all subject to the terms and conditions
hereof.
5.8 Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST
GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN
THE STATE OF NEVADA AND BY EXECUTION AND
DELIVERY OF THIS GUARANTY GUARANTOR ACCEPTS
FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS GUARANTY. Guarantor hereby
agrees that service of all process in any such proceeding in any such
court may be made by registered or certified mail, return receipt
requested, to Guarantor at its address provided in subsection 5.2,
such service being hereby acknowledged by Guarantor to be
sufficient for personal jurisdiction in any action against Guarantor in
any such court and to be otherwise effective and binding service in
every respect. Nothing herein shall affect the right to serve process
in any other manner permitted by law.
5.9 Waiver of Trial by Jury. GUARANTOR AND, BY ITS
ACCEPTANCE OF THE BENEFITS HEREOF,
PARTNERSHIP AND AGENT EACH HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS GUARANTY. The scope of this
waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter
of this transaction, including without limitation contract claims, tort
claims, breach of duty claims and all other common law and
statutory claims. Guarantor and, by its acceptance of the benefits
hereof, Partnership and Agent each (i) acknowledges that this
waiver is a material inducement for Guarantor, Partnership and
Agent to enter into a business relationship, that Guarantor and
Agent have already relied on this waiver in entering into this
Guaranty or accepting the benefits thereof, as the case may be, and
that each will continue to rely on this waiver in their related future
dealings and (ii) further warrants and represents that each has
reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS GUARANTY. In the event of litigation, this Guaranty may
be filed as a written consent to a trial by the court.
5.10 No Other Writing. This writing is intended by
Guarantor, Partnership and Agent as the final expression of this
Guaranty and is also intended as a complete and exclusive statement
of the terms of their agreement with respect to the matters covered
hereby. No course of dealing, course of performance or trade
usage, and no parol evidence of any nature, shall be used to
supplement or modify any terms of this Guaranty. There are no
conditions to the full effectiveness of this Guaranty.
5.11 Further Assurances. At any time or from time to
time, upon the request of Agent or Requisite Lenders, Guarantor or
Partnership or both shall execute and deliver such further
documents and do such other acts and things as Agent or Requisite
Lenders may reasonably request in order to effect fully the purposes
of this Guaranty.
5.12 Partnership Third-Party Beneficiary. Guarantor
and Agent hereby expressly agree and acknowledge that Partnership
is intended to be an express third-party beneficiary of this Guaranty
and Partnership shall be entitled to exercise any and all rights and
remedies afforded third-party beneficiaries under the laws of the
relevant jurisdiction.
5.13 Counterparts. This Guaranty may be executed in
one or more counterparts and by different parties hereto in separate
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; signature pages may be
detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically attached
to the same document.
[Remainder of page intentionally left blank]<PAGE>
IN WITNESS WHEREOF,
Guarantor has caused this
Guaranty to be duly executed and delivered by its officer thereunto
duly authorized as of the date first written above.
CIRCUS CIRCUS
ENTERPRISES, INC.
By
__________________________________
Title
_______________________________
Address:
2880 Las Vegas
Boulevard South
Las Vegas, Nevada
89109
Attention: General
Counsel
Accepted by:
FIRST INTERSTATE BANK OF NEVADA, N.A.
as Agent on behalf of Lenders
By _________________________________
Title ______________________________
Address: 3800 Howard Hughes Parkway
Suite 400
Las Vegas, Nevada 89109
Attention: Steve Byrne
CIRCUS AND ELDORADO
JOINT VENTURE, as express
third-party beneficiary
By: GALLEON, INC.
By:
Title:
Address: c/o Circus Circus Enterprises
2880 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Attention: General Counsel
By: ELDORADO LIMITED LIABILITY COMPANY
Its: general partner
By: ELDORADO HOTEL ASSOCIATES, LIMITED
PARTNERSHIP
Its: manager
By: RECREATIONAL ENTERPRISES
Its: general partner
By:
Title:
By: HOTEL-CASINO MANAGEMENT
Its: general partner
By:
Title:
Address: c/o Eldorado Hotel Casino
345 North Virginia Street
P.O. Box 3399
Reno, Nevada 89508
Attention: General Counsel
<PAGE>
By: EXECUTIVE COMMITTEE
By:
Title:
By:
Title:
EXHIBIT XIII-B
[FORM OF ELDORADO COMPLETION GUARANTY]
ELDORADO COMPLETION GUARANTY
This ELDORADO COMPLETION GUARANTY is
entered into as of May 30, 1995 by ELDORADO HOTEL
ASSOCIATES LIMITED PARTNERSHIP, a Nevada limited
partnership ("Eldorado Hotel Associates"), Recreational
Enterprises, Inc., a Nevada subchapter S corporation (Recreational
Enterprises"), and Hotel-Casino Management, Inc., a Nevada
subchapter S corporation ("Hotel-Casino Management"),
(individually a "Guarantor," and collectively, the "Guarantors"),
in favor of FIRST INTERSTATE BANK OF NEVADA, N.A., as
agent for and representative of (in such capacity herein called
"Agent") the financial institutions ("Lenders") party to the Credit
Agreement (as hereinafter defined), for the benefit of Agent and
Lenders, and CIRCUS AND ELDORADO JOINT VENTURE, a
Nevada general partnership (as an express third-party beneficiary of
this Guaranty) ("Partnership").
RECITALS
A. Partnership (the general partners of which are
Galleon, Inc., a Nevada corporation and a wholly-owned subsidiary
of Circus Circus Enterprises, Inc. and Eldorado Limited Liability
Company, a Nevada limited liability company ("Eldorado LLC"),
of which Eldorado Hotel Associates is the manager which has
Recreational Enterprises and Hotel-Casino Management as its
general partners, has entered into that certain Credit Agreement
dated as of even date herewith with Lenders, Agent, as arranger
and administrative agent, FIRST INTERSTATE BANK OF
NEVADA, N.A., THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., LOS ANGELES AGENCY and SOCIETE
GENERALE, as managing agents ("Managing Agents"), and
BANK OF AMERICA, N.T. & S.A., CIBC INC., and CREDIT
LYONNAIS, LOS ANGELES BRANCH, collectively, as co-
agents ("Co-Agents") (said Credit Agreement, as it may hereafter
be amended, supplemented or otherwise modified from time to
time, being the "Credit Agreement"; capitalized terms defined
therein and not otherwise defined herein being used herein as
therein defined).
B. It is a condition precedent to the making of the initial
Loans under the Credit Agreement that prompt and timely
completion of the Eldorado Bridge funded thereby be guarantied by
Guarantors.
C. Each Guarantor is willing irrevocably and
unconditionally to guaranty such prompt and timely completion of
the Eldorado Bridge in accordance with the Plans (as the same may
hereafter be amended, supplemented or otherwise modified from
time to time in accordance with the Credit Agreement).
NOW, THEREFORE, based upon the foregoing and for
other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and in order to induce Lenders,
Managing Agents, Co-Agents and Agent to enter into the Credit
Agreement and to make the Loans thereunder, Guarantors hereby
agree as follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms. As used in this Guaranty, the
following terms shall have the following meanings unless the
context otherwise requires:
"Guarantied Obligations" has the meaning assigned to that
term in subsection 2.1.
"Guaranty" means, as of any date, this Eldorado
Completion Guaranty, as it may be amended, supplemented or
otherwise modified from time to time through such date.
"Obligations" has the meaning assigned such term in the
Credit Agreement and shall also include, without limitation,
Partnership's performance of the obligations thereunder,
including without limitation, its obligation under subsection 6.9
thereof to Complete Construction and to Finally Complete
Construction with respect to the Eldorado Bridge at the times and
in the manner set forth in the Credit Agreement.
"payment in full", "paid in full" or any similar term means
indefeasible payment in full of the obligations referenced
including, without limitation, all principal, interest, costs, fees,
expenses and indemnities (including, without limitation, legal
fees and expenses) of Lenders, Managing Agents, Co-Agents and
Agent as required under the Loan Documents.
"Time for Performance" has the meaning assigned such
term in subsection 2.16.
1.2 Interpretation.
(a) References to "Sections" and "subsections" shall be
to Sections and subsections, respectively, of this Guaranty unless
otherwise specifically provided.
(b) In the event of any conflict or inconsistency between
the terms, conditions and provisions of this Guaranty and the
terms, conditions and provisions of the Credit Agreement, the
terms, conditions and provisions of this Guaranty shall prevail.
SECTION 2. THE GUARANTY
2.1 Guaranty of the Guarantied Obligations. Guarantors
hereby, jointly and severally and irrevocably and unconditionally
guarantee, as primary obligors and not merely as sureties, the
prompt and complete performance of Partnership's obligations
under subsection 6.9 of the Credit Agreement to Complete
Construction with respect to the Eldorado Bridge on or before the
Projected Completion of Construction Date and to Finally Complete
Construction with respect to the Eldorado Bridge on or before the
Projected Final Completion Date, all in the manner and in
accordance with the terms, provisions and conditions set forth in the
Credit Agreement (the "Guarantied Obligations").
Each Guarantor's obligation to perform hereunder shall be
enforceable irrespective of whether any claims made by mechanics,
laborers or materialmen require performance, are liquidated or
unliquidated, absolute or contingent, and irrespective of whether the
obligations of Partnership are joint or several, secured or
unsecured, or hereafter become barred by any statute of limitation.
Each Guarantor shall be obligated to perform irrespective of
whether such obligations of Partnership may be or hereafter become
otherwise unenforceable for any reason including insolvency, death,
dissolution or incompetency. Each Guarantor further agrees that it
shall promptly, fully and faithfully perform and discharge all of the
Guarantied Obligations.
2.2 Liability of Guarantor Absolute. Each Guarantor agrees
that its obligations hereunder are irrevocable, absolute, independent
and unconditional and shall not be affected by any circumstance that
constitutes a legal or equitable discharge of a guarantor or surety
other than either (but not both) (a) prompt and complete payment
and performance of the Guarantied Obligations or, without
duplication, (b) the payment in full by Guarantors, Partnership or
otherwise of all Obligations, the termination of all Commitments,
and the expiration or cancellation of all Letters of Credit and, in
each case, payment in full of all other payment obligations (other
than the Guarantied Obligations) of Guarantors hereunder. In
furtherance of the foregoing and without limiting the generality
thereof, each Guarantor agrees as follows:
(a) This Guaranty is a guaranty of payment and
performance and not of collectibility and is not conditioned or
contingent upon the genuineness, validity, regularity or
enforceability of the Loan Documents, any Construction Contract
or other instruments relating to the creation or performance of
the Guarantied Obligations or the pursuit by Agent of any
remedies that it now has or may hereafter have with respect
thereto under the Loan Documents, at law, in equity or
otherwise.
(b) Agent may enforce this Guaranty upon the occurrence
of an Event of Default or Potential Event of Default under the
Loan Documents with respect to the Guarantied Obligations even
if the Partnership, any Loan Party or any Partnership Parent
disputes the existence of such Event of Default or Potential Event
of Default.
(c) The obligations of such Guarantor hereunder are
independent of the obligations of Partnership under the Loan
Documents and the obligations of any other guarantor of the
obligations of Partnership under the Loan Documents, and a
separate action or actions may be brought and prosecuted against
such Guarantor whether or not any action is brought against
Partnership or any of such other guarantors and whether or not
Partnership is joined in any such action or actions.
(d) Such Guarantor's payment or performance of a
portion, but not all, of the Guarantied Obligations shall in no
way limit, affect, modify or abridge such Guarantor's liability for
any portion of the Guarantied Obligations that has not been paid
or performed. Without limiting the generality of the foregoing,
if Agent is awarded a judgment in any suit brought to enforce
such Guarantor's covenant to pay or perform a portion of the
Guarantied Obligations, such judgment shall not be deemed to
release such Guarantor from its covenant to pay or perform the
portion of the Guarantied Obligations that is not the subject of
such suit.
(e) Agent, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Guaranty or giving rise to any reduction,
limitation, impairment, discharge or termination of such
Guarantor's liability hereunder, from time to time may (i) renew,
extend, accelerate, increase the rate of interest on, or otherwise
change the time, place, manner or terms of payment or
performance of the Obligations other than any acceleration of the
Projected Completion of Construction Date or the Projected Final
Completion Date, as each is defined in the Credit Agreement on
the Closing Date, (ii) settle, compromise, release or discharge,
or accept or refuse any offer of performance with respect to, or
substitutions for, the Obligations or the Guarantied Obligations or
any agreement relating thereto and/or subordinate the payment or
performance of the same to the payment of any other obligations;
(iii) request and accept other guaranties of the Obligations or the
performance of subsection 6.9 of the Credit Agreement and take
and hold security for the payment or performance of this
Guaranty or the Guarantied Obligations; (iv) release, surrender,
exchange, substitute, compromise, settle, rescind, waive, alter,
subordinate or modify, with or without consideration, any
security for payment or performance of the Obligations, any
other guaranties of the Obligations, or any other obligation of
any Person with respect to the Obligations or the performance of
subsection 6.9 of the Credit Agreement; (v) enforce and apply
any security now or hereafter held by or for the benefit of Agent
or any Lender in respect of this Guaranty or the performance of
subsection 6.9 of the Credit Agreement or the Obligations and
direct the order or manner of sale thereof, or exercise any other
right or remedy that Agent or Lenders, or any of them, may
have against any such security, as Agent in its discretion may
determine consistent with the Credit Agreement (including
subsection 6.9 thereof) and any applicable security agreement,
including foreclosure on any such security pursuant to one or
more judicial or nonjudicial sales, whether or not every aspect of
any such sale is commercially reasonable, and even though such
action operates to impair or extinguish any right of
reimbursement or subrogation or other right or remedy of such
Guarantor against Partnership or any security for the Obligations
(and such Guarantor hereby waives any defense to liability it
might otherwise have, absent such waiver, resulting from such
impairment or extinguishment); and (vi) exercise any other rights
available to it under the Loan Documents.
(f) This Guaranty and the obligations of such Guarantor
hereunder shall be valid and enforceable and shall not be subject
to any reduction, limitation, impairment, discharge or
termination for any reason (other than either (but not both)
(a) prompt and complete payment and performance of the
Guarantied Obligations or, without duplication, (b) the payment
in full by Guarantor, Partnership or otherwise of all Obligations,
the termination of all Commitments and the expiration or
cancellation of all Letters of Credit and, in each case, payment in
full of all other payment obligations (other than the Guarantied
Obligations) of Guarantors hereunder), including without
limitation the occurrence of any of the following, whether or not
such Guarantor shall have had notice or knowledge of any of
them: (i) any failure or omission to assert or enforce or
agreement or election not to assert or enforce, or the stay or
enjoining, by order of court, by operation of law or otherwise, of
the exercise or enforcement of, any claim or demand or any
right, power or remedy (whether arising under the Loan
Documents, at law, in equity or otherwise) with respect to the
Obligations, Guarantied Obligations or any agreement relating
thereto, or with respect to any other guaranty of or security for
the payment of the Obligations; (ii) any rescission, waiver,
amendment or modification of, or any consent to departure from,
any of the terms or provisions (including without limitation
provisions relating to events of default) of the Credit Agreement,
any of the other Loan Documents or any agreement or instrument
executed pursuant thereto, or of any other guaranty or security
for the Obligations, in each case whether or not in accordance
with the terms of the Credit Agreement or such Loan Document
or any agreement relating to such other guaranty or security;
(iii) the Obligations, the Construction Contracts or any agreement
relating to the Obligations, at any time being found to be illegal,
invalid or unenforceable in any respect; (iv) the application of
payments received from any source to the payment of
indebtedness other than the Obligations, even though Agent or
Lenders, or any of them, might have elected to apply such
payment to any part or all of the Obligations; (v) any Lender's or
Agent's consent to the change, reorganization or termination of
the legal structure or existence of Partnership or any of its
Subsidiaries and to any corresponding restructuring of the
Obligations; (vi) any failure to perfect or continue perfection of a
security interest in any collateral that secures any of the
Obligations; (vii) any defenses, set-offs or counterclaims
Partnership may allege or assert against Agent or any Lender in
respect of the Obligations, including but not limited to failure of
consideration, breach of warranty, payment, statute of frauds,
statute of limitations, accord and satisfaction and usury; and
(viii) any other act or thing or omission, or delay to do any other
act or thing, that may or might in any manner or to any extent
vary the risk of such Guarantor as an obligor in respect of the
Guarantied Obligations.
(g) Such Guarantor acknowledges and agrees that such
Guarantor may be required to perform the Guarantied Obligations
in accordance with the terms hereof notwithstanding the fact that
the Loans have been accelerated, that the outstanding principal
balance thereof is fully due and payable, that Partnership is in
default of its obligation to pay the full amount due under the
Credit Agreement and that no Advances are available under the
Credit Agreement due to the occurrence and continuation of an
Event of Default.
2.3 Waivers by Guarantor. Each Guarantor hereby waives, for
the benefit of Lenders and Agent:
(a) any right to require Agent or Lenders, as a condition
of payment or performance by such Guarantor, to (i) proceed
against Partnership, any other guarantor of the Obligations or any
other Person, (ii) proceed against or exhaust any security held
from Partnership, any other guarantor of the Obligations or any
other Person, (iii) proceed against or have resort to any balance
of any deposit account or credit on the books of Agent or any
Lender in favor of Partnership or any other Person, or
(iv) pursue any other remedy in the power of Agent or any
Lender whatsoever;
(b) any defense arising by reason of the incapacity, lack
of authority or any disability or other defense of Partnership
including, without limitation, any defense based on or arising out
of the lack of validity or the unenforceability of the Obligations,
any Construction Contract or any agreement or instrument
relating to the Obligations or by reason of the cessation of the
liability of Partnership from any cause other than prompt and
complete performance of the Guarantied Obligations;
(c) any defense based upon any statute or rule of law that
provides that the obligation of a surety must be neither larger in
amount nor in other respects more burdensome than that of the
principal;
(d) any defense based upon Agent's or any Lender's
errors or omissions in the administration of the Obligations,
except for behavior which amounts to gross negligence or willful
misconduct;
(e) (i) any principles or provisions of law, statutory or
otherwise, that are or might be in conflict with the terms of this
Guaranty and any legal or equitable discharge of such
Guarantor's obligations hereunder, (ii) the benefit of any statute
of limitations affecting such Guarantor's liability hereunder or the
enforcement hereof, (iii) any rights to set-offs, recoupments and
counterclaims, and (iv) promptness, diligence and any
requirement that Agent or any Lender protect, secure, perfect or
insure any security interest or lien or any property subject
thereto;
(f) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Guaranty, notices of default under
the Credit Agreement or any agreement or instrument related
thereto, notices of any Advance or any Notice of Borrowing
received by Agent of any Lender, any renewal, extension or
modification of the Obligations or any agreement related thereto,
notices of any extension of credit to Partnership and notices of
any of the matters referred to in subsection 2.2 of this Guaranty
and any right to consent to any thereof; and
(g) any defenses or benefits that may be derived from or
afforded by law that limit the liability of or exonerate guarantors
or sureties, or that may conflict with the terms of this Guaranty,
including without limitation the provisions of Nevada Revised
Statutes Sections 40.430-40.459, 40.475 and 40.485 as permitted
by Nevada Revised Statutes Section 40.495, and any successor
provisions.
2.4 Guarantor's Rights of Subrogation, Contribution,
Etc. Until the earlier to occur of the time when (a) the Guarantied
Obligations shall have been promptly and fully paid and performed
and (b) the Obligations shall have been paid in full and completely
performed by Guarantors, Partnership or otherwise, and the
Commitments shall have terminated and all Letters of Credit shall
have expired or been cancelled, and in each case, all payment
obligations (other than payment of the Guarantied Obligations) of
Guarantors hereunder shall have been fully paid, each Guarantor
shall withhold exercise of (a) any claim, right or remedy, direct or
indirect, that such Guarantor now has or may hereafter have against
Partnership or any of its assets in connection with this Guaranty or
the performance by such Guarantor of its obligations hereunder, in
each case whether such claim, right or remedy arises in equity,
under contract, by statute, including without limitation under
Nevada Revised Statues Section 40.475 or 40.485 as permitted by
Nevada Revised Statutes Section 40.495 (1993), under common law
or otherwise and including without limitation (i) any right of
subrogation, reimbursement or indemnification that such Guarantor
now has or may hereafter have against Partnership, (ii) any right to
enforce, or to participate in, any claim, right or remedy that Agent
or any Lender now has or may hereafter have against Partnership,
and (iii) any benefit of, and any right to participate in, any
collateral or security now or hereafter held by Agent or any Lender,
and (b) any right of contribution such Guarantor may have against
any other guarantor of the Obligations. Each Guarantor further
agrees that, to the extent the agreement to withhold the exercise of
its rights of subrogation, reimbursement, indemnification and
contribution as set forth herein is found by a court of competent
jurisdiction to be void or voidable for any reason, any rights of
subrogation, reimbursement or indemnification such Guarantor may
have against Partnership or against any collateral or security, and
any rights of contribution such Guarantor may have against any
such other guarantor, shall be junior and subordinate to any rights
Agent or Lenders may have against Partnership, to all right, title
and interest Agent or Lenders may have in any such collateral or
security, and to any right Agent or Lenders may have against such
other guarantor; provided, however, that until an Event of Default,
such Guarantor shall be entitled (subject to subsection 7.5 of the
Credit Agreement) to such reimbursement as is permitted pursuant
to the documentation evidencing General Partner Subordinated Debt
issued to such Guarantor. Agent, on behalf of Lenders, may use,
sell or dispose of any item of collateral or security as it sees fit
without regard to any subrogation rights any Guarantor may have,
and upon any such disposition or sale any rights of subrogation such
Guarantor may have shall terminate. If any amount shall be paid to
any Guarantor on account of any such subrogation, reimbursement
or indemnification rights at any time when all Obligations shall not
have been paid in full or completely performed, such amount shall
be held in trust for Agent on behalf of Lenders and shall forthwith
be paid over to Agent for the benefit of Lenders to be credited and
applied against the Guarantied Obligations, whether matured or
unmatured, in accordance with the terms hereof. Notwithstanding
anything to the contrary in the foregoing paragraph, Guarantor shall
retain its rights under any Construction Contract assigned pursuant
to the Security Agreement for so long as Guarantor diligently is
performing its obligations hereunder and the time period for
performance thereof set forth in subsection 2.16 has not passed.
2.5 Real Property Security. Each Guarantor agrees that, if all
or a portion of the Obligations or any other guaranty of all or a
portion of the Obligations are at any time secured by a deed of trust
or mortgage covering interests in real property, Agent or its
designee, in its sole discretion, without notice or demand and
without affecting the liability of such Guarantor, may foreclose,
pursuant to the terms of the Loan Documents or otherwise in
accordance with applicable law, on any such deed of trust or
mortgage and the property described therein by nonjudicial or other
sale in accordance with applicable law; provided however that no
right of foreclosure shall arise as a result of a default with respect
to subsection 6.9 of the Credit Agreement if Guarantors are
diligently pursuing Completion of Construction or Final Completion
of Construction under the terms of this Guaranty. Without limiting
any of the waivers contained elsewhere herein, each Guarantor
hereby waives any defense to liability arising by reason of the
exercise by Lenders or Agent, or any of them, of any right or
remedy contained in any such deed of trust or mortgage or any of
the other Loan Documents. Each Guarantor hereby authorizes and
empowers Agent and any Lender to exercise, in its sole discretion,
any rights or remedies, or any combination thereof, that then may
be available, since it is the intent and purpose of each Guarantor
that its obligations hereunder shall be absolute, independent and
unconditional under any and all circumstances. Notwithstanding
any foreclosure of the lien of any such deed of trust or mortgage,
whether by the exercise of the power of sale contained therein, by
an action for judicial foreclosure, or by acceptance of a deed in lieu
of foreclosure, each Guarantor shall remain bound under this
Guaranty.
2.6 Expenses. Each Guarantor agrees to pay, or cause to be
paid, on demand, and to save Agent and Lenders harmless against
liability for, any and all costs and expenses (including fees and
disbursements of counsel and allocated costs of internal counsel)
incurred or expended by Agent or any Lender in connection with
the enforcement of or preservation of any rights under this
Guaranty.
2.7 Continuing Guaranty; Termination of Guaranty. This
Guaranty is a continuing guaranty and shall remain in effect until
the earlier of either (but not both) (a) prompt and complete payment
and performance of all of the Guarantied Obligations or, without
duplication, (b) the payment in full by Guarantors, Partnership or
otherwise of all Obligations, the termination of all Commitments
and the expiration or cancellation of all Letters of Credit and, in
each case, payment in full of all other payment obligations (other
than the Guarantied Obligations) of Guarantors hereunder, and each
Guarantor's liability under this Guaranty shall not be reduced by
virtue of any payment by Partnership of any amounts due under the
Credit Agreement or under any of the Loan Documents or by
Agent's or Lenders' recourse to any collateral or security. Each
Guarantor hereby irrevocably waives any right to revoke this
Guaranty as to future transactions giving rise to any Obligations.
2.8 Authority of Guarantor or Partnership. It is not
necessary for Lenders or Agent to inquire into the capacity or
powers of any Guarantor or Partnership or the officers, directors or
any agents acting or purporting to act on behalf of any of them.
2.9 Financial Condition of Partnership. Any Loans may be
granted to Partnership or continued from time to time without
notice to or authorization from any Guarantor regardless of the
financial or other condition of Partnership at the time of any such
grant or continuation. Lenders and Agent shall have no obligation
to disclose or discuss with any Guarantor their assessment, or such
Guarantor's assessment, of the financial condition of Partnership.
Each Guarantor has adequate means to obtain information from
Partnership on a continuing basis concerning the financial condition
of Partnership and its ability to perform its obligations under the
Loan Documents (including, without limitation, its obligations under
subsection 6.9 of the Credit Agreement), and each Guarantor
assumes the responsibility for being and keeping informed of the
financial condition of Partnership and of all circumstances bearing
upon the risk of nonpayment or nonperformance of the Obligations.
Each Guarantor hereby waives and relinquishes any duty on the part
of Agent or any Lender to disclose any matter, fact or thing relating
to the business, operations or conditions of Partnership now known
or hereafter known by Agent or any Lender.
2.10 Rights Cumulative. The rights, powers and
remedies given to Lenders and Agent by this Guaranty are
cumulative and shall be in addition to and independent of all rights,
powers and remedies given to Lenders and Agent by virtue of any
statute or rule of law or in any of the other Loan Documents or any
agreement between any Guarantor and Lenders and/or Agent or
between Partnership and Lenders and/or Agent. Any forbearance
or failure to exercise, and any delay by any Lender or Agent in
exercising, any right, power or remedy hereunder shall not impair
any such right, power or remedy or be construed to be a waiver
thereof, nor shall it preclude the further exercise of any such right,
power or remedy.
2.11 Cooperation With Gaming Boards. Each Guarantor
agrees that it shall cooperate with Agent and Lenders to fulfill the
requirements of any Gaming Board with respect to the rights of
Agent and Lenders to enforce and apply any security now or
hereafter held by or for the benefit of Agent or any Lender in
respect of the Guarantied Obligations, or to exercise any other right
or remedy that Agent or Lenders, or any of them, may have against
any such party.
2.12 Bankruptcy; Post-Petition Interest; Reinstatement
of Guaranty. (a) So long as any Obligations remain outstanding,
no Guarantor shall, without the prior written consent of Agent in
accordance with the terms of the Credit Agreement, commence or
join with any other Person in commencing any bankruptcy,
reorganization or insolvency proceedings of or against Partnership.
The obligations of each Guarantor under this Guaranty shall not be
reduced, limited, impaired, discharged, deferred, suspended or
terminated by any proceeding, voluntary or involuntary, involving
the bankruptcy, insolvency, receivership, reorganization, liquidation
or arrangement of Partnership or by any defense that Partnership
may have by reason of the order, decree or decision of any court or
administrative body resulting from any such proceeding.
(b) Each Guarantor acknowledges and agrees that any
interest on any portion of the Guarantied Obligations that accrues
after the commencement of any proceeding referred to in clause (a)
above (or, if interest on any portion of the Guarantied Obligations
ceases to accrue by operation of law by reason of the
commencement of said proceeding, such interest as would have
accrued on such portion of the Guarantied Obligations if said
proceedings had not been commenced) shall be included in the
Guarantied Obligations because it is the intention of each Guarantor
and Agent that the Guarantied Obligations that are guarantied by
each Guarantor pursuant to this Guaranty should be determined
without regard to any rule of law or order that may relieve
Partnership of any portion of such Guarantied Obligations. Each
Guarantor will permit any trustee in bankruptcy, receiver, debtor in
possession, assignee for the benefit of creditors or similar person to
pay Agent, or allow the claim of Agent in respect of, any such
interest accruing after the date on which such proceeding is
commenced.
(c) In the event that all or any portion of the Guarantied
Obligations are paid by Partnership, the obligations of each
Guarantor hereunder shall continue and remain in full force and
effect or be reinstated, as the case may be, in the event that all or
any part of such payment(s) are rescinded or recovered directly or
indirectly from Agent or any Lender as a preference, fraudulent
transfer or otherwise, and any such payments that are so rescinded
or recovered shall constitute Guarantied Obligations for all purposes
under this Guaranty.
2.13 Notice of Events. As soon as any Guarantor obtains
knowledge thereof, such Guarantor shall give Agent written notice
of any condition or event that has resulted in (a) a material adverse
change in the financial condition of such Guarantor or Partnership
or (b) a breach of or noncompliance with any term, condition or
covenant contained herein, in the Credit Agreement or any other
Loan Document or any other document delivered pursuant hereto or
thereto or a material breach of or noncompliance with any term,
condition or covenant contained in the General Contractor's
Contract.
2.14 Completion.
(a) Upon the occurrence of an Event of Default with respect
to the Guarantied Obligations under the Loan Documents, in
addition to the exercise of all of Lenders' other rights and
remedies hereunder and under the Loan Documents, Agent
(acting at the direction of Requisite Lenders) shall have the
option, to be exercised in their sole discretion, to require
Guarantors to Complete Construction or Finally Complete
Construction (in each case, with respect to the Eldorado Bridge),
as the case may be, within the Time for Performance and in the
manner and in accordance with all of the terms, conditions and
provisions of the Credit Agreement. After and only after Agent
so requires Guarantors to Complete Construction or Finally
Complete Construction, to the extent Guarantors do not diligently
pursue or are unable to cause such Completion of Construction
or Final Completion of Construction within the Time for
Performance and in the manner and in accordance with all the
terms, conditions and provisions of the Credit Agreement, then,
in addition to the exercise of all of Lenders' other rights and
remedies hereunder and under the Loan Documents, Agent
(acting at the direction of Requisite Lenders) shall have the
option, to be exercised in their sole discretion to (i) Complete
Construction or Finally Complete Construction (in each case,
with respect to the Eldorado Bridge) as the case may be, in the
manner and in accordance with all of the terms, conditions and
provisions of the Credit Agreement itself at Guarantors' expense
or (ii) cause a third party to Complete Construction or Finally
Complete Construction (in each case, with respect to the
Eldorado Bridge), as the case may be, in the manner and in
accordance with all of the terms, conditions and provisions of the
Credit Agreement at the expense of Guarantors. Nothing in this
subsection 2.14(a) shall (A) require any Guarantor to Complete
Construction or Finally Complete Construction or pay the costs
thereof with respect to any Collateral sold to any person that is
not an Affiliate of Agent or any Lender by Agent under its rights
of foreclosure or (B) release Agent or any Lender from the
limitations on the exercise of its rights of foreclosure set forth in
subsection 2.5 hereof.
(b)(i) Without limiting the generality of subsection 2.6, if
Agent (acting at the direction of Requisite Lenders) elects
pursuant to subsection 2.14(a) (after Guarantors have had the
opportunity to perform as set forth therein) to Complete
Construction or Finally Complete Construction or to have a third
party Complete Construction or Finally Complete Construction,
Guarantors shall reimburse Agent and Lenders immediately on
demand for all costs and expenses, including, without limitation,
reasonable attorneys' fees, that Agent and Lenders may incur in
performing such obligations or causing such obligations to be
performed (including, without limitation, costs and expenses
incurred to correct defects in construction, incurred as a result of
delays in construction, incurred to ensure timely Completion of
Construction or Final Completion of Construction (in each case,
with respect to the Eldorado Bridge), as the case may be and
incurred because it was necessary to engage new or different
contractors to Complete Construction or Finally Complete
Construction (in each case, with respect to the Eldorado Bridge),
as the case may be), together with interest on those sums from
and after the date they are incurred at the rate set forth in
subsection 2.2E of the Credit Agreement.
(ii) Agent may bring any action at law or in equity or
both on behalf of itself and Lenders to compel Guarantors to
perform or pay for performance of the Guarantied Obligations,
or to recover all of Lenders' and Agent's losses, costs, damages,
injuries and expenses that may be sustained or incurred by Agent
or Lenders as a direct or indirect consequence of Guarantors'
failure to perform the Guarantied Obligations, including without
limitation, the total costs that would be incurred to Complete
Construction or Finally Complete Construction (in each case,
with respect to the Eldorado Bridge), as the case may be, if
Completion of Construction or Final Completion of Construction
(in each case, with respect to the Eldorado Bridge) as the case
may be, were attained (including costs to correct defects in
construction), and direct damages that arise from delays in
Completion of Construction or Final Completion of Construction
(in each case, with respect to the Eldorado Bridge) as the case
may be, together with interest on such amounts at the rate set
forth in subsection 2.2E of the Credit Agreement. Each
Guarantor agrees that such losses, costs, damages, injuries and
expenses shall be calculated without regard to whether
Completion of Construction or Final Completion of Construction
(in each case, with respect to the Eldorado Bridge) as the case
may be, will result in an increased stabilized value of the Project
and without reference to the value of the Project in its condition
existing at the time of the Event of Default giving rise to an
action under this Guaranty, it being expressly acknowledged and
agreed to by such Guarantor that Agent and Lenders have
bargained for Guarantors' agreement to guaranty Completion of
Construction and Final Completion of Construction (in each case,
with respect to the Eldorado Bridge) and the payment of any
amounts necessary to Complete Construction and Finally
Complete Construction (in each case, with respect to the
Eldorado Bridge). Agent may from time to time bring such an
action regardless of whether it has first required performance by
Partnership or Guarantor, or whether Agent or Lenders have
exhausted any or all security for the Loans or commenced any
work on the Project.
2.15 Set Off. In addition to any other rights any Lender
or Agent may have under law or in equity, if any amount shall at
any time be due and owing by any Guarantor to any Lender or
Agent under this Guaranty, such Lender or Agent is authorized at
any time or from time to time, without notice (any such notice
being hereby expressly waived), to set off and to appropriate and to
apply any and all deposits (general or special, including but not
limited to indebtedness evidenced by certificates of deposit, whether
matured or unmatured and any other indebtedness of any Lender or
Agent owing to such Guarantor and any other property of such
Guarantor held by any Lender or Agent to or for the credit or the
account of such Guarantor against and on account of the Guarantied
Obligations and liabilities of such Guarantor to any Lender or Agent
under this Guaranty.
2.16 Time for Performance.
(a) Guarantors shall have the following time to perform
the Guarantied Obligations ("Time for Performance"):
(i) in the case of failure by Partnership to Complete
Construction (with respect to the Eldorado Bridge) on or
before the Projected Completion of Construction Date, a
period commencing with the Projected Completion of
Construction Date and ending on that date that is three (3)
months later, and
(ii) in the case of failure by Partnership to Finally Complete
Construction (with respect to the Eldorado Bridge) on or
before the Projected Final Completion Date, a period
commencing with the Projected Final Completion Date and
ending on that date that is six (6) months later;
provided that, in each case, the final date of the Time for
Performance shall be any earlier date upon which any Guarantor
ceases to use its best efforts diligently to commence and
prosecute Completion of Construction or Final Completion of
Construction (in each case, with respect to the Eldorado Bridge),
as the case may be, in the manner and in accordance with all of
the terms, conditions and provisions of the Credit Agreement and
in the most time efficient manner.
(b) If Guarantors are delayed from Completion of
Construction or Final Completion of Construction, as the case
may be, within the Time for Performance, solely by an act or
omission of the Lenders or their agents other than as permitted
by the Loan Documents, or by unavoidable labor disputes, fire
not caused by any Guarantor, unavoidable delays in
transportation, adverse weather conditions not reasonably
foreseeable by Guarantors, unavoidable casualties, or by any
other causes that Requisite Lenders deem justifies the delay, then
the Time for Performance may be extended by Agent and
Requisite Lenders, in their reasonable discretion, by the amount
of time (in any case not to exceed 180 days) of such delay that is
caused by such event. Each Guarantor shall use its best efforts
to remedy the situation that causes any delay to minimize such
delay. Without limiting the generality of the foregoing, each
Guarantor acknowledges that obtaining permits, Guarantor-caused
strikes, labor stoppages, sequencing of Project construction,
customary coordination with Consulting Engineer, if any,
customary coordination with any contractors or subcontractors
hired by Partnership or Lenders, acts and omissions of any
Guarantor's subcontractors and suppliers, delays to non-critical
path items and any delays that are the fault of such Guarantor or
its agents, employees or Affiliates are not cause for an extension
of the Time for Performance.
(c) Written notice that Guarantors' performance of the
Guarantied Obligations will be delayed shall be given to the
Lenders not more than fifteen days after any Guarantor becomes
aware of the commencement of the delay. Such notice shall
include a written report of the full impact of the delay on the
time in which Guarantors will Complete Construction or Finally
Complete Construction, as the case may be. The failure of
Guarantors to give such notice within such time shall render any
delay non-excusable and shall not result in any extension of the
Time for Performance. Guarantors shall deliver periodic reports
to Agent describing the current condition of the circumstance
causing delay for so long as such circumstance prevents the
performance of the Guarantied Obligations.
SECTION 3. REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and Agent to accept this
Guaranty and to enter into the Credit Agreement and to make the
Loans thereunder, each Guarantor hereby represents and warrants to
Lenders that the following statements are true and correct:
3.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries.
(a) Organization and Powers. Such Guarantor is a
limited partnership (in the case of Eldorado Hotel Associates) or
a subchapter S corporation (in the case of Recreational
Enterprises and Hotel-Casino Management), duly formed or
organized, validly existing and in good standing under the laws
of the State of Nevada. Such Guarantor has all requisite legal
power and authority to own and operate its properties, to perform
its obligations hereunder, to enter into the Loan Documents to
which it is a party and to carry out the transactions contemplated
thereby.
(b) Qualification and Good Standing. Such Guarantor
is qualified to do business and in good standing in every
jurisdiction where its assets are located and wherever necessary
to carry out its obligations under this Guaranty, except in
jurisdictions where the failure to be so qualified or in good
standing has not had and will not have a Material Adverse
Effect.
3.2 Authorization of Borrowing, etc.
(a) Authorization of Borrowing. The execution,
delivery and performance of the Loan Documents to which it is a
party have been duly authorized by all necessary company action
on the part of such Guarantor.
(b) No Conflict. The execution, delivery and
performance by such Guarantor of the Loan Documents to which
it is a party and the consummation of the transactions
contemplated by the Loan Documents do not and will not
(i) violate any provision of any law or any governmental rule or
regulation applicable to such Guarantor or any of its Subsidiaries,
the Certificate of Incorporation or Bylaws or partnership
agreement, as the case may be, of such Guarantor or the
organizational documents of any of its Subsidiaries or any order,
judgment or decree of any court or other agency of government
binding on such Guarantor or any of its Subsidiaries, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse
of time or both) a default under any Contractual Obligation of
such Guarantor or any of its Subsidiaries, (iii) result in or require
the creation or imposition of any Lien upon any of the properties
or assets of such Guarantor or any of its Subsidiaries (other than
any Liens created under any of the Loan Documents in favor of
Agent on behalf of Lenders), or (iv) require any approval of any
shareholder or partner, as the case may be, of such Guarantor or
any approval or consent of any Person under any Contractual
Obligation of such Guarantor or any of its Subsidiaries.
(c) Binding Obligation. Each of the Loan Documents to
which it is a party has been duly executed and delivered by such
Guarantor and is the legally valid and binding obligation of such
Guarantor, enforceable against such Guarantor in accordance
with its respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar
laws relating to or limiting creditors' rights generally or by
equitable principles relating to enforceability.
3.3 Access to Partnerships Records. Such Guarantor
represents and warrants to Agent and Lenders that it is, in the case
of Eldorado Hotel Associates and Recreational Enterprises, a
member of Eldorado LLC, and/or a general partner of Eldorado
Hotel Associates (in the case of Hotel-Casino Management and
Recreational Enterprises) and now has and will continue to have full
and complete access to any and all information concerning the
transactions contemplated by the Loan Documents or referred to
therein, the value of the assets owned or to be acquired by
Partnership, Partnership's financial status and its ability to pay and
perform the Obligations owed to Agent and Lenders. Such
Guarantor further represents and warrants that such Guarantor has
reviewed and approved copies of the Loan Documents and is fully
informed of the remedies Agent and Lenders may pursue, with or
without notice to Partnership, in the event of default under the
Credit Agreement or other Loan Documents. So long as any of the
Obligations remains unsatisfied or owing to Agent and Lenders,
such Guarantor shall keep fully informed as to all aspects of
Partnership's financial condition and the performance of the
Obligations.
SECTION 4. AFFIRMATIVE COVENANTS.
Each Guarantor covenants and agrees that, unless and until
the earlier of either (but not both) (a) prompt and complete payment
and performance of all of the Guarantied Obligations or, without
duplication, (b) the payment in full by Guarantors, Partnership or
otherwise of the Obligations, the termination of the Commitments
and the expiration or cancellation of all Letters of Credit and, in
each case, payment in full of all other payment obligations (other
than the Guarantied Obligations) of Guarantors hereunder, unless
Requisite Lenders shall otherwise consent in writing:
4.1 Legal Existence, Etc. Such Guarantor shall at all times
preserve and keep in full force and effect its legal existence as a
limited partnership or a subchapter S corporation, as the case may
be, and all rights and franchises material to its business.
4.2 Compliance with Laws, Etc. Such Guarantor shall comply
in all material respects with all applicable laws, rules, regulations
and orders, such compliance to include, without limitation, paying
when due all taxes, assessments and governmental charges imposed
upon it or upon any of its properties or assets or in respect of any
of its franchises, businesses, income or property before any penalty
or interest accrues thereon.
4.3 Books and Records. Such Guarantor shall keep and
maintain books of record and account with respect to its operations
in accordance with generally accepted accounting principles and the
statements of the accounting profession set forth in the AICPA
Audit and Accounting Guide: Audits of Casinos and shall permit
Agent or any Lender and their respective officers, employees and
authorized agents, to the extent Agent or such Lender in good faith
deems necessary for the proper administration of this Guaranty, to
examine, copy and make excerpts from the books and records of
such Guarantor and its Subsidiaries and to inspect the properties of
such Guarantor and its Subsidiaries, both real and personal, at such
reasonable times as Agent may request.
4.4 Relationship to Partnership. Such Guarantor shall continue
to keep itself informed as to the status of the transactions
contemplated by the Credit Agreement or referred to therein,
Partnership's financial status and its ability to perform its
obligations under the Loan Documents (including, without
limitation, its ability to satisfy its financial covenants).
4.5 Bankruptcy. Each Guarantor agrees that it shall not
commence or join with any other creditor of Partnership to
commence any bankruptcy, insolvency, reorganization or other
similar proceedings against Partnership.
SECTION 5. MISCELLANEOUS
5.1 Survival of Warranties. All agreements, representations
and warranties made herein shall survive the execution and delivery
of this Guaranty and the other Loan Documents and any increase in
the Commitments under the Credit Agreement.
5.2 Notices. Any communications between or among Agent,
any Guarantor and Partnership and any notices or requests provided
herein to be given may be given by mailing the same, postage
prepaid, or by telex or facsimile transmission by 5:00 p.m. (Pacific
Time) on a Business Day to each such party at its address set forth
in the Credit Agreement, on the signature pages hereof or to such
other addresses as each such party may in writing hereafter indicate.
Any notice, request or demand to or upon Agent or Lenders or any
Guarantor or Partnership under or relating to this Guaranty shall not
be effective until received.
5.3 Severability. In case any provision in or obligation under
this Guaranty shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any
other jurisdiction, shall not in any way be affected or impaired
thereby.
5.4 Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Guaranty, or consent
to any departure by any Guarantor therefrom, shall in any event be
effective without the written concurrence of all Lenders under the
Credit Agreement. Any waiver or consent shall be effective only in
the specific instance and for the specific purpose for which it was
given.
5.5 Headings. Section and subsection headings in this Guaranty
are included herein for convenience of reference only and shall not
constitute a part of this Guaranty for any other purpose or be given
any substantive effect.
5.6 Applicable Law. THIS GUARANTY SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEVADA, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
5.7 Successors and Assigns. This Guaranty is a continuing
guaranty and shall be binding upon each Guarantor and its
successors and assigns. This Guaranty shall inure to the benefit of
Lenders, Agent, Partnership and their respective successors and
assigns. No Guarantor shall assign this Guaranty or any of the
rights or obligations of such Guarantor hereunder without the prior
written consent of all Lenders. Subject to subsection 10.1 of the
Credit Agreement and as part of an assignment, participation or any
transfer of its interests in any Loan, any Lender may, without
notice or consent, assign its interest in this Guaranty in whole or in
part. The terms and provisions of this Guaranty shall inure to the
benefit of any transferee or assignee of any Loan, and in the event
of such transfer or assignment the rights and privileges herein
conferred upon Lenders and Agent shall automatically extend to and
be vested in such transferee or assignee, all subject to the terms and
conditions hereof.
5.8 Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY
GUARANTOR ARISING OUT OF OR RELATING TO THIS
GUARANTY MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN
THE STATE OF NEVADA AND BY EXECUTION AND
DELIVERY OF THIS GUARANTY EACH GUARANTOR
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS GUARANTY. Each Guarantor
hereby agrees that service of all process in any such proceeding in
any such court may be made by registered or certified mail, return
receipt requested, to such Guarantor at its address provided in
subsection 5.2, such service being hereby acknowledged by such
Guarantor to be sufficient for personal jurisdiction in any action
against such Guarantor in any such court and to be otherwise
effective and binding service in every respect. Nothing herein shall
affect the right to serve process in any other manner permitted by
law.
5.9 Waiver of Trial by Jury. EACH GUARANTOR AND,
BY ITS ACCEPTANCE OF THE BENEFITS HEREOF,
PARTNERSHIP AND AGENT EACH HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS GUARANTY. The scope of this
waiver is intended to be all-encompassing of any and all disputes
that may be filed in any court and that relate to the subject matter
of this transaction, including without limitation contract claims, tort
claims, breach of duty claims and all other common law and
statutory claims. Each Guarantor and, by its acceptance of the
benefits hereof, Partnership and Agent each (i) acknowledges that
this waiver is a material inducement for such Guarantor and Agent
to enter into a business relationship, that such Guarantor,
Partnership and Agent have already relied on this waiver in entering
into this Guaranty or accepting the benefits thereof, as the case may
be, and that each will continue to rely on this waiver in their related
future dealings and (ii) further warrants and represents that each has
reviewed this waiver with its legal counsel, and that each knowingly
and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO
THIS GUARANTY. In the event of litigation, this Guaranty may
be filed as a written consent to a trial by the court.
5.10 No Other Writing. This writing is intended by
Guarantors, Partnership and Agent as the final expression of this
Guaranty and is also intended as a complete and exclusive statement
of the terms of their agreement with respect to the matters covered
hereby. No course of dealing, course of performance or trade
usage, and no parol evidence of any nature, shall be used to
supplement or modify any terms of this Guaranty. There are no
conditions to the full effectiveness of this Guaranty.
5.11 Further Assurances. At any time or from time to
time, upon the request of Agent or Requisite Lenders, each
Guarantor or Partnership or any of them shall execute and deliver
such further documents and do such other acts and things as Agent
or Requisite Lenders may reasonably request in order to effect fully
the purposes of this Guaranty.
5.12 Partnership Third-Party Beneficiary. Guarantors
and Agent hereby expressly agree and acknowledge that Partnership
is intended to be an express third-party beneficiary of this Guaranty
and Partnership shall be entitled to exercise any and all rights and
remedies afforded third-party beneficiaries under the laws of the
relevant jurisdiction.
5.13 Counterparts. This Guaranty may be executed in
one or more counterparts and by different parties hereto in separate
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; signature pages may be
detached from multiple separate counterparts and attached to a
single counterpart so that all signature pages are physically attached
to the same document.
[Remainder of page intentionally left blank]<PAGE>
IN WITNESS WHEREOF,
Guarantor has caused this
Guaranty to be duly executed and delivered by its officer thereunto
duly authorized as of the date first written above.
ELDORADO HOTEL
ASSOCIATES LIMITED
PARTNERSHIP
By: HOTEL-
CASINO
MANAGEMENT, INC.
Its: general partner
By:
Title:
By:
RECREATIONAL ENTERPRISES,
INC.
Its: general partner
By:
Title:
HOTEL-CASINO
MANAGEMENT, INC.
By:
Title:
RECREATIONAL
ENTERPRISES, INC.
By:
Title:
Address: c/o
Eldorado
Hotel
Casino
345 North
Virginia
Street
P.O. Box
3399
Reno,
Nevada
89508
Attention:
General
Counsel
Accepted by:
FIRST INTERSTATE BANK OF NEVADA, N.A.
as Agent on behalf of Lenders
By
Title
Address: 3800 Howard Hughes Parkway
Suite 400
Las Vegas, Nevada 89109
Attention: Steve Byrne
CIRCUS AND ELDORADO
JOINT VENTURE, as express
third-party beneficiary
By: GALLEON, INC.
By:
Title:
Address: c/o Circus Circus Enterprises
2880 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Attention: General Counsel
By: ELDORADO LIMITED LIABILITY COMPANY
Its: general partner
By: ELDORADO HOTEL ASSOCIATES,
LIMITED PARTNERSHIP
Its: manager
By: RECREATIONAL ENTERPRISES
Its: general partner
By:
Title:
By: HOTEL-CASINO MANAGEMENT
Its: general partner
By:
Title:
Address: c/o Eldorado Hotel Casino
345 North Virginia Street
P.O. Box 3399
Reno, Nevada 89508
Attention: General Counsel
<PAGE>
By: EXECUTIVE COMMITTEE
By:
Title:
By:
Title:
EXHIBIT XIV
[FORM OF MAKE-WELL AGREEMENT]
MAKE-WELL AGREEMENT
This MAKE-WELL AGREEMENT is entered into as of
May 30, 1995 by CIRCUS CIRCUS ENTERPRISES, INC., a
Nevada corporation ("Circus"), in favor of FIRST INTERSTATE
BANK OF NEVADA, N.A., in its capacity as agent for and
representative of (in such capacity herein called "Agent") the
financial institutions ("Lenders") party to the Credit Agreement (as
hereinafter defined), for the benefit of Agent and Lenders, and
CIRCUS AND ELDORADO JOINT VENTURE, a Nevada
general partnership ("Partnership") (as an express third-party
beneficiary of this Make-Well Agreement).
RECITALS
A. Partnership (the general partners of which are
Galleon, Inc., a Nevada corporation ("Galleon") and a wholly-
owned subsidiary of Circus, and Eldorado Limited Liability
Company, a Nevada limited liability company of which Eldorado
Hotel Associates, a Nevada limited partnership is the manager
which has Recreational Enterprises, Inc., a Nevada subchapter S
corporation, and Hotel-Casino Management, Inc., a Nevada
subchapter S corporation, as its general partners), has entered into
that certain Credit Agreement of even date herewith with Lenders,
Agent, as arranger and administrative agent, FIRST INTERSTATE
BANK OF NEVADA, N.A., THE LONG-TERM CREDIT
BANK OF JAPAN, LTD., LOS ANGELES AGENCY and
SOCIETE GENERALE, as managing agents and BANK OF
AMERICA, N.T.&S.A., CIBC INC. and CREDIT LYONNAIS,
LOS ANGELES BRANCH, collectively, as co-agents ("Co-
Agents") (said Credit Agreement, as it may hereafter be amended,
supplemented or otherwise modified from time to time, being the
"Credit Agreement"; capitalized terms defined therein and not
otherwise defined herein being used herein as therein defined).
B. It is a condition precedent to the making of the initial
Loans under the Credit Agreement that Circus provide assurance to
the Lenders of Partnership's ability to perform certain of its
obligations thereunder.
C. Circus is willing irrevocably and unconditionally to
provide such assurance.
NOW, THEREFORE, based upon the foregoing and other
good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and in order to induce Lenders,
Managing Agents, Co-Agents and Agent to enter into the Credit
Agreement and to make the Loans thereunder, Circus hereby agrees
as follows:
SECTION 1. DEFINITIONS
1.1 Certain Defined Terms. As used in this Make-Well
Agreement, the following terms shall have the following meanings
unless the context otherwise requires:
"Additional Contributions" has the meaning assigned to
that term in subsection 2.1.
"Coverage Ratio" means the ratio set forth in subsection
7.6A of the Credit Agreement; provided that the Additional
Contributions shall be added to the numerator of such ratio as
and when paid in accordance with the terms of this Make-Well
Agreement.
"Make-Well Agreement" means, as of any date, this Make-
Well Agreement as it may be amended, supplemented or
otherwise modified from time to time through such date.
"Make-Well Obligations" has the meaning assigned to that
term in subsection 2.1.
"Minimum Coverage Ratio" has the meaning assigned to
that term in subsection 2.1.
"Obligations" has the meaning assigned such term in the
Credit Agreement and shall also include, without limitation,
Partnership's performance obligations thereunder, including
without limitation, its obligation to perform subsection 7.6A
thereof.
"payment in full", "paid in full" or any similar term means
the indefeasible payment in full of the Obligations or the Make-
Well Obligations, as the case may be, including, without
limitation, all principal, interest, costs, fees, expenses and
indemnities (including, without limitation, legal fees and
expenses) of Lenders, Managing Agents, Co-Agents and Agent
as required under the Loan Documents.
1.2 Interpretation.
(a) References to "Sections" and "subsections" shall be
to Sections and subsections, respectively, of this Make-Well
Agreement unless otherwise specifically provided.
(b) In the event of any conflict or inconsistency between
the terms, conditions and provisions of this Make-Well
Agreement and the terms, conditions and provisions of the Credit
Agreement, the terms, conditions and provisions of this Make-
Well Agreement shall prevail.
SECTION 2. MAKE-WELL
2.1 Obligation of Circus. Circus shall make Additional
Contributions (as defined below) to Partnership in such amounts as
are necessary to ensure that after the Conversion Date Partnership
maintains a Coverage Ratio for each of the periods set forth in
subsection 7.6A of the Credit Agreement of at least l.05:1.00
("Minimum Coverage Ratio"). If, at any time after the
Conversion Date and prior to the termination of all Commitments,
payment in full of all Loans and other Obligations and the
expiration or cancellation of all Letters of Credit, Partnership fails
to maintain the Minimum Coverage Ratio, Circus shall be obligated
to make additional contributions of cash for equity of Partnership or
General Partner Subordinated Debt or both in the amount necessary
for Partnership to maintain the Minimum Coverage Ratio (such
additional contributions, "Additional Contributions"). Circus'
obligations to make such Additional Contributions are referred to
herein as the "Make-Well Obligations." Circus shall make such
Additional Contributions no later than 10 Business Days after the
date on which Partnership delivers a Compliance Certificate
pursuant to subsection 6.1(iv) of the Credit Agreement
demonstrating Partnership's failure to maintain such Minimum
Coverage Ratio or, if Partnership fails to deliver a Compliance
Certificate by the date required pursuant to subsection 6.1(iv) of the
Credit Agreement (in which case Agent shall make a determination
of Partnership's Coverage Ratio, which determination shall be
presumed correct unless and until Circus demonstrates gross
inaccuracy thereof), Circus shall make such Additional
Contributions no later than 10 Business Days after the date such
Certificate was so required to be delivered. If Circus fails to make
Additional Contributions on the date required, interest shall accrue
on the amount of Additional Contributions at a rate per annum
equal to the Base Rate until such Additional Contributions are made
to Partnership; provided that all such interest accrued to the date
such Additional Contributions are made shall be paid to Partnership
together therewith and shall be treated as a cash contribution to
Partnership in exchange for equity of Partnership or General Partner
Subordinated Debt or, without duplication, both.
2.2 Liability of Circus Absolute. Circus agrees that its
obligations hereunder are irrevocable, absolute, independent and
unconditional and shall not be affected by any circumstance which
constitutes a legal or equitable discharge of a guarantor or surety
other than payment in full and prompt and complete performance of
the Obligations. In furtherance of the foregoing and without
limiting the generality thereof, Circus agrees as follows:
(a) This Make-Well Agreement is not conditioned or
contingent upon the genuineness, validity, regularity or
enforceability of the Loan Documents or other instruments
relating to the creation or performance of the Obligations or the
pursuit by Agent of any remedies that it now has or may
hereafter have with respect thereto under the Loan Documents, at
law, in equity or otherwise.
(b) Agent may enforce this Make-Well Agreement upon
the occurrence of an Event of Default or Potential Event of
Default under subsection 7.6A of the Credit Agreement even if
Partnership, any Loan Party or any Partnership Parent disputes
the existence of such Event of Default or Potential Event of
Default.
(c) The obligations of Circus hereunder are independent
of the obligations of Partnership under the Loan Documents and
the obligations of any other guarantor of the obligations of
Partnership under the Loan Documents, and a separate action or
actions may be brought and prosecuted against Circus whether or
not any action is brought against Partnership or any of such other
guarantors and whether or not Partnership is joined in any such
action or actions.
(d) Circus' payment of a portion, but not all, of the
Make-Well Obligations shall in no way limit, affect, modify or
abridge Circus' liability for any portion of the Make-Well
Obligations which has not been paid. Without limiting the
generality of the foregoing, if Agent is awarded a judgment in
any suit brought to enforce Circus' covenant to pay a portion of
the Make-Well Obligations, such judgment shall not be deemed
to release Circus from its covenant to pay the portion of the
Make-Well Obligations that is not the subject of such suit.
(e) Agent, upon such terms as it deems appropriate,
without notice or demand and without affecting the validity or
enforceability of this Make-Well Agreement or giving rise to any
reduction, limitation, impairment, discharge or termination of
Circus' liability hereunder, from time to time may (i) renew,
extend, accelerate, increase the rate of interest on, or otherwise
change the time, place, manner or terms of payment or
performance of the Obligations subject to the limitations set forth
in the Credit Agreement; provided that, at any time after
Galleon, Inc. ceases to be Managing Partner, unless Circus has
received prior notice of any such change with respect to the
performance standard required of Partnership under section 7.6A of
the Credit Agreement that would increase the amount of the
Additional Contributions that would otherwise have been
necessary to fulfill the Make-Well Obligations, Circus'
obligations hereunder shall be limited to making the amount of
Additional Contributions necessary to fulfill the Make-Well
Obligations prior to such change; (ii) settle, compromise, release
or discharge, or accept or refuse any offer of performance with
respect to, or substitutions for, the Obligations or the Make-Well
Obligations or any agreement relating thereto and/or subordinate
the payment or performance of the same to the payment or
performance of any other obligations; (iii) request and accept
other guaranties of the Obligations or the performance of
subsection 7.6A of the Credit Agreement and take and hold
security for the payment of the Make-Well Obligations or the
Obligations; (iv) release, surrender, exchange, substitute,
compromise, settle, rescind, waive, alter, subordinate or modify,
with or without consideration, any security for payment or
performance of the Obligations, any other guaranties of the
Obligations or the performance of subsection 7.6A of the Credit
Agreement, or any other obligation of any Person with respect to
the Obligations or the performance of subsection 7.6A of the
Credit Agreement; (v) enforce and apply any security now or
hereafter held by or for the benefit of Agent or any Lender in
respect of this Make-Well Agreement or the performance of the
Obligations and direct the order or manner of sale thereof, or
exercise any other right or remedy that Agent or Lenders, or any
of them, may have against any such security, as Agent in its
discretion may determine consistent with the Credit Agreement
and any applicable security agreement; and (vi) exercise any
other rights available to it under the Loan Documents.
(f) This Make-Well Agreement and the obligations of
Circus hereunder shall be valid and enforceable and shall not be
subject to any reduction, limitation, impairment, discharge or
termination for any reason (other than (a) payment in full and
prompt and complete performance of the Obligations or, only as
to the portion paid, payment of a portion of the Make-Well
Obligations for any relevant period), including without limitation
the occurrence of any of the following, whether or not Circus
shall have had notice or knowledge of any of them: (i) any
failure or omission to assert or enforce or agreement or election
not to assert or enforce, or the stay or enjoining, by order of
court, by operation of law or otherwise, of the exercise or
enforcement of, any claim or demand or any right, power or
remedy (whether arising under the Loan Documents, at law, in
equity or otherwise) with respect to the Obligations, the Make-
Well Obligations or any agreement relating thereto, or with
respect to any other guaranty of or security for the payment of
the Obligations; (ii) any rescission, waiver, amendment or
modification of, or any consent to departure from, any of the
terms or provisions (including without limitation provisions
relating to events of default) of the Credit Agreement, any of the
other Loan Documents or any agreement or instrument executed
pursuant thereto, or of any other guaranty or security for the
Obligations, or of the obligations encompassed thereby, in each
case whether or not in accordance with the terms of the Credit
Agreement or such Loan Document or any agreement relating to
such other guaranty or security; (iii) the Obligations, or any
agreement relating thereto, at any time being found to be illegal,
invalid or unenforceable in any respect; (iv) the application of
payments received from any source to the payment of
indebtedness other than the Obligations, even though Agent or
Lenders, or any of them, might have elected to apply such
payment to any part or all of the Obligations; (v) any Lender's or
Agent's consent to the change, reorganization or termination of
the legal structure or existence of Partnership and to any
corresponding restructuring of the Obligations; (vi) any failure to
perfect or continue perfection of a security interest in any
collateral which secures any of the Obligations; (vii) any
defenses, set-offs or counterclaims which Partnership may allege
or assert against Agent or any Lender in respect of the
Obligations, including but not limited to failure of consideration,
breach of warranty, payment, statute of frauds, statute of
limitations, accord and satisfaction and usury; and (viii) any
other act or thing or omission, or delay to do any other act or
thing, which may or might in any manner or to any extent vary
the risk of Circus as an obligor in respect of the Make-Well
Obligations.
2.3 Waivers by Circus. Circus hereby waives, for the benefit
of Lenders and Agent:
(a) any right to require Agent or Lenders, as a condition
of payment or performance by Circus, to (i) proceed against
Partnership, any other guarantor of the Obligations or any other
Person, (ii) proceed against or exhaust any security held from
Partnership, any other guarantor of the Obligations or any other
Person, (iii) proceed against or have resort to any balance of any
deposit account or credit on the books of Agent or any Lender in
favor of Partnership or any other Person, or (iv) pursue any
other remedy in the power of Agent or any Lender whatsoever;
(b) any defense arising by reason of the incapacity, lack
of authority or any disability or other defense of Partnership
including, without limitation, any defense based on or arising out
of the lack of validity or the unenforceability of the Obligations
or any agreement or instrument relating thereto or by reason of
the cessation of the liability of Partnership from any cause other
than payment in full of the Obligations;
(c) any defense based upon any statute or rule of law
which provides that the obligation of a surety must be neither
larger in amount nor in other respects more burdensome than that
of the principal;
(d) any defense based upon Agent's or any Lender's
errors or omissions in the administration of the Obligations,
except behavior which amounts to willful misconduct;
(e) (i) any principles or provisions of law, statutory or
otherwise, which are or might be in conflict with the terms of
this Make-Well Agreement and any legal or equitable discharge
of Circus' obligations hereunder, (ii) any rights to set-offs,
recoupments and counterclaims, and (iii) promptness, diligence
and any requirement that Agent or any Lender protect, secure,
perfect or insure any security interest or lien or any property
subject thereto;
(f) notices, demands, presentments, protests, notices of
protest, notices of dishonor and notices of any action or inaction,
including acceptance of this Make-Well Agreement, notices of
default under the Credit Agreement or any agreement or
instrument related thereto, notices of any renewal, extension or
modification of the Obligations or any agreement related thereto,
notices of any extension of credit to Partnership and notices of
any of the matters referred to in subsection 2.2 and any right to
consent to any thereof; and
(g) any defenses or benefits that may be derived from or
afforded by law which limit the liability of or exonerate
guarantors or sureties, or which may conflict with the terms of
this Make-Well Agreement, including without limitation the
provisions of Nevada Revised Statutes Sections 40.430-40.459,
40.475 and 40.485 as permitted by Nevada Revised Statutes
Sections 40.495 (1993), and any successor provisions.
2.4 Circus' Rights of Subrogation, Contribution, Etc. Circus
and Partnership hereby expressly agree that any Additional
Contributions made by Circus pursuant to this Make-Well
Agreement shall be made in exchange for equity of Partnership or
General Partner Subordinated Debt or, without duplication, both,
and Circus shall not be entitled to any right of subrogation,
contribution or reimbursement from any Person (including without
limitation, Partnership, Agent, any Lender or any guarantor) with
respect to such Additional Contributions until this Make-Well
Agreement has been terminated pursuant to subsection 2.8 hereof;
provided that to the extent Circus receives General Partner
Subordinated Debt in exchange for Additional Contributions, Circus
shall be entitled (subject to subsection 2.5 below and subsection 7.5
of the Credit Agreement) to such reimbursement as is permitted
pursuant to the Subordinated Debt Documents; provided further that
such entitlement shall cease upon the occurrence and during the
continuance of an Event of Default or Potential Event of Default.
2.5 Real Property Security. Circus agrees that, if all or a
portion of the Obligations or any other guaranty of all or a portion
of the Obligations are at any time secured by a deed of trust or
mortgage covering interests in real property, then, after 10 Business
Days have elapsed after the date on which a Compliance Certificate
is required to be delivered pursuant to subsection 6.1(iv) of the
Credit Agreement without Additional Contributions having been
made in an amount sufficient to maintain the Minimum Coverage
Ratio, Agent or its designee, in its sole discretion, without notice or
demand and without affecting the liability of Circus, may foreclose,
pursuant to the terms of the Loan Documents (including subsection
7.6A of the Credit Agreement) or otherwise in accordance with
applicable law, on any such deed of trust or mortgage and the
property described therein by nonjudicial or other sale. Without
limiting any of the waivers contained elsewhere herein, Circus
hereby waives any defense to liability arising by reason of the
exercise by Lenders or Agent, or any of them, of any right or
remedy contained in any such deed of trust or mortgage or any of
the other Loan Documents. Circus hereby authorizes and
empowers Agent and any Lender to exercise, in its sole discretion,
any rights or remedies, or any combination thereof, which may then
be available, since it is the intent and purpose of Circus that its
obligations hereunder shall be absolute, independent and uncondi-
tional under any and all circumstances. Notwithstanding any
foreclosure of the lien of any such deed of trust or mortgage,
whether by the exercise of the power of sale contained therein, by
an action for judicial foreclosure, or by acceptance of a deed in lieu
of foreclosure, Circus shall remain bound under this Make-Well
Agreement; provided the net proceeds of any such exercise of
remedies shall be deducted from Scheduled Facility Reductions to
the extent such proceeds are applied to reduce Scheduled Facility
Reductions in any calculation of amounts owing from Circus under
the terms of this Make-Well Agreement.
2.6 Expenses. Circus agrees to pay, or cause to be paid, on
demand, and to save Agent and Lenders harmless against liability
for, any and all costs and expenses (including fees and
disbursements of counsel and allocated costs of internal counsel)
incurred or expended by Agent or any Lender in connection with
the enforcement of or preservation of any rights under this Make-
Well Agreement.
2.7 Continuing Guaranty; Termination of Make-Well
Agreement. This Make-Well Agreement is a continuing guaranty
and shall remain in effect until all of the Obligations shall have been
paid in full in cash by Circus, Partnership or otherwise and
promptly and completely performed and the Commitments shall
have terminated and all Letters of Credit shall have expired or been
cancelled. Circus' liability under this Make-Well Agreement shall
not be reduced by virtue of any payment by Partnership of any
amounts due under the Credit Agreement (other than a payment that
increases the actual Coverage Ratio maintained by Partnership) or
under any of the Loan Documents or by Agent's or Lenders'
recourse to any collateral or security. Circus hereby irrevocably
waives any right to revoke this Make-Well Agreement as to future
transactions giving rise to any Make-Well Obligations.
2.8 Authority of Circus or Partnership. It is not necessary for
Lenders or Agent to inquire into the capacity or powers of Circus
or Partnership or the officers, directors or any agents acting or
purporting to act on behalf of any of them.
2.9 Financial Condition of Partnership. Any Loans may be
granted to Partnership or continued from time to time without
notice to or authorization from Circus regardless of the financial or
other condition of Partnership at the time of any such grant or
continuation. Lenders and Agent shall have no obligation to
disclose or discuss with Circus their assessment, or Circus'
assessment, of the financial condition of Partnership; provided that
Agent shall give notice to Circus of any reduction of Commitments
or change in the final maturity of the Loans; provided, further, that
the failure of Agent to so notify Circus shall not affect the
obligations of Circus hereunder. Circus has adequate means to
obtain information from Partnership on a continuing basis
concerning the financial condition of Partnership and its ability to
perform its obligations under the Loan Documents (including,
without limitation, its obligations to satisfy its financial covenants),
and Circus assumes the responsibility for being and keeping
informed of the financial condition of Partnership and of all
circumstances bearing upon the risk of nonpayment or
nonperformance of the Obligations. Circus hereby waives and
relinquishes any duty on the part of Agent or any Lender to disclose
any matter, fact or thing relating to the business, operations or
conditions of Partnership now known or hereafter known by Agent
or any Lender.
2.10 Rights Cumulative. The rights, powers and
remedies given to Lenders and Agent by this Make-Well Agreement
are cumulative and shall be in addition to and independent of all
rights, powers and remedies given to Lenders and Agent by virtue
of any statute or rule of law or in any of the other Loan Documents
or any agreement between Circus and Lenders and/or Agent or
between Partnership and Lenders and/or Agent. Any forbearance
or failure to exercise, and any delay by any Lender or Agent in
exercising, any right, power or remedy hereunder shall not impair
any such right, power or remedy or be construed to be a waiver
thereof, nor shall it preclude the further exercise of any such right,
power or remedy.
2.11 Bankruptcy. So long as any Obligations remain
outstanding, Circus shall not, without the prior written consent of
Agent in accordance with the terms of the Credit Agreement,
commence or join with any other Person in commencing any
bankruptcy, reorganization or insolvency proceedings of or against
Partnership. The obligations of Circus under this Make-Well
Agreement shall not be reduced, limited, impaired, discharged,
deferred, suspended or terminated by any proceeding, voluntary or
involuntary, involving the bankruptcy, insolvency, receivership,
reorganization, liquidation or arrangement of Partnership or by any
defense which Partnership may have by reason of the order, decree
or decision of any court or administrative body resulting from any
such proceeding.
2.12 Notice of Events. As soon as Circus obtains
knowledge thereof, Circus shall give Agent written notice of any
condition or event which has resulted in (a) a material adverse
change in the financial condition of Circus or Partnership or (b) a
breach of or noncompliance with any term, condition or covenant
contained herein or in the Circus Revolving Loan Agreements, the
Credit Agreement, any other Loan Document or any other
document delivered pursuant hereto or thereto. Promptly upon
Agent's receipt of notice thereof, Agent shall give Circus written
notice of any Event of Default; provided that the failure of Agent to
so notify Circus shall not affect any obligation of Circus hereunder.
2.13 Cooperation With Gaming Boards. Circus agrees
that it shall cooperate with Agent and Lenders to fulfill the
requirements of any Gaming Board with respect to the rights of
Agent and Lenders to enforce and apply any security now or
hereafter held by or for the benefit of Agent or any Lender in
respect of the Obligations, or to exercise any other right or remedy
that Agent or Lenders, or any of them, may have against any such
party.
SECTION 3. REPRESENTATIONS AND WARRANTIES.
In order to induce Lenders and Agent to accept this Make-
Well Agreement and to enter into the Credit Agreement and to
make the Loans thereunder, Circus hereby represents and warrants
to Lenders that the following statements are true and correct:
3.1 Each of the representations and warranties set forth in the
Circus Revolving Loan Agreements is true, correct and complete in
all material respects as if originally made as of the date hereof other
than subsections 4.2, 4.3, 4.4 and 4.11 thereof.
3.2 Authorization of Borrowing, etc.
(a) Authorization of Borrowing. The execution,
delivery and performance of the Loan Documents to which it is a
party have been duly authorized by all necessary corporate action
on the part of Circus.
(b) No Conflict. The execution, delivery and
performance by Circus of the Loan Documents to which it is a
party and the consummation of the transactions contemplated by
the Loan Documents do not and will not (i) violate any provision
of any law or any governmental rule or regulation applicable to
Circus or any of its Subsidiaries, the Certificate of Incorporation
or Bylaws of Circus or any of its Subsidiaries or any order,
judgment or decree of any court or other agency of government
binding on Circus or any of its Subsidiaries, (ii) conflict with,
result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Contractual Obligation of
Circus or any of its Subsidiaries, (iii) result in or require the
creation or imposition of any Lien upon any of the properties or
assets of Circus or any of its Subsidiaries (other than any Liens
created under any of the Loan Documents in favor of Agent on
behalf of Lenders), or (iv) require any approval of stockholders
or any approval or consent of any Person under any Contractual
Obligation of Circus or any of its Subsidiaries.
(c) Governmental Consents. The execution, delivery
and performance by Circus of the Loan Documents to which it is
a party and the consummation of the transactions contemplated
by the Loan Documents do not and will not require any
registration with, consent or approval of, or notice to, or other
action to, with or by, any federal, state or other governmental
authority or regulatory body.
(d) Binding Obligation. Each of the Loan Documents to
which it is a party has been duly executed and delivered by
Circus and is the legally valid and binding obligation of Circus,
enforceable against Circus in accordance with its respective
terms, except as such enforceability may be limited by bankrupt-
cy, insolvency, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by equitable
principles relating to enforceability.
SECTION 4. AFFIRMATIVE COVENANTS.
Circus covenants and agrees that, unless and until all of the
Obligations shall have been paid in full by Circus, Partnership or
otherwise and the Commitments shall have terminated and all
Letters of Credit shall have expired or been cancelled, unless
Requisite Lenders shall otherwise consent in writing:
4.1 Covenants in Circus Revolving Loan Agreements. Circus
shall at all times perform all of its obligations set forth in Article 5
of the Circus Revolving Loan Agreements for the benefit of the
financial institutions party thereto.
4.2 Reporting Requirements. As soon as possible after the
same are available to Circus, and in any event within the time set
for such delivery in the Circus Revolving Loan Agreements, Circus
will deliver to Lenders copies of the documents required to be
delivered under subsections 7.1(a) and 7.2 of the Circus Revolving
Loan Agreements as in effect on the Closing Date notwithstanding
any subsequent amendment, modification or termination thereof.
Circus will promptly and in any event no later than concurrently
with delivery of financial statements pursuant to such subsection
7.1(a), deliver to Lenders written notice of any change in the Senior
Debt Rating (as defined in the Circus Revolving Loan Agreements).
4.3 Bankruptcy. Circus agrees that it shall not commence or
join with any other creditor of Partnership to commence any
bankruptcy, insolvency, reorganization or other similar proceedings
against Partnership.
SECTION 5. MISCELLANEOUS
5.1 Survival of Warranties. All agreements, representations
and warranties made herein shall survive the execution and delivery
of this Make-Well Agreement and the other Loan Documents and
any increase in the Commitments under the Credit Agreement.
5.2 Notices. Any communications between or among Agent,
Circus and Partnership and any notices or requests provided herein
to be given may be given by mailing the same, postage prepaid, or
by telex or facsimile transmission prior to 5:00 P.M. (Pacific Time)
on a Business Day to each such party at its address set forth in the
Credit Agreement, on the signature pages hereof or to such other
addresses as each such party may in writing hereafter indicate. Any
notice, request or demand to or upon Agent, Partnership or Lenders
or Circus under or relating to this Make-Well Agreement shall not
be effective until received.
5.3 Severability. In case any provision in or obligation under
this Make-Well Agreement shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the
remaining provisions or obligations, or of such provision or
obligation in any other jurisdiction, shall not in any way be affected
or impaired thereby.
5.4 Amendments and Waivers. No amendment, modification,
termination or waiver of any provision of this Make-Well
Agreement, or consent to any departure by Circus therefrom, shall
in any event be effective without the written concurrence of all
Lenders under the Credit Agreement. Any waiver or consent shall
be effective only in the specific instance and for the specific
purpose for which it was given.
5.5 Headings. Section and subsection headings in this Make-
Well Agreement are included herein for convenience of reference
only and shall not constitute a part of this Make-Well Agreement
for any other purpose or be given any substantive effect.
5.6 Applicable Law. THIS MAKE-WELL AGREEMENT
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEVADA, WITHOUT
REGARD TO CONFLICTS OF LAWS PRINCIPLES.
5.7 Successors and Assigns. This Make-Well Agreement is a
continuing guaranty and shall be binding upon Circus and its
successors and assigns. This Make-Well Agreement shall inure to
the benefit of Partnership, Lenders, Agent and their respective
successors and assigns. Circus shall not assign this Make-Well
Agreement or any of the rights or obligations of Circus hereunder
without the prior written consent of all Lenders. Any Lender may,
without notice or consent, assign its third-party beneficiary interest
in this Make-Well Agreement in whole or in part. The terms and
provisions of this Make-Well Agreement shall inure to the benefit
of any transferee or assignee of any Loan, and in the event of such
transfer or assignment the rights and privileges herein conferred
upon Lenders and Agent shall automatically extend to and be vested
in such transferee or assignee, all subject to the terms and
conditions hereof.
5.8 Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST CIRCUS
ARISING OUT OF OR RELATING TO THIS MAKE-WELL
AGREEMENT MAY BE BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN
THE STATE OF NEVADA AND BY EXECUTION AND
DELIVERY OF THIS MAKE-WELL AGREEMENT CIRCUS
ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE EXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON
CONVENIENS AND IRREVOCABLY AGREES TO BE
BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH THIS MAKE-WELL AGREEMENT.
Circus hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified
mail, return receipt requested, to Circus at its address provided in
subsection 5.2, such service being hereby acknowledged by Circus
to be sufficient for personal jurisdiction in any action against Circus
in any such court and to be otherwise effective and binding service
in every respect. Nothing herein shall affect the right to serve
process in any other manner permitted by law.
5.9 Waiver of Trial by Jury. CIRCUS AND, BY ITS
ACCEPTANCE OF THE BENEFITS HEREOF,
PARTNERSHIP AND AGENT EACH HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF
ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS MAKE-WELL AGREEMENT. The
scope of this waiver is intended to be all-encompassing of any and
all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation
contract claims, tort claims, breach of duty claims and all other
common law and statutory claims. Circus and, by its acceptance of
the benefits hereof, Partnership and Agent each (i) acknowledges
that this waiver is a material inducement for Circus, Partnership and
Agent to enter into a business relationship, that Circus, Partnership
and Agent have already relied on this waiver in entering into this
Make-Well Agreement or accepting the benefits thereof, as the case
may be, and that each will continue to rely on this waiver in their
related future dealings and (ii) further warrants and represents that
each has reviewed this waiver with its legal counsel, and that each
knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS MAKE-WELL AGREEMENT. In
the event of litigation, this Make-Well Agreement may be filed as a
written consent to a trial by the court.
5.10 No Other Writing. This writing is intended by
Circus, Partnership and Agent as the final expression of this Make-
Well Agreement and is also intended as a complete and exclusive
statement of the terms of their agreement with respect to the matters
covered hereby. No course of dealing, course of performance or
trade usage, and no parol evidence of any nature, shall be used to
supplement or modify any terms of this Make-Well Agreement.
There are no conditions to the full effectiveness of this Make-Well
Agreement.
5.11 Further Assurances. At any time or from time to
time, upon the request of Agent or Requisite Lenders, Circus or
Partnership or both shall execute and deliver such further
documents and do such other acts and things as Agent or Requisite
Lenders may reasonably request in order to effect fully the purposes
of this Make-Well Agreement.
5.12 Partnership Third-Party Beneficiary. Circus and
Agent hereby expressly agree and acknowledge that Partnership is
intended to be an express third-party beneficiary of this Make-Well
Agreement and Partnership shall be entitled to exercise any and all
rights and remedies afforded third-party beneficiaries under the laws
of the relevant jurisdiction.
5.13 Counterparts. This Make-Well Agreement may be
executed in one or more counterparts and by different parties hereto
in separate 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; signature
pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are
physically attached to the same document.
[Remainder of page intentionally left blank]<PAGE>
IN WITNESS WHEREOF,
Circus has caused this Make-
Well Agreement to be duly executed and delivered by its officer
thereunto duly authorized as of the date first written above.
CIRCUS CIRCUS
ENTERPRISES, INC.
By
Title
Address: 2880 Las Vegas
Boulevard South
Las Vegas,
Nevada 89109
Attention:
General Counsel
Accepted by:
FIRST INTERSTATE BANK OF NEVADA, N.A.,
as Agent on behalf of the Lenders
By
Title
Address: 3800 Howard Hughes Parkway, Suite 400
Las Vegas, Nevada 89109
Attention: Steve Byrne
CIRCUS AND ELDORADO
JOINT VENTURE, as express
third-party beneficiary
By: GALLEON, INC.
By:
Title:
Address: c/o Circus Circus Enterprises
2880 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Attention: General Counsel
By: ELDORADO LIMITED LIABILITY COMPANY
Its: general partner
By: ELDORADO HOTEL ASSOCIATES LIMITED
PARTNERSHIP V,
Its: manager
By: RECREATIONAL ENTERPRISES
Its: general partner
By: ____________________________
Title: _________________________
By: HOTEL-CASINO MANAGEMENT
Its: general partner
By: _____________________________
Title: __________________________
Address: c/o Eldorado Hotel Casino
345 North Virginia Street
P.O. Box 3399
Reno, Nevada 89508
Attention: General Counsel
<PAGE>
By: EXECUTIVE COMMITTEE
By:
Title:
By:
Title:
EXHIBIT XV
[FORM OF DEED OF TRUST]
Recording requested by:
and when recorded mail to:
O'Melveny & Myers
400 South Hope Street
Los Angeles, California 90071-2899
Attention: Jack B. Hicks III, Esq.
(267,718-006)
(Space above line is for Recorder's use)
DEED OF TRUST, FIXTURE FILING
AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS
NOTICE: THE OBLIGATIONS SECURED HEREBY INCLUDE REVOLVING CREDIT
OBLIGATIONS WHICH PERMIT BORROWING, REPAYMENT AND
REBORROWING. INTEREST ON OBLIGATIONS SECURED HEREBY ACCRUES AT
RATES WHICH MAY FLUCTUATE FROM TIME TO TIME. THIS INSTRUMENT
SECURES FUTURE ADVANCES. THIS DEED OF TRUST SHALL BE DEEMED TO
BE A CONSTRUCTION MORTGAGE UNDER NEVADA REVISED STATUTES
104.9313(1)(c).
THIS DEED OF TRUST, FIXTURE FILING AND SECURITY
AGREEMENT WITH ASSIGNMENT OF RENTS (this "Deed of
Trust"), made as of the 30th day of May, 1995, by and among CIRCUS
AND ELDORADO JOINT VENTURE, a Nevada general partnership, as
debtor and trustor ("Trustor"), FIRST AMERICAN TITLE COMPANY
OF NEVADA, a Nevada corporation, as trustee ("Trustee"), and FIRST
INTERSTATE BANK OF NEVADA, N.A., as Agent Bank on behalf of
itself and each of the Lenders (as defined and described hereinbelow), as
secured party and beneficiary ("Beneficiary"),
W I T N E S S E T H:
THAT TRUSTOR HEREBY:
Grants, bargains, sells, transfers, conveys and assigns the following
described real property and related collateral to Trustee, IN TRUST, WITH
POWER OF SALE, to have and to hold the same unto Trustee and its
successors in interest, for the benefit of and on behalf of Beneficiary, upon
the trusts, covenants and agreements herein expressed:
DESCRIPTION OF REAL PROPERTY COLLATERAL
All that certain real property, and the interests of Trustor therein,
situate in the County of Washoe, State of Nevada, that is more particularly
described on Part I of that certain exhibit marked Exhibit A, affixed hereto
and by this reference incorporated herein and made a part hereof (the
"Land");
Together with all right, title and interest of Trustor, now owned or
hereafter acquired, in and to any land lying within the right-of-way of any
street, open or proposed, adjoining any of the Land and any and all
sidewalks, bridges, elevated walkways, tunnels, alleys, strips and gores of
land adjacent to, connecting or used in connection with any of the Land,
with appurtenances ("Adjacent Interests");
Together with all buildings, structures and all other improvements
and fixtures that are or may hereafter be erected or placed on or in the Land
and all rights and interests of Trustor in and to all buildings, structures
and
other improvements and fixtures that are or may hereafter be erected or
placed on or in Adjacent Interests (including, but not limited to, Trustor's
rights, title and interests in and to all buildings, structures and other
improvements and fixtures that are or may hereafter be erected or placed on
or in the easement areas, and leased areas, or any of them, referred to in
Part II of Exhibit A) (collectively, the "Improvements"), provided,
however, Trustor and Beneficiary acknowledge that the Skyways (as that
term is defined in the "Credit Agreement" described below) are owned by
entities other than Trustor, and that Trustor's rights, title and interests in
and to the Skyways arise from and under (i) rights of reverter for the air
rights parcels within which the Skyways are located, as provided in two
Grant, Bargain and Sale Deeds executed by Trustor, one in favor of each of
the two entities that own the Skyways, and (ii) certain Bridge Easements
referred to in Part II of Exhibit A and, while Trustor's rights, title and
interests arising from and under such Grant, Bargain and Sale Deeds and
such Bridge Easements are hereby bargained, sold, transferred, conveyed
and assigned to Trustee, in trust, with power of sale, for the benefit of and
on behalf of Beneficiary, the term "Improvements" as used in this Deed of
Trust shall not otherwise include the Skyways;
Together with all and singular the tenements, hereditaments and
appurtenances belonging or in anywise appertaining to any of the Land,
Adjacent Interests, Improvements or Skyways (including, but not limited to,
the easements and other rights referred to in Part II of Exhibit A)
(collectively, the "Appurtenances");
Together with all rents, issues, products, earnings, revenues,
payments, profits, royalties and other proceeds and income of or from any
of the foregoing or of or from any of the Leases, as hereinafter defined
(collectively, the "Rents"), subject, however, in the case of Rents, to the
absolute assignment given to Beneficiary in Section 12 hereof, to which
Section 12 this grant to the Trustee is subject and subordinate;
Together with all leasehold estate, right, title and interest of
Trustor
in and to all leases, subleases, licenses, concessions, franchises and other
use or occupancy agreements (excepting, however, agreements made by
Trustor in the ordinary course of business for short-term use by members of
the public of guest rooms and public rooms, including banquet and meeting
facilities, located in the Improvements), and any amendments, modifications,
extensions or renewals thereof (collectively, "Leases") covering any of the
Land, Adjacent Interests, Improvements, Skyways or Appurtenances, now or
hereafter existing or entered into, and all right, title and interest of
Trustor
thereunder, including, without limitation, the right to all security deposits,
advance rentals, other deposits, and all payments of similar nature, relating
thereto;
Together with all water rights and rights to the use of water now or
hereafter appurtenant to or used in connection with any of the Land,
Adjacent Interests, Improvements or Appurtenances ("Water Rights");
Together with any and all other estate, right, title, interest,
property,
possession, claim or demand, in law or in equity, which Trustor now has or
may hereafter acquire in or to any of the Land, Adjacent Interests,
Improvements, Skyways, Appurtenances, Rents, Leases and Water Rights,
or pertaining or appurtenant thereto, and all reversions and remainders
thereof, and all tenements, hereditaments and appurtenances thereunto
belonging or in any wise appertaining thereto ("Other Interests") (said
Land, Adjacent Interests, Improvements, Appurtenances, Rents, Leases,
Water Rights and Other Interests may be referred to herein as the "Real
Property"); and
THAT TRUSTOR HEREBY:
Grants a security interest, pursuant to the Nevada Uniform
Commercial Code -- Secured Transactions, to Beneficiary, on the terms and
provisions (by this reference incorporated herein with respect to the security
interest herein granted and the rights and obligations of the parties with
respect to the Personal Property, as hereinafter defined, but for no other
purpose) set forth in that certain Security Agreement dated as of even date
herewith by and between Trustor, as Grantor and Debtor, and Beneficiary,
as Secured Party (the "Security Agreement"), in all of the following
described personal property, and the interests of Trustor therein, whether
now owned or hereafter acquired (collectively, the "Personal Property"):
DESCRIPTION OF PERSONAL PROPERTY COLLATERAL
(a) All present and future chattels, furniture, furnishings,
goods, equipment, fixtures and all other tangible personal property, of
whatever kind and nature, now or hereafter used in connection with or
placed or located in or on any part of the Real Property (including, without
limitation, any building or structure that is now or that may hereafter be
erected on the Real Property, and including any of the foregoing owned by
Trustor and placed or located in or on the Skyways), including, but not
limited to, machinery, materials, goods and equipment now or hereafter
used in the construction or operation of the hotel, casino, restaurant,
entertainment and shopping complex constructed and to be constructed on
the Real Property or portions thereof (the "Project") (including, without
limitation, air conditioning, heating, electrical, lighting, fire fighting
and fire
prevention, food and beverage service, laundry, plumbing, refrigeration,
security, sound, signaling, telephone, television, window washing and other
equipment and fixtures, of whatever kind or nature, including generators,
transformers, switching gear, boilers, burners, furnaces, piping, sprinklers,
sinks, tubs, valves, compressors, motors, carts, dumb waiters, elevators and
other lifts, floor coverings, hardware, keys, locks, organs, pianos, planters,
railings, scales, shelving, signs, tools, machinery, molds, dies, drills,
presses, planers, saws, furniture, business fixtures, trade fixtures,
electric,
gas and other motor vehicles, uniforms, vacuum cleaners, hotel furniture,
furnishings and equipment, bathroom furniture and furnishings (including
towels, bathmats, hamperettes, shower curtains and other bath linens), beds
and bedding (including mattresses, springs, pillows, bed pads, sheets,
blankets, comforters, spreads and other bed linens and furnishings), bric-a-
brac, chairs, chests, vanities, secretaries, bureaus, chiffonniers, love
seats,
benches, costumers, smoking stands, sand jars, desks, dressers, hangings,
paintings, pictures, frames, sculptures, lamps, light bulbs, mirrors, night
stands, ornaments, radios, stereo equipment, sofas, statuary, tables,
telephones, televisions, vases, window coverings, foodstuffs, beverages
(including beer, wine, liquor and other alcoholic beverages), and other
consumables (including soap, shampoo, cleaning supplies and paper goods),
cutlery, cooking, baking and other kitchen utensils and apparatus (including
crockery, fryers, grills, kettles, mixers, pots, pans, pails, racks, steamers
and toasters), china and other dishes, flatware, glassware, hollowware,
serving pieces, trays, table linens, washers, dryers, irons, ironing boards
and other ironing equipment, cables, outlets, plugs, wiring and related
apparatus and fixtures, card readers, cash registers, adding machines,
calculators, computers, keyboards, monitors, printers, printing equipment,
envelopes, stationary, posting machines, blank forms, typewriters,
typewriter stands, other office and accounting equipment and supplies, time
stamps, time recorders, bookkeeping machines, checking machines, payroll
machines, computer reservations systems, equipment used in the operation
of casinos on the Real Property (including but not limited to, gaming devices
and associated equipment (as defined in Nevada Revised Statutes Chapter
463), including but not limited to, slot machines, cards, poker chips and
gaming tables) and all other goods, equipment, furnishings, apparatus and
fixtures that are now or may hereafter be located at or used at or in
connection with the Real Property) and all other tangible personal property
used or to be used at or in connection with, or placed or to be placed in,
rooms, halls, lounges, offices, lobbies, lavatories, basements, cellars,
vaults
or other portions of the Project or of any other building or buildings
hereafter constructed or erected thereon, whether herein enumerated or not,
and whether or not contained in any such building, and which are used or to
be used or useful in the operation and maintenance thereof, or in any bar,
casino, hotel, restaurant, store, health spa, salon or other business
conducted
thereon, together with all replacements and substitutions for any and all
personal property in which Trustor has an interest, including without
limitation such goods and equipment as shall from time to time be located,
placed, installed or used in or upon, or procured for use, or to be used or
useful in connection with the operation of the whole, or any part of, the
Project and all parts thereof and all accessions thereto;
(b) All present and future goods, including, without limitation,
all consumer goods, inventory, equipment (excluding, however, any
"Equipment" pledged to secure "Other Permitted Indebtedness" (as such
initially capitalized terms are defined in the Credit Agreement) incurred to
finance the purchase of such Equipment, pursuant to a pledge in form, scope
and substance satisfactory to Beneficiary), and other supplies, of whatever
kind or nature, and any and all other goods, wherever located, used or to be
used in connection with or in the conduct of Trustor's business;
(c) All present and future inventory and merchandise in all of
its forms (including, but not limited to, (i) all goods held by Trustor for
sale
or lease or to be furnished under contracts of service or so leased or
furnished, (ii) all raw materials, work in process, finished goods, and
materials used or consumed in the manufacture, packing, shipping,
advertising, selling, leasing, furnishing or production of such inventory or
otherwise used or consumed in Trustor's business, (iii) all goods in which
Trustor has an interest in mass or a joint or other interest or right of any
kind, (iv) all goods that are returned to or repossessed by Trustor, and (v)
all packing materials, supplies and containers relating to or used in
connection with any of the foregoing, and all accessions thereto and products
thereof and all negotiable documents of title (including without limitation
warehouse receipts, dock receipts and bills of lading) issued by any person
covering any of the foregoing;
(d) All present and future accounts, accounts receivable, rentals,
revenues, receipts, payments, and income of any other nature whatsoever
derived from or received with respect to hotel rooms, banquet facilities,
convention facilities, retail premises, bars, restaurants, casinos and any
other
facilities on the Real Property and any facilities in the Skyways leased by
Trustor, agreements, contracts, leases, contract rights, rights to payment
(including, without limitation, rights to payment under the Make-Well
Agreement, as that term is defined in the Credit Agreement), instruments,
documents, chattel paper, security agreements, guaranties, undertakings,
surety bonds, insurance policies, condemnation deposits and awards, notes
and drafts, securities, certificates of deposit and the right to receive all
payments thereon or in respect thereof (whether principal, interest, fees or
otherwise), contract rights (other than rights under contracts or governmental
permits that may not be transferred by law), including, without limitation,
rights to all deposits from tenants and other users of the Project or
facilities
in the Skyways leased by Trustor, rights under all contracts relating to the
construction, renovation or restoration of any of the improvements now or
hereafter located on the Real Property or the financing thereof and all rights
under payment or performance bonds, warranties, and guaranties, and all
rights to payment from any credit/charge card organization or entity such as
or similar to, and including, without limitation, the organizations or
entities
that sponsor and administer, respectively, the American Express Card, the
Carte Blanche Card, the Diners Club Card, the Discover Card, the
MasterCard and the Visa Card, books of account, and principal, interest and
payments due on account of goods sold, services rendered, loans made or
credit extended, on or in connection with the Project and all forms of obliga-
tions owing to and rights of Trustor or in which Trustor may have any
interest, however created or arising;
(e) All present and future general intangibles (including but not
limited to all governmental permits relating to construction or other
activities
on the premises), all tax refunds of every kind and nature to which Trustor
now or hereafter may become entitled, however arising, all other refunds,
and all deposits, goodwill, chooses in action, rights to payment or
performance, gambling debts or gaming debts owed to Trustor by Trustor's
patrons (whether or not evidenced by a note), judgments taken on any rights
or claims included in the Property (as hereinafter defined), trade secrets,
computer programs, software, customer lists, business names, trademarks,
trade names and service marks (including, but not limited to: "Silver Legacy
Hotel Casino" and any derivation thereof, including any and all state and
federal applications and registrations thereof), patents, patent applications,
licenses, copyrights, technology, processes, proprietary information and
insurance proceeds;
(f) All present and future deposit accounts of Trustor,
including, without limitation, the Circus and Eldorado Joint Venture
Account maintained at the office of Beneficiary, any demand, time, savings,
passbook or like account maintained by Trustor with any bank, savings and
loan association, credit union or like organization, and all money, cash and
cash equivalents of Trustor, whether or not deposited in any such deposit
account;
(g) All present and future books and records, including, without
limitation, books of account and ledgers of every kind and nature, ledger
cards, computer programs, tapes, disks and other information storage
devices, all related data processing software, and all electronically recorded
data relating to Trustor or its business or the Project, all receptacles and
containers for such records, and all files and correspondence;
(h) All present and future stocks, bonds, debentures, securities,
subscription rights, options, warrants, puts, calls, certificates, partnership
interests, joint venture interests, investments, brokerage accounts and all
rights, preferences, privileges, dividends, distributions, redemption payments
and liquidation payments received or receivable with respect thereto;
(i) All present and future right, title and interest of Trustor in
and to all Leases, whether or not specifically herein described, that now or
may hereafter pertain to or affect the Real Property or any portion thereof,
or the Skyways, and all amendments to the same, including, but not limited
to, the following: (aa) all payments due and to become due under such
Leases, whether as rent, damages, insurance payments, condemnation
awards, or otherwise; (bb) all claims, rights, powers, privileges and
remedies under such Leases; and (cc) all rights of the Trustor under such
Leases to exercise any election or option, or to give or receive any notice,
consent, waiver or approval, or to accept any surrender of the premises or
any part thereof, together with full power and authority in the name of the
Trustor, or otherwise, to demand and receive, enforce, collect, and receipt
for any or all of the foregoing, to endorse or execute any checks or any
instruments or orders, to file any claims, and to take any other action that
Beneficiary may deem necessary or advisable in connection therewith;
(j) All present and future maps, plans, specifications, surveys,
studies, reports, data and drawings (including, without limitation,
architectural, structural, mechanical and engineering plans and
specifications, studies, data and drawings) prepared for or relating to the
development of the Project and the Skyways or the construction, renovation
or restoration of any improvements on the Real Property or the extraction of
minerals, sand, gravel or other valuable substances from the Real Property,
together with all amendments and modifications thereto;
(k) All present and future licenses, permits, variances, special
permits, franchises, certificates, rulings, certifications, validations,
exemptions, filings, registrations, authorizations, consents, approvals,
waivers, orders, rights and agreements (including options, option rights and
contract rights), other than those (including non-transferable gaming permits)
that may not be transferred by law, now or hereafter obtained by Trustor
from any governmental authority having or claiming jurisdiction over the
Project, the Real Property or any other element of the Property or the
Skyways or providing access thereto, or the operation of any business on,
at, or from the Project or the Skyways;
(l) All present and future accessions, appurtenances,
components, repairs, repair parts, spare parts, replacements, substitutions,
additions, issue and improvements to or of or with respect to any of the
foregoing;
(m) All other fixtures and storage and office facilities, and all
accessions thereto and products thereof and all water stock relating to the
Real Property;
(n) All other tangible and intangible personal property of
Trustor;
(o) All rights, remedies, powers and privileges of Trustor with
respect to any of the foregoing; and
(p) Any and all proceeds, products, rents, income and profits of
any of the foregoing, including, without limitation, all money, accounts,
general intangibles, deposit accounts, documents, instruments, chattel paper,
goods, insurance proceeds (whether or not the Beneficiary is the loss payee),
and any other tangible or intangible property received upon the sale or
disposition of any of the foregoing (it being agreed, for purposes hereof,
that
the term "proceeds" includes whatever is receivable or received when any of
the Property is sold, collected, exchanged or otherwise disposed of, whether
such disposition is voluntary or involuntary). Notwithstanding anything to
the contrary contained herein, Beneficiary acknowledges that it has no
security interest in (x) any cash of Trustor described in clauses (e), (f) and
(h) above, to the extent such a security interest is prohibited by any Gaming
Laws (as defined in the Credit Agreement), or (y) any deposit account
described in clause (f) above, to the extent such a security interest is not
permitted by applicable law.
(The Real Property, the Personal Property and all of the other
collateral described above may hereinafter be collectively referred to as the
"Property".)
FOR THE PURPOSE OF SECURING:
First: Payment when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including
payment of amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
section 362(a)), of all obligations and liabilities of every nature of Trustor
now or
hereafter existing under or arising out of or in connection with that certain
Credit Agreement executed concurrently herewith by Trustor, as Borrower,
First Interstate Bank of Nevada, N.A., The Long Term Credit Bank of
Japan, Ltd., Los Angeles Agency, and Societe Generale, as managing
agents, Bank of America, N.T.&S.A., CIBC Inc. and Credit Lyonnais, Los
Angeles Branch, as co-agents, the Lenders listed therein as lenders (the
"Lenders") and First Interstate Bank of Nevada, N.A., as Arranger and
Administrative Agent, together with any and all renewals, extensions,
amendments, modifications, rearrangements, replacements, restatements,
substitutions and addendums thereof or thereto (herein referred to as the
"Credit Agreement"), or the promissory notes issued to the Lenders to
evidence such obligations and liabilities, together with any and all renewals,
extensions, amendments, modifications, rearrangements, replacements,
restatements, substitutions and addendums thereof or thereto (herein referred
to as the "Notes"), whether for principal in the amount of Two Hundred
Thirty Million Dollars ($230,000,000) or such principal amount as may be
advanced and remain unpaid or for interest (including, without limitation,
interest that, but for the filing of a petition in bankruptcy with respect to
Trustor, would accrue on such obligations), reimbursement of amounts
drawn under letters of credit, fees, expenses, indemnities or otherwise,
whether voluntary or involuntary, direct or indirect, absolute or contingent,
liquidated or unliquidated, whether or not jointly owed with others, and
whether or not from time to time decreased or extinguished and later
increased, created or incurred, and all or any portion of such obligations or
liabilities that are paid, to the extent all or any part of such payment is
avoided or recovered directly or indirectly from Beneficiary or any such
Lender as a preference, fraudulent transfer or otherwise.
Second: Payment and performance of every obligation, covenant,
promise and agreement of Trustor herein contained (excepting, however, the
obligations of Trustor under Section 5(c) hereof), or incorporated herein by
reference, including any sums paid or advanced by Beneficiary or Trustee
pursuant to the terms hereof.
Third: Payment of the expenses and costs incurred or paid by
Beneficiary in the preservation and enforcement of the rights and remedies
of Beneficiary and the duties and liabilities of Trustor hereunder, including,
but not by way of limitation, reasonable attorneys' fees, court costs,
reasonable witness fees, reasonable expert witness fees, reasonable collection
costs, Trustee's fees and costs of a Trustee's Sale Guarantee, and costs and
expenses paid by Beneficiary in performing for Trustor's account any
obligation of Trustor.
Fourth: Payment of additional sums and interest thereon which
may hereafter be loaned to Trustor by the Lenders when evidenced by a
promissory note or notes or other agreement between Trustor and the
Lenders that recites that this Deed of Trust is security therefor.
Fifth: Performance of every obligation, warranty, representation,
covenant, agreement and promise of Trustor contained in the Credit
Agreement.
The foregoing are described herein as the "Secured Obligations".
All persons who may have or acquire an interest in all or any part of the
Property will be considered to have notice of, and will be bound by, the
terms of the Secured Obligations and each other agreement or instrument
made or entered into in connection with each of the Secured Obligations.
Such terms include any provisions in the Notes or the Credit Agreement
which permit borrowing, repayment and reborrowing, or the making of
future advances, or which provide that the interest rate on one or more of
the Secured Obligations may vary from time to time.
THIS DEED OF TRUST FURTHER WITNESSETH THAT, IN
CONNECTION WITH AND IN FURTHERANCE OF THE
FOREGOING GRANTS, AND THE ENCUMBRANCES, LIENS AND
SECURITY INTERESTS CREATED THEREBY, TRUSTOR
COVENANTS AND AGREES AS FOLLOWS:
1. Certain Representations and Warranties of Trustor.
Trustor represents, warrants and covenants that, except as set forth in the
Credit Agreement or as previously disclosed to Beneficiary in a writing
making reference to this Section 1:
(a) Trustor lawfully possesses and holds fee simple title
to all of the Land and Improvements;
(b) Trustor has or will have good title to all Property
other than the Land and Improvements;
(c) Trustor has the full and unlimited partnership
power, right and authority to encumber the Property and assign the
Rents;
(d) This Deed of Trust creates a first priority deed of
trust lien on the Property, subject only to the Permitted Encumbrances
(as defined in the Credit Agreement);
(e) The Property includes all property and rights which
may be reasonably necessary to promote the present and any reasonable
future beneficial use and enjoyment of the Land, the Improvements and
the Project;
(f) Trustor owns (or, with respect to any Personal
Property acquired by Trustor after the date hereof, will own) the
Personal
Property free and clear of any security agreements, reservations of
title
or conditional sales contracts and there is no financing statement
affecting
the Personal Property on file in any public office other than one filed
to
perfect the Security Interest herein granted; and
(g) Trustor's place of business, or its chief executive
office if it has more than one place of business, is located at the
address
of Trustor specified in the Credit Agreement.
2. Payment of Obligations. Trustor shall pay when due the
principal of and interest on the indebtedness evidenced by the Notes; all
charges, fees and other sums as provided in the Loan Documents (as defined
in the Credit Agreement); the principal of and interest on any future
advances secured by this Deed of Trust; and the principal of and interest on
any other indebtedness secured by this Deed of Trust.
3. Compliance with Laws. Trustor shall not commit, suffer
or permit any act to be done, or condition to exist, on, or with respect to,
the Property which violates or is prohibited by any law, statute, code, act,
ordinance, order, judgment, decree, injunction, rule, regulation, permit,
license, authorization or direction of any government or subdivision thereof,
whether it be federal, state, county or municipal (collectively, "Legal
Requirements"), which is applicable to the Property, or any part thereof,
now or at any time hereafter, if such violation or prohibited act or condition
could reasonably be expected to have or cause a Material Adverse Effect (as
defined in the Credit Agreement).
4. Maintenance of Property. Trustor agrees: (a) properly to
care for and keep said Property in good condition and repair, ordinary wear
and tear excepted; (b) not to remove, demolish or substantially alter any
building on the Real Property, or permit the removal, demolition or
substantial alteration of the Skyways (except as may otherwise be permitted
in the Bridge Easements referred to in Part II of Exhibit A), except upon the
prior written consent of Beneficiary, provided that neither this clause (b)
nor
any other provision of this Deed of Trust shall alter, modify, supersede or
limit the provisions of the Credit Agreement, or any party's rights and
obligations thereunder, relating to the construction of the Project; (c) to
complete promptly and in a good and workmanlike manner any building or
other improvement which may be constructed thereon, to restore promptly in
like manner any portion of the Improvements (and to cause the prompt
restoration of the Skyways) which may be damaged or destroyed from any
cause whatsoever (provided that if, pursuant to Section 7(c) below,
Beneficiary is to apply insurance proceeds to the restoration of the Property
but fails to do so, such failure shall excuse Trustor's obligation under this
clause (c) but only to the extent of the insurance proceeds withheld by
Beneficiary) and to pay when due all claims for labor performed and
materials furnished therefor (subject to Trustor's right to contest the
validity
or amount of such lien in accordance with Section 9 below); (d) to comply
(or, with respect to the Skyways, cause the compliance) with all Legal
Requirements and covenants, conditions and restrictions (including any
which require alteration or improvement thereof) now or hereafter affecting
the Property or any part thereof or the Skyways if such noncompliance could
reasonably be expected to have or cause a Material Adverse Effect, and with
all requirements of insurance companies insuring the Property or any portion
thereof or the Skyways and of any bureau or agency which establishes
standards of insurability; (e) not to commit or permit any waste or
deterioration of the Property or the Skyways; (f) to keep and maintain
abutting grounds, sidewalks, roads, parking and landscaped areas in good
and neat order and repair; (g) not to apply for, willingly suffer or permit
any change in zoning, subdivision, or land use regulations affecting the
Property or the Skyways without the prior written consent of Beneficiary,
other than any such change that is beneficial to the Property (with the
beneficial nature of any such change to be determined in Beneficiary's
reasonable judgment); (h) not to drill or extract or enter into any lease for
the drilling for or extraction of oil, gas or other hydrocarbon substances or
any mineral of any kind or character on or from the Property or any part
thereof without the prior written consent of Beneficiary; and (i) to do (or,
with respect to the Skyways, to cause to be done) all other acts, in a timely
and proper manner, which, from the character or use of the Property or the
Skyways, may be reasonably necessary to maintain and preserve its value,
the specific enumerations herein not excluding the general. With respect to
any matter in this Section 4 requiring Beneficiary's prior consent, Trustor
shall submit to Beneficiary a written request for such consent (together with
such information and documentation as appropriate to enable Beneficiary to
make an informed decision regarding such request), and Beneficiary will
have thirty (30) days after receipt thereof in which to review and respond to
such request. If Beneficiary fails to respond to Trustor's request within
said
thirty (30) day period, Trustor may resubmit its request in writing, stating
that Beneficiary failed to respond to the initial request within said thirty
(30)
day period and, if Beneficiary thereafter fails to respond to such request
within five (5) days, Beneficiary shall be deemed to have consented thereto.
5. Environmental Obligations.
(a) Trustor shall exercise due diligence in order to comply with
any and all Environmental Laws (as hereinafter defined) regarding the
presence or removal of Hazardous Material on or in the Property, shall pay
immediately, when due, the costs of removal from the Property and disposal
of any Hazardous Material which is required to be removed pursuant to any
Environmental Laws and shall keep the Property free of any lien which may
arise pursuant to any such Environmental Laws. Trustor shall not, and shall
use its best efforts to not permit any person or entity to, release,
discharge,
or dispose of any Hazardous Material on the Real Property except in
compliance with all Environmental Laws and, if the same shall exist,
Trustor shall immediately remove or cause to be removed from the Real
Property such Hazardous Material to the extent required to be removed
pursuant to any Environmental Laws.
(b) As used herein, the term "Hazardous Material" shall
means: (i) any chemical, material or substance at any time defined as or
included in the definition of "hazardous substances", "hazardous materials",
hazardous wastes", "extremely hazardous waste", "restricted hazardous
waste", "infectious waste", "toxic substances" or any other formulations
intended to define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
toxicity, reproductive toxicity, "TCLP toxicity" or "EP toxicity" or words of
similar import under any applicable Environmental Law or publication
promulgated pursuant thereto; (ii) any oil, petroleum, petroleum fraction or
petroleum derived substance; (iii) any drilling fluid, produced water or other
waste associated with the exploration, development or production of crude
oil, natural gas or geothermal resources; (iv) any flammable substance or
explosive; (v) any radioactive material; (vi) asbestos in any form; (vii) urea
formaldehyde foam insulation; (viii) electrical equipment which contains any
oil or dielectric fluid containing poly-chlorinated biphenyls; (ix) any
pesticide; (x) all hazardous substances defined in NRS 40.504 ("NRS"
means Nevada Revised Statutes), and (xi) any other chemical, material or
substance exposure to which is prohibited, limited or regulated by any
Federal, state, local or other governmental authority or which may or could
pose a hazard to human health or safety or the environment if released into
the workplace or the environment; the term "Environmental Law" means
any statute, ordinance, order, rule, regulation, plan, policy, decree, permit,
guidance document, or other requirement of any Federal, state, local or
other governmental authority relating to: (aa) environmental matters,
including, without limitation, those relating to fines, injunctions,
penalties,
damages, contribution, cost recovery compensation, losses or injuries
resulting from the Release or threatened Release of Hazardous Material, (bb)
the presence, generation, use, storage, transportation or disposal of
Hazardous Material, or (cc) occupational safety and health, industrial
hygiene, land use or the protection of human, plant or animal health or
welfare, in any manner applicable to any of the Property, including, without
limitation, the Comprehensive Environmental Response, Compensation and
Liability Act (42 U.S.C. section 9601 et seq.), the Hazardous Materials
Transportation Act (49 U.S.C. section 1801 et seq.), the Resource Conservation
and Recovery Act (42 U.S.C. section 6901 et seq.), the Federal Water Pollution
Control Act (33 U.S.C. section 1251 et seq.), the Clean Air Act (42 U.S.C.
section 7401 et seq.), the Federal Insecticide, Fungicide, and Rodenticide
Act (7 U.S.C. section 136 et seq.), the Occupational Safety and Health Act
(29 U.S.C. section 651 et seq.) and the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. section 11001 et seq.), each as amended and
supplemented, and any analogous future or present local, state and federal
statutes, ordinances and other laws, and rules and regulations promulgated
pursuant thereto, each as in effect as of the date of determination; and
the term "Release" means
any release, spill, emission, leaking, pumping, pouring, injection, escaping,
deposit, disposal, dispersal, dumping, leaching or migration of Hazardous
Material into the indoor or outdoor environment (including, without
limitation, the abandonment or disposal of any barrels, containers or other
closed receptacles containing any Hazardous Material), or into or out of any
of the Property, including the movement of any Hazardous Material through
the air, soil, surface, water, groundwater or property.
(c) Trustor hereby agrees to indemnify, hold harmless and
defend (by counsel of Beneficiary's choice) Beneficiary, its directors,
officers, employees, agents, successors and assigns from and against any and
all claims, losses, damages, demands, liabilities, fines, penalties,
assessments, charges, administrative and judicial proceedings and orders,
judgments, remedial action requirements, enforcement actions of any kind,
and all costs and expenses incurred in connection therewith (including but
not limited to reasonable attorneys' and consultants' fees and expenses),
arising directly or indirectly, in whole or in part, out of (i) the presence
on or under the Property (including, but not limited to, the surrounding
streets and sidewalks) of any Hazardous Material (including, without
limitation, the
existence in the aquifer underlying the Property and other portions of Reno,
Nevada, or in soils affecting that aquifer, of PCE (tetrachloroethylene) and
hydrocarbons, or either of them on or prior to the "Transfer Date" (as such
term is defined in the "Environmental Indemnity" described in Section 45
below), or any Release of any Hazardous Material on, under or from the
Property on or prior to the Transfer Date, or (b) any activity carried on or
undertaken on or off the Property on or prior to the Transfer Date, whether
by Trustor or any employees, agents, contractors or subcontractors of
Trustor or any third persons occupying or present on the Property, in
connection with the use, holding, handling, treatment, removal, storage,
decontamination, cleanup, transport, Release, generation, processing or
abatement of any Hazardous Material located or present in, on or under the
Property (including, but not limited to, the surrounding streets and
sidewalks). The foregoing indemnity shall further apply to any residual
contamination in, on or under the Property (including, but not limited to, the
surrounding streets and sidewalks), or affecting any natural resources, and to
any contamination of any property or natural resources arising in connection
with the generation, use, holding, handling, treatment, removal,
decontamination, cleanup, storage, transport, Release, processing or
abatement of any such Hazardous Material on or prior to the Transfer Date,
and irrespective of whether any of such activities are undertaken in
accordance with applicable Environmental Laws, but shall not include, with
respect to any particular indemnitee and loss, that portion, if any, of that
loss which was caused by the gross negligence or wilful misconduct of that
indemnitee. Trustor hereby acknowledges and agrees that, notwithstanding
any other provision of this Deed of Trust to the contrary, the obligations of
Trustor under this Section 5(c) shall be unlimited personal obligations of
Trustor, shall not be secured by this Deed of Trust and shall survive any
foreclosure under this Deed of Trust, any transfer in lieu thereof, and any
satisfaction of the Secured Obligations.
6. Insurance.
(a) Types and Amounts Required. During the continuance of
this Trust, Trustor shall at all times provide, maintain and keep in force, at
no expense to Trustee or Beneficiary, for the benefit of Trustor and
Beneficiary, as their respective interests may appear, the following policies
of insurance:
(i) During the course of any construction or
repair of Improvements on the Property, (x) builder's completed
value risk insurance against "all risks of physical loss" (including
fire and extended coverage, and endorsements extending coverage
for vandalism and malicious mischief, collapse and property in
transit, offsite storage, delay of opening (business interruption),
demolition and debris removal, flood, and, if reasonably available,
earthquake), in non-reporting form, covering 100% of the
anticipated construction cost, including "soft costs," with not more
than $250,000 deductible from the loss payable for any casualty and
no more than fourteen (14) days for delay of opening; said policy to
contain a "permission to occupy upon completion of work or
occupancy" endorsement and waiver of subrogation endorsement
acceptable to Beneficiary, and replacement cost coverage in an
agreed amount, and (y) an "owner/contractor protective liability"
policy, providing separate liability coverage for Trustor and
Beneficiary, with a limit of not less than $10,000,000;
(ii) Insurance against loss or damage to the
Improvements and Personal Property by fire and any of the other
risks covered by insurance of the type now known as "all risks of
physical loss" (including flood, and, if reasonably available,
earthquake coverage) in an amount not less than 100% of the then
replacement cost of the Improvements and Personal Property
(exclusive of the cost of excavations, pilings, foundations, footings
and other underground improvements lying below the lowest
basement level) without deduction for physical depreciation; with an
Agreed Amount endorsement (waiving co-insurance), a Replacement
Cost Valuation endorsement, a waiver of subrogation endorsement,
coverage for the cost of removing damaged property, and, if
Beneficiary shall so require, coverage for demolition and increased
cost of construction occasioned by operation of any law or ordinance
regulating the construction, use or repair of the Improvements; and
with not more than $250,000 deductible per occurrence and
$1,000,000 for the perils of flood and earthquake, if a sub-
deductible applies (and Trustor shall cause similar casualty insurance
to be carried by the owners of the Skyways in accordance with the
provisions of the Bridge Easements referred to in Part II of Exhibit
A);
(iii) Mechanical breakdown insurance (also known
as "boiler and machinery" insurance) covering pressure vessels, air
tanks, boilers, machinery, pressure piping, heating, air conditioning
and elevator equipment and escalator equipment, if the
Improvements contain equipment of such nature, and insurance
against loss of occupancy or use arising from any such breakdown,
written on a comprehensive form with a combined direct and
indirect limit of $50,000,000; the policy shall include an Agreed
Amount endorsement (waiving co-insurance), a Replacement Cost
Valuation endorsement, and coverage for increased cost of
construction occasioned by operation of any law or ordinance
regulating the construction, use or repair of the Improvements; the
policy may contain deductibles of no greater than $250,000 for
direct damage and forty-eight (48) hours for indirect loss;
(iv) Comprehensive general liability insurance
(1973 Form), written on an "occurrence basis," against claims for
death, bodily injury, personal injury and property damage occurring
in, on or about the Real Property or the adjoining streets, sidewalks
and passageways (including, without limitation, the Skyways), or
arising from or connected with the use, conduct or operation of
Trustor's business or interest (including, without limitation, products
liability coverage; blanket contractual liability coverage, including
both oral and written contracts; broad form property damage
coverage; coverage against liability for injury or property damage
arising out of the use, by or on behalf of the Trustor or any other
person or organization, of any owned, non-owned, leased or hired
automotive equipment in the conduct of any and all operations of
Trustor; coverage for "liquor legal liability," "innkeepers legal
liability," "safe deposit legal liability," and "employee benefits legal
liability;" coverage for all professional liability exposures associated
with the operation of the health spa; coverage for those hazards
commonly known in the insurance industry as explosion, collapse
and underground property damage; and owners' and contractors'
protective coverage), such insurance to afford combined single limit
protection of not less than $1,000,000 per occurrence; if such policy
contains a self-insured retention, (A) such self-insured retention shall
be no greater than $100,000 per occurrence, with an aggregate of
$1,500,000 for all losses (including expenses) within the self-insured
retention, and (B) Trustor shall be solely responsible for the
payment of all amounts due within said self-insured retention, and
the indemnification provisions contained in this Deed of Trust shall
include all liability associated with said self-insured retention;
(v) Comprehensive business automobile liability
insurance, written under Coverage Symbol "1," covering all
owned, non-owned and hired or borrowed vehicles of Trustor used
in connection with any of the construction, maintenance and
operation of the Improvements, naming Trustor as the named
insured and covering Beneficiary as additional insured, insuring
against liability for bodily injury and death and/or for property
damage in an amount not less than $1,000,000 combined single limit
per accident; (if the policy contains a self-insured retention, (A)
such self-insured retention shall be no greater than $100,000 per
occurrence, with an aggregate limit of $1,500,000 for all losses
(including expenses) within the self-insured retention, and (B)
Trustor shall be solely responsible for the payment of all amounts
due within said self-insured retention, and the indemnification
provisions contained in this Deed of Trust shall include all liability
associated with said self-insured retention); in addition to said
automobile liability insurance, Trustor must provide, maintain and
keep in effect (x) garage liability insurance, providing $1,000,000
combined single limit for bodily injury and property damage for the
parking garage operation, and (y) garagekeepers legal liability
insurance, providing $1,000,000 limit for comprehensive and
collision coverages for physical damage to vehicles in Trustor's
care, custody and control, with a deductible no greater than $2,500
for each automobile and $25,000 for each loss;
(vi) A standard Worker's Compensation policy
covering the State of Nevada and Employer's Liability coverage
subject to a limit of no less than $500,000 for each employee,
$500,000 for each accident, and a $500,000 policy limit, which
policy shall include endorsements for Voluntary Compensation and
Employer's Liability Coverage and Stop Gap Liability; if Trustor
elects to self-insure Worker's Compensation coverage in the State of
Nevada, Beneficiary must be furnished with a copy of the certificate
from the state permitting self insurance and evidence of a stop loss
Excess Worker's Compensation policy with a specific retention of
no greater than $300,000.
(vii) An Umbrella Liability policy with a limit of
no less than $75,000,000 providing excess coverage over all limits
and coverages set forth in paragraphs (iv), (v) and (vi) above, which
limits can be obtained by a combination of Primary and Excess
Umbrella policies, provided that all layers follow form with the
underlying policies set forth in paragraphs (iv), (v) and (vi) and are
written on an "occurrence form;"
(viii) Business interruption insurance/extra expense
and loss of "rental value" insurance, including coverage for off-
premises power losses and an extended period of indemnity
endorsement for at least 180 days, in an amount representing not
less than 100% percent of the annual net profit plus continuing
expenses (including debt service) for the Project, as such net profit
and continuing expenses are reasonably projected by Trustor and
consented to by Beneficiary (or, in the absence of such a projection,
as reasonably projected by Beneficiary), with a deductible of no
greater than seventy-two (72) hours, or $250,000 if a separate
deductible applies ($1,000,000 for the perils of flood and
earthquake);
(ix) If the Property is located in an area identified
by the Secretary of Housing and Urban Development as a flood
hazard area and in which flood insurance has been made available
under the National Flood Insurance Act of 1968, flood insurance
covering the Improvements, in an amount, available under the Act,
satisfactory to Beneficiary;
(x) A comprehensive crime policy, including the
following coverages: (A) Employee Dishonesty: $5,000,000; (B)
Money & Securities (inside): $2,000,000; (C) Money & Securities
(outside): $2,000,000; (D) Depositors Forgery: $2,500,000; and (E)
Computer Fraud: $2,500,000; such policy shall be amended so that
the term "money" is defined therein to include "chips," the policy
may contain deductibles of no more than $500,000 for Employee
Dishonesty and $250,000 for all other agreements listed above; and
(xi) Such other insurance and in such amounts, and
such additional amounts of the foregoing insurance, as may
reasonably be required by Beneficiary, from time to time, due
consideration being given to standard practices in the industry and to
the risks involved in Trustor's business, operations or interest.
(b) Uniform Policy Requirements. All policies of
insurance required by the terms of this Deed of Trust:
(i) shall be issued by insurance companies
licensed and admitted to do business in the State of Nevada, and
rated no lower than A XII in the most recent edition of A.M. Best's
and AA in the most recent edition of Standard & Poor's, and in
such form and amounts as are reasonably satisfactory to Beneficiary
from time to time;
(ii) shall contain an endorsement or agreement by
the insurer that any loss shall be payable in accordance with the
terms of such policy notwithstanding any act, failure to act,
negligence or breach of representation or warranty of Trustor, or of
any party holding under Trustor, which might otherwise result in
forfeiture of said insurance;
(iii) shall contain a waiver by the insurer of all
rights of setoff, counterclaim and deduction against Trustor;
(iv) shall contain a waiver of subrogation by the
insurer in favor of Beneficiary and a clause providing that the policy
is primary and that any other insurance of Beneficiary with respect
to the matters covered by such policy shall be excess and non-
contributing;
(v) shall, in the case of policies affording liability
insurance coverage, name Beneficiary (and Beneficiary's officers,
directors, employees, agents and representatives) as additional
insured by an endorsement satisfactory to Beneficiary and contain
cross-liability and severability of interest clauses satisfactory to
Beneficiary, and, in the case of other policies, shall name
Beneficiary as a loss payee and have attached thereto a lender's loss
payable endorsement, for the benefit of Beneficiary, in form
satisfactory to Beneficiary (Form 438 BFU, unless otherwise
specified by Beneficiary); and
(vi) shall contain a provision that, notwithstanding
any contrary agreement between Trustor and insurance company,
such policies will not be canceled, fail to be renewed or materially
amended (which term shall include any reduction in the type, scope
or limits of coverage) without at least thirty (30) days prior written
notice to Beneficiary.
(c) Blanket and Umbrella Policies. If Beneficiary
consents, Trustor may provide any of the required insurance through an
umbrella policy or policies or through blanket policies carried by Trustor
and covering more than one location, or by policies procured by a tenant or
other party holding under Trustor; provided, however, that the amount of
the total insurance allocated to the Real Property and available with respect
to occurrences required to be insured against shall be such as to furnish
protection the equivalent of separate policies in the amounts herein required,
and provided further, that, in all other respects, any such policy or policies
shall comply with all of the other provisions of this Deed of Trust.
(d) Evidence of Insurance. At Beneficiary's option,
Trustor shall furnish Beneficiary with an original of all policies of
insurance
required under this Section or with a certificate of insurance for each
required policy setting forth the coverage, the limits of liability, the
deductibles, if any, the name of the carrier, the policy number, and the
period of coverage, which certificates shall be executed by authorized
officials of the companies issuing such insurance, or by agents or attorneys-
in-fact authorized to issue said certificates (in which event each such
certificate shall be accompanied by a notarized affidavit, agency agreement
or power of attorney evidencing the authority of the signatory to issue such
certificate on behalf of the insurer named therein). Trustor shall furnish to
Beneficiary annually, within ten days after the date hereof, or more often if
Beneficiary shall reasonably request, a certificate of Trustor specifying all
insurance policies with respect to the Property and all other policies
required
hereby then outstanding and in force, and stating whether or not such
insurance complies with the requirements of this Section and, if it does not,
the manner in which it does not comply. At least ten (10) days prior to the
expiration of each required policy, Trustor shall deliver to Beneficiary
evidence satisfactory to Beneficiary of the payment of premium and the
renewal or replacement of such policy continuing insurance in force as
required by this Deed of Trust.
(e) Procurement by Beneficiary. If Trustor fails to
provide, maintain, keep in force or deliver to Beneficiary the policies of
insurance required by this Deed of Trust, Beneficiary may (but shall have no
obligation to) procure such insurance, or single interest insurance for such
risks covering Beneficiary's interests, and Trustor will pay all premiums
therefor promptly upon demand by Beneficiary; and until such payment is
made by Trustor, the amount of all such premiums, together with interest
thereon at an annual rate equal to the rate specified in Section 2.2 E. (Post-
Maturity Interest) of the Credit Agreement (or if such provision is hereafter
replaced or renumbered, the equivalent section) (the "Agreed Rate"), shall
be secured by this Deed of Trust.
(f) Reserve Fund. Upon request by Beneficiary
following an Event of Default (as defined in Section 23 hereof) relating to
the payment of money, or following and during the continuance of any other
Event of Default, Trustor shall pay to Beneficiary an initial cash reserve in
an amount adequate to pay all insurance premiums due within the next
succeeding twelve calendar months on all policies of insurance required by
this Deed of Trust (or such lesser amount as may then be specified by
Beneficiary), and shall thereafter deposit with Beneficiary each month,
commencing with the first month after such request by Beneficiary and
continuing until all sums secured hereby are paid in full or Beneficiary
notifies Trustor to cease making such deposits, an amount equal to one-
twelfth of the aggregate annual insurance premiums on all policies of
insurance required by this Deed of Trust, as reasonably estimated by
Beneficiary. In such event Trustor further agrees to cause all bills,
statements or other documents relating to the foregoing insurance premiums
to be sent or mailed directly to Beneficiary. Upon receipt of such bills,
statements or other documents evidencing that a premium for a required
policy is then payable, and providing Trustor has deposited sufficient funds
with Beneficiary pursuant to this Section, Beneficiary shall pay such
amounts as may be due thereunder out of the funds so deposited with
Beneficiary. If at any time and for any reason the funds deposited with
Beneficiary are or will be insufficient to pay such amounts as may be then
or subsequently due, Beneficiary may notify Trustor and Trustor shall
immediately deposit an amount equal to such deficiency with Beneficiary.
Notwithstanding the foregoing, nothing contained herein shall cause
Beneficiary to be deemed a trustee of said funds or to be obligated to pay
any amounts in excess of the amount of funds deposited with Beneficiary
pursuant to this Section, nor shall anything contained herein modify the
obligation of Trustor to maintain and keep in force at all times such
insurance as is required by this Deed of Trust. Beneficiary may commingle
said reserve with its own funds and Trustor shall be entitled to no interest
thereon.
(g) Replacement Cost. Whenever Beneficiary requires
insurance with full replacement cost protection, such full replacement cost
shall be determined annually (except in the event of substantial changes,
alterations or additions to the Improvements or in the event of new
construction undertaken by the Trustor, in which event such full replacement
cost shall be determined from time to time as required to assure full
replacement cost coverage). Such determination of full replacement cost
shall be made by written agreement of the insurance carrier and Trustor,
subject to the reasonable approval of Beneficiary. If they cannot agree or
the value shall not be approved by Beneficiary within thirty (30) days after
such request, such full replacement cost shall be determined by an appraiser,
architect or contractor who shall be reasonably acceptable to Beneficiary.
No omission on the part of Beneficiary to request any such determination
shall relieve Trustor of its obligations hereunder, and any such determination
to the contrary notwithstanding, Beneficiary may require Trustor to obtain
additional insurance as provided in this Section.
(h) Separate Insurance. Trustor shall not take out
separate insurance concurrent in form or contributing in the event of loss
with that required by this Section to be furnished by Trustor unless
Beneficiary is a named insured therein, with loss payable as provided herein.
Trustor shall immediately notify Beneficiary of the taking out of any such
separate insurance and shall cause the original policies in respect thereof or
certificates therefor to be delivered to Beneficiary.
(i) Compliance with Insurance Requirements.
Trustor shall observe and comply with the requirements of all policies of
insurance required to be maintained in accordance with this Deed of Trust
and shall cause the requirements of the companies writing such policies to be
so performed and satisfied that at all times companies of good standing
satisfactory to Beneficiary shall be willing to write and to continue such
insurance. Notwithstanding any approval, disapproval, acceptance or
acquiescence by Beneficiary with respect to such insurance, or Beneficiary's
obtaining or failure to obtain any insurance, Beneficiary shall incur no
liability as to the form or legal sufficiency of insurance contracts, the
solvency of any insurer or the payment of any loss, and Trustor hereby
expressly assumes full responsibility therefor.
(j) Assignment of Policies upon Foreclosure. In the
event of foreclosure of this Deed of Trust or other transfer of title or
assignment of any of the Property in extinguishment, in whole or in part, of
the debt secured hereby, all right, title and interest of Trustor in and to
all
policies of insurance required by this Section with respect to such Property
and any unearned premiums paid thereon shall, without further act, be
assigned to and shall inure to the benefit of and pass to the successor in
interest to Trustor or the purchaser or grantee of the Property, and Trustor
hereby appoints Beneficiary its lawful attorney-in-fact to execute an
assignment thereof and any other document necessary to effect such transfer.
(k) Waiver of Subrogation. Trustor waives any and
all right to claim or recover against Beneficiary, its directors, officers,
employees, agents and representatives, for loss of or damage to Trustor, the
Property, any other property of Trustor, or any property of others under
Trustor's control, from any cause insured against or required to be insured
against by the provisions of this Deed of Trust.
(l) Requirements Supplemental. The requirements of
this Deed of Trust with respect to insurance and maintenance of the Property
shall be supplemental to and not exclusive of the requirements of the Credit
Agreement and the Security Agreement relating thereto.
7. Casualties; Insurance Proceeds.
(a) Notice of Casualties. Trustor shall give prompt
written notice thereof to Beneficiary after the happening of any material
casualty to or in connection with the Property or any part thereof, whether
or not such casualty is covered by insurance.
(b) Payment of Proceeds. Prior to any Event of
Default, proceeds of insurance in an amount not greater than $1,000,000
payable in connection with any casualty affecting all or any portion of the
Property shall be payable to Trustor. Proceeds in any greater amount and,
after an Event of Default, all proceeds, payable in connection with any
casualty affecting all or any portion of the Property shall be payable to
Beneficiary. Trustor hereby authorizes and directs any affected insurance
company to make payment of such proceeds directly to Beneficiary. If
Trustor receives any proceeds of insurance resulting from a casualty which,
pursuant to this Deed of Trust, are to be paid to Beneficiary, Trustor shall
promptly pay over such proceeds to Beneficiary. Trustor shall not settle,
adjust or compromise any claims for loss, damage or destruction of the
Property or any part thereof under any policy or policies of insurance in
connection with a loss in an amount of $1,000,000 or more without the prior
written consent of Beneficiary to such settlement, adjustment or
compromise; and, after an Event of Default hereunder, Beneficiary shall
have the sole and exclusive right, and Trustor hereby authorizes and
empowers Beneficiary, to settle, adjust or compromise any such claims.
(c) Use in Restoration. In the event of any damage to
or destruction of the Property, and provided that (i) at the time of such
damage or destruction or thereafter, an Event of Default does not exist
hereunder, and (ii) application of insurance proceeds to restoration of the
Property will not, in Beneficiary's sole judgment, materially impair
Beneficiary's security for the obligations secured hereby, insurance proceeds
payable in connection with such damage or destruction shall be applied,
first, toward reimbursement of all of Beneficiary's reasonable costs and
expenses of recovering the proceeds, including reasonable attorneys' fees;
then, to payment of all sums advanced by Beneficiary to protect the Property
or the security of the Loan; then, to payment of installments of principal and
interest then due and payable under the Notes; then, to restoration of the
Property, upon conditions which are substantially similar to the disbursement
provisions and conditions set forth in the Credit Agreement, as reasonably
determined by Beneficiary (including, without limitation: delivery to
Beneficiary by Trustor of detailed plans and specifications providing for
restoration in accordance with all applicable Legal Requirements of all
governmental authorities having jurisdiction over the Project, together with a
detailed estimate of the cost of the work and schedule therefor and a
construction contract satisfactory to Beneficiary, with a contractor
satisfactory to Beneficiary, for performance of the work within the budgeted
amount, and within the scheduled time for completion; proof that the
insurance required hereby is in force; proof that an amount equal to the sum
which Beneficiary is requested to disburse has theretofore been paid by
Trustor, or is then due and payable, for materials theretofore installed or
work theretofore performed upon the Property and properly includable in the
cost of repair, reconstruction or restoration thereof; proof that, after
repair
or reconstruction, the Property will be at least as valuable as it was
immediately before the damage or condemnation occurred; and proof that
the insurance proceeds available for repair or restoration are sufficient, in
Beneficiary's determination, to pay for the total cost of repair or recon-
struction, including all associated development costs and interest projected
to
be payable on the Secured Obligations until the repair or reconstruction is
complete, or Trustor must provide its own funds in an amount equal to the
difference between the proceeds available for repair or restoration and a
reasonable estimate, made by Trustor and found acceptable by Beneficiary,
of the total cost of repair or reconstruction); and, upon completion of the
work of restoration and payment of the cost thereof, any balance of such
proceeds shall be applied to the indebtedness secured hereby, in such order
as Beneficiary, in its sole discretion, shall determine; and, if any then
remains, it shall be paid over to Trustor.
(d) Application by Beneficiary. If (i) at the time of
such damage or destruction or thereafter, an Event of Default exists
hereunder, or (ii) application of insurance proceeds to restoration will, in
Beneficiary's sole judgment, materially impair Beneficiary's security for the
obligations secured hereby, Beneficiary shall have the option, in its sole and
absolute discretion, (1) to apply all or any portion of such proceeds to any
indebtedness or other obligation secured hereby and in such order as
Beneficiary may determine, notwithstanding that said indebtedness or the
performance of said obligation may not be due according to the terms
thereof, or (2) to apply all or any portion of such proceeds to the
restoration
of the Property, subject to such conditions as Beneficiary shall determine, or
(3) to deliver all or any portion such proceeds to Trustor, subject to such
conditions as Beneficiary may determine.
(e) Duty to Restore. Nothing in this Deed of Trust
shall be deemed to excuse Trustor from restoring, repairing and maintaining
the Property, as herein provided (other than Beneficiary's failure to apply
insurance proceeds to the restoration of the Property as and to the extent
required by Section 7(c) above, which failure shall excuse Trustor only to
the extent of the insurance proceeds so withheld by Beneficiary), regardless
of whether or not insurance proceeds are available for restoration, whether
or not any such proceeds are sufficient in amount, or whether or not the
Property can be restored to the same condition and character as existed prior
to such damage or destruction.
8. Taxes and Impositions.
(a) Payment by Trustor. Subject to the provisions of
Section 8(d) below, Trustor shall pay, or cause to be paid, at least ten (10)
days prior to delinquency, all real property taxes and assessments, general
and special, and all other taxes and assessments of any kind or nature
whatsoever, including, without limitation, non-governmental levies or
assessments such as maintenance charges, owner association dues or charges
or fees, levies or charges resulting from covenants, conditions or
restrictions
affecting the Property or the Skyways, which are assessed or imposed upon
the Property or the Skyways, or become due and payable, and which create,
may create or appear to create a lien upon the Property, or any part thereof,
or the Skyways, or upon any personal property, equipment or other facility
used in the operation or maintenance thereof (all of which taxes, assessments
and charges, together with any and all other taxes, and charges of a similar
kind or nature are collectively referred to hereinafter as "Impositions");
provided, however, that if, by law, any such Imposition is payable, or may
at the option of the taxpayer be paid, in installments, Trustor may pay the
same or cause it to be paid, together with any accrued interest on the unpaid
balance of such Imposition, in installments as the same become due and
before any fine, penalty, interest or cost may be added thereto for the
nonpayment of any such installment and interest.
(b) New Impositions. If at any time after the date
hereof there shall be assessed or imposed (i) a tax or assessment on the
Property in lieu of or in addition to the Impositions payable by Trustor
pursuant to Subsection (a) of this Section, or (ii) a license fee, tax or
assessment imposed on Beneficiary and measured by or based in whole or in
part upon the amount of the Notes or other obligations secured hereby, then
all such taxes, assessments or fees shall be deemed to be included within the
term "Impositions" as defined in Subsection (a) of this Section, and Trustor
shall pay and discharge the same as herein provided with respect to the
payment of Impositions, if Trustor is permitted by law to pay the same. If
Trustor is prohibited by law from paying such Impositions, then, at the
option of Beneficiary, all obligations secured hereby, together with all
accrued interest thereon, shall immediately become due and payable.
Anything to the contrary herein notwithstanding, Trustor shall have no
obligation to pay any franchise, estate, inheritance, income, excess
profits or
similar tax levied on Beneficiary or on the obligations secured hereby.
(c) Proof of Payment. Subject to the provisions of
Subsection (d) of this Section, Trustor shall deliver to Beneficiary, within
seven (7) days after the date upon which any Imposition is due and payable
by Trustor in accordance with this Deed of Trust, official receipts of the
appropriate taxing authority, or other proof satisfactory to Beneficiary,
evidencing the payment thereof.
(d) Contest of Assessments. Trustor shall have the
right before any delinquency occurs to contest or object to the amount or
validity or amount of any such Imposition by appropriate legal proceedings,
but this shall not be deemed or construed in any way as relieving, modifying
or extending Trustor's covenant to pay any such Imposition at the time and
in the manner provided in this Section unless Trustor has given prior written
notice to Beneficiary of Trustor's intent so to contest or object to an
Imposition, and unless, at Beneficiary's sole option, (i) Trustor shall
demonstrate to Beneficiary's satisfaction that the legal proceedings shall
conclusively operate to prevent the sale of the Property, or any part thereof,
to satisfy such Imposition prior to final determination of such proceedings;
or (ii) Trustor shall furnish a good and sufficient bond or surety as
requested
by and satisfactory to Beneficiary; or (iii) Trustor shall demonstrate to
Beneficiary's satisfaction that Trustor has provided a good and sufficient
undertaking as required or permitted by law to accomplish a stay of any
such sale.
(e) Reserve Fund. Upon request by Beneficiary
following an Event of Default relating to the payment of money, or
following and during the continuance of any other Event of Default, Trustor
shall pay to Beneficiary an initial cash reserve in an amount adequate to pay
all Impositions for the ensuing tax fiscal year (or such lesser amount as may
then be specified by Beneficiary), and shall thereafter deposit with
Beneficiary each month, commencing with the first month after such request
by Beneficiary and continuing until all sums secured hereby are paid in full
or Beneficiary gives notice to Trustor to cease making such deposits, an
amount equal to one-twelfth of the sum of the annual Impositions, as
reasonably estimated by Beneficiary. In such event, Trustor further agrees
to cause all bills, statements or other documents relating to Impositions to
be
sent or mailed directly to Beneficiary. Upon receipt of such bills,
statements or other documents evidencing that Impositions are then payable,
and providing Trustor has deposited sufficient funds with Beneficiary
pursuant to this Section, Beneficiary shall pay such amounts as may be due
thereunder out of the funds so deposited with Beneficiary. If at any time
and for any reason the funds deposited with Beneficiary are or will be
insufficient to pay such amounts as may then or subsequently be due,
Beneficiary may notify Trustor and upon such notice Trustor shall
immediately deposit an amount equal to such deficiency with Beneficiary.
Notwithstanding the foregoing, nothing contained herein shall cause
Beneficiary to be deemed a trustee of said funds or to be obligated to pay
any amounts in excess of the amount of funds deposited with Beneficiary
pursuant to this Section, nor shall anything contained herein modify the
obligation of Trustor to pay, or cause to be paid, all Impositions.
Beneficiary may commingle said reserve with its own funds and Trustor
shall be entitled to no interest thereon. Beneficiary may impound or reserve
for future payment of Impositions such portion of such payments as
Beneficiary may in its absolute discretion deem proper, applying the balance
upon any indebtedness or obligation secured hereby in such order as
Beneficiary may determine, notwithstanding that said indebtedness or the
performance of said obligation may not yet be due according to the terms
thereof. Should Trustor fail to deposit with Beneficiary (exclusive of that
portion of said payments which has been applied by Beneficiary upon any
indebtedness or obligation secured hereby) sums sufficient to fully pay such
Impositions at least thirty (30) days before delinquency thereof, Beneficiary
may, at Beneficiary's election, but without any obligation so to do, advance
any amounts required to make up the deficiency, which advances, if any,
together with interest thereon at an annual rate equal to the Agreed Rate,
shall be secured hereby and shall be repayable to Beneficiary upon demand;
or, at the option of Beneficiary, Beneficiary may, without making any
advance whatever, apply any sums held by it upon any indebtedness or
obligation secured hereby, in such order as Beneficiary may determine,
notwithstanding that said indebtedness or the performance of said obligation
may not yet be due according to the terms thereof.
(f) Joint Assessment. Trustor shall not initiate, and, to
the maximum extent permitted by law, shall not suffer or permit the joint
assessment of any real and personal property which may constitute all or a
portion of the Property or any other procedure whereby the lien of real
property taxes and the lien of personal property taxes shall be assessed,
levied or charged to the Property as a single lien.
(g) Tax Service. Trustor shall cause to be furnished to
Beneficiary a tax reporting service, covering the Property, of the type and
duration, and with a company, satisfactory to Beneficiary.
9. Liens. Trustor shall pay and promptly discharge, at
Trustor's cost and expense, all liens, encumbrances and charges upon the
Property, or any part thereof or interest therein; provided that Trustor shall
have the right to contest in good faith the validity or amount of any such
lien, encumbrance or charge in accordance with the provisions of the Credit
Agreement, and provided further that Trustor will not be required to pay or
discharge Permitted Encumbrances. If Trustor shall fail to remove and
discharge any such lien, encumbrance or charge when due (or, if being
contested in accordance with the Credit Agreement, promptly upon final
determination of such contest proceedings), then, in addition to any other
right or remedy of Beneficiary, Beneficiary may, but shall not be obligated
to, discharge the same, either by paying the amount claimed to be due, or
by procuring the discharge of such lien, encumbrance or charge by
depositing in a court a bond or the amount claimed or otherwise giving
security for such claim, or by procuring such discharge in such manner as is
or may be prescribed by law. Trustor shall, immediately upon demand
therefor by Beneficiary, pay to Beneficiary an amount equal to all costs and
expenses incurred by Beneficiary in connection with the exercise by
Beneficiary of the foregoing right to discharge any such lien, encumbrance
or charge, together with interest thereon from the date of such expenditure
at an annual rate equal to the Agreed Rate.
10. Easements and Leaseholds. If a leasehold estate or
an easement or other incorporeal right constitutes a portion of the Real
Property, Trustor agrees not to amend, change or modify (other than any
such amendment, change or modification that is beneficial to the Real
Property, with the beneficial nature thereof to be determined in Beneficiary's
reasonable judgment) or terminate such leasehold estate, easement or other
right or interest, or any right thereto or interest therein, without the prior
written consent of Beneficiary. Consent to one amendment, change,
agreement or modification shall not be deemed to be a waiver of the right to
require consent to other, future or successive amendments, changes,
agreements or modifications. Trustor shall submit to Beneficiary any such
request for consent in writing (which request shall include such information
and documentation as appropriate to enable Beneficiary to make an informed
decision regarding such request), and Beneficiary will have thirty (30) days
after receipt thereof in which to review and respond to such request. If
Beneficiary fails to respond to Trustor's request within said thirty (30) day
period, Trustor may resubmit its request in writing, stating that Beneficiary
failed to respond to the initial request within said thirty (30) day period
and,
if Beneficiary thereafter fails to respond to such request within five (5)
days,
Beneficiary shall be deemed to have consented thereto. Trustor agrees to
perform all obligations and agreements with respect to said leasehold,
easement or other right or interest and shall not take any action or omit to
take any action which would effect or permit the termination thereof.
Trustor agrees to promptly notify Beneficiary in writing with respect to any
default or alleged default by any party thereto and to deliver to Beneficiary
copies of all notices, demands, complaints or other communications received
or given by Trustor with respect to any such default or alleged default.
Beneficiary shall have the option to cure any such default and to perform
any or all of Trustor's obligations thereunder or with respect thereto. All
sums expended by Beneficiary in curing any such default shall be secured
hereby and shall be immediately due and payable without demand or notice
and shall bear interest from date of expenditure at an annual rate equal to
the
Agreed Rate.
11. Further Acts. Trustor shall do and perform all acts
necessary to keep valid and effective the charges and lien hereof, to carry
into effect its object and purposes, to protect the lawful owners of the Notes
and other obligations secured hereby; shall execute and deliver to
Beneficiary at any time, upon request of Beneficiary, all other and further
instruments in writing necessary to vest in and secure to Trustee each and
every part of the Real Property and to Beneficiary the Rents therefrom and
rights and interest of Beneficiary therein or with respect thereto; and, upon
request by the Beneficiary, shall supply evidence of fulfillment of each of
the covenants herein contained concerning which a request for such evidence
has been made.
12. Assignment of Rents.
(a) Assignment to Beneficiary; Trustor's Limited
License to Collect Prior to Default. Notwithstanding any language
contained herein, or in any other document, to the contrary, Trustor hereby
irrevocably and absolutely assigns and transfers to Beneficiary, without
having to first take possession of the Property, all Rents, including all
present and future Leases and other rental agreements, reserving unto
Trustor a license to collect such Rents prior to the occurrence of any Event
of Default. Subsequent to the occurrence of an Event of Default, such
license reserved to Trustor shall be immediately revoked without further
demand or notice, and any Rents, including those past due, unpaid or
undetermined, may be collected by Beneficiary or its agent, and any amount
so collected shall be applied, less costs and expenses of operation and
collection, including reasonable attorneys' fees, to any indebtedness and/or
obligations secured hereby, and in such order as Beneficiary shall determine,
provided that, upon Trustor's cure of any Event of Default not relating to
the payment of money, Beneficiary will reinstate Trustor's license to collect
such Rents. The collection of such Rents, and the application thereof as
aforesaid, shall not cure or constitute a waiver of any default or notice of
default hereunder or invalidate any act done pursuant to such notice.
Trustor and Beneficiary intend that this assignment shall be a present,
absolute and unconditional assignment, not an assignment for additional
security only, and shall, immediately upon the execution hereof, subject to
the license granted above, give Beneficiary, and its agent, the right to
collect
the Rents and to apply them as aforesaid. Nothing contained herein, nor any
collection of Rents by Beneficiary, or its agent or a receiver, shall be
construed to make Beneficiary (i) a "Mortgagee-in-Possession" of the
Property so long as Beneficiary has not itself entered into actual possession
of the Property; (ii) responsible for performing any of the obligations of the
lessor under any Lease; (iii) responsible for any waste committed by lessees
or any other parties, any dangerous or defective condition of the Property,
or any negligence in the management, upkeep, repair or control of the
Property; or (iv) liable in any manner for the Property or the use,
occupancy, enjoyment or operation of all or any part of it (provided that this
clause (iv) shall not act to relieve Beneficiary from liability resulting from
the gross negligence or willful misconduct of Beneficiary).
(b) No Other Assignments. Trustor hereby represents
to Beneficiary that there is no assignment or pledge of any Leases of, or
Rentals from, the Property now in effect, and covenants that, until the Notes
are fully paid, the Letters of Credit (as defined in the Credit Agreement)
have expired or been cancelled, and the other Secured Obligations are fully
satisfied and the Commitments (as defined in the Credit Agreement) are
terminated, Trustor will not make any such assignment or pledge to anyone
other than Beneficiary nor will it accept any periodic payments which are to
be made pursuant to such Leases or Rents more than thirty (30) days in
advance of the date on which such payments are due.
13. Actions Affecting Property. Trustor shall give
Beneficiary and Trustee prompt written notice of the assertion of any claim
with respect to, or the filing of any action or proceeding affecting or
purporting to affect, the Property or Skyways, or title thereto or any right
of
possession thereof, or this Deed of Trust or the security hereof or the rights
or powers of Beneficiary or Trustee hereunder. Trustor shall appear in and
contest any such action or proceeding at Trustor's sole expense; and shall
pay all costs and expenses, including cost of evidence of title and reasonable
attorneys' fees, in any such action or proceeding in which Beneficiary or
Trustee may appear.
14. Eminent Domain. If any proceeding or action be
commenced for the taking of the Property, or any part thereof or interest
therein, for public or quasi-public use under the power of eminent domain,
condemnation or otherwise, or if the same be taken or damaged by reason of
any public improvement or condemnation proceeding, or in any other
manner, or should Trustor receive any notice or other information regarding
such proceeding, action, taking or damage (including, without limitation, a
proposal to purchase the Property or some portion thereof in lieu of
condemnation), Trustor shall give prompt written notice thereof to
Beneficiary. Beneficiary shall be entitled, at its option, without regard to
the adequacy of its security, to investigate and negotiate with the condemnor
concerning the proposed taking, to commence, appear in and prosecute in its
own name any such action or proceeding, and, if the amount of the Award
(defined below) is an amount greater than $1,000,000, or if an Event of
Default then exists hereunder, to make any compromise or settlement in
connection with such taking or damage. Trustor shall not compromise or
settle any such action or proceeding or agree to any sale in lieu of
condemnation if the amount of the Award is an amount greater than
$1,000,000 without the prior written consent of Beneficiary. All
compensation, awards, damages, rights of action and proceeds awarded to
Trustor by reason of any such taking, transfer or damage (the "Award") are
hereby assigned to Beneficiary and Trustor agrees to execute such further
assignments of the Award as Beneficiary or Trustee may require. After
deducting therefrom all costs and expenses (regardless of the particular
nature thereof and whether incurred with or without suit), including
reasonable attorneys' fees, incurred by it in connection with any such
negotiations, action or proceeding (whether or not prosecuted to judgment),
Beneficiary shall, if (i) an Event of Default does not then exist hereunder,
and (ii) if application of the Award to restoration of the Property will
not, in
Beneficiary's sole judgment, materially impair Beneficiary's security for the
obligations secured hereby, apply the Award to the restoration of the
Property, upon conditions substantially similar to the disbursement
provisions and conditions set forth in the Credit Agreement, as reasonably
determined by Beneficiary (it being expressly understood and agreed that
Beneficiary may condition disbursement of such proceeds for restoration
upon proof that an amount equal to the sum which Beneficiary is requested
to disburse has theretofore been paid by Trustor without reimbursement
therefor, or is then due and payable, for materials theretofore installed or
work theretofore performed upon the Property and properly includable in the
cost of repair, reconstruction or restoration thereof). If, at the time of
receipt by Beneficiary of such proceeds, (i) an Event of Default then exists
hereunder, or (ii) application of the Award to restoration will, in
Beneficiary's sole judgment, materially impair Beneficiary's security for the
obligations secured hereby, Beneficiary shall have the option, in its sole and
absolute discretion, (1) to apply all or any portion of the Award upon any
indebtedness or other obligation secured hereby and in such order as
Beneficiary may determine, notwithstanding that said indebtedness or the
performance of said obligation may not be due according to the terms
thereof, or (2) to apply all or any portion of the Award to the restoration of
the Property, subject to such conditions as Beneficiary may determine, or (3)
to deliver all or any portion of the Award, after such deductions, to Trustor,
subject to such conditions as Beneficiary may determine (and, if the Award
is not sufficient to satisfy the Secured Obligations in full, Trustor shall
immediately pay any remaining balance, together with all accrued interest
thereon). Nothing herein contained shall be deemed to excuse Trustor from
restoring, repairing and maintaining the Property, as herein provided (other
than Beneficiary's failure to apply the Award to the restoration of the
Property as and to the extent required by the provisions of this Section 17,
which failure shall excuse Trustor only to the extent of the Award so
withheld by Beneficiary), regardless of whether or not the Award is
available for restoration, whether or not any such Award is sufficient in
amount, or whether or not the Property can be restored to the same
condition and character as existed prior to such damage or partial taking.
Trustor hereby specifically, unconditionally and irrevocably waives all rights
of a property owner under all laws, including NRS 37.115, as amended or
recodified from time to time, which provide for allocation of condemnation
proceeds between a property owner and a lienholder.
15. Due on Sale. Except as otherwise permitted in the
Credit Agreement, or this Deed of Trust, if the Trustor shall sell or convey,
or create or permit to exist any mortgage, pledge, security interest or other
encumbrance on, or in any other manner alienate or otherwise "transfer" the
Real Property hereby encumbered or any part thereof or any interest therein,
or shall enter into any agreement for the same that is not expressly
conditioned on Beneficiary's approval, or shall be divested of its title in
any
manner or way, whether voluntary or involuntary or by merger, without the
written consent of Beneficiary being first had and obtained, any indebtedness
or obligation secured hereby, irrespective of the maturity dates expressed in
the Notes or any other notes evidencing the same, at the option of
Beneficiary, and without demand or notice, shall immediately become due
and payable. Consent to one such transaction shall not be deemed to be a
waiver of the right to require consent to future or successive transactions.
Beneficiary may grant or deny such consent in its sole discretion and, if
consent should be given, any such transfer shall be subject to this Deed of
Trust, and any such transferee shall assume all obligations hereunder and
agree to be bound by all provisions contained herein. Such assumption shall
not, however, release Trustor or any maker or guarantor of any Secured
Obligation from any liability with respect thereto without the prior written
consent of Beneficiary. As used herein, "transfer" includes the direct or
indirect sale, agreement to sell, transfer, conveyance, pledge, collateral as-
signment or hypothecation of the Real Property, or any portion thereof or
interest therein, whether voluntary, involuntary, by operation of law or
otherwise, the execution of any installment land sale contract or similar
instrument affecting all or a portion of the Real Property, or the lease of
all
or substantially all of the Real Property. The term "transfer" shall also
include the direct or indirect transfer, assignment, hypothecation or
conveyance of legal or beneficial ownership of (i) any partnership interest in
Trustor, (ii) any partnership or other interest in any general partner in
Trustor, or in any constituent of any general partner of Trustor, that is a
partnership or limited liability company or similar entity or (iii) any stock
in
any general partner in Trustor, or in any constituent of any general partner
or Trustor, that is a corporation.
16. Partial or Late Payments. By accepting payment
of any indebtedness secured hereby after its due date, Beneficiary does not
waive its right either to require prompt payment, when due, of all other
indebtedness so secured or to declare default, as herein provided, for failure
to so pay.
17. Reconveyance By Trustee. Upon receipt of written
request from Beneficiary reciting that all sums secured hereby have been
paid, and the Letters of Credit have expired or been cancelled and the
Commitments have terminated, and upon surrender of this Deed of Trust
and the Notes secured hereby to Trustee for cancellation and retention, or
such other disposition as Trustee, in its sole discretion, may choose, and
upon payment of its fees, the Trustee shall reconvey, without warranty or
recourse, the Property then held hereunder. The recitals in such
reconveyance of any matters of fact shall be conclusive proof of the truth
thereof. The grantee in such reconveyance may be described in general
terms as "the person or persons legally entitled thereto".
18. Right of Beneficiary and Trustee to Appear. If,
during the existence of the trust created hereby, there be commenced or
pending any suit or action materially and adversely affecting the Property,
or any part thereof, or the title thereto, or if any adverse claim for or
against the Property, or any part thereof, be made or asserted, the Trustee
or Beneficiary may appear or intervene in the suit or action and retain
counsel therein and, unless such suit or action is being diligently contested
in good faith by Trustor and Trustor shall have established and maintained
adequate reserves with Beneficiary for the full payment and satisfaction of
such suit or action if determined adversely to Trustor, may defend same, or
otherwise take such action therein as the Trustee or Beneficiary may be
advised and may pay and expend such sums of money as the Trustee or
Beneficiary may deem to be necessary and Trustor shall pay all reasonable
costs and expenses of Trustee and Beneficiary incurred in connection
therewith.
19. Performance by Trustee or Beneficiary. If
Trustor fails to make any payment or perform any act as and in the manner
provided in any of the Loan Documents, then the Trustee or Beneficiary, at
the election of either of them and without any obligation to do so, after the
giving of reasonable notice to the Trustor, or any successor in interest of
the
Trustor, or any of them and without releasing Trustor from any obligation
hereunder, may make such payment or perform such act and incur any
liability, or expend whatever amounts, in its absolute discretion, it may
deem necessary therefor. In connection therewith (without limiting their
general and other powers, whether conferred herein, in another Loan
Document or by law), Beneficiary and Trustee, and each of them, shall have
and are hereby given the right, but not the obligation, (i) to enter upon and
take possession of the Property; (ii) to make additions, alterations, repairs
and improvements to the Property which they or either of them may
consider necessary or proper to keep the Property in good condition and
repair; (iii) to appear and participate in any action or proceeding affecting
or
which may affect the security hereof or the rights or powers of Beneficiary
or Trustee; (iv) to pay, purchase, contest or compromise any encumbrance,
claim, charge, lien or debt which in the judgment of either may affect or
appears to affect the security of this Deed of Trust or to be prior or
superior
hereto; and (v) in exercising such powers, to pay necessary expenses,
including employment of counsel and other necessary or desirable
consultants. All sums incurred or expended by the Trustee or Beneficiary,
under the terms hereof (including, without limiting the generality of the
foregoing, costs of evidence of title, court costs, appraisals, surveys, and
receiver's, Trustee's and reasonable attorneys' fees, costs and expenses
(including, without limitation, the reasonable fees and expenses of attorneys
for Trustee), whether or not an action is actually commenced in connection
therewith), shall become due and payable by the Trustor to the Trustee on
the next interest or installment payment date under the Notes secured hereby
and shall bear interest until paid at an annual percentage rate equal to the
Agreed Rate. In no event shall payment by Trustee or Beneficiary be
construed as a waiver of the default occasioned by Trustor's failure to make
such payment or payments.
20. Inspections. Beneficiary, or its agents,
representatives or workers, are authorized to enter at any reasonable time
upon or in any part of the Property for the purpose of inspecting the same
and for the purpose of performing any of the acts it is authorized to perform
hereunder or under the terms of any of the Loan Documents.
21. Invalidity of Lien. If the lien of this Deed of Trust
is invalid or unenforceable as to any part of the Indebtedness (as defined in
the Credit Agreement), or if the lien is invalid or unenforceable as to any
part of the Property, the unsecured or partially secured portion of the
Indebtedness shall be completely paid prior to the payment of the remaining
and secured or partially secured portion of the Indebtedness, and all
payments made on the Indebtedness, whether voluntary or under foreclosure
or other enforcement action or procedure, shall be considered to have been
first paid on and applied to the full payment of that portion of the
Indebtedness which is not secured or is not fully secured by the lien of this
Deed of Trust.
22. Subrogation. To the extent that proceeds of the
Notes or other sums advanced by Beneficiary are used to pay any
outstanding lien, charge or prior encumbrance against the Property, such
proceeds shall be deemed to have been advanced by Beneficiary at Trustor's
request and Beneficiary shall be subrogated to any and all rights and liens
held by any owner or holder of such outstanding liens, charges and prior
encumbrances, regardless of whether said liens, charges or encumbrances
are released.
23. Events of Default. Trustor will be in default under
this Deed of Trust upon the occurrence of any one or more of the following
events (some or all collectively, "Events of Default"; any one singly, an
"Event of Default"):
(a) Failure to Pay. Any amount due under any of the
Notes, the Credit Agreement, this Deed of Trust or any other Loan
Document, or any other amount the payment of which is secured hereby, is
not paid when due; or
(b) Other Breaches Hereof. A breach by Trustor of
any representation, warranty or covenant in this Deed of Trust which is not
cured within fifteen (15) days after receipt by Trustor of notice of such
breach; or
(c) Defaults Under Other Loan Documents. The
occurrence under any of the Loan Documents of an "Event of Default" (as
defined therein).
24. Remedies. At any time after an Event of Default,
Beneficiary and Trustee will be entitled to invoke any and all of the
following rights and remedies, all of which will be cumulative, and the
exercise of any one or more of which shall not constitute an election of
remedies:
(a) Acceleration. Beneficiary may declare any or all of
the Secured Obligations to be due and payable immediately, without
presentment, demand, protest or notice of any kind.
(b) Receiver. Beneficiary may apply to any court of
competent jurisdiction for, and obtain appointment of, a receiver for the
Property or any part thereof, without notice to Trustor or anyone claiming
under Trustor, and without regard to the then value of the Property or the
adequacy of any security for the Secured Obligations, and Trustor hereby
irrevocably consents to such appointment and waives notice of any
application therefor. Any such receiver or receivers shall have all the usual
powers and duties of receivers in like or similar cases and all the powers
and duties of Beneficiary in case of entry as provided herein and in the
Credit Agreement and shall continue as such and exercise all such powers
until the later of (i) the date of confirmation of sale of all of the
Property;
(ii) the disbursement of all proceeds of the Property collected by such
receiver and the payment of all expenses incurred in connection therewith;
or (iii) the termination of such receivership with the consent of Beneficiary
or pursuant to an order of a court of competent jurisdiction. Beneficiary
may also request, in connection with any foreclosure proceeding hereunder,
that the Nevada Gaming Commission petition a District Court of the State of
Nevada for the appointment of a supervisor to conduct the normal gaming
activities on the Property following such foreclosure proceeding.
(c) Entry. Beneficiary, in person, by agent or by
court-appointed receiver, may enter, take possession of, manage and operate
all or any part of the Property, subject to applicable Gaming Laws, and may
also do any and all other things in connection with those actions that
Beneficiary may, in its sole discretion, consider necessary and appropriate to
protect the security of this Deed of Trust. Such other things may include,
among other things, any of the following: taking and possessing all of
Trustor's or the then owner's books and records; entering into, enforcing,
modifying, or canceling Leases on such terms and conditions as Beneficiary
may consider proper; obtaining and evicting tenants; fixing or modifying
Rents; collecting and receiving any payment of money owing to Trustor;
completing construction; and contracting for and making repairs and
alterations. If Beneficiary so requests, Trustor shall assemble all of the
Property that has been removed from the Real Property in violation of the
Loan Documents and make all of it available to Beneficiary at the site of the
Real Property. Trustor hereby irrevocably constitutes and appoints
Beneficiary as Trustor's attorney-in-fact to perform such acts and execute
such documents as Beneficiary in its sole discretion may consider to be
appropriate in connection with taking these measures, including endorsement
of Trustor's name on any instruments. Regardless of any provision of this
Deed of Trust or the Credit Agreement, Beneficiary shall not be considered
to have accepted any property other than cash or immediately available
funds in satisfaction of any obligation of Trustor to Beneficiary, unless
Beneficiary has given express written notice of Beneficiary's election of that
remedy in accordance with the Nevada Uniform Commercial Code, as it
may be amended or recodified from time to time.
(d) Cure; Protection of Security. Either Beneficiary
or Trustee may cure any breach or default of Trustor, and if it chooses to do
so in connection with any such cure, Beneficiary or Trustee may also enter
the Property and, whether or not Beneficiary or Trustee enter the Property,
do any and all other things which it, in its sole discretion, may consider
necessary and appropriate to protect the security of this Deed of Trust,
including, without limitation, the right to complete the Improvements. Such
other things may include: appearing in and/or defending any action or
proceeding which purports to affect the security of, or the rights or powers
of Beneficiary or Trustee under, this Deed of Trust; paying, purchasing,
contesting or compromising any encumbrance, charge, lien or claim of lien
which in Beneficiary's or Trustee's sole judgment is or may be senior in
priority to this Deed of Trust, such judgment of Beneficiary or Trustee to be
conclusive as among the parties to this Deed of Trust; obtaining insurance
and/or paying any premiums or charges for insurance required to be carried
under this Deed of Trust; otherwise caring for and protecting any and all of
the Property; and employing counsel, accountants, contractors and other
appropriate persons to assist Beneficiary or Trustee. Beneficiary and
Trustee may take any of the actions permitted under this Subsection either
with or without giving notice to any person.
(e) Uniform Commercial Code Remedies. With
respect to Personal Property, Beneficiary may exercise any or all of the
remedies granted to a secured party under NRS Article 104.9101 et seq. (the
Nevada enactment of the Uniform Commercial Code), together with any and
all other rights and remedies provided in the Security Agreement.
(f) Judicial Action. Beneficiary may bring an action
in any court of competent jurisdiction to foreclose this Deed of Trust or to
obtain specific enforcement of any of the covenants or agreements of this
Deed of Trust or for any other remedy provided herein, in the Credit
Agreement, in any Loan Document or otherwise provided by law or in
equity.
(g) Power of Sale. Under the power of sale herein
granted, Beneficiary shall have the discretionary right to cause some or all
of the Property, including any Property which constitutes personal property,
to be sold or otherwise disposed of in any combination and in any manner
permitted by applicable law.
(i) Sales of Personal Property.
(A) For purposes of the power of sale
herein granted, Beneficiary may elect to treat as personal
property any Property which is intangible or which can be
severed from the Land or Improvements without causing
structural damage. If Beneficiary chooses to do so,
Beneficiary may dispose of any personal property separately
from the sale of real property, in any manner permitted by
or under the NRS, including any public or private sale, or
in any manner permitted by any other applicable law.
(B) The following provision shall apply
in the absence of any specific statutory requirement which
permits or requires a different notice period: In connection
with any sale or other disposition of such Property, Trustor
agrees that the following procedures constitute a
commercially reasonable sale: Beneficiary shall mail written
notice of the sale to Trustor not later than ten (10) days
prior to such sale. Upon receipt of any written request,
Beneficiary will, to the extent reasonably practicable, make
the Property available to any bona fide prospective
purchaser for inspection during reasonable business hours
prior to the sale. Notwithstanding any provision to the
contrary, Beneficiary shall be under no obligation to
consummate a sale if, in its judgment, none of the offers
received by it equals the fair value of the Property offered
for sale. The foregoing procedures do not constitute the
only procedures that may be commercially reasonable.
(ii) Trustee's Sales of Real Property or Mixed
Collateral.
(A) Beneficiary may choose to dispose
of some or all of the Property which consists solely of real
property in any manner then permitted by applicable law.
In its discretion, Beneficiary may also or alternatively
choose to dispose of some or all of the Property, in any
combination consisting of both real and personal property,
together in one sale to be held in accordance with the law
and procedures applicable to real property. Trustor agrees
that any sale of personal property together with real
property constitutes a commercially reasonable sale of the
personal property. For purposes of this power of sale,
either a sale of real property alone, or a sale of both real
and personal property together in accordance with law, will
sometimes be referred to as a "Trustee's Sale."
(B) Before any Trustee's Sale,
Beneficiary or Trustee shall give and record such notice of
default and election to sell as may then be required by law.
When all time periods then legally mandated have expired,
and after such notice of sale as may then be legally required
has been given, Trustee shall sell the property being sold at
a public auction to be held at the time and place specified in
the notice of sale. Neither Trustee nor Beneficiary shall
have any obligation to make demand on Trustor before any
Trustee's Sale. From time to time, in accordance with then
applicable law, Trustee may, and in any event at
Beneficiary's request shall, postpone any Trustee's sale by
public announcement at the time and place noticed for that
sale, or may, in its discretion, give a new notice of sale.
(C) At any Trustee's Sale, Trustee shall
sell to the highest bidder at public auction for cash in lawful
money of the United States. Trustee shall execute and
deliver to the purchaser(s) a deed or deeds conveying the
property being sold without any covenant or warranty
whatsoever, express or implied. The recitals in any such
deed of any matters or facts, including any facts bearing
upon the regularity or validity of any Trustee's Sale, shall
be conclusive proof of their truthfulness. Any such deed
shall be conclusive against all persons as to the facts recited
in it.
(h) Single or Multiple Foreclosure Sales. If the
Property at the time of sale or other disposition consists of more than one
lot, parcel or item of property, Beneficiary may:
(i) Designate the order in which the lots,
parcels or items shall be sold or disposed of or offered for
sale or disposition; and
(ii) Elect to dispose of the lots, parcels or items
through a single consolidated sale or disposition to be held
or made under the power of sale herein granted, or in
connection with judicial proceedings, or by virtue of a
judgment and decree of foreclosure and sale; or through two
or more such sales or dispositions; or in any other manner
that Beneficiary may deem to be in its best interests (any
such sale or disposition, a "Foreclosure Sale;" any two or
more, "Foreclosure Sales").
If Beneficiary chooses to have more than one Foreclosure Sale, Beneficiary
at its option may cause the Foreclosure Sales to be held simultaneously or
successively, on the same day, or on such different days and at such
different times and in such order as Beneficiary may deem to be in its best
interests. No Foreclosure Sale shall terminate or affect the liens of this
Deed of Trust on any part of the Property which has not been sold, until all
of the Secured Obligations have been paid in full.
25. Costs of Enforcement. If an installment of
principal or interest on the Notes is not paid when due or if any other Event
of Default occurs, Beneficiary and Trustee, and each of them, may employ
an attorney or attorneys to protect their rights hereunder. Trustor promises
to pay to Beneficiary, on demand, the reasonable fees and expenses of such
attorneys and all other costs of enforcing the obligations secured hereby,
including but not limited to, recording fees, the expense of a Trustee's Sale
Guarantee, Trustee's fees and expenses, receivers' fees and expenses, and all
other expenses, of whatever kind or nature, incurred by Beneficiary and
Trustee, and each of them, in connection with the enforcement of the
obligations secured hereby, whether or not such enforcement includes the
filing of a lawsuit. Until paid, such sums shall be secured hereby and shall
bear interest, from date of expenditure, at an annual rate equal to the Agreed
Rate.
26. Remedies Cumulative and Not Exclusive. Trustee
and Beneficiary, and each of them, shall be entitled to enforce payment and
performance of any indebtedness or obligations secured hereby and to
exercise all rights and powers under this Deed of Trust or under any Loan
Document or other agreement or any laws now or hereafter in force,
notwithstanding some or all of the said indebtedness and obligations secured
hereby may now or hereafter be otherwise secured, whether by mortgage,
deed of trust, pledge, lien, assignment or otherwise. Neither the acceptance
of this Deed of Trust nor its enforcement whether by court action or
pursuant to the power of sale or other powers herein contained, shall
prejudice or in any manner affect Trustee's or Beneficiary's right to realize
upon or enforce any other security now or hereafter held by Trustee or
Beneficiary, it being agreed that Trustee and Beneficiary, and each of them,
shall be entitled to enforce this Deed of Trust and any other security now or
hereafter held by Beneficiary or Trustee in such order and manner as they or
either of them may in their absolute discretion determine. No remedy
herein conferred upon or reserved to Trustee or Beneficiary is intended to be
exclusive of any other remedy herein or by law provided or permitted, but
each shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by
statute. Every power or remedy given by any of the Loan Documents to
Trustee or Beneficiary or to which either of them may be otherwise entitled,
may be exercised, concurrently or independently, from time to time and as
often as may be deemed expedient by Trustee or Beneficiary and either of
them may pursue inconsistent remedies.
27. Credit Bids. At any Foreclosure Sale, any person,
including Trustor, Trustee or Beneficiary, may bid for and acquire the
Property or any part thereof to the extent permitted by then applicable law.
Instead of paying cash for such property, Beneficiary may settle therefor by
crediting such portion of the following obligations against the sales price of
the property as is necessary to equal such price:
(a) First, the portion of the Secured Obligations
attributable to the expenses of sale, costs of any action and any other sums
for which Trustor is obligated to pay or reimburse Beneficiary or Trustee
hereunder or under any other Loan Document; and
(b) Second, any of the other Secured Obligations, in
any order and proportion as Beneficiary, in its sole discretion, may elect.
28. Application of Foreclosure Sale Proceeds.
Beneficiary and Trustee shall apply the proceeds of any Foreclosure Sale in
the following manner:
(a) First, to pay the portion of the Secured Obligations
attributable to the expenses of sale, costs of any action and any other sums
for which Trustor is obligated to reimburse Beneficiary or Trustee hereunder
or under any other Loan Document;
(b) Second, to pay the portion of the Secured
Obligations attributable to any sums expended or advanced by Beneficiary or
Trustee under the terms of this Deed of Trust which then remain unpaid;
(c) Third, to pay any and all other Secured Obligations,
in any order and proportion as Beneficiary, in its sole discretion, may elect;
and
(d) Fourth, the remainder, if any, shall be remitted to
the person or persons entitled to it.
29. Application of Rents and Other Sums. Beneficiary
shall apply any and all Rents collected by it, and any and all sums, other
than proceeds of a Foreclosure Sale, which Beneficiary may receive or
collect, in the following manner:
(a) First, to pay the portion of the Secured Obligations
attributable to the costs and expenses of operation and collection that may be
incurred by Trustee, Beneficiary or any receiver;
(b) Second, to pay any and all other Secured
Obligations in any order and proportion as Beneficiary, in its sole
discretion,
may elect; and
(c) Third, the remainder, if any, shall be remitted to the
person or persons entitled to it.
Beneficiary shall have no liability for any funds which it does not actually
receive.
30. Incorporation of Certain Nevada Covenants. The
following covenants, Nos. 1, 3, 4 (at the Agreed Rate), 6, 7 (reasonable), 8
and 9 of NRS 107.030, where not in conflict with the provisions of the Loan
Documents, are hereby adopted and made a part of this Deed of Trust.
Upon any Event of Default by Trustor hereunder, Beneficiary may (a)
declare all sums secured immediately due and payable without demand or
notice or (b) have a receiver appointed as a matter of right without regard to
the sufficiency of said property or any other security or guaranty and
without any showing as required by NRS section 107.100. All remedies provided
in this Deed of Trust are distinct and cumulative to any other right or
remedy under this Deed of Trust or afforded by law or equity and may be
exercised concurrently, independently or successively. The sale of said
property conducted pursuant to Covenants Nos. 6, 7 and 8 of NRS section
107.030 may be conducted either as to the whole of said property or in
separate parcels and in such order as Trustee may determine.
31. Substitution of Trustee. Beneficiary or assigns
may, from time to time, by a written instrument executed and acknowledged
by Beneficiary, recorded in the county in which the Real Property is located
and otherwise complying with applicable law, appoint a successor trustee or
trustees to any Trustee named herein or acting hereunder, to execute the
trust created by the Deed of Trust or other conveyance in trust. Upon the
recording of such instrument, the new trustee or trustees shall, without
conveyance from the predecessor trustee, be vested with all the title, estate,
interest, rights, powers, duties and trusts in the premises vested in or
conferred upon the predecessor trustee. If there be more than one trustee,
either may act alone and execute the trusts upon the request of the
Beneficiary, and all his acts thereunder shall be deemed to be the acts of all
trustees, and the recital in any conveyance executed by such sole trustee of
such request shall be conclusive evidence thereof, and of the authority of
such sole trustee to act.
32. Binding Nature. This Deed of Trust applies to,
inures to the benefit of and binds Trustor and the heirs, legatees, devisees,
administrators, personal representatives, executors and the successors and
assigns thereof, Trustee and Beneficiary. As used herein, the term
"Beneficiary" shall include the owners and holders of the Notes and other
Secured Obligations from time to time, whether or not named as Beneficiary
herein (it being expressly agreed, however, that Beneficiary may act through
an agent; that only the signature of such agent is required on any amendment
hereof or any consent, approval or other action hereunder; and that First
Interstate Bank of Nevada, N.A., is the initial agent hereunder); the term
"Trustee" shall mean the trustee appointed hereunder from time to time,
whether or not notice of such appointment is given; and the term "Trustor"
shall mean the Trustor named herein and the successors-in-interest, if any,
of said named Trustor, in and to the Property or any part thereof. If there
be more than one Trustor hereunder, their obligations hereunder shall be
joint and several. It is expressly agreed that the Trust created hereby is
irrevocable by Trustor.
33. Acceptance of Trust; Resignation by Trustee.
Trustee accepts this trust when this Deed of Trust, duly executed and
acknowledged, is made a public record as provided by law, reserving,
however, unto the Trustee, the right to resign from the duties and
obligations imposed herein whenever Trustee, in its sole discretion, deems
such resignation to be in the best interest of the Trustee. Written notice of
such resignation shall be given to Trustor and Beneficiary.
34. Full Performance Required; Survival of War-
ranties. All representations, warranties and covenants of Trustor contained
in any loan application or made to Beneficiary in connection with the loan
secured hereby or contained in any of the Loan Documents or incorporated
by reference therein, shall survive the execution and delivery of this Deed of
Trust and shall remain continuing obligations, warranties and representations
of Trustor so long as any portion of the obligations secured by this Deed of
Trust remains outstanding.
35. Waiver of Certain Rights By Trustor. Trustor
waives, to the extent permitted by law, (i) the benefit of all laws now
existing or that may hereafter be enacted providing for any appraisement
before sale of any portion of the Property, (ii) all rights of redemption,
valuation, appraisement, stay of execution, notice of election to mature or
declare due the whole of the secured indebtedness and marshalling in the
event of foreclosure of the liens hereby created, and (iii) all rights and
remedies which Trustor may have or be able to assert by reason of the laws
of the State of Nevada pertaining to the rights and remedies of sureties.
Without limiting the generality of the foregoing, Trustor waives, to the
extent permitted by law, all rights (including any rights provided by NRS
100.040 and 100.050) to direct the order in which any of the Property shall
be sold in the event of any sale or sales pursuant hereto and to have any of
the Property or any other property now or hereafter constituting security for
the indebtedness secured hereby marshalled upon any foreclosure of this
Deed of Trust or of any other security for any of such indebtedness.
36. Construction. The language in all parts of this
Deed Of Trust shall be in all cases construed simply according to its fair
meaning and not strictly for or against any of the parties hereto. Headings
at the beginning of Sections, Subsections, paragraphs and subparagraphs of
this Deed of Trust are solely for the convenience of the parties, are not a
part hereof and shall not be used in construing this Deed of Trust. The
preamble, any recitals and all exhibits and schedules to this Deed of Trust
are part of this Deed of Trust and are incorporated herein by this reference.
When required by the context: whenever the singular number is used in this
Deed of Trust, the same shall include the plural, and the plural shall include
the singular; and the masculine gender shall include the feminine and neuter
genders and vice versa. Unless otherwise required by the context (or
otherwise provided herein): the words "herein", "hereof" and "hereunder"
and similar words shall refer to this Deed of Trust generally and not merely
to the provision in which such term is used; the word "person" shall include
individual, partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture,
governmental authority and other entity of whatever nature; the words
"including", "include" or "includes" shall be interpreted in a non-exclusive
manner as though the words "but [is] not limited to" or "but without limiting
the generality of the foregoing" or "without limitation" immediately
followed the same; the word "month" shall mean calendar month; and the
term "business day" shall mean any day other than a Saturday, Sunday or
legal holiday under the laws of the State of Nevada. If the day on which
performance of any act or the occurrence of any event hereunder is due is
not a business day, the time when such performance or occurrence shall be
due shall be the first business day occurring after the day on which
performance or occurrence would otherwise be due hereunder. All times
provided in this Deed of Trust for the performance of any act will be strictly
construed, time being of the essence hereof.
37. Priority. This Deed of Trust is intended to have,
and retain, priority over all other liens and encumbrances upon the Real
Property, excepting only: (i) such Impositions as, at the date hereof, have,
or, by law, gain, priority over the lien created hereby; (ii) covenants,
conditions, restrictions, easements, rights of way and Leases which are of
record or are disclosed of record and which, on the date hereof, affect the
Real Property and are superior in right to or have priority over this Deed of
Trust and (iii) Leases, liens, encumbrances and other matters as to which
Beneficiary hereafter expressly subordinates the lien of this Deed of Trust by
written instrument in recordable form. Under no circumstances shall
Beneficiary be obligated or required to subordinate the lien hereof to any
lien, encumbrance, covenant or other matter affecting the Real Property or
any portion thereof. Beneficiary may, however, at Beneficiary's option,
exercisable in its sole and absolute discretion, subordinate the lien of this
Deed of Trust, in whole or in part, to any or all Leases, liens,
encumbrances or other matters affecting all or any portion of the Real
Property, by executing and recording, in the Office of the County Recorder
of the county or counties in which the Real Property is located, a unilateral
declaration of such subordination specifying the Lease, lien, encumbrance or
other matter or matters to which this Deed of Trust shall thereafter be
subordinate.
38. Amendments. This Deed of Trust cannot be
waived, changed, discharged or terminated orally, but only by an instrument
in writing signed by the party against whom enforcement of any waiver,
change, discharge or termination is sought.
39. Financing Statement. Portions of the Personal
Property (and portions of the Real Property) are goods which are or are to
become fixtures on or relating to the Real Property. This Deed of Trust
constitutes a financing statement filed as a fixture filing in the Official
Records of the County Recorder of the County in which the Property is
located with respect to any and all fixtures included within the term
"Property" as used herein and with respect to any goods or other Personal
Property that may now be or hereafter become such fixtures. The address
of Beneficiary, from which information concerning the security interest
granted hereunder may be obtained, is:
First Interstate Bank of Nevada, N.A.
Gaming Industry Division
3800 Howard Hughes Parkway
Las Vegas, Nevada 89109
Attn: Steve Byrne, V.P.
40. Attorney-in-Fact. Trustor hereby appoints
Beneficiary the attorney-in-fact of Trustor to prepare, sign, file and record
one or more financing statements; any documents of title or registration, or
like papers, and to take any other action deemed necessary, useful or
desirable by Beneficiary to perfect and preserve Beneficiary's security
interest against the rights or interests of third persons.
41. Releases, Extensions, Modifications and
Additional Security.
(a) From time to time, Beneficiary may perform any of
the following acts without incurring any liability or giving notice to any
person, and without affecting the personal liability of any person for the
payment of the Secured Obligations (except as provided below), and without
affecting the security hereof for the full amount of the Secured Obligations
on all Property remaining subject hereto, and without the necessity that any
sum representing the value of any portion of the Property affected by the
Beneficiary's action be credited on the Secured Obligations:
(i) Release any person liable for payment of any
Secured Obligation;
(ii) Extend the time for payment, or otherwise
alter the terms of payment, of any Secured Obligation;
(iii) Accept additional real or personal property of
any kind as security for any Secured Obligation, whether evidenced
by deeds of trust, mortgages, security agreements or any other
instruments of security; or
(iv) Alter, substitute or release any property
securing the Secured Obligations.
(b) From time to time when requested to do so by
Beneficiary in writing, Trustee may perform any of the following acts
without incurring any liability or giving notice to any person:
(i) Consent in writing to the making of any plat
or map of the Property or any part of it;
(ii) Join in granting any easement or creating any
restriction affecting the Property;
(iii) Join in any subordination or other agreement
affecting this Deed of Trust or the lien of it or other agreement or
instrument relating hereto or to the Property or any portion thereof;
or
(iv) Reconvey the Property or any part of it
without any warranty.
42. Exculpation and Indemnification.
(a) Beneficiary shall not be directly or indirectly liable
to Trustor or any other person as a consequence of any of the following:
(i) Beneficiary's exercise of or failure to exercise
any rights, remedies or powers granted to Beneficiary in this Deed
of Trust;
(ii) Beneficiary's failure or refusal to perform or
discharge any obligation or liability of Trustor under any agreement
related to the Property or under this Deed of Trust; or
(iii) Any loss sustained by Trustor or any third
party resulting from Beneficiary's failure to lease the Property, or
from any other act or omission of Beneficiary in managing the
Property, after an Event of Default, unless the loss is caused by the
willful misconduct, gross negligence or bad faith of Beneficiary.
To the extent permitted by applicable law, Trustor hereby expressly waives
and releases all liability of the types described above, and agrees that no
such liability shall be asserted against or imposed upon Beneficiary.
(b) Except for losses caused by the willful misconduct,
gross negligence or bad faith of Trustee or Beneficiary, Trustor agrees to
indemnify Trustee and Beneficiary against and hold them harmless from all
losses, damages, liabilities, claims, causes of action, judgments, court
costs,
reasonable attorneys' fees and other reasonable legal expenses, cost of
evidence of title, cost of evidence of value, and other reasonable costs and
expenses which either may suffer or incur:
(i) In performing any act required or permitted by
this Deed of Trust or any of the other Loan Documents or by law;
(ii) Because of any failure of Trustor to perform
any of Trustor's obligations; or
(iii) Because of any alleged obligation of or
undertaking by Beneficiary to perform or discharge any of the
representations, warranties, conditions, covenants or other
obligations in any document relating to the Property other than the
Loan Documents.
This agreement by Trustor to indemnify Trustee and Beneficiary shall
survive the release and cancellation of any or all of the Secured Obligations
and the full or partial release and/or reconveyance of this Deed of Trust.
(c) Trustor shall pay all amounts arising under the
indemnity obligations of this Deed of Trust immediately upon demand by
Trustee or Beneficiary.
43. Relationship to Credit Agreement. This Deed of
Trust has been executed pursuant to and is subject to the terms of the Credit
Agreement executed concurrently herewith and Trustor agrees to observe
and perform all provisions contained therein. If and to the extent of any
conflict between the provisions of the Credit Agreement and the provisions
of this Deed of Trust, the provisions of this Deed of Trust shall control.
44. Relationship to Security Agreement. Concurrently
herewith, Trustor is entering into the Security Agreement with Beneficiary
with respect to the Personal Property. As provided above, the terms of said
Security Agreement shall, with respect to the Personal Property and the
security interest therein granted hereby, supplement the terms of this Deed
of Trust and, if and to the extent of any conflict with the terms hereof
applicable to said security interest and Personal Property, shall, to the
extent
enforceable, control. Nothing in this Section 44 shall be deemed or
construed, however, to impair the rights of Beneficiary to conduct one or
more Trustee's Sales at which real and personal property are sold together
pursuant to the laws applicable to the sale of real property.
45. Relationship to Environmental Indemnity.
Concurrently herewith, Trustor has executed an agreement entitled
"Environmental Indemnity" for the benefit of the Lenders. Trustor hereby
acknowledges and agrees that, notwithstanding any other provision of this
Deed of Trust to the contrary, the obligations of Trustor under such
"Environmental Indemnity" agreement shall be unlimited personal
obligations of Trustor, the obligations of Trustor under such instrument shall
not be secured by this Deed of Trust and shall survive foreclosure under this
Deed of Trust, any transfer in lieu thereof, and any satisfaction of the
Secured Obligations.
46. Severability. If any provision in or obligation
under this Deed of Trust shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
47. Loan Statement Fees. Trustor shall pay the
amount demanded by Beneficiary or its authorized loan servicing agent for
any statement requested by Trustor regarding the obligations secured hereby;
provided, however, that such amount may not exceed the maximum amount
allowed by law at the time request for the statement is made.
48. Notices.
(a) Methods; Addresses. All notices, requests and
demands to be made hereunder to the parties hereto shall be in writing and
shall be given by any of the following means: (i) personal service;
(ii) electronic communication, whether by telex, telegram or telecopying (if
confirmed in writing sent by registered or certified, first class mail, return
receipt requested); or (iii) registered or certified, first class mail, return
receipt requested. Such addresses may be changed by notice to the other
parties given in the same manner as provided above. Any notice, demand
or request sent pursuant to clause (i) of this Section shall be deemed
received upon such personal service, and if sent pursuant to clause (ii) of
this Section shall be deemed received upon receipt if sent prior to 5:00 p.m.
on a business day, and otherwise shall be deemed received on the next
succeeding business day, and, if sent pursuant to clause (iii) of this Section
shall be deemed received three (3) days following deposit in the mail.
To Beneficiary: First Interstate Bank of Nevada, N.A.
Gaming Industry Division
3800 Howard Hughes Parkway
Las Vegas, Nevada 89109
Attn: Steve Byrne, V.P.
With a copy to: O'Melveny & Myers
400 South Hope Street
Los Angeles, California 90071-2899
Attn: Jack B. Hicks III, Esq.
To Trustor: Circus and Eldorado Joint Venture
430 North Virginia Street
Reno, Nevada 89503
Attn: General Manager
To Trustee: First American Title Company of Nevada
241 Ridge Street
Reno, Nevada 89504
Attn: Gene T. Turk
(b) Reliance on Faxes. Each party hereto (a "Recipient")
who receives from another party hereto (a "Sender") by electronic facsimile
transmission (telecopier or fax) any writing which appears to be signed by
an authorized signatory of that Sender is authorized to rely and act upon that
writing in the same manner as if the original signed writing was in the
possession of the Recipient upon oral confirmation of that Sender to the
Recipient that the writing was signed by an authorized signatory of that
Sender and is intended by that Sender to be relied upon by the Recipient.
Each party transmitting any writing to any other party by electronic
facsimile transmission agrees to forward immediately to that Recipient, by
expedited means (for next day delivery, if possible), or by first class mail
if
the Recipient so agrees, the signed hard copy of that writing, unless the
Recipient expressly agrees to some other disposition of the original by the
Sender.
49. Governing Law. THIS DEED OF TRUST SHALL
BE GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF
THE STATE OF NEVADA, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES, EXCEPT TO THE EXTENT THAT
APPLICABLE LAW PROVIDES THAT THE VALIDITY OR
PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR
REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR
COLLATERAL ARE GOVERNED BY THE LAWS OF A
JURISDICTION OTHER THAN THE STATE OF NEVADA.
50. Consent to Jurisdiction and Service of Process. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST TRUSTOR
ARISING OUT OF OR RELATING TO THIS DEED OF TRUST MAY
BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF NEVADA, AND
BY EXECUTION AND DELIVERY OF THIS DEED OF TRUST
TRUSTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH
ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND
IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT
RENDERED THEREBY IN CONNECTION WITH THIS DEED OF
TRUST. Trustor hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified mail,
return receipt requested, to Trustor at its address provided in the Credit
Agreement, such service being hereby acknowledged by Trustor to be
sufficient for personal jurisdiction in any action against Trustor in any such
court and to be otherwise effective and binding service in every respect.
Nothing herein shall affect the right to serve process in any other manner
permitted by law.
51. Waiver of Jury Trial. TRUSTOR AND
BENEFICIARY HEREBY AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS DEED OF
TRUST. The scope of this waiver is intended to be all-encompassing of any
and all disputes that may be filed in any court and that relate to the subject
matter of this transaction, including without limitation contract claims, tort
claims, breach of duty claims, and all other common law and statutory
claims. Trustor and Beneficiary each acknowledge that this waiver is a
material inducement for Trustor and Beneficiary to enter into a business
relationship, that Trustor and Beneficiary have already relied on this waiver
in entering into this Deed of Trust and that each will continue to rely on
this
waiver in their related future dealings. Trustor and Beneficiary further
warrant and represent that each has reviewed this waiver with its legal
counsel, and that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED
EITHER ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS DEED OF TRUST.
In the event of litigation, this Deed of Trust may be filed as a written
consent to a trial by the court.
52. Nonforeign Entity. Section 1445 of the Internal
Revenue Code of 1986, as amended (the "Code") provides that a transferee
of a U.S. real property interest must withhold tax if the transferor is a
foreign person. To inform Beneficiary that the withholding of tax will not
be required in the event of the disposition of the Property pursuant to the
terms of this Deed of Trust, Trustor hereby certifies, under penalty of
perjury, that:
(a) Trustor is not a foreign corporation, foreign partnership,
foreign trust or foreign estate, as those terms are defined in the Code and
the regulations promulgated thereunder; and
(b) Trustor's U.S. employer identification number is 88-
0310787; and
(c) Trustor's principal place of business is 430 North
Virginia Street, Reno, Nevada 89503.
It is understood that Beneficiary may disclose the contents of this
certification to the Internal Revenue Service and that any false statement
contained herein could be punished by fine, imprisonment or both. Trustor
covenants and agrees to execute such further certificates, which shall be
signed under penalty of perjury, as Beneficiary shall reasonably require.
The covenant set forth herein shall survive the foreclosure of the lien of
this
Deed of Trust or acceptance of a deed in lieu thereof.
53. Counterparts. This Deed of Trust may be executed in
any number of counterparts, each of which shall be deemed an original and
all of which shall constitute one and the same document with the same effect
as if all parties had signed the same signature page. Any signature page and
acknowledgment page of this Deed of Trust may be detached from any
counterpart of this Deed of Trust and reattached to any other counterpart of
this Deed of Trust identical in form hereto but having attached to it one or
more additional signature and acknowledgment pages.
[SIGNATURES ON NEXT PAGE]<PAGE>
IN WITNESS WHEREOF, Trustor has executed this
instrument as of the day and year first above written.
TRUSTOR:
CIRCUS AND ELDORADO JOINT VENTURE,
a Nevada general partnership
By: GALLEON INC.
Its: Managing Partner
By: _____________________________
Title: __________________________
By: ELDORADO LIMITED LIABILITY COMPANY
Its: General Partner
By: _____________________________
Title: __________________________
<PAGE>
STATE OF NEVADA )
) ss
COUNTY OF WASHOE )
This instrument was acknowledged before me on May ___,
1995, by ____________________________________ as
______________________________________________ of/for CIRCUS
AND ELDORADO JOINT VENTURE.
____________________________
Notary Public
STATE OF NEVADA )
) ss
COUNTY OF WASHOE )
This instrument was acknowledged before me on May ___,
1995, by ____________________________________ as
______________________________________________ of/for CIRCUS
AND ELDORADO JOINT VENTURE.
____________________________
Notary Public
<PAGE>
EXHIBIT A
Legal Description
THE LAND REFERRED TO HEREIN IS SITUATED IN THE
COUNTY OF WASHOE, STATE OF NEVADA, AND IS
DESCRIBED AS FOLLOWS:
PART I:
PARCEL 1:
Beginning at the intersection of the Southern line of West Fifth Street
with the Western line of North Virginia Street; thence Southerly
along
said Western line of North Virginia Street, 88.00 feet; thence
Westerly
parallel with the Northern line of West Fourth Street 140.00 feet to
the
Eastern line of alley; thence Northerly along the last mentioned line
88.00 feet to said Southern line of West Fifth Street; thence
Easterly
along said Southern line of West Fifth Street, 140.00 feet to the
point of
beginning.
PARCEL 2:
Beginning at the intersection of the West line of North Virginia Street
with the North line of Lot 10 in Block "B" of ORIGINAL TOWN,
NOW CITY OF RENO, according to the map thereof, filed in the office
of the County Recorder of Washoe County, State of Nevada, on June
27, 1871; thence Northerly along the Westerly line of North
Virginia
Street, 12 feet, more or less, to the Southeast corner of the parcel
of
land described in the deed to Ivanhoe Corporation of record in Book
453, File No. 278019, Deed Records; thence Westerly along the
Southern line of said Ivanhoe Corporation parcel 140 feet to the
Easterly
line of an alley; thence Southerly along the last mentioned line,
12 feet,
more or less, to the Northwest corner of said Lot 10; thence Easterly
to
the point of beginning.
PARCEL 3:
Lots 10, 11, 12 and the North 13 feet of Lot 13 in Block "B" of
ORIGINAL TOWN, NOW CITY OF RENO, according to the map
thereof, filed in the office of the County Recorder of Washoe County,
State of Nevada, on June 27, 1871.
PARCEL 4:
The Northerly 9.25 feet of Lot 3 and all of Lots 4, 5, 6, 7 and 8 in
Block "B" of ORIGINAL TOWN, NOW CITY OF RENO, according to
the map thereof, filed in the office of the County Recorder of Washoe
County, State of Nevada, on June 27, 1871.
ALSO a parcel of land bounded on the South by the Southern line of the
40 foot alley as laid out on the map of the Town, now City of Reno,
in
said Block "B", bounded on the West by the Eastern line of North
Sierra Street, bounded on the North by the Southern line of West
Fifth
Street and bounded on the East by the Western line of the 20 foot
alley
running Northerly and Southerly through said Block "B".
PARCEL 5:
The South 37 feet of Lot 13 in Block "B" of the "ORIGINAL TOWN,
NOW CITY OF RENO", according to the official map thereof, filed in
the office of the County Recorder of Washoe County, State of Nevada,
on June 27, 1871.
PARCEL 6:
Lot 14 in Block B of ORIGINAL TOWN, NOW CITY OF RENO,
according to the map thereof, filed in the office of the County
Recorder
of Washoe County, State of Nevada, on June 27, 1871.
PARCEL 7:
The West forty (40) feet of Lot Fifteen (15) in Block "B" fronting
forty
(40) feet on the North line of Fourth Street, as designated on the
official
map of said City of Reno, Nevada, on file and of record in the office
of
the County Recorder in and for the said County of Washoe; the
property
hereby conveyed being the same property described in a Deed from May
J. A. Nadon and others to Dale V. Clanton, dated November 18, 1920,
and filed for record on the 29th day of November, 1920, in the
office
of the County Recorder in and for the County of Washoe, and therein
recorded in Book 56 of Deeds, at Page 440.
PARCEL 8:
The East 100 feet of Lot 15 in Block B of original town, now City of
Reno, according to the map thereof, filed in the office of the County
Recorder of Washoe County, State of Nevada, on June 27, 1871.
PARCEL 9:
All of Lots 1 and 2, and the South 40.75 feet of Lot 3 in Block B of
the
ORIGINAL TOWN, NOW CITY OF RENO, according to the map
thereof, filed in the office of the County Recorder of Washoe County,
State of Nevada, on June 27, 1871.
PARCEL 10:
The South 20 feet of Lot 10, and all of Lots 11, 12, 13, 14, 15 and 16,
in Block A, of ORIGINAL TOWN, NOW CITY OF RENO, according
to the map thereof, filed in the office of the County Recorder of
Washoe
County, State of Nevada, on June 27, 1871.
TOGETHER WITH the East 1/2 of the North-South alley running
through said Block A, immediately adjoining Lots 11, 12, 13, 14, 15
and 16 on the West, and more particularly described in those certain
Orders of Abandonment recorded January 19, 1977 in Book 1044, Page
521 as Document No. 445058, and recorded November 14, 1985 in
Book 2251, Page 933 as Document No. 1034253 of Official Records.
PARCEL 11:
The East 78 feet of Lot 9 and the East 78 feet of the North 30 feet of
Lot 10 in Block A of the ORIGINAL TOWN, NOW CITY OF RENO,
according to the Official Map thereof, filed in the office of the
County
Recorder of Washoe County, State of Nevada, on June 27, 1871.
Together with that portion of the vacated alley lying Southerly of the
Southerly line of West Fifth Street and Westerly of the Westerly
line of
North Sierra Street adjoining said Lot 9 at its most Northeasterly
corner.
PARCEL 12:
A portion of the Southwest 1/4 of the Northeast 1/4 of Section 11,
Township 19 North, Range 19 East, M.D.B&M., lying and being in the
City of Reno, County of Washoe, State of Nevada, and more
particularly described as follows:
The Westerly 74 feet of Lot 9 and the Westerly 74 feet of the North 30
feet of Lot 10, all in Block A of the ORIGINAL TOWN, NOW CITY
OF RENO, according to the official map thereof, filed in the office
of
the County Recorder of Washoe County, State of Nevada, on June 27,
1871.
PARCEL 13:
BEGINNING at the Northeast corner of Lot 8, Block A, as shown on
the official plat of the town, now City of Reno, Nevada, filed in the
office of the County Recorder of Washoe County, Nevada, on June 27,
1871; thence Southerly along the Easterly lines of Lots 8 and 7 of
said
Block A to the Southeast corner of Lot 7; thence Westerly along the
Southerly line of Lot 7 and the Southerly line of Lot 7 projected to
its
intersection with the Easterly line of West Street; thence Northerly
along
the Easterly line of West Street to the Southerly line of West Fifth
Street; thence Easterly along the Southerly line of West Fifth Street
to
the point of beginning.
PARCEL 14:
Lots 1, 2, 3, 4, 5, 6, in Block A, of ORIGINAL TOWN, NOW CITY
OF RENO, according to the map thereof, filed in the office of the
County Recorder of Washoe County, State of Nevada, on June 27,
1871, together with that parcel immediately adjoining Lots 5 and 6 on
the West, that is more particularly described as follows:
BEGINNING at the Northeasterly corner of Lot 6, in Block A of
ORIGINAL TOWN, NOW CITY OF RENO, according to the map
thereof, filed in the office of the County Recorder of Washoe County,
State of Nevada, on June 27, 1871; thence Southerly along the
Easterly
line of said Lots 5 and 6, in Block A, 100 feet to the
Southeasterly corner thereof; thence Westerly along the Southerly
line of
said Lot 5 and the Southerly line of Lot 5 extended Westerly to the
Easterly line of West Street, as now located in the City of Reno, a
distance of 140 feet; thence Northerly along the Easterly line of
West
Street 100 feet to a point which would be intersected by a line
extended
Westerly from the Northeasterly corner of said Lot 6 and along the
Northerly line of said Lot 6; thence Easterly and along said line and
the
Northerly line of said Lot 6, a distance of 140 feet to the
Northeasterly
corner of said Lot 6, the point of beginning; said premises being
Lots 5
and 6 in Block A of the TOWN OF RENO, according to the map above
mentioned, and that portion of the 40 foot alley around the Town of
Reno, according to the map above mentioned, lying Westerly of Lots 5
and 6 and East of the East line of West Street, as now located and
between the Northerly and Southerly line of said Lots 5 and 6 if said
lines were extended Westerly to the Easterly line of West Street as
now
located.
TOGETHER WITH the West one-half of the North-South alley running
through said Block A, immediately adjoining said LOTS 1, 2, 3, 4, 5
and 6 on the East, and more particularly described in those certain
Orders of Abandonment recorded January 19, 1977 in Book 1044, Page
521 as Document No. 445058, and recorded on November 14, 1985 in
Book 2251, Page 533 as Document No. 1034253, Official Records,
Washoe County, State of Nevada.
PARCEL 15:
All that certain 20.0 ft. wide alley connecting West Fourth Street with
West Fifth Street, Reno, Nevada, lying within Block B of the original
Town, now City of Reno, according to the map thereof, filed in the
Office of the Washoe County Recorder on June 27, 1871, and within
Block B of the Evans North Addition, according to the map thereof,
filed in the office of the Washoe County Recorder on December 16,
1879.
PARCEL 16:
All that certain 20.0 ft. wide alley lying between Lots 7, 8, 9 and 10
of
Block A of the Original Town, now City of Reno, according to the map
thereof, filed in the office of the Washoe County Recorder on June
27,
1871.
PARCEL 17: (Air Rights Only)
All that certain piece or parcel of land located within a portion of
the
Northeast 1/4 of Section 11, Township 19 North, Range 19 East,
M.D.B.&M. more particularly described as follows:
That certain air space located above Sierra Street commencing at an
elevation of 4,521 and extending vertically 32 feet to an elevation
of
4,553 feet, which height is measured from the finished floor
elevation of
the Silver Legacy Casino at 4,503 feet, and located directly over
that
certain parcel of real property described as follows:
Commencing at the Southwest corner of Block B Reno Townsite as
shown on Record-of-Survey 2665, recorded January 27, 1994,
thence North 13 degrees 48'48" West 97.13 feet to the True Point of
Beginning
thence North 13 degrees 48'48" West 223.17 feet
thence South 76 degrees 11'12" West 80.00 feet
thence South 13 degrees 48'48" East 223.17 feet
thence North 76 degrees 11'12" East 80.00 feet to the True Point of
n Beginning
PARCEL 18: (Subterranean Rights Only)
All that certain piece or parcel of land located within a portion of
the
Northeast 1/4 of Section 11, Township 19 North, Range 19 East,
M.D.B.&M. more particularly described as follows:
That certain subterranean space located beneath Sierra Street
commencing at an elevation of 4,480 and extending vertically 20 feet
to
an elevation of 4,500 feet, which height is measured from the
finished
floor elevation of the Silver Legacy Casino at 4,503 feet, and
located
directly below that certain parcel of real property described as
follows:
Commencing at the Southwest corner of Block B Reno Townsite as
shown on Record-of -Survey 2665, recorded January 27, 1994,
thence North 13 degrees 48'48" West 181.05 feet to the True Point of
Beginning
thence North 13 degrees 48'48" West 24.33 feet
thence South 76 degrees 11'12" West 80.00 feet
thence South 13 degrees 48'48" East 24.33 feet
thence North 76 degrees 11'12" East 80.00 feet to the True Point of
Beginning
EXCEPTING THEREFROM the above Parcels 1 through 18, all those
certain parcels as conveyed to THE CITY OF RENO, a Nevada
municipal corporation, by Deed of Dedication recorded March 9, 1995
in Book 4259, Page 956 as Document No. 1876631 of Official Records,
and as amended by Deed of Dedication recorded May 5, 1995 in Book
4297, Page 667 as Document No. 1891266 of Official Records.
PART II:
PARCEL 19:
Together with the reciprocal easement rights, as contained in those
certain Bridge Easements dated May ___, 1995 by and between
CIRCUS AND ELDORADO JOINT VENTURE, a Nevada general
partnership and CIRCUS CIRCUS CASINO, INC., a Nevada
corporation and ELDORADO HOTEL ASSOCIATES LIMITED
PARTNERSHIP, a Nevada limited partnership, recorded May __ 1995
as Document Numbers _________________ and _________________
Official Records, Washoe County, Nevada.
<PAGE>
TABLE OF CONTENTS
Parties. . . . . . . . . . . . . . . . . . . . . . . 1
Description of Real Property Collateral. . . . . . . 1
Description of Personal Property Collateral. . . . . 3
1. Certain Representations and Warranties of Trustor 7
2. Payment of Obligations. . . . . . . . . . . . 7
3. Compliance with Laws. . . . . . . . . . . . . 7
4. Maintenance of Property . . . . . . . . . . . 8
5. Environmental Obligations.. . . . . . . . . . 8
6. Insurance . . . . . . . . . . . . . . . . . . . 9
(a) Types and Amounts Required . . . . . . . . 9
(b) Uniform Policy Requirements. . . . . . . 11
(c) Blanket and Umbrella Policies. . . . . . 12
(d) Evidence of Insurance. . . . . . . . . . 12
(e) Procurement by Beneficiary . . . . . . . 12
(f) Reserve Fund . . . . . . . . . . . . . . 12
(g) Replacement Cost . . . . . . . . . . . . 13
(h) Separate Insurance . . . . . . . . . . . 13
(i) Compliance with Insurance Requirements . 13
(j) Assignment of Policies upon Foreclosure. 13
(k) Waiver of Subrogation. . . . . . . . . . 13
(l) Requirements Supplemental. . . . . . . . 14
7. Casualties; Insurance Proceeds. . . . . . . . 14
(a) Notice of Casualties . . . . . . . . . . 14
(b) Payment of Proceeds. . . . . . . . . . . 14
(c) Use in Restoration . . . . . . . . . . . 14
(d) Application by Beneficiary . . . . . . . 15
(e) Duty to Restore. . . . . . . . . . . . . 15
8. Taxes and Impositions . . . . . . . . . . . . 15
(a) Payment by Trustor . . . . . . . . . . . 15
(b) New Impositions. . . . . . . . . . . . . 15
(c) Proof of Payment . . . . . . . . . . . . 16
(d) Contest of Assessments . . . . . . . . . 16
(e) Reserve Fund . . . . . . . . . . . . . . 16
(f) Joint Assessment . . . . . . . . . . . . 17
(g) Tax Service. . . . . . . . . . . . . . . 17
9. Liens . . . . . . . . . . . . . . . . . . . . 17
10. Easements and Leaseholds. . . . . . . . . . . 17
11. Further Acts. . . . . . . . . . . . . . . . . 17
12. Assignment of Rents . . . . . . . . . . . . . 18
(a) Assignment to Beneficiary; Trustor's Limited License to
Collect Prior to Default . . . . . . . 18
(b) No Other Assignments . . . . . . . . . . 18
13. Actions Affecting Property. . . . . . . . . . 18
14. Eminent Domain. . . . . . . . . . . . . . . . 18
15. Due on Sale . . . . . . . . . . . . . . . . . 19
16. Partial or Late Payments. . . . . . . . . . . 20
17. Reconveyance By Trustee . . . . . . . . . . . 20
18. Right of Beneficiary and Trustee to Appear. . 20
19. Performance by Trustee or Beneficiary . . . . 20
20. Inspections . . . . . . . . . . . . . . . . . 21
21. Invalidity of Lien. . . . . . . . . . . . . . 21
22. Subrogation . . . . . . . . . . . . . . . . . 21
23. Events of Default . . . . . . . . . . . . . . 21
24. Remedies. . . . . . . . . . . . . . . . . . . 21
(a) Acceleration . . . . . . . . . . . . . . 21
(b) Receiver . . . . . . . . . . . . . . . . 22
(c) Entry. . . . . . . . . . . . . . . . . . 22
(d) Cure; Protection of Security . . . . . . 22
(e) Uniform Commercial Code Remedies . . . . 23
(f) Judicial Action. . . . . . . . . . . . . 23
(g) Power of Sale. . . . . . . . . . . . . . 23
(h) Single or Multiple Foreclosure Sales . . 24
25. Costs of Enforcement. . . . . . . . . . . . . 24
26. Remedies Cumulative and Not Exclusive . . . . 25
27. Credit Bids . . . . . . . . . . . . . . . . . 25
28. Application of Foreclosure Sale Proceeds. . . 25
29. Application of Rents and Other Sums . . . . . 26
30. Incorporation of Certain Nevada Covenants . . 26
31. Substitution of Trustee . . . . . . . . . . . 26
32. Binding Nature. . . . . . . . . . . . . . . . 26
33. Acceptance of Trust; Resignation by Trustee . 27
34. Full Performance Required; Survival of Warranties 27
35. Waiver of Certain Rights By Trustor . . . . . 27
36. Construction. . . . . . . . . . . . . . . . . 27
37. Priority. . . . . . . . . . . . . . . . . . . 27
38. Amendments. . . . . . . . . . . . . . . . . . 28
39. Financing Statement . . . . . . . . . . . . . 28
40. Attorney-in-Fact. . . . . . . . . . . . . . . 28
41. Releases, Extensions, Modifications and Additional Security 28
42. Exculpation and Indemnification . . . . . . . 29
43. Relationship to Credit Agreement. . . . . . . 30
44. Relationship to Security Agreement. . . . . . 30
45 Relationship to Environmental Indemnity . . . 30
46. Severability. . . . . . . . . . . . . . . . . 30
47. Loan Statement Fees . . . . . . . . . . . . . 30
48. Notices . . . . . . . . . . . . . . . . . . . 30
(a) Methods; Addresses . . . . . . . . . . . 30
(b) Reliance on Faxes. . . . . . . . . . . . 31
49. Governing Law . . . . . . . . . . . . . . . . 31
50. Consent to Jurisdiction and Service of Process 31
51. Waiver of Jury Trial. . . . . . . . . . . . . 32
Acknowledgments. . . . . . . . . . . . . . . . . . . 34
EXHIBIT A - Legal Description. . . . . . . . . . . . 35
EXHIBIT XVI
[FORM OF REQUISITION]
REQUISITION
Requisition No. __________
In connection with and in order to induce Lenders listed on the
signature pages of that certain Credit Agreement, dated as of
May 30, 1995 by and among Circus and Eldorado Joint Venture
("Partnership"), First Interstate Bank of Nevada, N.A., as arranger
and administrative agent (in such capacity, "Agent"), Lenders, and
First Interstate Bank of Nevada, N.A., The Long-Term Credit Bank
of Japan, Ltd., Los Angeles Agency and Societe Generale, as
managing agents, and Bank of America, N.T. & S.A., CIBC Inc.
and Credit Lyonnais, Los Angeles Branch, collectively, as co-agents
(the "Credit Agreement"; capitalized terms defined in the Credit
Agreement and not defined herein being used herein as defined
therein), to advance the amount requested in the Notice of
Borrowing of even date herewith submitted in connection herewith,
each of the undersigned officers of Partnership, Executive
Committee Signatories and Partnership hereby represents, warrants
and stipulates as follows:
1. Schedule 1 attached hereto sets forth the Primary Items,
Construction Costs Incurred and paid against such Primary Items to
the date hereof, estimated Construction Costs to Finally Complete
Construction, Construction Costs for which Partnership is
committed pursuant to contract to the date hereof, together with a
break-out of Primary Items (including Pre-Opening Expenses), all in
substantially the form prepared for internal Project funding prior to
the Closing Date. All Construction Costs Incurred are allocated on
Schedule 1 to one and only one Primary Item.
2. The conditions of subsection 4.2 of the Credit Agreement
have been complied with.
3. Calculations of Material Overrun:
a) Total amount to Finally Complete
Construction set forth in Budget as submitted
on Closing Date. . . . . . . .$___________
b) Total amount expended to date on
Construction Costs . . . . . .$___________
c) Amount of this Requisition for funding$___________
d) Total Construction Costs Incurred ((b) + (c)) $___________
e) Budget amount less Total Construction Costs
Incurred ((a) - (d)) . . . . .$___________
f) Total costs to Finally Complete Construction$___________
g) Amount of overrun, if any ((f) - (e))$___________
h) Calculation of Change Order review - is (g)
greater than $25 million?. . . Yes/No
(If yes, follow document instructions)
i) Calculation of Material Overrun - is (g)
greater than
10% of (a)?. . . . . . . . . . . Yes/No
(If yes, follow document instructions)
4. Attached hereto is any request for Lenders' consent
required to be delivered pursuant to subsection 4.2 D(iv) of the
Credit Agreement.
5. Attached hereto are copies of Change Orders signature
pages and grid summary pages that set forth the total amount
approved by all Change Orders (and a list of all Change Orders
contemplated or under negotiation), if any, required to be delivered
pursuant to subsection 4.2D(v) of the Credit Agreement. Change
Orders executed or to be executed after the Closing Date do [not]
exceed $263,539,808 by $25 million or more individually or in the
aggregate.
6. Total Utilization of Commitments:
a. Outstanding Loans (including Loans under
this Requisition) $_________
b. Letter of Credit Usage $_________
c. Total Utilization of Commitments ((a) + (b))$_________
d. Construction Costs Incurred after the Closing
Date to date plus Short Term General Partner
Subordinated Debt plus the aggregate amount
of all Working Capital Loans . .$_________
[7. Delivered herewith are true and complete copies of all
Documentary Support, Lien Waivers and other documents, if any,
requested by Agent pursuant to subsection 4.2D(vi) of the Credit
Agreement.]
[8. Delivered herewith are true and complete copies of all
letters, reports, certificates, surveys and other documents required
to be delivered pursuant to subsection 4.2F of the Credit
Agreement.]
<PAGE>
DATED ______________________ CIRCUS AND
ELDORADO JOINT
VENTURE,
a Nevada general
partnership
By:
______________________
Its:
_____________________
By:
______________________
Its: Executive Committee
Signatory
<PAGE>
Requisition No. ________
Date: _________________
SCHEDULE 1
Primary Item<PAGE>
Budgeted
Amount<PAGE>
Committed
Amount<PAGE>
Actual Amount
Paid<PAGE>
Amounts of
Construction
Costs Incurred
Approved by
Circus for
Payment
<PAGE>
1. Land
Acquisition<PAGE>
<PAGE>
2. Architectural
and Engineer-
ing Work<PAGE>
<PAGE>
3. Base Building
Construction
Costs<PAGE>
<PAGE>
4. Special
Attractions<PAGE>
<PAGE>
5. Furniture,
Fixtures and
Equipment<PAGE>
<PAGE>
6. Contingency
7. Legal
8. Insurance<PAGE>
<PAGE>
9. Construction
Period Interests
10. Working
Capital<PAGE>
<PAGE>
11. Pre-Opening
Expenses<PAGE>
<PAGE>
Total:<PAGE>
SCHEDULE 2
PARTIAL AND CONDITIONAL RELEASE AND WAIVER
OF LIEN OF THE CURRENT AMOUNT DUE
AND UNCONDITIONAL RELEASE AND WAIVER OF LIEN
OF ALL PREVIOUS ITEMS PROVIDED ON THE PROJECT
The undersigned has furnished labor, materials, services
and/or equipment for the construction of SILVER LEGACY
(hereinafter referred to as "Project") on the property of CIRCUS
AND ELDORADO JOINT VENTURE (hereinafter referred to as
"Owner"), located between Fourth Street and Fifth Street and North
Virginia Street and West Street in Reno, Nevada (hereinafter
referred to as "Property") pursuant to any and all express or
implied contract(s) or subcontract(s) through and including the date
specified below (hereinafter referred to as the "Cutoff Date").
Now, therefore, in consideration of the payment of the
sum specified below (hereinafter referred to as the "Current
Amount Due") representing payment currently due the undersigned
(less retention and such other sums that the Owner or General
Contractor may withhold) for the above-mentioned labor, materials,
services and equipment furnished to the above Project and Property
through the Cutoff Date, the undersigned hereby forever waives and
releases any and all lien, claim of lien, all labor and material, bond
rights and claims, any and all equitable lien rights and claims and
any demand whatsoever that now exist or may hereafter accrue on
or against the Project and Property and against Owner and General
Contractor, on account of labor, materials, services and equipment
furnished by the undersigned through and including the Cutoff Date.
This release does not cover any retention, those funds the Owner
withheld or any items or labor furnished by the undersigned after
the Cutoff Date. The Release for the Current Amount Due is
conditioned upon the undersigned's receipt of a check in the sum of
the Current Amount Due.
In addition, the undersigned hereby represents and
warrants that the undersigned has been paid in full (except for any
retention or any disputed claims for extra work or offsets which the
undersigned has specifically asserted to date, which claims, if any,
are attached hereto*) for all labor, services, equipment and/or
material furnished by the undersigned to any party in connection
with the Project up to and including the Cutoff Date, other than the
items which are subject of the Current Amount Due, and the
undersigned hereby expressly, unconditionally and fully waives and
releases any rights of mechanic's lien or equitable lien and any
bond rights in connection therewith.
This Partial and Conditional Release of All Claims and
Waiver of Lien shall inure to the benefit of, and may be relied upon
by Owner, General Contractor, any applicable Construction Lender,
and any Principal and Surety of any Bond furnished in connection
with the construction of the Project.
The undersigned represents and warrants that all labor,
materials, services and equipment, performed or supplied by or
through the undersigned or incorporated in the Project or Property
through the Cutoff Date are free from any claims, liens, or
encumbrances. The undersigned represents and warrants that
payment has been made by the undersigned to all persons working
on this Project or Property who are entitled to compensation on said
Project or Property including trust funds and to all workmen, (sub)
subcontractors, suppliers, laborers and materialmen who may have
delivered materials or rented equipment to or performed work at or
on behalf of the Project and all architects, engineers, consultants
and others providing services at or on behalf of the Property on the
Project. The undersigned shall and does hereby indemnify, save
and hold the Owner and the General Contractor harmless from any
and all claims, damages, liens or losses, expenses, including all
costs, professional fees and attorneys fees, which the Owner and/or
General Contractor may suffer or incur by reason of the filing of
any claims, notices, liens, encumbrances, suits against Owner,
General Contractor or the Property, or the failure of the
undersigned to obtain cancellation and discharge thereof.
CUTOFF DATE: __________________________
CURRENT AMOUNT DUE:
__________________
Original Contract Price:
$____________________________
Total Change Orders to date: $____________________________
Revised Contract Amount (total):
$____________________________
Amount Paid to Date:
$____________________________
(*Note: It shall be deemed to be a conclusive evidence
that no claims exist against the Owner or General Contractor if
nothing is attached to this Partial and Conditional Release of All
Claims and Waiver of Lien)
DATED this ___ day of _____________, 1995.
CONTRACTOR/SUPPLIER/LABORER:
__________________________________
By:_______________________________
Its:_______________________________
<PAGE>
FULL AND FINAL UNCONDITIONAL RELEASE OF
ALL CLAIMS AND WAIVER OF LIEN
The undersigned has furnished labor, materials, services
and/or equipment for the construction of the SILVER LEGACY,
(hereinafter referred to as the "Project") on the property of
CIRCUS AND ELDORADO JOINT VENTURE (hereinafter
referred to as the "Owner") located between Fourth Street and Fifth
Street and North Virginia Street and West Street in Reno, Nevada
(hereinafter referred to as "Property") pursuant to any and all
expressed or implied contracts.
In consideration of the sum of
$_________________________, representing full and final payment
for the above-mentioned labor, materials, services and equipment
furnished to the above Project and Property, the receipt and
sufficiency of which consideration are hereby acknowledged, the
undersigned does hereby forever waive and release any and all lien,
claim of lien, all labor and material bond rights and claims, any and
all equitable lien rights and claims and any demands whatsoever that
now exist or may hereafter accrue on or against the Project and
Property and against Owner and General Contractor, on account of
labor, materials, services and equipment furnished by the
undersigned.
This RELEASE and WAIVER shall inure to the benefit
of, and may be relied upon by: Owner, General Contractor, any
applicable Construction Lender, and any principal and Surety of any
Bond furnished in connection with the construction of the Project.
The undersigned represents and warrants that all labor,
materials, services and equipment, performed or supplied by or
through the undersigned or incorporated in the Project or Property
are free from any claims, liens, or encumbrances. The undersigned
represents and warrants that payment has been made by the
undersigned to all persons working on this Project or Property and
entitled to compensation on said Project or Property, including trust
funds and to all workmen, (sub) subcontractors, suppliers, laborers
and materialmen who may have delivered materials or rented
equipment to or performed work at or on behalf of the Project and
all architects, engineers, consultants and others providing services at
or on behalf of the Property on the Project. The undersigned shall
and does hereby indemnify, save and hold the Owner and General
Contractor harmless from any and all claims damages, liens or
losses, expenses, including all costs, professional fees and
attorneys' fees, which the Owner <PAGE>
and/or General Contractor may suffer or
incur by reason of the
filing of any claims, notices, liens, encumbrances, suits against
Owner, General Contractor or the Property, or the failure of the
undersigned to obtain cancellation and discharge thereof.
DATED THIS ___ day of ___________, 1995.
CONTRACTOR/SUPPLIER/LABORER:
____________________________
By: ________________________
Its: _______________________
<PAGE>
STATE OF NEVADA )
) ss.
COUNTY OF WASHOE )
On this ___ day of ____________, 1995, personally
appeared before me, a Notary Public, ____________________, who
acknowledged to me that (s)he has read the foregoing, that the same
is true and correct and that (s)he is authorized to execute the same.
__________________________________
Notary Public.
EXHIBIT XVII-A
[FORM OF ENVIRONMENTAL
INDEMNITIES]
ENVIRONMENTAL INDEMNITY
THIS ENVIRONMENTAL INDEMNITY (this
"Indemnity") is entered into as of May 30, 1995, by CIRCUS
AND ELDORADO JOINT VENTURE, a Nevada general
partnership, ("Indemnitor" or "Partnership"), to and for the
benefit of Agent and Lenders (each as defined below), and each of
their respective successors, and permitted assigns, and their
respective parent, subsidiary and affiliated corporations, and the
respective directors, officers, agents, attorneys, and employees of
each of the foregoing (each of which shall be referred to hereinafter
individually as an "Indemnitee" and collectively as the "Indem-
nitees"). As used herein, "Agent" means FIRST INTERSTATE
BANK OF NEVADA, N.A., acting in its capacity as agent for and
representative of the Lenders, and any successor in that capacity,
and "Lenders" means the Persons identified as "Lenders" and listed
on the signature pages of the Credit Agreement, as defined below,
together with their successors and permitted assigns.
R E C I T A L S
A. Lenders have agreed to make certain Loans to
Partnership pursuant to that certain Credit Agreement (as it may be
amended, supplemented or otherwise modified from time to time,
the "Credit Agreement") of even date herewith by and among
Partnership, Agent, as arranger and administrative agent, Lenders,
and First Interstate Bank of Nevada, N.A., The Long-Term Credit
Bank of Japan, Ltd., Los Angeles Agency, and Societe Generale,
collectively, as managing agents ("Managing Agents") and Bank of
America N.T.& S.A., CIBC Inc. and Credit Lyonnais, Los Angeles
Branch, collectively, as co-agents ("Co-Agents"), which Loans are
to be secured by, among other things, that certain Deed of Trust,
Fixture Filing and Security Agreement with Assignment of Rents,
dated as of even date herewith (the "Deed of Trust") executed by
Partnership, as trustor, to First American Title Company of
Nevada, as trustee, in favor of Agent, as beneficiary, which Deed
of Trust encumbers, among other things that certain real property
described on Exhibit A attached hereto (the "Premises"), and the
Improvements thereon, whether now existing or hereafter
constructed.
B. It is a condition of Lenders making the Loans
that this Indemnity be executed and delivered by Indemnitor.
Lenders are making the Loans in reliance upon this Indemnity.
NOW, THEREFORE, based upon the foregoing
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to
induce Lenders, Managing Agents, Co-Agents and Agent to enter
into the Credit Agreement and to make the Loans thereunder,
Indemnitor agrees as follows:
1. Each capitalized term which is used herein
but which is not defined herein shall have the meaning given to that
term in the Credit Agreement. As used in this Indemnity:
"Agreed Rate" means a rate per annum equal to the
sum of two percent (2%) plus the Base Rate, such rate to
change as and when the Base Rate changes.
"CERCLA" means the Comprehensive
Environmental Response, Compensation, and Liability Act
of 1980 (42 U.S.C. section 9601 et seq.), as heretofore or
hereafter amended from time to time.
"Environmental Losses" means Losses suffered or
incurred by any Indemnitee, arising out of or as a result of:
(i) any Hazardous Material Activity that occurs, or is
alleged by any governmental agency or any claimant other
than an Indemnitee to have occurred, in whole or in part,
on or prior to the Transfer Date; (ii) any violation on or
prior to the Transfer Date of any applicable Environmental
Laws relating to the Premises or other portion of the Project
or to the ownership, use, occupancy or operation thereof;
(iii) any investigation, inquiry, order, hearing, action, or
other proceeding by or before any governmental agency in
connection with any Hazardous Material Activity that
occurs, or is alleged, by any governmental agency or any
claimant other than an Indemnitee to have occurred, in
whole or in part, on or prior to the Transfer Date; (iv) any
inaccuracy or breach of any representation or warranty of
the Partnership set forth in Section 5.13 (Environmental
Protection) or any breach of any covenant of the Partnership
set forth in Section 6.7 (Environmental Disclosure and
Inspection) or Section 6.8 (Partnership's Remedial Action
Regarding Hazardous Materials) of the Credit Agreement;
(v) the existence, prior to the Transfer Date, in the aquifer
underlying the Premises and other portions of Reno,
Nevada, or in soils affecting that aquifer, of PCE
(tetrachloroethylene) and hydrocarbons, or either of them,
insofar as the Losses arise out of or otherwise relate
(whether physically or economically) to the Premises or
other portion of the Project; or (vi) any claim, demand or
cause of action, or any action or other proceeding, whether
meritorious or not, brought or asserted against any
Indemnitee that directly or indirectly relates to, arises from
or is based on any of the matters described in clauses (i),
(ii), (iii), (iv) or (v) of this definition or any allegation by
any governmental agency or any claimant other than an
Indemnitee of any such matters. Environmental Losses
shall include Losses suffered or incurred by an Indemnitee
after the Transfer Date that would not have been incurred or
suffered but for any matter described in clause (i), (ii), (iii),
(iv) or (v) of this definition that commenced prior to the
Transfer Date or any allegation by any governmental agency
or any claimant other than an Indemnitee of any such
matters, including, but not limited to, Environmental Losses
incurred by any Indemnitee arising out of or as a result of
(x) the introduction or release of a Hazardous Material that
is discovered or released at the Premises or any portion
thereof after the Transfer Date but that was introduced at
the Premises prior to the Transfer Date, or (y) the
continuing migration onto, on or from the Premises, or the
release on or at the Premises, of any Hazardous Material
introduced in, on or under the Premises or the surrounding
streets and sidewalks prior to the Transfer Date.
"Hazardous Material Activity" means any actual,
proposed or threatened use, storage, holding, existence,
release (including any spilling, leaking, pumping, pouring,
emitting, emptying, dumping, disposing into the
environment, and the continuing migration into or through
soil, surface water, or groundwater), emission, discharge,
generation, processing, abatement, removal, disposition,
handling or transportation to or from the Premises or other
portion of the Project of any Hazardous Material from,
under, in, into or on the Premises or other portion of the
Project (including, but not limited to, the surrounding
streets and sidewalks), including, without limitation, the
movement or migration of any Hazardous Material from
surrounding property or groundwater in, into or onto the
Premises or other portion of the Project and any residual
Hazardous Material contamination on or under the Premises
or other portion of the Project.
"Losses" means any and all losses, liabilities,
damages (whether actual, consequential, punitive, or
otherwise denominated), demands, claims, actions,
judgments, causes of action, assessments, penalties, costs
and expenses (including, without limitation, environmental
investigation, response, removal and remediation costs,
reasonable attorneys' fees and disbursements), of any and
every kind or character, foreseeable and unforeseeable,
liquidated and contingent, proximate and remote, including,
without limitation, any of the foregoing caused by the active
or passive negligence of any Indemnitee, but shall not
include: (i) with respect to any particular Indemnitee and
loss, that portion, if any, of that loss which was caused by
the gross negligence or wilful misconduct of (including any
willful violation of any Environmental Law by) that
Indemnitee, and (ii) any special assessments made by any
special assessment district formed pursuant to Nevada law
for the purpose of investigating and remediating pollution of
the groundwater aquifer underlying downtown Reno,
Nevada, which become a lien on the Premises after
foreclosure of the lien of the Deed of Trust by or for the
benefit of the Lenders.
"Transfer Date" means the later of: (i) the date on
which any of Lenders (or any of their affiliates) acquires,
directly or through Agent, fee title to the Premises and
Improvements pursuant to the power of sale or judicial
foreclosure of the lien of the Deed of Trust, or by
acceptance of a deed in lieu of such foreclosure, and all
redemption rights that Partnership may have with respect
thereto have expired, and (ii) the date on which a period of
ninety-one (91) days has elapsed since the date on which fee
title thereto has vested in any of Lenders or Agent (or any
affiliate thereof) and, during such period, no bankruptcy or
other insolvency proceeding has been filed by or against
Partnership. If Partnership should remain in possession of
the Project after the Transfer Date, or if Partnership should
engage in any Hazardous Material Activity on or at the
Premises or other portion of the Project after the Transfer
Date, the Transfer Date shall be deemed to be the date after
which Partnership is no longer in possession of the Premises
or other portion of the Project and has ceased to engage in
any Hazardous Material Activity on or at the Premises or
other portion of the Project (it being expressly understood
and agreed, however, that, solely for purposes of this
definition, the presence of any Hazardous Material on the
Premises or other portion of the Project after the Transfer
Date, or the migration of such Hazardous Material thereon,
in either instance without the active involvement of
Partnership (whether directly or through any agent or
contractor of Partnership) shall not be deemed or construed
to be engaging in any Hazardous Material Activity on or at
the Premises or other portion of the Project after the
Transfer Date).
2. Indemnitor hereby agrees to indemnify,
defend, and hold harmless Indemnitees, and each of them, from and
against any and all Environmental Losses.
3. (a) Indemnitee shall notify Indemnitor of
any claim or notice of the commencement of any action,
administrative or legal proceeding or investigation as to which the
indemnity provided for in Paragraph 2 applies, within a reasonable
period of time after such claim, action, proceeding or investigation
becomes known to Indemnitee (it being expressly understood and
agreed, however, that no such notice shall be required if the claim,
action, proceeding or investigation has already become known to
Indemnitor prior to or during that period). Indemnitor shall assume
on behalf of such Indemnitee and conduct with due diligence and in
good faith the investigation and defense of such claim, action,
proceeding or investigation and the response thereto with counsel
reasonably satisfactory to Agent; provided, however, that such
Indemnitee shall have the right to be represented by advisory
counsel of its own selection and at its own expense; and provided,
further, that if any such claim, action, proceeding, or investigation
involves both Indemnitor and an Indemnitee, and such Indemnitee
shall have reasonably concluded that there may be legal defenses
available to it that are different from, additional to, or inconsistent
with those available to Indemnitor, or that Indemnitor is not
adequately investigating or defending such matter on behalf of
Indemnitee, then the Indemnitee shall have the right to select
separate counsel to participate in the investigation and defense of
and response to such claim, action, proceeding or investigation on
its own behalf at Indemnitor's expense. In addition to the
foregoing, after foreclosure of the lien of the Deed of Trust by or
on behalf of Lenders, Indemnitee shall notify Indemnitor of
Hazardous Material Activity not previously known to Indemnitor
and which may be the basis for a claim by Indemnitee against
Indemnitor hereunder within a reasonable period of time after such
newly discovered Hazardous Material Activity becomes known to
Indemnitee.
(b) If any claim, action, proceeding, or
investigation arises as to which the indemnity provided for in
Paragraph 2 applies, and Indemnitor fails to assume promptly (and
in any event within fifteen (15) days after being notified of the
claim, action, proceeding, or investigation) the defense of an
Indemnitee, then such Indemnitee may contest and settle the claim,
action, proceeding, or investigation at Indemnitor's expense using
counsel selected by such Indemnitee; provided, however, that after
any such failure by Indemnitor no such contest need be made by
such Indemnitee and settlement or full payment of any claim may be
made by such Indemnitee without Indemnitor's consent and without
releasing Indemnitor from any obligations to such Indemnitee under
Paragraph 2.
4. This Indemnity is given solely to protect
Lenders and the other Indemnitees against Environmental Losses,
and not as additional security for, or as a means of repayment of,
the Loans. The obligations of Indemnitor under this Indemnity are
independent of, and shall not be measured or affected by (i) any
amounts at any time owing under the Loans or secured by the Deed
of Trust, (ii) the sufficiency or insufficiency of any collateral
(including, without limitation, the Premises) given to Lenders to
secure repayment of the Loans, (iii) the consideration given by
Lenders or any other Person in order to acquire the Project or any
portion thereof, (iv) the modification, expiration or termination of
the Deed of Trust or any other document or instrument relating to
the Loans, or (v) except as otherwise expressly provided herein, the
discharge or repayment in full of the Loans (including, without
limitation, by amounts paid or credit bid at a foreclosure sale or by
discharge in connection with a deed in lieu of foreclosure).
5. Indemnitor's obligations hereunder shall
survive the sale or other transfer of the Project or any portion
thereof prior to the Transfer Date, and shall remain in force beyond
(i) the expiration of any statute of limitations and (ii) payment or
satisfaction in full of any single claim within the scope of this
Indemnity. The rights of each Indemnitee under this Indemnity
shall be in addition to any other rights and remedies of such
Indemnitee against Indemnitor under any other document or instru-
ment now or hereafter executed by Indemnitor, or at law or in
equity (including, without limitation, any right of reimbursement or
contribution pursuant to CERCLA), and shall not in any way be
deemed a waiver of any of such rights. Indemnitor agrees that it
shall have no right of contribution (including, without limitation,
any right of contribution under CERCLA) against any Indemnitee
with respect to any matter covered by this Indemnification, and
hereby waives and relinquishes any such right, excepting, however,
any right of contribution which such Indemnitor may have by
reason of the ownership or other interest in, or use of, by any
Indemnitee of property, other than the Premises, in Reno, Nevada.
Indemnitor further agrees that it shall have no right of subrogation
to any right or claim of any Indemnitee against any third Person
until all obligations of Indemnitor to such Indemnitee hereunder
with respect to such right or claim have been satisfied.
6. All obligations of Indemnitor hereunder shall
be payable on demand, and any amount due and payable hereunder
to any Indemnitee by Indemnitor that is not paid within thirty (30)
days after written demand therefor from an Indemnitee with an
explanation of the amounts demanded shall bear interest from the
date of such demand at the Agreed Rate.
7. If any action or proceeding is brought in
connection with the construction or enforcement of this Indemnity,
the prevailing party in such matter shall be entitled to
reimbursement of its costs and expenses (including reasonable
attorneys' fees) in such matter. The obligations set forth in this
Section 7 are in addition to and not in lieu of other obligations set
forth herein and in other Loan Documents or any of them.
8. This Indemnity shall be binding upon
Indemnitor, its heirs, representatives, administrators, executors,
successors and assigns and shall inure to the benefit of and shall be
enforceable by each Indemnitee and its successors, and permitted
assigns (it being expressly understood and agreed that the term
"permitted assign" means any Person to which any Lender assigns
or sells all or any portion of its interest in the Loans in accordance
with the terms of the Credit Agreement, any "Eligible Assignee" as
defined in the Credit Agreement and any other Person to whom
assignment by a Lender or Agent of rights under the Credit
Agreement or other Loan Document is permitted thereby, and any
Person to whom consent to an assignment thereto has otherwise
been given by Indemnitor).
9. THIS INDEMNITY SHALL BE
GOVERNED BY, AND SHALL BE CONSTRUED AND
ENFORCED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEVADA, WITHOUT REGARD
TO CONFLICTS OF LAWS PRINCIPLES.
10. ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST INDEMNITOR ARISING OUT OF OR
RELATING TO THIS INDEMNITY MAY BE BROUGHT IN
ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEVADA AND BY
EXECUTION AND DELIVERY OF THIS INDEMNITY
INDEMNITOR ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS AND WAIVES ANY DEFENSE
OF FORUM NON CONVENIENS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS INDEMNITY.
Indemnitor hereby agrees that service of all process in any such
proceeding in any such court may be made by registered or certified
mail, return receipt requested, at its address provided in Section 15,
such service being hereby acknowledged by Indemnitor to be
sufficient for personal jurisdiction in any action against Indemnitor
in any such court and to be otherwise effective and binding service
in every respect. Nothing herein shall affect the right to serve
process in any other manner permitted by law.
11. INDEMNITOR AND, BY ITS
ACCEPTANCE OF THE BENEFITS HEREOF, INDEMNITEE
EACH HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS
INDEMNITY. The scope of this waiver is intended to be all-
encompassing of any and all disputes that may be filed in any court
and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty
claims and all other common law and statutory claims. Indemnitor
and, by its acceptance of the benefits hereof, Indemnitee each
(i) acknowledges that this waiver is a material inducement for
Indemnitor and the Lenders to enter into a business relationship,
that Indemnitor and Indemnitee have already relied on this waiver in
entering into this Indemnity or accepting the benefits thereof, as the
case may be, and that each will continue to rely on this waiver in
their related future dealings and (ii) further warrants and represents
that each has reviewed this waiver with its legal counsel, and that
each knowingly and voluntarily waives its jury trial rights following
consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS INDEMNITY. In the event of
litigation, this Indemnity may be filed as a written consent to a trial
by the court.
12. Every provision of this Indemnity is intended
to be severable. If any provision of this Indemnity or the
application of any provision hereof to any Person or circumstance is
declared to be illegal, invalid or unenforceable for any reason
whatsoever by a court of competent jurisdiction, such invalidity
shall not affect the balance of the terms and provisions hereof or the
application of the provision in question to any other Person or
circumstance, all of which shall continue in full force and effect.
13. No failure or delay on the part of any
Indemnitee to exercise any power, right or privilege under this
Indemnity shall impair or prejudice the exercise by Indemnitee of
any such power, right or privilege with respect to any future claim,
action, proceeding, investigation or Environmental Loss, or be
construed to be a waiver of any default or an acquiescence therein.
No such failure or delay shall impair or prejudice the exercise by
Indemnitee of any such power, right or privilege with respect to any
claim, action, proceeding, investigation or Environmental Loss
existing at the time of such failure or delay unless (and then only to
the extent that) Indemnitor establishes by a preponderance of the
evidence that such failure or delay by Indemnitee materially
impaired the ability of Indemnitor to defend against or to limit its
liability with respect to the Environmental Loss for which such
Indemnitee is seeking indemnification hereunder. No single or
partial exercise of such power, right or privilege shall preclude
other or further exercise thereof or of any other right, power or
privilege. No provision of this Indemnity may be changed, waived,
discharged or terminated except by an instrument in writing signed
by the party against whom enforcement of the change, waiver,
discharge or termination is sought. The rights, powers and
remedies given to Indemnitees by this Indemnity are cumulative and
shall be in addition to and independent of all rights, powers and
remedies given to any of the Indemnitees by virtue of any statute or
rule of law or in any of the other Loan Documents or in any other
agreement or document.
14. All notices, requests and demands to be made
hereunder to the parties hereto shall be in writing (at the respective
address of the Person for whom intended set forth below or
hereafter provided in accordance with this Section) and shall be
given by any of the following means: (a) personal service;
(b) electronic communication, whether by telex, telegram or
telecopying (if confirmed in writing sent by registered or certified,
first class mail, return receipt requested); or (c) registered or
certified, first class mail, return receipt requested. Such addresses
may be changed by notice to the other parties given in the same
manner as provided above. Any notice, demand or request sent
pursuant to either clause (a) or (b) hereof shall be deemed received
upon such personal service or upon dispatch by electronic means,
and, if sent pursuant to clause (c) shall be deemed received three
(3) days following deposit in the mail.
To Agent: First Interstate Bank of Nevada,
N.A.
3800 Howard Hughes Parkway
Suite 400
Las Vegas, Nevada 89109
Attention: Silver Legacy Loan
Officer
To Indemnitor: CIRCUS AND ELDORADO
JOINT VENTURE
430 Virginia Street
Reno, Nevada 89501
Attention: General Manager
15. This Indemnity may be executed in
counterparts each of which shall be deemed an original and all of
which shall constitute one and the same Indemnity with the same
effect as if all parties had signed the same signature page. Any
signature page of this Indemnity may be detached from any other
counterpart of this Indemnity and reattached to any other
counterpart of this Indemnity identical in form hereto but having
attached to it one or more additional signature pages.
<PAGE>
IN WITNESS WHEREOF, Indemnitor has
executed this Indemnity as of the day and year first written above.
Indemnitor: CIRCUS AND ELDORADO JOINT
VENTURE,
a Nevada general partnership
By: GALLEON, INC.,
a Nevada corporation
Its: Managing Partner
By:
Title:
By: ELDORADO LIMITED
LIABILITY
COMPANY, a Nevada limited liability company
Its: General Partner
By:
Title:
By: ELDORADO
HOTEL
ASSOCIATES
LIMITED
PARTNERSHIP,
a Nevada
Limited
Partnership
Its: manager
By: HOTEL-
CASINO
MANAG
EMENT,
INC., a
Nevada
corporatio
n
Its: general
partner
By:_________________
Title:______________
By: RECREA
TIONAL
ENTERP
RISES,
INC., a
Nevada
corporatio
n
Its: general
partner
By:_________________
Title:______________
By: EXECUTIVE COMMITTEE
By:
Title:
By:
Title:
<PAGE>
EXHIBIT A
DESCRIPTION OF THE PREMISES
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE
STATE OF NEVADA, COUNTY OF WASHOE, MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
[To Follow]
EXHIBIT XVII-B
ENVIRONMENTAL INDEMNITY
THIS ENVIRONMENTAL INDEMNITY (this
"Indemnity") is entered into as of May 30, 1995, jointly and
severally by CIRCUS CIRCUS ENTERPRISES, INC., a Nevada
corporation, and ELDORADO HOTEL ASSOCIATES LIMITED
PARTNERSHIP, a Nevada limited partnership ("Eldorado"),
(each an "Indemnitor," and collectively, the "Indemnitors"), to
and for the benefit of Agent and Lenders (each as defined below),
and each of their respective successors and permitted assigns, and
their respective parent, subsidiary and affiliated corporations, and
the respective directors, officers, agents, attorneys, and employees
of each of the foregoing (each of which shall be referred to
hereinafter individually as an "Indemnitee" and collectively as the
"Indemnitees"). As used herein, "Agent" means FIRST
INTERSTATE BANK OF NEVADA, N.A., acting in its capacity
as agent for and representative of the Lenders, and any successor in
that capacity, and "Lenders" means the Persons identified as
"Lenders" and listed on the signature pages of the Credit
Agreement, as defined below, together with their successors and
permitted assigns.
R E C I T A L S
A. Lenders have agreed to make certain Loans to
CIRCUS AND ELDORADO JOINT VENTURE, a Nevada general
partnership ("Partnership") pursuant to that certain Credit
Agreement (as it may be amended, supplemented or otherwise
modified from time to time, the "Credit Agreement") of even date
herewith by and among Agent, as arranger and administrative
agent, Partnership, Lenders, and First Interstate Bank of Nevada,
N.A., The Long-Term Credit Bank of Japan, Ltd., Los Angeles
Agency, and Societe Generale, collectively, as managing agents
("Managing Agents") and Bank of America, N.T. & S.A., CIBC
Inc. and Credit Lyonnais, Los Angeles Branch, collectively, as co-
agents ("Co-Agents") which Loans are to be secured by, among
other things, that certain Deed of Trust, Fixture Filing and Security
Agreement with Assignment of Rents, dated as of even date
herewith (the "Deed of Trust") executed by Partnership, as trustor,
to First American Title Company of Nevada, as trustee, in favor of
Agent, as beneficiary, which Deed of Trust encumbers, among
other things that certain real property described on Exhibit A
attached hereto (the "Premises"), and the Improvements thereon,
whether now existing or hereafter constructed.
B. It is a condition of Lenders making the Loans
that this Indemnity be executed and delivered by Indemnitor.
Lenders are making the Loans in reliance upon this Indemnity.
NOW, THEREFORE, based upon the foregoing
and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, and in order to
induce Lenders, Managing Agents, Co-Agents and Agent to enter
into the Credit Agreement and to make the Loans thereunder,
Indemnitors jointly and severally agree as follows:
1. Each capitalized term which is used herein
but which is not defined herein shall have the meaning given to that
term in the Credit Agreement. As used in this Indemnity:
"Agreed Rate" means a rate per annum equal to the
sum of two percent (2%) plus the Base Rate, such rate to
change as and when the Base Rate changes.
"CERCLA" means the Comprehensive
Environmental Response, Compensation, and Liability Act
of 1980 (42 U.S.C. section 9601 et seq.), as heretofore or
hereafter amended from time to time.
"Environmental Losses" means Losses suffered or
incurred by any Indemnitee, arising out of or as a result of:
(i) any Hazardous Material Activity that occurs, or is
alleged by any governmental agency or any claimant other
than an Indemnitee to have occurred, in whole or in part,
on or prior to the Transfer Date; (ii) any violation on or
prior to the Transfer Date of any applicable Environmental
Laws relating to the Premises or other portion of the Project
or to the ownership, use, occupancy or operation thereof;
(iii) any investigation, inquiry, order, hearing, action, or
other proceeding by or before any governmental agency in
connection with any Hazardous Material Activity that
occurs, or is alleged, by any governmental agency or any
claimant other than an Indemnitee to have occurred, in
whole or in part, on or prior to the Transfer Date; (iv) any
breach of any covenant of the Partnership set forth in
Section 6.7 (Environmental Disclosure and Inspection) or
Section 6.8 (Partnership's Remedial Action Regarding
Hazardous Materials) of the Credit Agreement; (v) the
existence, prior to the Transfer Date, in the aquifer
underlying the Premises and other portions of Reno,
Nevada, or in soils affecting that aquifer, of PCE
(tetrachloroethylene) and hydrocarbons, or either of them,
insofar as the Losses arise out of or otherwise relate
(whether physically or economically) to the Premises or
other portion of the Project; or (vi) any claim, demand or
cause of action, or any action or other proceeding, whether
meritorious or not, brought or asserted against any
Indemnitee that directly or indirectly relates to, arises from
or is based on any of the matters described in clauses (i),
(ii), (iii), (iv) or (v) of this definition or any allegation by
any governmental agency or any claimant other than an
Indemnitee of any such matters. Environmental Losses
shall include Losses suffered or incurred by an Indemnitee
after the Transfer Date that would not have been incurred or
suffered but for any matter described in clause (i), (ii), (iii),
(iv) or (v) of this definition that commenced prior to the
Transfer Date or any allegation by any governmental agency
or any claimant other than an Indemnitee of any such
matters, including, but not limited to, Environmental Losses
incurred by any Indemnitee arising out of or as a result of
(x) the introduction or release of a Hazardous Material that
is discovered or released at the Premises or any portion
thereof after the Transfer Date but that was introduced at
the Premises prior to the Transfer Date, or (y) the
continuing migration onto, on or from the Premises, or the
release on or at the Premises, of any Hazardous Material
introduced in, on or under the Premises or the surrounding
streets and sidewalks prior to the Transfer Date.
"Hazardous Material Activity" means any actual,
proposed or threatened use, storage, holding, existence,
release (including any spilling, leaking, pumping, pouring,
emitting, emptying, dumping, disposing into the
environment, and the continuing migration into or through
soil, surface water, or groundwater), emission, discharge,
generation, processing, abatement, removal, disposition,
handling or transportation to or from the Premises or other
portion of the Project of any Hazardous Material from,
under, in, into or on the Premises or other portion of the
Project (including, but not limited to, the surrounding
streets and sidewalks), including, without limitation, the
movement or migration of any Hazardous Material from
surrounding property or groundwater in, into or onto the
Premises or other portion of the Project and any residual
Hazardous Material contamination on or under the Premises
or other portion of the Project.
"Losses" means any and all costs and expenses
actually incurred required to comply with (and, in the case
of investigation and response costs, costs necessary to
assure compliance with) applicable Environmental Laws and
other governmental requirements (including, without
limitation, reasonable attorneys' fees and disbursements) but
only to the extent such costs and expenses reasonably were
required for such compliance; provided that Losses shall not
include: (i) with respect to any particular Indemnitee and
loss, that portion, if any, of that loss which was caused by
the gross negligence or wilful misconduct of (including any
wilful violation of any Environmental Law by) that
Indemnitee, and (ii) any special assessments made by any
special assessment district formed pursuant to Nevada law
for the purpose of investigating and remediating pollution of
the groundwater aquifer underlying downtown Reno,
Nevada, which become a lien on the Premises after
foreclosure of the lien of the Deed of Trust by or for the
benefit of the Lenders, and (iii) any damages measured by
the diminution in the value of the Premises caused by any
Hazardous Material Activity (it being expressly understood
and agreed, however, that this exclusion shall not affect the
obligation of Indemnitors to compensate Indemnitees for
actual damages reasonably incurred by them in complying
with Environmental Laws except as otherwise provided in
clause (ii) above), and (iv) costs and expenses incurred by
any Indemnitee after indefeasible payment in full, in lawful
money of the United States, of the Loans and all other
monetary Obligations then due under the Loan Documents,
expiration or cancellation of all Letters of Credit and
termination of the Commitments (it being expressly
understood and agreed that this clause (iv) shall not apply if
foreclosure of the lien of the Deed of Trust occurs).
"Transfer Date" means the later of: (i) the date on
which any of Lenders (or any of their affiliates) acquires,
directly or through Agent, fee title to the Premises and
Improvements pursuant to the power of sale or judicial
foreclosure of the lien of the Deed of Trust, or by
acceptance of a deed in lieu of such foreclosure, and all
redemption rights that Partnership may have with respect
thereto have expired, and (ii) the date on which a period of
ninety-one (91) days has elapsed since the date on which fee
title thereto has vested in any of Lenders or Agent (or any
affiliate thereof) and, during such period, no bankruptcy or
other insolvency proceeding has been filed by or against
Partnership. If Partnership should remain in possession of
the Project after the Transfer Date, or if Partnership should
engage in any Hazardous Material Activity on or at the
Premises or other portion of the Project after the Transfer
Date, the Transfer Date shall be deemed to be the date after
which Partnership is no longer in possession of the Premises
or other portion of the Project and has ceased to engage in
any Hazardous Material Activity on or at the Premises or
other portion of the Project (it being expressly understood
and agreed, however, that, solely for purposes of this
definition, the presence of any Hazardous Material on the
Premises or other portion of the Project after the Transfer
Date, or the migration of such Hazardous Material thereon,
in either instance without the active involvement of
Partnership (whether directly or through any agent or
contractor of Partnership) shall not be deemed or construed
to be engaging in any Hazardous Material Activity on or at
the Premises or other portion of the Project after the
Transfer Date).
2. Indemnitors jointly and severally hereby
agree to indemnify, defend, and hold harmless Indemnitees, and
each of them, from and against any and all Environmental Losses.
3. (a) Indemnitee shall notify Indemnitors of
any claim or notice of the commencement of any action,
administrative or legal proceeding or investigation as to which the
indemnity provided for in Section 2 applies, within a reasonable
period of time after such claim, action, proceeding or investigation
becomes known to Indemnitee (it being expressly understood and
agreed, however, that no such notice shall be required to an
Indemnitor if the claim, action, proceeding or investigation has
already become known to such Indemnitor prior to or during that
period). Indemnitors shall assume on behalf of such Indemnitee and
conduct with due diligence and in good faith the investigation and
defense of such claim, action, proceeding or investigation and the
response thereto with counsel reasonably satisfactory to Agent;
provided, however, that such Indemnitee shall have the right to be
represented by advisory counsel of its own selection and at its own
expense; and provided, further, that if any such claim, action,
proceeding, or investigation involves both an Indemnitor and an
Indemnitee, and such Indemnitee shall have reasonably concluded
that there may be legal defenses available to it that are different
from, additional to, or inconsistent with those available to such
Indemnitor, or that such Indemnitor is not adequately investigating
or defending such matter on behalf of Indemnitee, then the
Indemnitee shall have the right to select separate counsel to
participate in the investigation and defense of and response to such
claim, action, proceeding or investigation on its own behalf at
Indemnitors' expense. In addition to the foregoing, after
foreclosure of the lien of the Deed of Trust by or on behalf of
Lenders, Indemnitee shall notify Indemnitors of Hazardous Material
Activity not previously known to Indemnitors and which may be the
basis for a claim by Indemnitee against Indemnitors hereunder
within a reasonable period of time after such newly discovered
Hazardous Material Activity becomes known to Indemnitee.
(b) If any claim, action, proceeding, or
investigation arises as to which the indemnity provided for in
Section 2 applies, and Indemnitors fail to assume promptly (and in
any event within fifteen (15) days after being notified of the claim,
action, proceeding, or investigation) the defense of an Indemnitee,
then such Indemnitee may contest and settle the claim, action,
proceeding, or investigation at Indemnitors' expense using counsel
selected by such Indemnitee; provided, however, that after any such
failure by Indemnitors no such contest need be made by such
Indemnitee and settlement or full payment of any claim may be
made by such Indemnitee without Indemnitors' consent and without
releasing any of the Indemnitors from any obligations to such
Indemnitee under Section 2.
4. This Indemnity is given solely to protect
Lenders and the other Indemnitees against Environmental Losses,
and not as additional security for, or as a means of repayment of,
the Loans. The obligations of Indemnitors under this Indemnity are
independent of, and shall not be measured or affected by (i) any
amounts at any time owing under the Loans or secured by the Deed
of Trust, (ii) the sufficiency or insufficiency of any collateral
(including, without limitation, the Premises) given to Lenders to
secure repayment of the Loans, (iii) the consideration given by
Lenders or any other Person in order to acquire the Project or any
portion thereof, (iv) the modification, expiration or termination of
the Deed of Trust or any other document or instrument relating to
the Loans, or (v) except as otherwise expressly provided herein, the
discharge or repayment in full of the Loans (including, without
limitation, by amounts paid or credit bid at a foreclosure sale or by
discharge in connection with a deed in lieu of foreclosure).
5. Indemnitors' obligations hereunder shall
survive the sale or other transfer of the Project or any portion
thereof prior to the Transfer Date, and shall remain in force beyond
(i) the expiration of any statute of limitations and (ii) payment or
satisfaction in full of any single claim within the scope of this
Indemnity. The rights of each Indemnitee under this Indemnity
shall be in addition to any other rights and remedies of such
Indemnitee against Indemnitors or any of them under any other
document or instrument now or hereafter executed by Partnership,
any of the Indemnitors or any Affiliate thereof, or at law or in
equity (including, without limitation, any right of reimbursement or
contribution pursuant to CERCLA), and shall not in any way be
deemed a waiver of any of such rights. Each Indemnitor agrees
that it shall have no right of contribution (including, without
limitation, any right of contribution under CERCLA) against any
Indemnitee with respect to any matter covered by this
Indemnification, and hereby waives and relinquishes any such right
excepting, however, any right of contribution which such
Indemnitor may have by reason of the ownership or other interest
in, or use of, by any Indemnitee of property, other than the
Premises, in Reno, Nevada. Indemnitor further agrees that it shall
have no right of subrogation to any right or claim of any Indemnitee
against any third Person until all obligations of such Indemnitor to
such Indemnitee hereunder with respect to such right or claim have
been satisfied.
6. All obligations of Indemnitors hereunder shall
be payable on demand, and any amount due and payable hereunder
to any Indemnitee by any Indemnitor that is not paid within thirty
(30) days after written demand therefor from an Indemnitee with an
explanation of the amounts demanded shall bear interest from the
date of such demand at the Agreed Rate.
7. If any action or proceeding is brought in
connection with the construction or enforcement of this Indemnity,
the prevailing party in such matter shall be entitled to
reimbursement of its costs and expenses (including reasonable
attorneys' fees) in such matter. The obligations set forth in this
Section 7 are in addition to and not in lieu of other obligations set
forth herein and in other Loan Documents or any of them.
8. Each Indemnitor hereby waives, for the
benefit of each Indemnitee:
(a) any right to require Indemnitee, as a
condition of payment or performance by such Indemnitor, to
(i) proceed against Partnership, any guarantor of the
Obligations or any other Person, (ii) proceed against or
exhaust any security held from Partnership, any other
guarantor of the Obligations or any other Person,
(iii) proceed against or have resort to any balance of any
deposit account or credit on the books of Indemnitee in
favor of Partnership or any other Person, or (iv) pursue any
other remedy in the power of Indemnitee whatsoever;
(b) any defense arising by reason of the
incapacity, lack of authority or any disability or other
defense of Partnership including, without limitation, any
defense based on or arising out of the lack of validity or the
unenforceability of the Obligations or any agreement or
instrument relating thereto or by reason of the cessation of
the liability of Partnership from any cause other than
indefeasible payment in full of the Obligations;
(c) any defense based upon any statute or rule of
law which provides that the obligation of a surety must be
neither larger in amount nor in other respects more
burdensome than that of the principal;
(d) any defense based upon any error or omission
of any Person in the administration of the Obligations,
except, in the case of any particular Indemnitee, behavior
by such Indemnitee which amounts to bad faith by such
Indemnitee;
(e) any principles or provisions of law, statutory
or otherwise, which are or might be in conflict with the
terms of this Indemnity and any legal or equitable discharge
of such Indemnitor's obligations hereunder, (i) the benefit
of any statute of limitations affecting such Indemnitor's
liability hereunder or the enforcement hereof, (ii) any rights
to set-offs, recoupments and counterclaims, and
(iii) promptness, diligence and any requirement that any
Indemnitee protect, secure, perfect or insure any security
interest or lien or any property subject thereto;
(f) notices, demands, presentments, protests,
notices of protest, notices of dishonor and notices of any
action or inaction, including acceptance of this Indemnity,
notices of default under the Credit Agreement or any
agreement or instrument related thereto, notices of any
renewal, extension or modification of the Obligations or any
agreement related thereto, notices of any extension of credit
to Partnership and notices of any of the matters referred to
in Section 4 and any right to consent to any thereof; and
(g) any defenses or benefits that may be derived
from or afforded by law which limit the liability of or
exonerate guarantors or sureties, or which may conflict with
the terms of this Indemnity, including without limitation the
provisions of Nevada Revised Statutes Sections 40.430-
40.459, 40.475 and 40.485 as permitted by Nevada Revised
Statutes Sections 40.495 (1993), and any successor
provisions.
9. In order to induce Indemnitees to accept this
Indemnity and to induce Lenders and Agent to enter into the Credit
Agreement and to make the Loans thereunder, each Indemnitor
hereby represents and warrants to each Indemnitee that the
following statements are true and correct:
(a) Such Indemnitor is duly organized, validly
existing and in good standing under the laws of the State of
Nevada, has the corporate (or, in the case of Eldorado, the
partnership) power to own its assets and to transact the
business in which it is now engaged and is duly qualified as
a foreign corporation (or, in the case of Eldorado, foreign
partnership) and in good standing under the laws of each
jurisdiction where its ownership or lease of property or the
conduct of its business requires such qualification, except
for failures to be so qualified, authorized or licensed that
would not in the aggregate have a material adverse effect on
the business, operations, assets or financial condition of
such Indemnitor and its Subsidiaries, taken as a whole;
(b) Such Indemnitor has the corporate (or, in the
case of Eldorado, partnership) power, authority and legal
right to execute, deliver and perform this Indemnity and all
obligations required hereunder and has taken all necessary
corporate (or, in the case of Eldorado, partnership) action to
authorize its Indemnity hereunder on the terms and
conditions hereof and its execution, delivery and
performance of this Indemnity and all obligations required
hereunder. No consent of any other Person including,
without limitation, stockholders, partners and creditors of
such Indemnitor, and no license, permit, approval or
authorization of, exemption by, notice or report to, or
registration, filing or declaration with, any governmental
authority is required by such Indemnitor in connection with
this Indemnity or the execution, delivery, performance,
validity or enforceability of this Indemnity and all
obligations required hereunder. This Indemnity has been,
and each instrument or document required hereunder will
be, executed and delivered by a duly authorized officer (or,
in the case of Eldorado, general partner) of such
Indemnitor, and this Indemnity constitutes, and each
instrument or document required hereunder when executed
and delivered hereunder will constitute, the legally valid and
binding obligation of such Indemnitor, enforceable against
such Indemnitor in accordance with its terms, except as
enforcement may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or other similar
laws or equitable principles relating to or limiting creditors'
rights generally.
(c) The execution, delivery and performance of
this Indemnity and the documents or instruments required
hereunder, will not violate any provision of any existing law
or regulation binding on such Indemnitor, or any order,
judgment, award or decree of any court, arbitrator or
governmental authority binding on such Indemnitor, or the
certificate of incorporation or bylaws of such Indemnitor or
any securities issued by such Indemnitor, or any mortgage,
indenture, lease, contract or other agreement, instrument or
undertaking to which such Indemnitor is a party or by
which such Indemnitor or any of its assets may be bound,
the violation of which would have a material adverse effect
on the business, operations, assets or condition (financial or
otherwise) of such Indemnitor and its Subsidiaries, taken as
a whole, and will not result in, or require, the creation or
imposition of any Lien on any of its property, assets or
revenues pursuant to the provisions of any such mortgage,
indenture, lease, contract or other agreement, instrument or
undertaking.
10. This Indemnity shall be binding upon
Indemnitors, their respective heirs, representatives, administrators,
executors, successors and assigns and shall inure to the benefit of
and shall be enforceable by each Indemnitee, and its successors, and
permitted assigns (it being expressly understood and agreed that the
term "permitted assign" means any Person to which any Lender
assigns or sells all or any portion of its interest in the Loans in
accordance with the terms of the Credit Agreement, any "Eligible
Assignee" as defined in the Credit Agreement and any other Person
to whom assignment by a Lender or Agent of rights under the
Credit Agreement or other Loan Document is permitted thereby,
and any Person to whom consent to an assignment thereto has been
given by the Indemnitor against whom enforcement is sought).
11. THIS INDEMNITY SHALL BE GOVERNED
BY, AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEVADA, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
12. ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST ANY INDEMNITOR ARISING OUT OF
OR RELATING TO THIS INDEMNITY MAY BE BROUGHT
IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEVADA AND, BY
EXECUTION AND DELIVERY OF THIS INDEMNITY, EACH
INDEMNITOR ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS AND WAIVES ANY DEFENSE
OF FORUM NON CONVENIENS AND IRREVOCABLY
AGREES TO BE BOUND BY ANY JUDGMENT RENDERED
THEREBY IN CONNECTION WITH THIS INDEMNITY.
Each Indemnitor hereby agrees that service of all process in any
such proceeding in any such court may be made by registered or
certified mail, return receipt requested, to at its address provided in
Section 17, such service being hereby acknowledged by such
Indemnitor to be sufficient for personal jurisdiction in any action
against such Indemnitor in any such court and to be otherwise
effective and binding service in every respect. Nothing herein shall
affect the right to serve process in any other manner permitted by
law.
13. EACH INDEMNITOR AND, BY ITS
ACCEPTANCE OF THE BENEFITS HEREOF, INDEMNITEE
EACH HEREBY AGREES TO WAIVE ITS RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS
INDEMNITY. The scope of this waiver is intended to be all-
encompassing of any and all disputes that may be filed in any court
and that relate to the subject matter of this transaction, including
without limitation contract claims, tort claims, breach of duty
claims and all other common law and statutory claims. Indemnitor
and, by its acceptance of the benefits hereof, Indemnitee each
(i) acknowledges that this waiver is a material inducement for
Indemnitors and the Lenders to enter into a business relationship,
that Indemnitors and Indemnitee have already relied on this waiver
in entering into this Indemnity or accepting the benefits thereof, as
the case may be, and that each will continue to rely on this waiver
in their related future dealings and (ii) further warrants and
represents that each has reviewed this waiver with its legal counsel,
and that each knowingly and voluntarily waives its jury trial rights
following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE
MODIFIED EITHER ORALLY OR IN WRITING, AND THIS
WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS INDEMNITY. In the event of
litigation, this Indemnity may be filed as a written consent to a trial
by the court.
14. Every provision of this Indemnity is intended
to be severable. If any provision of this Indemnity or the
application of any provision hereof to any Person or circumstance is
declared to be illegal, invalid or unenforceable for any reason
whatsoever by a court of competent jurisdiction, such invalidity
shall not affect the balance of the terms and provisions hereof or the
application of the provision in question to any other Person or
circumstance, all of which shall continue in full force and effect.
15. No failure or delay on the part of any
Indemnitee to exercise any power, right or privilege under this
Indemnity shall impair or prejudice the exercise by Indemnitee of
any such power, right or privilege with respect to any future claim,
action, proceeding, investigation or Environmental Loss, or be
construed to be a waiver of any default or an acquiescence therein.
No such failure or delay shall impair or prejudice the exercise by
Indemnitee of any such power, right or privilege with respect to any
claim, action, proceeding, investigation or Environmental Loss
existing at the time of such failure or delay unless (and then only to
the extent that) Indemnitor establishes by a preponderance of the
evidence that such failure or delay by Indemnitee materially
impaired the ability of Indemnitor to defend against or to limit its
liability with respect to the Environmental Loss for which such
Indemnitee is seeking indemnification hereunder. No single or
partial exercise of such power, right or privilege shall preclude
other or further exercise thereof or of any other right, power or
privilege. No provision of this Indemnity may be changed, waived,
discharged or terminated except by an instrument in writing signed
by the party against whom enforcement of the change, waiver,
discharge or termination is sought. The rights, powers and
remedies given to Indemnitees by this Indemnity are cumulative and
shall be in addition to and independent of all rights, powers and
remedies given to any of the Indemnitees by virtue of any statute or
rule of law or in any of the other Loan Documents or in any other
agreement or document.
16. All notices, requests and demands to be made
hereunder to the parties hereto shall be in writing (at the respective
address of the Person for whom intended set forth below or
hereafter provided in accordance with this Section) and shall be
given by any of the following means: (a) personal service;
(b) electronic communication, whether by telex, telegram or
telecopying (if confirmed in writing sent by registered or certified,
first class mail, return receipt requested); or (c) registered or
certified, first class mail, return receipt requested. Such addresses
may be changed by notice to the other parties given in the same
manner as provided above. Any notice, demand or request sent
pursuant to either clause (a) or (b) hereof shall be deemed received
upon such personal service or upon dispatch by electronic means,
and, if sent pursuant to clause (c) shall be deemed received three
(3) days following deposit in the mail. Eldorado, HCM and REI
shall designate a single address for themselves and shall be entitled
to only a single notice, request or demand addressed all of them at
that address.
To Agent: First Interstate Bank of Nevada, N.A.
3800 Howard Hughes Parkway
Suite 400
Las Vegas, Nevada 89109
Attention: Silver Legacy Loan Officer
To Indemnitors: Circus Circus Enterprises, Inc.
2880 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Attention: Yvette Landau
Associate General Counsel
and to: Eldorado Hotel Associates Limited
Partnership
c/o Eldorado Hotel Casino
345 North Virginia Street
Reno, Nevada 89501
Attention: Bob Jones
Chief Financial Officer
17. This Indemnity may be executed in
counterparts each of which shall be deemed an original and all of
which shall constitute one and the same Indemnity with the same
effect as if all parties had signed the same signature page. Any
signature page of this Indemnity may be detached from any other
counterpart of this Indemnity and reattached to any other
counterpart of this Indemnity identical in form hereto but having
attached to it one or more additional signature pages.
IN WITNESS WHEREOF, Indemnitor has
executed this Indemnity as of the day and year first written above.
Indemnitors: CIRCUS CIRCUS ENTERPRISES, INC.
a Nevada corporation
By:__________________________
Title: ___________________________
ELDORADO HOTEL ASSOCIATES
LIMITED PARTNERSHIP, a Nevada
general partnership
By: _________________,
a Nevada ___________
Its: Managing Partner
By:
Title:
Accepted by:
FIRST INTERSTATE BANK OF NEVADA, N.A.,
on behalf of itself as Agent and
on behalf of all Managing Agents,
and all Lenders
By:
Title: <PAGE>
EXHIBIT A
DESCRIPTION OF THE PREMISES
ALL THAT CERTAIN REAL PROPERTY SITUATED IN THE
STATE OF NEVADA, COUNTY OF WASHOE, MORE
PARTICULARLY DESCRIBED AS FOLLOWS:
[To Follow]
EXHIBIT XVIII
[FORM OF GENERAL PARTNER SUBORDINATED
DEBT]
LOAN AGREEMENT
THIS LOAN AGREEMENT ( Agreement ), dated May
30, 1995, is made by and between CIRCUS AND ELDORADO
JOINT VENTURE, a Nevada general partnership (the
Partnership ), as borrower, and CIRCUS CIRCUS
ENTERPRISES, INC., a Nevada corporation ( CC ), as lender,
with reference to the following facts and purposes:
RECITALS:
A. On or about March 1, 1994, Galleon, Inc., a Nevada
corporation ( C ) owned and controlled by CC, and Eldorado
Limited Liability Company, a Nevada limited-liability company
( E ) owned and controlled by Eldorado Hotel Associates Limited
Partnership, a Nevada limited partnership, entered into an
Agreement of Joint Venture of Circus and Eldorado Joint Venture
(as amended the Joint Venture Agreement ) pursuant to which C
and E agreed to form a general partnership to acquire, develop,
construct, finance, manage and operate a hotel, casino and
entertainment complex now known as the Silver Legacy Hotel &
Casino in Reno, Nevada (the Project ).
B. Pursuant to the Joint Venture Agreement, C
undertook to provide certain Construction Financing (as defined
therein) for the Project; in accordance therewith C and CC have
obtained bank financing in the amount of $230,000,000 (the Bank
Loans ), as set forth in the Bank Credit Agreement (hereinafter
defined), and by this Agreement the parties desire to have CC
provide the additional construction financing necessary to complete
the Project (the CC Loan ).
C. CC is willing to make the CC Loan upon the terms
and conditions hereinafter set forth.
D. As a condition to the Bank Loans, CC is required to
execute and deliver the Circus Completion Guaranty and the Make-
Well Agreement (as such terms are hereinafter defined), pursuant to
which CC is undertaking certain obligations in favor of the Banks
(as hereinafter defined), which may require CC to advance funds
for the benefit of the Partnership.
E. The parties desire to provide for the Partnership's
reimbursement to CC for CC advances under the Circus Completion
Guaranty and the Make-Well Agreement.
F. As set forth in the Bank Credit Agreement, the CC
Loan and the Partnership's obligation to reimburse CC for CC
advances under the Circus Completion Guaranty and the Make-Well
Agreement constitute General Partner Subordinated Debt (as defined
in the Bank Credit Agreement).
NOW THEREFORE, in consideration of the promises
herein contained, and each intending to be legally bound hereby, the
parties agree as follows:
SECTION I. CERTAIN DEFINITIONS
Accelerating Transfer means the sale by the Partnership
or any of its Subsidiaries to any Person other than the Partnership
or any of its wholly-owned Subsidiaries of (i) any of the stock of
any of the Partnership's Subsidiaries, (ii) substantially all of the
assets of any division or line of business of the Partnership or any
of its Subsidiaries, or (iii) any other assets (whether tangible or
intangible) of the Partnership or any of its Subsidiaries outside of
the ordinary course of business (including, without limitation, sale
of the Project); provided, in each case, that no such sale or
disposition shall be an Accelerating Transfer for purposes of this
Agreement unless the fair market value of the assets sold or
disposed exceeds $3,000,000 for any given transaction or series of
related transactions or $6,000,000 in the aggregate in any calendar
year.
Advances means, collectively, Loan Advances, CC
Guaranty Advances and Make-Well Advances.
Agent means First Interstate Bank of Nevada, N.A., a
national banking association, in its capacity as arranger and
administrative agent under the Bank Credit Agreement, and its
successors and assigns.
Bank Credit Agreement means that certain Credit
Agreement, dated as of May 30, 1995, among the Partnership, the
Banks, First Interstate Bank of Nevada, N.A., The Long-Term
Credit Bank of Japan, Ltd., Los Angeles Agency and Societe
Generale, as Managing Agents, Bank of America, N.T. & S.A,
CIBC Inc. and Credit Lyonnais, Los Angeles Branch, as Co-
Agents, and Agent, together with any and all supplements,
amendments, restatements, waivers and other modifications thereto
from time to time, and all refinancings thereof.
Bank Deed of Trust means the Deed of Trust as
defined in the Bank Credit Agreement.
Bank Default means an Event of Default or a
Potential Event of Default as such terms are defined in the Bank
Credit Agreement.
Bank Loan Term means the period commencing upon the
Closing Date (as defined in the Bank Credit Agreement) and
continuing until the Bank Loan Termination.
Bank Obligations means the Obligations, as such term
is defined in the Bank Credit Agreement, including the principal
amount of the Bank Loans, and all related interest (including post-
petition interest in any proceeding under the Bankruptcy Code or
other applicable bankruptcy laws), fees, expenses and costs of
collection.
Bank Payment Restrictions means those provisions
contained in the Bank Credit Agreement (including, without
limitation, Section 7.5 thereof) or in the Subordination and Debt Put
Agreement, which restrict or prohibit the payment of General
Partner Subordinated Debt.
Bank Loan Termination means the payment in full of the
Bank Loans and other Bank Obligations and the cancellation or
expiration of all Letters of Credit (as defined in the Bank Credit
Agreement) or (ii) a termination of the Bank Payment Restrictions.
Banks means the Lenders that are, from time to time,
parties to the Bank Credit Agreement.
Budget means the Budget delivered to the Banks on the
Closing Date (as such terms are defined in the Bank Credit
Agreement), together with any amendments thereto approved by
CC.
CC Construction Financing means, collectively, the Loan
Advances and the CC Guaranty Advances.
CC Guaranty Advances includes all amounts advanced by
CC pursuant to the Circus Completion Guaranty, including, without
limitation, all of CC's expenses and costs, including the reasonable
fees and expenses of its counsel, incurred by CC in connection with
the performance by CC of its obligations under the Circus
Completion Guaranty.
CC Loan Documents means (i) this Agreement, (ii) the
Notes, (iii) the Collateral Documents (as hereinafter defined), (iv)
the Environmental Indemnity (as hereinafter defined) and (v) such
other agreements, financing statements, documents or certificates as
may be executed by the Partnership in favor of CC relating to the
CC Obligations.
CC Obligations means the obligation of the Partnership:
(i) to pay the principal of and interest on the Notes in accordance
with the terms thereof and to satisfy all of its other liabilities to CC
hereunder or under any of the other CC Loan Documents, whether
now existing or hereafter incurred, including the obligation of the
Partnership to repay the Loan Advances and to reimburse CC for
the CC Guaranty Advances and the Make-Well Advances, and
including any and all supplements, amendments, restatements,
renewals, substitutions and other modifications thereto from time to
time; and (ii) to reimburse CC, on demand, for all of CC's
expenses and costs, including the reasonable fees and expenses of
its counsel, in connection with the preparation, administration,
amendment, modification, or enforcement of this Agreement and
the documents required hereunder, including, without limitation,
any proceeding brought or threatened to enforce payment of any of
the obligations referred to in the foregoing paragraphs (i) and (ii).
Circus Completion Guaranty means that certain Circus
Completion Guaranty dated May 30, 1995 (as it may hereafter be
amended, supplemented or otherwise modified from time to time)
given by CC in favor of Agent and the Partnership, pursuant to the
Bank Credit Agreement.
Default Rate means the greater of (i) ten percent (10%)
per annum or (ii) a rate of interest which is two percentage points
added to the reference rate of interest as publicly announced from
time to time by Bank of America National Trust and Savings
Association in San Francisco, California.
Event of Default has the meaning set forth in Section 8
hereof.
First Payment Date means the first day following the
Partnership's first four full fiscal quarters immediately following the
Conversion Date (as that term is defined in the Bank Credit
Agreement).
Indebtedness has the same meaning given that term in the
Bank Credit Agreement.
Joint Venture Default means (i) the failure of any party to
the Joint Venture Agreement (other than a Subsidiary of CC) to
observe or perform any material obligation to be observed or
performed by it under the Joint Venture Agreement or (ii) the
occurrence of a material default under the Joint Venture Agreement
or the existence of a condition or event that, after notice or lapse of
time or both, would constitute a material default under the Joint
Venture Agreement, unless, such default, condition or event results
from the act or omission of CC or a Subsidiary of CC.
Laws means all ordinances, statutes, rules, regulations,
orders, injunctions, writs or decrees of any government or political
subdivision or agency thereof, or any court or similar entity
established by any thereof.
Loan Advance means a disbursement of proceeds of the
CC Loan.
Make-Well Advances means those Make-Well
Obligations (as defined in the Make-Well Agreement) which CC
elects to treat as a loan (as opposed to a contribution of cash to
equity), together with all of CC's expenses and costs, including the
reasonable fees and expenses of its counsel, incurred by CC in
connection with the performance by CC of its obligations under the
Make-Well Agreement.
Make-Well Agreement means that certain Make-Well
Agreement dated May 30, 1995 (as it may hereafter be amended,
supplemented or otherwise modified from time to time), entered
into by CC in favor of Agent and the Partnership pursuant to the
Bank Credit Agreement.
Maturity Date means August 31, 2005.
Net Cash From Operations has the meaning given that
term in Section 4.1 of the Joint Venture Agreement as in effect on
the Closing.
Notes mean the Secured Note and the Unsecured Note.
Person means any individual, corporation, partnership,
association, limited liability company, joint-stock company, trust,
unincorporated organization, joint venture, court or government or
political subdivision or agency thereof.
Potential Event of Default means a condition or event
that, after notice or lapse of time or both, would constitute an Event
of Default under subsection 8.01 hereof.
Rate means ten percent (10%) per annum.
Secured Note means, whether one or more, a promissory
note, substantially in the form of Exhibit A-1 attached hereto,
payable by the Partnership to the order of CC, evidencing all or any
part of the CC Obligations (other than those evidenced by the
Unsecured Note) and secured by the Collateral Documents, together
with all supplements, amendments, restatements, renewals,
substitutions and other modifications thereto from time to time.
Subordinated Debt Documents has the meaning given that
term in the Bank Credit Agreement, and includes the CC Loan
Documents and the Subordination and Debt Put Agreement.
Subordination and Debt Put Agreement means that certain
Subordination and Debt Put Agreement dated as of May 30, 1995,
entered into by the Partnership and CC in favor of Agent, as agent
for the Banks, together with any and all supplements, amendments,
restatements, waivers and other modifications thereto from time to
time.
Subsidiary means, with respect to any Person, any
corporation, partnership, limited-liability company, association,
joint venture or other business entity of which more than 50% of
the total voting power of shares of stock or other ownership
interests entitled (without regard to the occurrence of any
contingency) to vote in the election of the Person or Persons
(whether directors, managers, trustees or other Persons performing
similar functions) having the power to direct or cause the direction
of the management and policies thereof is at the time owned or
controlled, directly or indirectly, by that Person or one or more of
the other Subsidiaries of that Person or a combination thereof.
Tax Distributions has the meaning given that term in the
Bank Credit Agreement.
Unsecured Note means, whether one or more, an
unsecured promissory note, substantially in the form of Exhibit A-2
attached hereto, payable by the Partnership to the order of CC,
evidencing, at the option of CC, all or any part of those CC
Obligations constituting Make-Well Advances, together with all
supplements, amendments, restatements, renewals, substitutions and
other modifications thereto from time to time.
SECTION II. CONSTRUCTION FINANCING ADVANCES
2.01 General Terms. Subject to the terms hereof, CC
agrees to make Loan Advances to the Partnership from time to time
from the date hereof until September 30, 1996 (the Termination
Date ), in amounts (the CC Loan Commitment ) equal to the
difference between (i) the Budget and (ii) the sum of (A) the
Commitments (as defined in the Bank Credit Agreement, which is
in the original amount of $230,000,000) and (B) $103,800,000;
provided, however, that the CC Loan Commitment shall not, in any
event exceed $75,000,000.00.
2.02 Interest. Except as provided in Section 2.05,
interest on the aggregate unpaid principal balance of the CC
Construction Financing, from time to time outstanding, shall accrue
at the Rate. Interest shall be charged on a daily basis for actual
number of days the principal is outstanding on a per annum basis
from the date of disbursement until paid. Interest shall be
calculated on the basis of a 365-day year, counting the actual
number of days elapsed.
2.03 Payments. Principal and interest with respect to the
CC Construction Financing shall be due and payable as follows:
(a) Restricted Period. During the Bank Loan
Term, all Net Cash From Operations less only Tax
Distributions shall be payable by the Partnership to CC to
be applied on account of accrued interest on the CC
Construction Financing and, thereafter, to the unpaid
principal of the CC Construction Financing, subject to the
proviso that no such payments may be made to CC if the
payment would result in a violation of the Bank Payment
Restrictions. During the Bank Loan Term, other than the
Bank Payment Restrictions, there are no restrictions on the
amount of CC Construction Financing principal that may be
repaid. Notwithstanding anything contained herein or in the
Joint Venture Agreement to the contrary, during the Bank
Loan Term, payments of Net Cash From Operations on
account of the CC Construction Financing shall be made
prior to any distributions to the partners under Section 4.1
or any other provision of the Joint Venture Agreement,
subject, however, to the Bank Payment Restrictions and
subject to the prior payment of Tax Distributions.
(b) Unrestricted Period. Upon, but not before (i)
the Bank Loan Termination or (ii) at any time at which, in
accordance with the terms of the Bank Credit Agreement,
the CC Construction Financing shall no longer constitute
General Partner Subordinated Debt, the CC Construction
Financing shall be repayable as follows: (x) prior to
September 30, 1996, in quarterly installments of interest
only; and (y) commencing November 1, 1996 (A) in
monthly installments in an amount equal to the sum of the
Basic Installment (as hereinafter defined) plus the Additional
Installment (as hereinafter defined); plus (B) no later than
the 45th day after the end of each fiscal quarter, all Net
Cash From Operations. Amounts payable under clause (B)
shall be applied, first, to the Additional Installments and,
second, to the Basic Installments, in each case in the inverse
order of maturity. Notwithstanding anything contained
herein or in the Joint Venture Agreement to the contrary,
after the Bank Loan Termination, payments of Net Cash
From Operations on account of the CC Construction
Financing shall be made prior to any Tax Distributions or
other distributions to the partners under Section 4.1 or any
other provision of the Joint Venture Agreement.
(1) Basic Installment. As used herein,
Basic Installment means a level monthly installment of
principal and interest, commencing November 1, 1996,
sufficient to fully amortize the unpaid principal balance of
the CC Construction Financing as of the Termination Date
over a twenty (20) year period from that date at the Rate.
If any additional CC Construction Financing Advances are
made after the Termination Date, the Basic Installment shall
be increased by the amount necessary to fully amortize such
additional amounts over the same amortization period.
(2) Additional Installment. As used
herein, the term Accrued Payments shall mean the sum,
as of the Bank Loan Termination, of (i) interest on the CC
Construction Financing through September 30, 1996
accrued and unpaid as of the Bank Loan Termination plus
(ii) the amount of all Basic Installments that CC would have
been entitled to receive during the Bank Loan Term had the
Partnership commenced making the Basic Installments on
November 1, 1996, but which, as of the Bank Loan
Termination, remain unpaid. As used herein Additional
Installment means a monthly installment of (i) principal
sufficient to fully amortize the Accrued Payments over the
number of months remaining until the Maturity Date,
together with (ii) accrued interest at the Rate on the unpaid
principal portion of the Accrued Payments.
(c) Maturity. Subject to the Bank Payment
Restrictions, the unpaid principal balance of the CC
Construction Financing, together with all interest thereon
and all other CC Obligations relating to the CC
Construction Financing, shall be fully due and payable upon
the earlier of acceleration, as provided herein, or the
Maturity Date.
(d) Prepayments. Subject to the Bank Payment
Restrictions, the unpaid principal balance of the CC
Construction Financing may be prepaid in whole or in part
at any time, without premium or penalty, upon ten (10)
days' prior written notice; subject to the Bank Payment
Restrictions. Prepayments of principal shall be applied,
first, to the Additional Installments and, second, to the
Basic Installments, in each case in the inverse order of
maturity.
2.04 Limitation. Notwithstanding anything to the
contrary contained in Sections 2.02 or 2.03 or elsewhere in this
Agreement, so long as the CC Construction Financing (or any part
thereof) constitutes General Partner Subordinated Debt, repayment
of the CC Construction Financing (or such part) is and shall
continue to be subject to the Bank Payment Restrictions, and, in no
event shall payment of interest or principal on the CC Construction
Financing (or such part) be made if, as a result thereof, the
Partnership would be in violation of the Bank Payment Restrictions.
2.05 Post-Maturity Interest. On and after the Maturity
Date or upon the occurrence of an Event of Default, unpaid
principal on the CC Construction Financing shall bear interest
(including post-petition interest in any proceeding under the
Bankruptcy Code or other applicable bankruptcy laws), payable on
demand, at the Default Rate. Payment or acceptance of interest at
the Default Rate is not a permitted alternative to timely payment
and shall not constitute a waiver of any Event of Default or
otherwise prejudice or limit any rights or remedies of CC.
2.06 Manner of Payment. All sums payable to CC in
connection with CC Construction Financing shall be paid directly to
CC in immediately available funds. CC shall keep a record of the
amount of the Loan Advances and the CC Guaranty Advances,
which records shall be presumed correct.
2.07 The Secured Note. The Partnership's obligation to
repay Loan Advances and CC Guaranty Advances shall be secured
by the Collateral Documents and evidenced by the Secured Note.
2.08 Collateral Documents. The CC Construction
Financing shall be secured by a deed of trust, assignment of rents
and security agreement (the CC Deed of Trust ), substantially in
the form of Exhibit C attached hereto and a security agreement (the
CC Security Agreement ) substantially in the form of Exhibit D
attached hereto (collectively, as either of such instruments may
hereafter be amended, supplemented or otherwise modified from
time to time, the Collateral Documents ). The Collateral
Documents shall constitute a lien and security interest upon, and an
assignment of, all of the Partnership's right, title and interest in and
to the real property, personal and other property described in the
Collateral Documents, subject only, in each case, to the liens,
security interests and rights of the Banks in the Project pursuant to
the Bank Credit Agreement (collectively, the Bank Liens ) and
those defects, encumbrances and exceptions to which the Bank
Liens are subject pursuant to the Bank Credit Agreement
(collectively, the Permitted Exceptions ).
SECTION III. CONDITIONS PRECEDENT
The obligation of CC to make Loan Advances hereunder is
subject to the following conditions precedent:
3.01 Documents Required for the Closing. The
Partnership shall have delivered to CC prior to the initial Loan
Advance (the Closing ), the following:
(a) Resolutions of (i) C's board of directors, on
behalf of the Partnership and itself, (ii) E's managers and
(iii) the Executive Committee (as described in Section 5.6
of the Joint Venture Agreement), each approving and
authorizing the execution, delivery and performance of this
Agreement, the other Subordinated Debt Documents to
which the Partnership is a party, the Circus Completion
Guaranty and the Make-Well Agreement certified as of the
Closing by C's secretary or an assistant secretary, an officer
of E and an authorized representative of the Executive
Committee, respectively, as being in full force and effect
without modification or amendment and, in the case of
Executive Committee certified copies of the resolutions
authorizing the representatives of the Executive Committee
to execute such documents.
(b) Executed originals of this Agreement, the
Notes, the Collateral Documents, an environmental
indemnity substantially in the form of Exhibit F attached
hereto (the Environmental Indemnity ) and the other CC
Loan Documents to which the Partnership is a party.
(c) A CLTA mortgagee form of title insurance
policy or commitment therefor in form and substance
acceptable to CC in the amount of $75,000,000 issued by
First American Title Insurance Company, insuring the lien
of the CC Deed of Trust to be a valid lien against the
Project, free and clear of all defects, encumbrances and
exceptions except the Permitted Exceptions.
(d) Originally executed copies of one or more
favorable written opinions of MacDonald Carano Wilson
McCune Bergin Frankovich & Hicks, special counsel for
the Partnership, in form and substance reasonably
satisfactory to CC, dated as of the Closing and setting forth
substantially the matters in the opinions designated in
Exhibit E attached hereto and as to such other matters as
CC may reasonably request.
(e) Uniform Commercial Code financing
statements and fixture filings, executed by Partnership as to
the collateral granted by Partnership pursuant to the
Collateral Documents for all jurisdictions as may be
necessary or desirable to perfect CC's security interest in
such collateral.
(f) Such other documents as CC may reasonably
request.
3.02 Closing Events. On or before the Closing,
(a) The Partnership shall have obtained all
consents to the transactions contemplated under the
Subordinated Debt Documents, the Circus Completion
Guaranty and the Make-Well Agreement, of any Person
required under any contractual obligation, including,
without limitation, approval of the terms of the CC Loan
and the repayment of the CC Guaranty Advances and Make-
Well Advances by the Executive Committee pursuant to
subsection 5.9(c) of the Joint Venture Agreement, by C and
E and by the Banks, all of the foregoing in form and
substance satisfactory to CC.
(b) The Closing Date shall have occurred under
the Bank Credit Agreement.
(c) The Partnership shall have taken or caused to
be taken such actions in such a manner so that CC has a
valid and perfected lien and security interest in the Project
subject only to the Permitted Exceptions.
(d) CC shall have received evidence satisfactory
to CC, that the Partnership has procured the insurance
required to be procured and maintained pursuant to
subsection 6.01(c) hereof.
(e) The Partnership shall have furnished CC a
copy of the current Budget and Construction Schedule (as
defined in the Bank Credit Agreement), both of which shall
have been approved by CC.
3.03 Conditions to all Loan Advances. The obligation of
CC to make Loan Advances are subject to the following further
conditions precedent:
(a) Prior to each Loan Advance, the Partnership
shall have delivered to CC a Request for Loan Advance
substantially in the form attached hereto as Exhibit B, which
shall specify (i) the proposed funding date ( Funding Date )
of the Loan Advance (which shall be a business day) and
(ii) the amount of Loan Advance requested.
(b) The representations and warranties contained
herein and in the other Subordinated Debt Documents shall
be true, correct and complete in all material respects on and
as of that Funding Date to the same extent as though made
on and as of that date, except to the extent such
representations and warranties specifically relate to an
earlier date, in which case such representations and
warranties shall have been true, correct and complete in all
material respects on and as of such earlier date.
(c) No event shall have occurred and be
continuing or would result from the consummation of the
borrowing contemplated by such Request for Loan Advance
that would constitute (i) an Event of Default, (ii) a Potential
Event of Default or (iii) a Joint Venture Default.
(d) The Partnership shall have performed in all
material respects all agreements and satisfied all conditions
which this Agreement provides shall be performed or
satisfied by it on or before that Funding Date.
(e) No order, judgment or decree of any court,
arbitrator or governmental authority shall purport to enjoin
or restrain CC from making the Loan Advance to be made
by it on that Funding Date.
(f) CC shall have approved all material changes
to the Budget and the Construction Schedule after the
Closing.
(g) The Termination Date shall not have
occurred.
(h) There shall not be pending or, to the
knowledge of any Senior Officer (as defined in the Bank
Credit Agreement) of the Partnership, threatened, any
action, suit, proceeding, governmental investigation or
arbitration against or affecting the Partnership or its
properties that would be expected to (i) have a material
adverse effect on (1) the business, operations, properties,
assets, condition (financial or otherwise) or prospects of the
Partnership, (2) the validity, priority or enforceability of
any of the CC Loan Documents or any security interest or
lien created or intended to be created thereby, or (3) the
construction, use, occupancy or operation of all or any
material part of the Project; or (ii) impair the ability of the
Partnership to perform, or of CC to enforce, the CC
Obligations.
SECTION IV. REQUIRED BANK ADVANCES
4.01 General. Partnership covenants and agrees to
reimburse CC the amount of any and all CC Guaranty Advances in
accordance with the provisions of Section II; Partnership further
covenants and agrees to reimburse CC the amount of any and all
Make-Well Advances in accordance with the provisions of this
Section. Partnership acknowledges and agrees that the CC
Guaranty Advances and the Make-Well Advances constitute
obligatory advances by CC pursuant to the respective terms of the
Circus Completion Guaranty and the Make-Well Agreement, and
that the obligation of Partnership to reimburse CC for the CC
Guaranty Advances and the Make-Well Advances shall, subject to
the Bank Payment Restrictions, be unconditional and irrevocable
and shall be paid strictly in accordance with the terms of this
Agreement under all circumstances, including, without limitation,
(i) any lack of validity or enforceability of the Circus Completion
Guaranty or the Make-Well Agreement; (ii) the existence of any
claim, set-off, defense or other right which Partnership or CC may
have at any time against Agent or the Banks or any other Person;
(iii) any breach of this Agreement or any other Loan Document by
any party thereto; or (iv) the fact that a Bank Default, Joint Venture
Default or Event of Default shall have occurred and be continuing.
The Partnership specifically waives its rights under NRS 104.3605,
and agrees that the foregoing shall constitute a waiver of discharge
under NRS 104.3605(9) with respect to CC Guaranty Advances and
Make-Well Advances.
4.02 Make-Well Interest. Subject to Section 4.05,
interest on the principal balance of the Make-Well Advances, from
time to time outstanding, shall accrue at the Rate. Interest shall be
charged on a daily basis for the actual number of days the principal
is outstanding on a per annum basis from the date of disbursement
until paid. Interest shall be calculated on the basis of a 365-day
year, counting the actual number of days elapsed.
4.03 Make-Well Payments. Principal and interest with
respect to the Make-Well Advances shall be due and payable as
follows:
(a) Restricted Period. During the Bank Loan
Term, all Net Cash From Operations less only (i) Tax
Distributions and (ii) payments under Section II of this
Agreement shall be payable by the Partnership to CC to be
applied on account of accrued interest on the Make-Well
Advances and, thereafter, to the unpaid principal of the
Make-Well Advances, subject to the proviso that no such
payments may be made to CC if the payment would result
in a violation of the Bank Payment Restrictions. During the
Bank Loan Term, other than the Bank Payment Restrictions,
there are no restrictions on the principal amount of Make-
Well Advances that may be repaid. Notwithstanding
anything contained herein or in the Joint Venture Agreement
to the contrary, during the Bank Loan Term, payments of
Net Cash From Operations on account of the Make-Well
Advances shall be made prior to any distributions to the
partners under Section 4.1 or any other provision of the
Joint Venture Agreement, subject, however, to the Bank
Payment Restrictions and subject to the prior payment of
Tax Distributions and CC Construction Financing.
(b) Unrestricted Period. Upon, but not before (i)
the Bank Loan Termination or (ii) at any time at which, in
accordance with the terms of the Bank Credit Agreement,
the Make Well Advances shall no longer constitute General
Partner Subordinated Debt, the Make-Well Advances shall
be repayable in quarterly installments of principal and
interest no later than the 45th day after the end of each
fiscal quarter in an amount equal to all Net Cash From
Operations, subject only to the prior payment of the CC
Construction Financing. Notwithstanding anything
contained herein or in the Joint Venture Agreement to the
contrary, after the Bank Loan Termination, payments of Net
Cash From Operations on account of the Make-Well
Advances shall be made prior to any Tax Distributions or
other distributions to the partners under Section 4.1 or any
other provision of the Joint Venture Agreement, but subject
to the prior payments of Construction Financing required by
Section 2.03(b).
(c) Maturity. Subject to the Bank Payment
Restrictions, the unpaid principal balance of the Make-Well
Advances, together with all interest thereon and all other
CC Obligations relating to the Make-Well Advances, shall
be fully due and payable upon the earlier of acceleration, as
provided herein, or the Maturity Date.
(d) Prepayments. Subject to the Bank Payment
Restrictions, the unpaid principal balance of the Make-Well
Advances may be prepaid in whole or in part at any time,
without premium or penalty, upon ten (10) days' prior
written notice.
4.04 Limitation. Notwithstanding anything to the
contrary contained in Sections 4.02 or 4.03 or elsewhere in this
Agreement, so long as the Make-Well Advances (or any part
thereof) constitute General Partner Subordinated Debt, repayment of
the Make-Well Advances (or such part thereof) is and shall continue
to be subject to the Bank Payment Restrictions, and, in no event
shall reimbursement of the Make-Well Advances (or such part
thereof) or the payment of interest thereon be made if, as a result
thereof, the Partnership would be in violation of the Bank Payment
Restrictions.
4.05 Post-Maturity Interest. On and after the Maturity
Date or upon the occurrence of an Event of Default, unpaid
principal on the Make-Well Advances shall bear interest (including
post-petition interest in any proceeding under the Bankruptcy Code
or other applicable bankruptcy laws), payable on demand, at the
Default Rate. Payment or acceptance of interest at the Default Rate
is not a permitted alternative to timely payment and shall not
constitute a waiver of any Event of Default or otherwise prejudice
or limit any rights or remedies of CC.
4.06 Manner of Payment. All sums payable to CC under
this Section IV shall be paid directly to CC in immediately available
funds. CC shall keep a record of the amount of the Make-Well
Advances, which records shall be presumed correct.
4.07 Note. The Partnership's obligation to repay Make-
Well Advances shall be secured by the Collateral Documents and
evidenced by the Secured Note, unless CC elects, by written notice
to the Partnership and Agent, to have a Make-Well Advance, or any
part thereof, unsecured, in which event, at the option of CC, the
applicable Make-Well Advance(s) shall be evidenced by the
Unsecured Note.
4.08 Joint Venture Agreement. Notwithstanding any
provision to the contrary contained herein or in the Joint Venture
Agreement: (i) Make-Well Advances shall be excluded from the
calculation of annual net loss referenced in Section 2.6(a) of the
Joint Venture Agreement; and (ii) the Managing Partner (as defined
in the Joint Venture Agreement) shall be entitled to call for an
Additional Capital Contribution (as described in the Joint Venture
Agreement) under the Joint Venture Agreement upon CC's making
of any Make-Well Advance, subject to the limitation that the
aggregate amount of all Additional Capital Contributions pursuant to
this express provision shall not exceed the principal portion of a
Hypothetical Construction Loan (as hereinafter defined) that would
have been payable from the date hereof to the date as of which the
applicable Additional Capital Contribution is determined. In such
event, the Managing Partner shall be entitled to exercise the rights
and remedies provided for in the Joint Venture Agreement with
respect to Additional Capital Contributions, including, without
limitation the rights and remedies set forth in Sections 2.7(a)(i),
2.7(a)(ii) and 12.4 of the Joint Venture Agreement. The partners
under the Joint Venture Agreement acknowledge and agree that
such rights and remedies are independent of and in addition to the
provisions contained in this Agreement regarding the Make-Well
Advances themselves. As used herein a Hypothetical Construction
Loan means a loan, fully amortized over a twenty year term at the
Rate, with level payments of principal and interest, in an amount
equal to the sum of (x) $220,000,000 (increased by any additional
amounts available for construction financing under the Bank Credit
Agreement) plus (y) the amount of the CC Loan Commitment, plus
(z) the amount of any CC Guaranty Advances. The foregoing
provision is not intended to restrict the rights of the Managing
Partner to call for Additional Capital Contributions under the Joint
Venture Agreement should Additional Capital Contributions be
required for any reason not set forth in this Section and permitted
under the Joint Venture Agreement.
SECTION V. SUBORDINATION TO BANK LOANS
5.01. Subordination. The CC Obligations are subject to
the terms and provisions of the subordination provisions contained
in the Subordination and Debt Put Agreement.
5.02 Limitation on Payments. Without limiting the
provisions of Section 5.01, payment of the CC Obligations is
subject to the Bank Payment Restrictions.
5.03 Information. Upon the request of Agent, each of
CC and the Partnership shall provide copies of all certificates,
statements, writings or other information required or otherwise
given under this Agreement.
5.04 Controlling Provision. Notwithstanding anything to
the contrary contained in this Agreement, the provisions of this
Section V are made for the benefit of the holders of the Bank
Obligations, each of whom is entitled to the benefits hereof, without
any act or notice of acceptance hereof or reliance hereon. No
amendment, modification or discharge of any provision of this
Agreement or the other CC Loan Documents shall be effective
against any holder of the Bank Obligations unless expressly
consented to in writing by Agent. The provisions of this Section V
apply notwithstanding anything to the contrary contained elsewhere
in this Agreement.
SECTION VI. REPRESENTATIONS AND WARRANTIES
6.01 Original. To induce CC to enter into this
Agreement, the Partnership represents and warrants to CC as
follows:
(a) The Partnership is a general partnership duly
formed, validly existing and in good standing under the
Laws of the State of Nevada; the Partnership has the lawful
power to own its properties and to engage in the business it
conducts.
(b) Neither of the Partnership's partners nor any
of its respective affiliates is in default in the performance of
any of its obligations under or with respect to the Joint
Venture Agreement, and no event or circumstance presently
exists which, with the giving of notice, the passage of time
or both would constitute a default by a partner or its
affiliates under or with respect to the Joint Venture
Agreement.
(c) The Partnership is not in default with respect
to any of its existing Indebtedness (including, without
limitation, any Bank Default), and the making and
performance of this Agreement and the Notes will not
(immediately, with the passage of time, the giving of notice,
or both):
(1) Violate the Joint Venture Agreement
or result in any event permitting or requiring a dissolution
of the Partnership, or violate any Laws or result in a default
under any contract, agreement, or instrument to which the
Partnership is a party or by which the Partnership or its
property is bound; or
(2) Except as provided herein or in the
Bank Credit Agreement, result in the creation or imposition
of any security interest in, or lien or encumbrance upon,
any of the assets of the Partnership; or
(3) Violate the Bank Credit Agreement or
constitute a Bank Default.
(d) The Partnership has the power and authority
to enter into and perform this (i) Agreement, the Notes and
the other Subordinated Debt Documents to which the
Partnership is a party and (ii) the Circus Completion
Guaranty and Make-Well Agreement, and to incur the
obligations herein and therein provided for, and has taken
all partnership action necessary to authorize the execution,
delivery, and performance of this Agreement and the Notes.
(e) (i) This Agreement, the Notes and the other
Subordinated Debt Documents to which the Partnership is a
party and (ii) the Circus Completion Guaranty and Make-
Well Agreement are valid and binding upon and enforceable
against the Partnership in accordance with their respective
terms.
(f) The Partnership has good and marketable title
to all of its assets, subject to no security interest,
encumbrance or lien, or the claim of any third Person
except for the Permitted Exceptions.
(g) Except to the extent that the failure to comply
would not materially interfere with the conduct of the
business of the Partnership, the Partnership has complied
with all applicable Laws with respect to:
(1) any restrictions, specifications, or
other requirements pertaining to the Partnership's business;
and
(2) the construction, use, maintenance and
operation of the real and personal properties owned or
leased by the Partnership.
(h) No representation or warranty by the
Partnership contained herein or in any certificate or other
document furnished by the Partnership pursuant hereto
contains any untrue statement of material fact or omits to
state a material fact necessary to make such representation
or warranty not misleading in light of the circumstances
under which it was made.
(i) Each consent, approval or authorization of, or
filing, registration or qualification with, any Person required
to be obtained or effected by the Partnership in connection
with the execution and delivery of (i) this Agreement, the
Notes and the other Subordinated Debt Documents to which
the Partnership is a party and (ii) the Circus Completion
Guaranty and the Make-Well Agreement or the undertaking
or performance of any obligation hereunder or thereunder
has been duly obtained or effected.
(j) Upon the occurrence of the Closing Date
under the Bank Credit Agreement and the execution and
delivery of this Agreement by the parties hereto C and CC
will have fulfilled their respective obligations under the
Joint Venture Agreement to provide Construction Financing.
6.02 Survival. All of the representations and warranties
set forth in Section 6.01 shall survive until all CC Obligations are
satisfied in full and CC's obligation to make Advances has been
terminated.
SECTION VII. PARTNERSHIP COVENANTS
The Partnership does hereby covenant and agree with CC
that, so long as any of the CC Obligations remain unsatisfied or CC
is obligated to make Advances, it will comply with the following
covenants:
7.01 Affirmative Covenants.
(a) The Partnership will at all times preserve and
keep in full force and effect its partnership existence and all
rights and franchises material to its business.
(b) The Partnership will pay all taxes,
assessments and other governmental charges imposed upon
it or any of its properties or assets or in respect of any of
its income, businesses or franchises before any penalty
accrues thereon, and all claims (including, without
limitation, claims for labor, services, materials and
supplies) for sums that have become due and payable and
that by law have or may become a lien upon any of its
properties or assets, prior to the time when any penalty or
fine shall be incurred with respect thereto; provided that no
such charge or claim need be paid if being contested in
good faith by appropriate proceedings promptly instituted
and diligently conducted and if such reserve or other
appropriate provision, if any, as shall be required in
conformity with GAAP shall have been made therefor.
(c) The Partnership will maintain or cause to be
maintained in good repair, working order and condition,
ordinary wear and tear excepted, all material properties
used or useful in the business of the Partnership and from
time to time will make or cause to be made all appropriate
repairs, renewals and replacements thereof. The
Partnership will maintain or cause to be maintained, with
financially sound and reputable insurers, insurance with
respect to its properties and business against loss or damage
of the kinds customarily carried or maintained under similar
circumstances by Persons of established reputation engaged
in similar businesses, including the insurance required by
the Deed of Trust. Each such policy of insurance shall
name CC, or, at any time the Bank Credit Agreement is
still in effect, the Agent (in which case CC's rights, title
and interest therein shall be subject to the Subordination and
Debt Put Agreement), as the loss payee thereunder for
amounts in excess of $1,000,000 and shall provide for at
least 30 days prior written notice to CC of any modification
or cancellation of such policy.
(d) The Partnership will use the proceeds of the
CC Loans solely for payment of costs in connection with
the completion of the Project, as described in the Budget.
(e) The Partnership will furnish CC copies of (i)
all financial statements required to be furnished to Agent
under the Bank Credit Agreement, and (ii) any notices of
default given by the Partnership, Agent or any Bank in
connection with the Bank Credit Agreement.
(f) The Partnership will, when requested so to
do, make available for inspection by duly authorized
representatives of CC any of its books and records, and will
furnish CC any information regarding the Partnership's
business affairs and financial condition within a reasonable
time after written request therefor.
(g) The Partnership will give prompt notice to
CC (and, in any event, not later than concurrently with the
delivery of the financial statements of the Partnership under
Section 6.1(ii) of the Bank Credit Agreement) of the
institution of any other suit or proceeding that might
materially and adversely affect the Partnership's operations,
financial condition, property or business.
(h) The Partnership will pay when due (or within
applicable grace periods) all Indebtedness due third Persons
in an individual principal amount of $5,000,000 or more or
any items with an aggregate principal amount of
$10,000,000 or more, including, without limitation, the
Bank Loans, except when the amount thereof is being
contested in good faith by appropriate proceedings and with
adequate reserves therefor, in accordance with generally
accepted accounting principles, being set aside on the books
of the Partnership. If default be made by the Partnership in
the payment of any principal (or installment thereof) of, or
interest on, any such Indebtedness, CC shall have the right,
in its discretion, to pay such interest or principal for the
account of the Partnership and be reimbursed by the
Partnership therefor to the extent permitted in the
Subordination and Debt Purchase Agreement.
(i) The Partnership will notify CC promptly
(and, in any event, not later than concurrently with the
delivery of the financial statements of the Partnership under
Section 6.1(ii) of the Bank Credit Agreement) if the
Partnership becomes aware of the occurrence of any Event
of Default or of any Potential Event of Default hereunder or
any Bank Default.
(j) The Partnership will comply with the
requirements of all applicable laws, rules, regulations and
orders of any governmental authority, including, without
limitation, all gaming laws, and obtain and keep in full
force and effect any permit, license, consent, or approval
required in order to complete the Project, in each case, if
such noncompliance or failure to obtain and keep in full
force and effect could reasonably be expected to (i) have a
material adverse effect on (1) the business, operations,
properties, assets, condition (financial or otherwise) or
prospects of the Partnership, (2) the validity, priority or
enforceability of any of the CC Loan Documents or any
security interest or lien created or intended to be created
thereby, or (3) the construction, use, occupancy or
operation of all or any material part of the Project; or (ii)
impair the ability of the Partnership to perform, or of CC to
enforce, the CC Obligations.
7.02 Negative Covenants.
(a) The Partnership shall not make any
Accelerating Transfer, unless the transfer is preceded by
CC's express written consent to the particular transaction
and transferee. CC may withhold such consent in it sole
discretion.
(b) The Partnership will not prepay any
Indebtedness subordinated in right of payment or otherwise
to the CC Obligations or enter into or modify any
agreement as a result of which the terms of payment of such
Indebtedness are waived or modified.
(c) The Partnership will not furnish CC any
certificate or other document pursuant to the terms hereof
that will contain any untrue statement of material fact or
that will omit to state a material fact necessary to make it
not misleading in light of the circumstances under which it
was furnished.
SECTION VIII. DEFAULT
8.01 Events of Default. The occurrence of any one or
more of the following events shall constitute an Event of Default
hereunder:
(a) The Partnership shall fail (i) to pay when due
any installment of principal or interest payable hereunder or
under the Notes and such failure shall continue for a period
of five (5) days, after written notice from CC to the
Partnership and Agent or (ii) to pay the CC Obligations in
full at the Maturity Date; provided that such failure to pay
shall not constitute an Event of Default if such failure
results solely from the operation of the Bank Payment
Restrictions; and provided, further, that, prior to the Bank
Loan Termination, failure to pay any principal or interest
hereunder or under the Notes shall not constitute an Event
of Default if such failure results solely from the lack of
sufficient Net Cash From Operations to make the required
payments.
(b) The Partnership shall fail to observe or
perform any other obligation to be observed or performed
by it hereunder and does not cure that failure within 30 days
( Initial Cure Period ) after written notice is given to the
Partnership by CC or within 90 days after such written
notice, so long as the Partnership begins within the Initial
Cure Period and diligently continues to cure the failure, and
CC, exercising reasonable judgment, determines that the
cure cannot reasonably be completed at or before the
expiration of the Initial Cure Period.
(c) The Partnership shall: (i) make an assignment
for the benefit of creditors; (ii) apply for or consent to the
appointment of a receiver or trustee for it or for a
substantial part of its property or business or such a receiver
or trustee otherwise shall be appointed; or (iii) admit in
writing its inability to pay its debts as they mature.
(d) Bankruptcy, insolvency, reorganization or
liquidation proceedings or other proceedings for relief under
the United States Bankruptcy Code or any similar
bankruptcy law or law for the relief of debtors shall be
instituted by or against the Partnership and, in the case of
any proceeding instituted against the Partnership without its
consent, such proceeding shall not have been vacated by
appropriate order of a court within 60 days of being
instituted.
8.02 Acceleration. At the option of CC, but only upon
the lapse of 15 business days after notice to the Agent and the
Partnership, upon the occurrence of an Event of Default that is
uncured within such 15 business days (which 15-business-day period
may run concurrently with any notice required by Section 8.01)
under Sections 8.01(a) or (b), and, subject to any limitations
contained in the Collateral Documents, all CC Obligations, whether
hereunder or otherwise, shall immediately become due and payable
without further action of any kind. Upon the occurrence of an
Event of Default under Section 8.01(c) or (d), all CC Obligations,
whether hereunder or otherwise, shall automatically immediately
become due and payable without further action of any kind.
8.03 Other Remedies. Upon the occurrence of an Event
of Default, CC (or, if applicable, C) shall have, in addition to the
rights and remedies given it by this Agreement and the
Subordinated Debt Documents, all those allowed to it under the
Joint Venture Agreement or the Loan Documents (as defined in the
Bank Credit Agreement) or by all applicable Laws or otherwise
available in equity, the Partnership acknowledging and agreeing that
the rights and remedies provided for in the Joint Venture Agreement
(including the rights and remedies of C as Managing Partner
thereunder), this Agreement and the Bank Credit Agreement have
each been separately bargained for and agreed upon.
8.04 Remedies under Bank Loan Documents. The
Partnership acknowledges that, pursuant to the provisions of NRS
40.475 and 40.485, as well as the express terms of the
Subordination and Debt Put Agreement, performance by CC under
the Circus Completion Guaranty, Make-Well Agreement and the
Subordination and Debt Put Agreement or under any of such
agreements, may entitle CC to be subrogated in whole or in part to
the rights and remedies of the Bank under the Loan Documents (as
defined in the Bank Credit Agreement), including, without
limitation, the Bank Deed of Trust. The parties specifically
acknowledge and agree that such subrogation rights and remedies
are independent of, and in addition to, the rights and remedies of
CC hereunder.
8.05 Cure; Protection of Security. Subject to the
provisions of the Subordination and Debt Put Agreement, in
addition to any other right or remedy provided in the Subordinated
Debt Documents, upon the occurrence of an Event of Default or,
following the making of a CC Guaranty Advance, CC, if it chooses
to do so, may enter the Project and/or do any and all other things
which it may in its sole discretion consider necessary and
appropriate to protect its rights hereunder or to protect the security
of the CC Loan Documents. Subject to the provisions of the
Subordination and Debt Put Agreement, such other things may
include: appearing in and/or defending any action or proceeding
which purports to affect the security of, or the rights or powers of
CC under, the Collateral Documents; paying, purchasing, contesting
or compromising any encumbrance, charge, lien or claim of lien
(including, without limitation, but subject to the Subordination and
Debt Put Agreement, any lien in favor of Agent or the Banks)
which in CC's sole judgment is or may be senior in priority to the
Collateral Documents, such judgment of CC to be conclusive as
among the parties to this Agreement; obtaining insurance and/or
paying any premiums or charges for insurance required to be
carried under the CC Loan Documents; otherwise caring for and
protecting any and all of the Project; and/or employing counsel,
accountants, contractors and other appropriate Persons to assist CC.
CC or its authorized agents or representatives may take any of the
actions permitted under this Section 8.05 either with or without
giving notice to any Person.
SECTION IX. MISCELLANEOUS
9.01 Further Assurance. From time to time, the
Partnership will execute and deliver to CC such additional
documents and will provide such additional information as CC may
reasonably require to carry out the terms of this Agreement and be
informed of the Partnership's status and affairs.
9.02 Enforcement and Waiver by CC. CC shall have the
right at all times to enforce the provisions of this Agreement in
strict accordance with the terms hereof and thereof, notwithstanding
any conduct or custom on the part of CC in refraining from so
doing at any time or times to enforce its rights under such
provisions, strictly in accordance with the same, shall not be
construed as having created a custom in any way or manner
contrary to specific provisions of this Agreement or as having in
any way or manner modified or waived the same. CC may, in its
sole and absolute discretion waive any condition to a Loan
Advance, and, in such event CC's funding of such Loan Advance
without satisfaction of such condition(s) shall be deemed to have
been made in accordance with the terms and conditions of this
Agreement. All rights and remedies of CC are cumulative and
concurrent and the exercise of one right or remedy shall not be
deemed a waiver or release of any other right or remedy.
9.03 Expenses of CC. Subject to the Bank Payment
Restrictions, the Partnership will, on demand, reimburse CC for all
expenses, including the reasonable fees and expenses of legal
counsel for CC, incurred by CC in connection with the preparation,
administration, amendment, modification, or enforcement of this
Agreement and the collection or attempted collection of the Notes
or any of them, such amounts shall bear interest at the Default Rate
if not paid within ten (10) days after demand. If either party
commences an action against the other party arising out of or in
connection with this Agreement or any other CC Loan Document,
the prevailing party shall be entitled to have and recover from the
losing party reasonable attorneys' fees and costs of suit.
9.04 Notices. Any notices or consents required or
permitted by this Agreement shall be in writing and shall be deemed
delivered if delivered in person or if sent by certified mail, postage
prepaid, return receipt requested, or telegraph, as follows, unless
such address is changed by written notice hereunder:
(a) If to the Partnership: Galleon,
Inc.
Circus
Circus Enterprises, Inc.
2880 Las
Vegas Blvd. South
Las
Vegas, Nevada 89109
Attn:
General Counsel
and: Eldorado
Limited Liability Company
Eldorado Hotel Casino
345 N.
Virginia Street
P.O. Box
3399
Reno,
Nevada 89508
Attn:
Chief Financial Officer
(b) If to CC: Circus
Circus Enterprises, Inc.
2880 Las
Vegas Blvd. South
Las
Vegas, Nevada 89109
Attn:
General Counsel
Notices required under this Agreement or any other
Subordinated Debt Document or under the Joint Venture Agreement
may be given concurrently, and any cure periods required under the
terms of such documents shall also run concurrently.
9.05 Applicable Law. The substantive Laws of the State
of Nevada shall govern the construction of this Agreement and the
rights and remedies of the parties hereto.
9.06 Binding Effect, Assignment. The Partnership has no
right to assign any of its rights or obligations hereunder without the
prior written consent of CC. Except as limited by the preceding
sentence, this Agreement shall inure to the benefit of, and shall be
binding upon, the respective successors and permitted assigns of the
parties hereto. Without limiting the foregoing, CC shall have the
right to assign all or any part of its rights duties and obligations
hereunder to E without the necessity of obtaining the Partnership's
consent.
9.07 Entire Agreement. This Agreement, and the
documents executed and delivered pursuant hereto, constitute the
entire agreement between the parties, and may be amended only by
a writing signed on behalf of each party.
9.08 Severability. If any provision of this Agreement
shall be held invalid under any applicable Laws, such invalidity
shall not affect any other provision of this Agreement that can be
given effect without the invalid provision, and, to this end, the
provisions hereof are severable.
9.09 Counterparts. This Agreement may be executed in
any number of counterparts, each of which shall be deemed to be an
original, but all of which together shall constitute but one and the
same instrument.
9.10 Other Financing Provisions. Neither the agreement
of CC to provide the financing contemplated by the CC Loan, nor
CC's entering into the Completion Guaranty or the Make-Well
Agreement is intended to supersede or conflict with any provisions
of the Joint Venture Agreement obligating the parties thereto to
provide financing (other than the Construction Financing).
9.10 Relationship to Joint Venture Agreement. In the
event of any conflict between the terms and provisions of this
Agreement and the Joint Venture Agreement, including, without
limitation, the provisions of Section 2.6 (Additional Capital
Contributions) and 4.1(a) (payments of Tax Distributions during
first year of operation only), each of the Partnership's partners
expressly acknowledges and agrees that the terms and provisions of
this Agreement shall prevail. Any amendment or other modification
of the Joint Venture Agreement affecting the rights and remedies of
CC hereunder shall require the prior written consent of CC, which
it may withhold or grant in its sole discretion.
IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement as of the day and year first above written.
CIRCUS CIRCUS
ENTERPRISES, INC.,
a Nevada corporation
By:
CIRCUS AND
ELDORADO JOINT
VENTURE, a Nevada
general partnership
By: GALLEON,
INC, a Nevada
corporation, its
managing
general partner
By:
Title:
By: ELDORADO
LIMITED
LIABILITY
COMPANY, a
Nevada limited-
liability
company, its
general partner
By:
Title:
By:
Title:
By: EXECUTIVE
COMMITTEE
By:
Title:
By:
Title:
meb\circus\fib\sub-loan.8
EXHIBIT XIX
[FORM OF CONSENT TO ASSIGNMENT OF GENERAL
CONTRACTOR'S
CONTRACT]
CONSENT TO ASSIGNMENT OF GENERAL
CONTRACTOR'S CONTRACT
As of May 30, 1995, in consideration of the Lenders
extending credit to CIRCUS AND ELDORADO JOINT
VENTURE, a Nevada general partnership ("Assignor") pursuant to
that certain Credit Agreement (the "Credit Agreement"), dated as
of the date hereof, among Assignor, as borrower, the Lenders listed
therein, FIRST INTERSTATE BANK OF NEVADA, N.A., as
arranger and administrative agent ("Assignee"), First Interstate
Bank of Nevada, N.A., The Long-Term Credit Bank of Japan,
Ltd., Los Angeles Agency, and Societe General, collectively, as
managing agents, and Bank of America, N.T. & S.A., CIBC Inc.
and Credit Lyonnais, Los Angeles Branch, collectively, as co-
agents, PERINI BUILDING COMPANY, an Arizona corporation
("Contractor"), hereby consents to assignment by Assignor to
Assignee for the benefit of Assignee and the Lenders of that certain
Contract for Construction, dated as of February 7, 1994, by and
between Contractor and Assignor as it may be amended,
supplemented or otherwise modified (the "Contract"), pursuant to
the terms of that certain Security Agreement, dated as of May 30,
1995, by and between Assignor and Assignee ("Security
Agreement"; the terms defined therein and not otherwise defined
herein being used herein as therein defined, in accordance with
subsection 7.2.2 of the General Conditions of the Contract; and
covenants and agrees as follows:
(1) Contractor will, at the same time it gives any
written notice of default under the Contract to Assignor, send a
copy of such written notice to Assignee, by the manner and means
provided for the giving of notices under paragraph 8 hereof.
Assignee shall have a reasonable period of time from the receipt of
such notice of default to remedy or cure said default prior to
Contractor's exercising any of the remedies provided in the
Contract for such default, subject to paragraph (2) below; provided,
however, that nothing herein shall require Assignee to cure said
default but Assignee, in its sole discretion, shall have the option to
do so.
(2) In the event of a default by Assignor under
the Contract, Contractor, at Assignee's request, shall continue its
performance under the Contract on Assignee's behalf in accordance
with the terms thereof, and, in such event, Contractor shall be paid
in accordance with the Contract for all work, labor and materials
rendered on Assignee's behalf during such period.
(3) The maximum cost for the construction work,
including Contractor's fee for such work, shall not exceed
$____________.
(4) Contractor will construct the improvements,
including, without limitation, construction of the building shell, in
accordance with the provisions of the Contract. Contractor
covenants and agrees to discharge or cause to be discharged all liens
or claims of lien filed or otherwise asserted against the Premises by
any of Contractor's suppliers, vendors or subcontractors.
(5) Contractor hereby represents and warrants to
Assignee that Contractor is duly licensed to conduct its business in
the jurisdiction where such construction work is to be performed;
that the Contract is in full force and effect and is binding on
Contractor; that no default by Contractor or Assignor exists under
the Contract and no event has occurred which, with notice or lapse
of time or both, would constitute a default by Contractor or
Assignor thereunder; and that all conditions to the effectiveness or
continuing effectiveness of the Contract required to be satisfied as
of the date hereof have been satisfied.
(6) Contractor hereby assigns to Assignee all of
Contractor's right, title and interest in, to, and under all
subcontracts that are now or hereafter entered into by Contractor in
furtherance of its obligations under the Contract; provided,
however, that until a default occurs by the Contractor under the
Contract (and the expiration of any applicable period provided
therein), Assignee shall not exercise any rights in the subcontracts
that are hereby assigned.
(7) Contractor hereby agrees that no increase in
the cost of the Contract shall be effective without Assignee's prior
written consent except as permitted in the remainder of this
paragraph. Any non-material changes in the Contract need not be
submitted to Assignee for prior approval; provided, however, if
change orders executed or to be executed after the closing date of
the Credit Agreement would cause the "Base Building Construction"
plus "Contingency" items in the Partnership's budget to exceed
$263,359,608 by the amount agreed in the Credit Agreement, then,
commencing with the change order that will cause such excess, each
subsequent change order must be approved by Requisite Lenders (as
defined in the Credit Agreement) prior to its execution or
commencement of any work pursuant to such change order.
Notwithstanding the foregoing, work on the Project pursuant to a
change order shall require the prior written approval of such
Requisite Lenders for variations and omissions if such change order
(i) would materially affect the intended use of the project, its
appearance, dimensions, or mix; or (ii) would cause any
governmental authority to suspend or revoke any necessary
governmental authorizations.
(8) Unless otherwise specifically provided herein,
any notice or other communication herein required or permitted to
be given shall be in writing and may be personally served, telexed
or sent by telefacsimile or United States mail or courier service and
shall be deemed to have been given when delivered in person or by
courier service, upon receipt of telefacsimile or telex prior to
5 p.m. (Pacific Time) on a business day, or three business days
after depositing it in the United States mail with postage prepaid
and properly addressed; provided that notices to Assignee shall not
be effective until received. For the purposes hereof, the address of
Assignee shall be First Interstate Bank of Nevada, N.A., 3800
Howard Hughes Parkway, Suite 400, Las Vegas, Nevada, 89109,
Attention: Steve Byrne, the address of Contractor shall be as set
forth on the signature pages hereof and the address of Assignor
shall be Circus and Eldorado Joint Venture, c/o Circus Circus
Enterprises, Inc., 2880 Las Vegas Boulevard South, Las Vegas
Nevada, 89109, Attention: General Counsel, or, in each case, such
other address as shall be designated by such party in a written
notice delivered to each other party.
(9) Assignee shall have the benefit of all rights
and remedies under the Contract, including, without limitation, all
rights and remedies arising from the representations, warranties,
covenants and indemnities given to Assignor under the Contract and
all such representations, warranties, covenants and indemnities shall
be deemed to have been made for the benefit of Assignee as if
Assignee were named as the beneficiary thereof in the Contract;
provided, however, that Assignee shall have no obligation under the
Contract until Assignee enforces its rights with respect to the
assignment of the Contract pursuant to the terms of the Security
Agreement.
(10) Assignee shall be deemed within the
definition of "Indemnitees" pursuant subsection 1.1.5.13 to the
General Conditions of the Contract, in each case, as if no default by
Owner had occurred. Contractor shall include the Assignee as
Additional Insured (as that term is defined in the Contract) pursuant
to subsection 11.1.6 of the General Conditions of the Contract.
Contractor shall advise all of its Subcontractors (as that term is
defined in the Contract) and material suppliers that Assignee is the
Lender (as that term is defined in the Contract) pursuant to
subsection 4.22.1 of the General Conditions of the Contract.
(11) Contractor will not claim or exercise upon
any right of setoff that Contractor may hold against any
subcontractor on the Project pursuant to the terms of any agreement
between Contractor and such subcontractor with respect to work
performed by such subcontractor on any project other than the
Project.
[Remainder of Page Intentionally Left Blank]
<PAGE>
This Consent to Assignment of Construction
Contract is made as of the date first written above.
"Contractor"
PERINI BUILDING
COMPANY
a Nevada corporation
By:
____________________________
Title:
_________________________
State Contractor's License
No:
_______________________________
Notice Address:
_______________________________
_______________________________
_______________________________
_______________________________
EXHIBIT XX
[FORM OF CERTIFICATE OF COMPLETION OF
CONSTRUCTION]
CERTIFICATE OF COMPLETION OF CONSTRUCTION
Pursuant to that certain Credit
Agreement dated as of May 30, 1995, as amended, supplemented or
otherwise modified to the date hereof (said Credit Agreement, as so
amended, supplemented or otherwise modified, being the "Credit
Agreement", the terms defined therein and not otherwise defined
herein being used herein as therein defined), by and among CIRCUS
AND ELDORADO JOINT VENTURE, a Nevada general partnership
("Partnership"), FIRST INTERSTATE BANK OF NEVADA,
N.A., as arranger and administrative agent ("Agent"), the financial
institutions listed therein as Lenders ("Lenders"), FIRST
INTERSTATE BANK OF NEVADA, N.A., THE LONG TERM
CREDIT BANK OF JAPAN, LTD., LOS ANGELES AGENCY,
and SOCIETE GENERALE, collectively, as managing agents, and
BANK OF AMERICA, N.T. & S.A., CIBC INC. and CREDIT
LYONNAIS, LOS ANGELES BRANCH, collectively, as co-agents,
Partnership hereby makes and delivers this Completion of Construction
Certificate.
Each of the undersigned are
officers of Partnership's General Partners or of the general partner of
a General Partner's Manager, as manager of such General Partner, as
the case may be, or Executive Committee Signatories and each
certifies, to the best of his or her knowledge that:
(i)The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and
complete in all material respects on and as of the date hereof to the
same extent as though made on and as of such date, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were
true, correct and complete in all material respects on and as of such
earlier date;
(ii)No event has occurred and is continuing or would result from the
consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Potential Event of Default;
(iii)Each Loan Party in all material respects all agreements and
satisfied all conditions that the Credit Agreement provides shall be
performed or satisfied by it on or before the date hereof;
(iv)There is not pending nor, to the knowledge of any Senior Officer
of Partnership or Executive Committee Signatory, threatened, any
action, suit, proceeding, governmental investigation or arbitration
against or affecting any Loan Party or any of their Subsidiaries or any
property of any Loan Party or any of their Subsidiaries that is required
to be disclosed but has not been disclosed by Partnership in writing
pursuant to subsections 5.6 or 6.1(x) of the Credit Agreement prior to
the making of the last preceding Loans, and there has occurred no
development in any action, suit, proceeding, governmental
investigation or arbitration so disclosed by Partnership in writing
pursuant to subsections 5.6 or 6.1(x) of the Credit Agreement prior to
the making of the last preceding Loans, that, in either event, in the
opinion of such Senior Officer or Executive Committee Signatory,
could reasonably be expected to have a Material Adverse Effect; and
no injunction or other restraining order has been issued and no hearing
to cause an injunction or other restraining order to be issued is
pending or noticed with respect to any action, suit or proceeding
seeking to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated by the Credit Agreement or the making of Loans
thereunder;
(vii)Since December 31, 1994, no Material Adverse Effect has
occurred;
(viii) Partnership has or has caused (i) construction of the Project to
have been substantially completed pursuant to the Plans and the Loan
Documents (except with respect to construction related to Later
Opening Rooms and the Attraction), (ii) all governmental approvals,
including, without limitation, a temporary certificate of occupancy for
all of the Improvements (excluding the Later Opening Rooms and the
Attraction) and for the Skyways, and such gaming, liquor and other
licenses (copies of which have been delivered to Agent), as may be
necessary for the opening for business to the public and operation of
the Project to have been obtained (except with respect to construction
related to Later Opening Rooms and the Attraction that occurred after
the last Business Day of the month immediately preceding the
Completion of Construction Date), (iii) the release of all equitable
liens, mechanics liens and any other Liens (other than Liens created
pursuant to the terms of the Collateral Documents and Permitted
Encumbrances) against or directly related to the Project have been
provided for (except with respect to construction related to Later
Opening Rooms and the Attraction that occurred after the last Business
Day of the month immediately preceding the Completion of
Construction Date) and all indebtedness secured by such Liens to have
been paid or provided for, to the reasonable satisfaction of Agent and
(iv) substantially all casino and public space (other than the Attraction)
and approximately 1,300 hotel rooms of the Project as set forth in the
Plans are open for business to the public; and
(ix) Attached hereto with respect to the Improvements (other than the
Later Opening Rooms and the Attraction) is a true, correct and
complete copy of the Certificate of Substantial Completion prepared
by the Architect on the basis of an inspection and submitted to
Partnership and the General Contractor in accordance with Section
8.5.1 of the General Conditions to the General Contractor's Contract
as in effect on the Closing Date.
DATED: ____________________ CIRCUS AND
ELDORADO JOINT VENTURE
By: GALLEON, INC.
Its: Managing Partner
By:
Title:
By: ELDORADO
LIMITED LIABILITY
COMPANY
Its: General Partner
By: ELDORADO HOTEL
ASSOCIATES
Its: Manager
By:
RECREATIONAL
ENTERPRISES, INC.
Its: general partner
By:
Title:
and
By:
HOTEL-CASINO
MANAGEMENT, INC.
Its: general partner
By:
Title:
By: EXECUTIVE
COMMITTEE
By:
Title:
By:
Title:
<PAGE>
[FORM OF CERTIFICATE OF FINAL COMPLETION OF
CONSTRUCTION]
CERTIFICATE OF FINAL COMPLETION OF
CONSTRUCTION
Pursuant to that certain Credit
Agreement dated as of May 30, 1995, as amended, supplemented or
otherwise modified to the date hereof (said Credit Agreement, as so
amended, supplemented or otherwise modified, being the "Credit
Agreement", the terms defined therein and not otherwise defined
herein being used herein as therein defined), by and among CIRCUS
AND ELDORADO JOINT VENTURE, a Nevada general partnership
("Partnership"), FIRST INTERSTATE BANK OF NEVADA,
N.A., as arranger and administrative agent ("Agent"), the financial
institutions listed therein as Lenders ("Lenders"), FIRST
INTERSTATE BANK OF NEVADA, N.A., THE LONG TERM
CREDIT BANK OF JAPAN, LTD., LOS ANGELES AGENCY,
and SOCIETE GENERALE, collectively, as managing agents, and
BANK OF AMERICA, N.T. & S.A., CIBC INC. and CREDIT
LYONNAIS, collectively, as co-agents, Partnership hereby makes and
delivers this Final Completion of Construction Certificate.
Each of the undersigned are
officers of Partnership's General Partners or of the general partner of
a General Partner's Manager, as manager of such General Partner, as
the case may be, or Executive Committee Signatories and each
certifies, to the best of his or her knowledge that:
(i)The representations and warranties contained in the Credit
Agreement and the other Loan Documents are true, correct and
complete in all material respects on and as of the date hereof to the
same extent as though made on and as of such date, except to the
extent such representations and warranties specifically relate to an
earlier date, in which case such representations and warranties were
true, correct and complete in all material respects on and as of such
earlier date;
(ii)No event has occurred and is continuing or would result from the
consummation of the borrowing contemplated hereby that would
constitute an Event of Default or a Potential Event of Default;
(iii)Each Loan Party in all material respects all agreements and
satisfied all conditions that the Credit Agreement provides shall be
performed or satisfied by it on or before the date hereof;
(iv)There is not pending nor, to the knowledge of any Senior Officer
of Partnership or Executive Committee Signatory, threatened, any
action, suit, proceeding, governmental investigation or arbitration
against or affecting any Loan Party or any of their Subsidiaries or any
property of any Loan Party or any of their Subsidiaries that is required
to be disclosed but has not been disclosed by Partnership in writing
pursuant to subsections 5.6 or 6.1(x) of the Credit Agreement prior to
the making of the last preceding Loans, and there has occurred no
development in any action, suit, proceeding, governmental
investigation or arbitration so disclosed by Partnership in writing
pursuant to subsections 5.6 or 6.1(x) of the Credit Agreement prior to
the making of the last preceding Loans, that, in either event, in the
opinion of such Senior Officer or Executive Committee Signatory,
could reasonably be expected to have a Material Adverse Effect; and
no injunction or other restraining order has been issued and no hearing
to cause an injunction or other restraining order to be issued is
pending or noticed with respect to any action, suit or proceeding
seeking to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated by the Credit Agreement or the making of Loans
thereunder;
(vii)Since December 31, 1994, no Material Adverse Effect has
occurred;
(viii) Partnership has or has caused (i) Completion of Construction and
completion of construction of the remainder of the Project (including
the Later Opening Rooms, but not including the Attraction) pursuant
to the Plans and the Loan Documents, (ii) all governmental approvals,
including, without limitation, a final certificate of occupancy (or,
evidence satisfactory to Agent in its reasonable discretion that the
requirements to obtain such final certificate will not require
Partnership to expend more than $5 million) for all of the
Improvements and the Skyways, and all gaming, liquor and other
licenses (copies of which have been delivered to Agent), necessary for
the opening for business to the public and operation of the Project to
have been obtained (including with respect to the Later Opening
Rooms and the Skyways, but not including with respect to the
Attraction), (iii) the release of all equitable liens, mechanics liens and
any other Liens (other than Liens created pursuant to the terms of the
Collateral Documents and Permitted Encumbrances) against or directly
related to the Project to have been provided for (including with respect
to the Later Opening Rooms and the Skyways, but not including with
respect to the Attraction) and all indebtedness secured by such Liens
to have been paid or provided for, to the reasonable satisfaction of
Agent and (iv) all casino and public space (other than the Attraction)
and hotel rooms of the Project as set forth in the Plans are open for
business to the public; and
(ix) Attached hereto is a true, correct and complete copy of the final
Certificate for Payment prepared by the Architect on the basis of an
inspection and submitted to Partnership and the General Contractor in
accordance with Section 8.5.1 of the General Conditions to the
General Contractor's Contract as in effect on the Closing Date.
DATED: ____________________ CIRCUS AND
ELDORADO JOINT VENTURE
By: GALLEON, INC.
Its: Managing Partner
By:
Title:
By: ELDORADO
LIMITED LIABILITY
COMPANY
Its: General Partner
By: ELDORADO HOTEL
ASSOCIATES
Its: Manager
By:
RECREATIONAL
ENTERPRISES, INC.
Its: general partner
By:
Title:
and
By:
HOTEL-CASINO
MANAGEMENT, INC.
Its: general partner
By:
Title:
By: EXECUTIVE
COMMITTEE
By:
Title:
By:
Title:
EXHIBIT XXI
[FORM OF ASSIGNMENT OF RENTS AND
REVENUES]
RECORDING REQUESTED BY:
AND WHEN RECORDED MAIL TO:
O'Melveny & Myers
400 South Hope Street
Los Angeles, California 90071-2899
Attention: Jack B. Hicks III, Esq.
(267,718-006)
_________________________________________________________
_____________________
ASSIGNMENT OF RENTS AND REVENUES
THIS ASSIGNMENT OF
RENTS AND REVENUES (this "Assignment") is made and
entered into as of May 30, 1995, by and between CIRCUS AND
ELDORADO JOINT VENTURE, a Nevada general partnership
("Assignor"), and FIRST INTERSTATE BANK OF NEVADA,
N.A., as Agent Bank on behalf of itself and each of the Lenders (as
defined in the Credit Agreement described below) ("Agent Bank"),
with reference to the following Recitals:
R E C I T A L S:
A. Assignor is the owner of
that certain real property situated in the County of Washoe, State of
Nevada, that is more particularly described on Exhibit A affixed
hereto and by this reference incorporated herein and made a part
hereof (the "Real Property").
B. In this Assignment all
capitalized words and terms shall have the respective meanings and
be construed herein as provided in that certain Credit Agreement
(the "Credit Agreement"), executed concurrently herewith by and
between Assignor, as borrower, the lenders listed therein as lenders
(hereinafter collectively referred to as "Lenders"), Agent Bank as
the arranger and administrative agent for the Lenders, and The
Long Term Credit Bank of Japan, Ltd., Los Angeles Agency,
Societe Generale, as managing agents and Bank of America, CIBC
Inc., and Credit Lyonnais, Los Angeles Branch, collectively, as co-
agents for Lenders, and any reference to a provision of the Credit
Agreement shall be deemed to incorporate that provision as a part
hereof in the same manner and with the same effect as if the same
were fully set forth herein.
C. Pursuant to the Credit
Agreement and subject to the terms and conditions specified therein,
Lenders have agreed to provide the Loans to Assignor in an
aggregate amount not to exceed Two Hundred Thirty Million and
No/100 Dollars ($230,000,000.00) as reduced from time to time in
accordance with the terms and conditions of the Credit Agreement
and the Notes. It is a condition of the Loans that all of Assignor's
right, title and interest in and to all rents, issues, profits, products,
earnings, income, royalties, proceeds, payments and revenues,
including, without limitation, rentals, revenues, receipts, payments,
income and deposits of any nature whatsoever now and in the future
derived from or received with respect to hotel rooms, banquet
facilities, convention facilities, retail premises, bars, restaurants,
casinos and any other facilities, relating to or derived from the Real
Property or from leases, subleases, licenses, concessions, franchises
or other use or occupancy agreements covering any of the Real
Property (collectively, the "Rents and Revenues"), be assigned to
Agent Bank upon the terms and conditions set forth hereinbelow.
NOW, THEREFORE, in
consideration of the Loans, Assignor hereby absolutely and
irrevocably grants, sells, assigns, transfers and sets over to Agent
Bank all of the right, title and interest of Assignor in and to the
Rents and Revenues as follows:
1. Assignor has granted,
sold, assigned, transferred and set over, and by these presents does
hereby grant, sell, assign, transfer and set over unto Agent Bank,
its successors and assigns, all of Assignor's right, title and interest
in and to the Rents and Revenues, together with all rights, interests
and privileges which Assignor has or may have to receive and
collect the Rents and Revenues, including, without limitation, the
present and continuing right with full power and authority in its
own name and in the name of Assignor or otherwise to make, claim
for, enforce, collect, receive and receipt for any and all of such
Rents and Revenues and to do any and all things which Assignor is
or may become entitled for the collection of the Rents and
Revenues.
2. The acceptance of this
Assignment and the payment of any Rents and Revenues hereby
assigned shall not constitute a waiver of any rights of Agent Bank
or any of the Lenders under the terms of the Credit Agreement or
any other Loan Documents for the benefit of Agent Bank or any of
the Lenders.
3. It is understood and
agreed that Assignor reserves, for so long as there shall exist no
Event of Default under the Credit Agreement, the Notes or the
Loan Documents, a revocable license to collect the Rents and
Revenues as they become due, but not prior to accrual, and to remit
the same in accordance with the Credit Agreement. Upon the
occurrence of an Event of Default under the Credit Agreement, the
Notes or the other Loan Documents, such license reserved to
Assignor shall be immediately revoked without further demand or
notice and Agent Bank thereafter will have the right, but not the
obligation, to: (i) demand payment of the Rents and Revenues from
the appropriate party, (ii) give notice that further payment of Rents
and Revenues are to be made as directed by Agent Bank, and (iii)
settle, compromise, bring suit in respect to Rents and Revenues or
otherwise deal with the person owing such Rents and Revenues,
either in the name of Assignor or in its own name. If any Rents
and Revenues are collected by Assignor in violation of this
Assignment, such Rents and Revenues shall be held in trust for the
benefit of Agent Bank on behalf of the Lenders. Any such Rents
and Revenues which are actually collected by Agent Bank and not
held by a receiver or other third party shall be applied to Assignor's
obligations under the Credit Agreement in the order set forth by
Section 8 of the Credit Agreement. Agent Bank hereby agrees that,
upon Assignor's cure of any Event of Default not relating to the
payment of money, Agent Bank will reinstate Assignor's license to
collect the Rents and Revenues.
4. Neither Agent Bank nor
any of the Lenders shall be obligated to perform or discharge any
obligation or duty to be performed or discharged by Assignor
relating to the Rents and Revenues or the Real Property, and
Assignor hereby agrees to indemnify Agent Bank and each of the
Lenders for, and to save them harmless from, any and all liability
arising from the Rents and Revenues, from this Assignment, or
from the management, operation and repair of the Real Property,
and this Assignment shall not place responsibility for the control,
care, management, operation or repair of the Real Property upon
Agent Bank or any of the Lenders, or make Agent Bank or any of
the Lenders responsible or liable for any negligence in the
management, operation, upkeep, repair or control of the Real
Property resulting in loss or injury or death to any tenant, guest,
licensee, employee or stranger (provided that this Section 4 shall
not act to relieve Agent Bank from liability resulting from the gross
negligence or willful misconduct of Agent Bank).
5. Assignor agrees that this
Assignment and the designation and directions herein set forth are
irrevocable and that Assignor will not, while this Assignment or
such designation and directions are in effect or thereafter so long as
any obligation of Assignor under the Credit Agreement remains
unsatisfied or the Lenders have any obligation, whether contingent
or otherwise, to advance any funds under the Credit Agreement,
make any other assignment, designation or direction inconsistent
herewith, and that any assignment, designation or direction
inconsistent herewith shall be void. Assignor will from time to
time, upon the request of Agent Bank, execute all instruments of
further assurance and all such supplemental instruments as Agent
Bank may specify.
6. No action or inaction on
the part of Agent Bank or any of the Lenders shall constitute an
assumption on the part of Agent Bank or any of the Lenders of any
obligations or duties relating to the Rents and Revenues. No action
or inaction on the part of Assignor shall adversely affect or limit in
any way the rights of Agent Bank under this Assignment or,
through this Assignment, to the Rents and Revenues.
7. Assignor covenants and
represents that, except for an assignment made by Assignor in favor
of Circus Circus Enterprises, Inc. pursuant to a Construction Deed
of Trust of even date herewith (which assignment is, pursuant to a
Subordination and Debt Put Agreement of even date herewith
among Assignor, Assignee and Circus Circus Enterprises, Inc.,
subject and subordinate to the assignment in favor of Assignor made
pursuant to this Assignment), no other assignments of its interests in
the Rents and Revenues have been made.
8. The full performance of
the terms contained in the Credit Agreement and the Notes and the
duly recorded reconveyance of the Deed of Trust shall render this
Assignment void. Upon such reconveyance, the Agent Bank, at the
request and the expense of Assignor, will deliver either an
instrument canceling this Assignment or assigning the rights of the
Agent Bank hereunder, as Assignor shall direct.
9. This Assignment applies
to and binds the parties hereto and their respective heirs,
administrators, executors, successors and assigns. This Assignment
may not be modified or terminated orally.
10. Nothing contained in this
Assignment and no act done or omitted by Agent Bank or any of
the Lenders pursuant to its terms shall be deemed a waiver by
Agent Bank or any of the Lenders of any rights or remedies under
the Loan Documents, and this Assignment is made and accepted
without prejudice to any rights or remedies possessed by Agent
Bank or any of the Lenders under the terms of the Loan
Documents. The right of the Lenders to collect the Indebtedness,
and to enforce any security for the Indebtedness, may be exercised
by Agent Bank or any of the Lenders prior to, simultaneous with,
or subsequent to any action taken under this Assignment.
11. Assignor and Agent Bank
intend that this Assignment shall be a present, absolute and
unconditional assignment from Assignor to Agent Bank and not
merely the passing of a security interest and, immediately upon
execution, subject to the license granted above, this Assignment
gives Agent Bank the right (but not the obligation) to collect the
Rents and Revenues and to apply them in payment of the principal
and interest and all other sums payable under the Loan Documents.
Assignor and Assignee further agree that, during the term of this
Assignment, the Rents and Revenues will not constitute property of
Assignor (or of any estate of Assignor) within the meaning of 11
U.S.C. section 541, as amended from time to time. Nothing contained
herein, nor any collection of Rents and Revenues by Agent Bank or
any of the Lenders or by a receiver, shall be construed to make
Agent Bank or any of the Lenders a "mortgagee-in-possession" of
the Real Property.
12. The parties hereto
acknowledge that prior to Agent Bank or any of the Lenders
obtaining gaming revenues as a part of Rents and Revenues, prior
approval of the Gaming Board may be required.
13. THIS ASSIGNMENT
SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL
LAWS OF THE STATE OF NEVADA, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
14. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST ASSIGNOR ARISING
OUT OF OR RELATING TO THIS ASSIGNMENT MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION IN THE STATE OF NEVADA,
AND BY EXECUTION AND DELIVERY OF THIS
ASSIGNMENT ASSIGNOR ACCEPTS FOR ITSELF AND IN
CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF
THE AFORESAID COURTS AND WAIVES ANY DEFENSE OF
FORUM NON CONVENIENS AND IRREVOCABLY AGREES
TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY
IN CONNECTION WITH THIS ASSIGNMENT. Assignor hereby
agrees that service of all process in any such proceeding in any such
court may be made by registered or certified mail, return receipt
requested, to Assignor at its address provided in subsection 10.8 of
the Credit Agreement, such service being hereby acknowledged by
Assignor to be sufficient for personal jurisdiction in any action
against Assignor in any such court and to be otherwise effective and
binding service in every respect. Nothing herein shall affect the
right to serve process in any other manner permitted by law.
15. ASSIGNOR AND
ASSIGNEE HEREBY AGREE TO WAIVE THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS
ASSIGNMENT. The scope of this waiver is intended to be all-
encompassing of any and all disputes that may be filed in any court
and that relate to the subject matter of this Assignment, including
without limitation contract claims, tort claims, breach of duty
claims and all other common law and statutory claims. Each party
hereto acknowledges that this waiver is a material inducement to
enter into a business relationship, that each has already relied on
this waiver in entering into this Assignment, and that each will
continue to rely on this waiver in their related future dealings.
Each party hereto further warrants and represents that it has
reviewed this waiver with its legal counsel and that it knowingly
and voluntarily waives its jury trial rights following consultation
with legal counsel. THIS WAIVER IS IRREVOCABLE,
MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL
APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS,
SUPPLEMENTS OR MODIFICATIONS TO THIS
ASSIGNMENT. In the event of litigation, this Assignment may be
filed as a written consent to a trial by the court.
16. This Assignment may be
executed in any number of counterparts, each of which shall be
deemed an original and all of which shall constitute one and the
same document with the same effect as if all parties had signed the
same signature page. Any signature page and acknowledgment
page of this Assignment may be detached from any counterpart of
this Assignment and reattached to any other counterpart of this
Assignment identical in form hereto but having attached to it one or
more additional signature and acknowledgment pages.
[SIGNATURES ON FOLLOWING PAGE]
IN WITNESS WHEREOF,
the parties have caused their duly authorized representatives to
execute this Assignment on the day and year first above written.
ASSIGNOR:
CIRCUS AND ELDORADO JOINT VENTURE,
a Nevada general partnership
By: GALLEON, INC.
Its: Managing Partner
By:_________________________________
Title:_______________________
By: ELDORADO LIMITED LIABILITY COMPANY,
Its: General Partner
By: ELDORADO HOTEL ASSOCIATES LIMITED
PARTNERSHIP, a
Nevada Limited Partnership
Its: manager
By: HOTEL-CASINO MANAGEMENT, INC., a
Nevada
corporation
Its: general partner
By:_______________________________
Title:____________________________
By: RECREATIONAL ENTERPRISES, INC. a
Nevada
corporation
Its: general partner
By:_______________________________
Title:____________________________
By: EXECUTIVE COMMITTEE
By:____________________________
Title:_________________________
By:____________________________
Title:_________________________
AGENT BANK:
FIRST INTERSTATE BANK OF NEVADA, N.A.
as Agent Bank on behalf of itself and
each of the Lenders
By: _________________________________
Its: ___________________________
<PAGE>
ACKNOWLEDGMENT
STATE OF NEVADA )
) ss
COUNTY OF )
This instrument was acknowledged before me on
May ___, 1995, by ____________________________________ as
______________________________________ of/for CIRCUS AND ELDORADO JOINT
VENTURE.
____________________________
Notary Public
STATE OF NEVADA )
) ss
COUNTY OF )
This instrument was acknowledged before me on
May ___, 1995, by ____________________________________ as
_____________________________________ of/for CIRCUS AND ELDORADO JOINT
VENTURE.
____________________________
Notary Public
<PAGE>
ACKNOWLEDGMENT
STATE OF NEVADA )
) ss
COUNTY OF )
This instrument was acknowledged before me on
May ___, 1995, by ____________________________________ as
______________________________________ of/for CIRCUS AND ELDORADO JOINT
VENTURE.
____________________________
Notary Public
STATE OF NEVADA )
) ss
COUNTY OF )
This instrument was acknowledged before me on
May ___, 1995, by ____________________________________ as
_____________________________________ of/for CIRCUS AND ELDORADO JOINT
VENTURE.
____________________________
Notary Public
<PAGE>
ACKNOWLEDGMENT
STATE OF NEVADA )
) ss
COUNTY OF )
This instrument was acknowledged before me on
May ___, 1995, by ____________________________________ as
______________________________________ of/for CIRCUS AND ELDORADO JOINT
VENTURE.
____________________________
Notary Public
STATE OF NEVADA )
) ss
COUNTY OF )
This instrument was acknowledged before me on
May ___, 1995, by ____________________________________ as
_____________________________________ of/for CIRCUS AND ELDORADO JOINT
VENTURE.
____________________________
Notary Public
<PAGE>
EXHIBIT A
Legal Description of Real Property
THE LAND REFERRED TO HEREIN IS SITUATED IN THE
COUNTY OF WASHOE, STATE OF NEVADA, AND IS
DESCRIBED AS FOLLOWS:
PARCEL 1:
Beginning at the intersection
of the Southern line of West
Fifth Street with the
Western line of North
Virginia Street; thence
Southerly along said
Western line of North
Virginia Street, 88.00 feet;
thence Westerly parallel
with the Northern line of
West Fourth Street 140.00
feet to the Eastern line of
alley; thence Northerly
along the last mentioned line
88.00 feet to said Southern
line of West Fifth Street;
thence Easterly along said
Southern line of West Fifth
Street, 140.00 feet to the
point of beginning.
PARCEL 2:
Beginning at the intersection
of the West line of North
Virginia Street with the
North line of Lot 10 in
Block "B" of ORIGINAL
TOWN, NOW CITY OF
RENO, according to the
map thereof, filed in the
office of the County
Recorder of Washoe
County, State of Nevada, on
June 27, 1871; thence
Northerly along the
Westerly line of North
Virginia Street, 12 feet,
more or less, to the
Southeast corner of the
parcel of land described in
the deed to Ivanhoe
Corporation of record in
Book 453, File No. 278019,
Deed Records; thence
Westerly along the Southern
line of said Ivanhoe
Corporation parcel 140 feet
to the Easterly line of an
alley; thence Southerly
along the last mentioned
line, 12 feet, more or less,
to the Northwest corner of
said Lot 10; thence Easterly
to the point of beginning.
PARCEL 3:
Lots 10, 11, 12 and the
North 13 feet of Lot 13 in
Block "B" of ORIGINAL
TOWN, NOW CITY OF
RENO, according to the
map thereof, filed in the
office of the County
Recorder of Washoe
County, State of Nevada, on
June 27, 1871.
PARCEL 4:
The Northerly 9.25 feet of
Lot 3 and all of Lots 4, 5,
6, 7 and 8 in Block "B" of
ORIGINAL TOWN, NOW
CITY OF RENO, according
to the map thereof, filed in
the office of the County
Recorder of Washoe
County, State of Nevada, on
June 27, 1871.
ALSO a parcel of land
bounded on the South by the
Southern line of the 40 foot
alley as laid out on the map
of the Town, now City of
Reno, in said Block "B",
bounded on the West by the
Eastern line of North Sierra
Street, bounded on the
North by the Southern line
of West Fifth Street and
bounded on the East by the
Western line of the 20 foot
alley running Northerly and
Southerly through said
Block "B".
PARCEL 5:
The South 37 feet of Lot 13
in Block "B" of the
"ORIGINAL TOWN, NOW
CITY OF RENO",
according to the official map
thereof, filed in the office of
the County Recorder of
Washoe County, State of
Nevada, on June 27, 1871.
PARCEL 6:
Lot 14 in Block B of
ORIGINAL TOWN, NOW
CITY OF RENO, according
to the map thereof, filed in
the office of the County
Recorder of Washoe
County, State of Nevada, on
June 27, 1871.
PARCEL 7:
The West forty (40) feet of
Lot Fifteen (15) in Block
"B" fronting forty (40) feet
on the North line of Fourth
Street, as designated on the
official map of said City of
Reno, Nevada, on file and
of record in the office of the
County Recorder in and for
the said County of Washoe;
the property hereby
conveyed being the same
property described in a
Deed from May J. A.
Nadon and others to Dale
V. Clanton, dated
November 18, 1920, and
filed for record on the 29th
day of November, 1920,
in the office of the County
Recorder in and for the
County of Washoe, and
therein recorded in Book 56
of Deeds, at Page 440.
PARCEL 8:
The East 100 feet of Lot 15
in Block B of original town,
now City of Reno,
according to the map
thereof, filed in the office of
the County Recorder of
Washoe County, State of
Nevada, on June 27, 1871.
PARCEL 9:
All of Lots 1 and 2, and the
South 40.75 feet of Lot 3 in
Block B of the ORIGINAL
TOWN, NOW CITY OF
RENO, according to the
map thereof, filed in the
office of the County
Recorder of Washoe
County, State of Nevada, on
June 27, 1871.
PARCEL 10:
The South 20 feet of Lot 10,
and all of Lots 11, 12, 13,
14, 15 and 16, in Block A,
of ORIGINAL TOWN,
NOW CITY OF RENO,
according to the map
thereof, filed in the office of
the County Recorder of
Washoe County, State of
Nevada, on June 27, 1871.
TOGETHER WITH the East
1/2 of the North-South alley
running through said Block
A, immediately adjoining
Lots 11, 12, 13, 14, 15 and
16 on the West, and more
particularly described in
those certain Orders of
Abandonment recorded
January 19, 1977 in Book
1044, Page 521 as
Document No. 445058, and
recorded November 14,
1985 in Book 2251, Page
933 as Document No.
1034253 of Official
Records.
PARCEL 11:
The East 78 feet of Lot 9
and the East 78 feet of the
North 30 feet of Lot 10 in
Block A of the ORIGINAL
TOWN, NOW CITY OF
RENO, according to the
Official Map thereof, filed
in the office of the County
Recorder of Washoe
County, State of Nevada, on
June 27, 1871.
Together with that portion
of the vacated alley lying
Southerly of the Southerly
line of West Fifth Street and
Westerly of the Westerly
line of North Sierra Street
adjoining said Lot 9 at its
most Northeasterly corner.
PARCEL 12:
A portion of the Southwest
1/4 of the Northeast 1/4 of
Section 11, Township 19
North, Range 19 East,
M.D.B&M., lying and
being in the City of Reno,
County of Washoe, State
of Nevada, and more
particularly described as
follows:
The Westerly 74 feet of Lot
9 and the Westerly 74 feet
of the North 30 feet of Lot
10, all in Block A of the
ORIGINAL TOWN, NOW
CITY OF RENO, according
to the official map thereof,
filed in the office of the
County Recorder of Washoe
County, State of Nevada, on
June 27, 1871.
PARCEL 13:
BEGINNING at the
Northeast corner of Lot 8,
Block A, as shown on the
official plat of the town,
now City of Reno, Nevada,
filed in the office of the
County Recorder of Washoe
County, Nevada, on June
27, 1871; thence Southerly
along the Easterly lines of
Lots 8 and 7 of said Block
A to the Southeast corner of
Lot 7; thence Westerly
along the Southerly line of
Lot 7 and the Southerly line
of Lot 7 projected to its
intersection with the
Easterly line of West Street;
thence Northerly along the
Easterly line of West Street
to the Southerly line of West
Fifth Street; thence Easterly
along the Southerly line of
West Fifth Street to the
point of beginning.
<PAGE>
PARCEL 14:
Lots 1, 2, 3, 4, 5, 6, in
Block A, of ORIGINAL
TOWN, NOW CITY OF
RENO, according to the
map thereof, filed in the
office of the County
Recorder of Washoe
County, State of Nevada, on
June 27, 1871, together with
that parcel immediately
adjoining Lots 5 and 6 on
the West, that is more
particularly described as
follows:
BEGINNING at the
Northeasterly corner of Lot
6, in Block A of
ORIGINAL TOWN, NOW
CITY OF RENO, according
to the map thereof, filed in
the office of the County
Recorder of Washoe
County, State of Nevada, on
June 27, 1871; thence
Southerly along the Easterly
line of said Lots 5 and
6, in Block A, 100 feet
to the Southeasterly corner
thereof; thence Westerly
along the Southerly line of
said Lot 5 and the Southerly
line of Lot 5 extended
Westerly to the Easterly line
of West Street, as now
located in the City of Reno,
a distance of 140 feet;
thence Northerly along the
Easterly line of West Street
100 feet to a point which
would be intersected by a
line extended Westerly from
the Northeasterly corner of
said Lot 6 and along the
Northerly line of said Lot 6;
thence Easterly and along
said line and the Northerly
line of said Lot 6, a distance
of 140 feet to the
Northeasterly corner of said
Lot 6, the point of
beginning; said premises
being Lots 5 and 6 in Block
A of the TOWN OF RENO,
according to the map above
mentioned, and that portion
of the 40 foot alley around
the Town of Reno,
according to the map above
mentioned, lying Westerly
of Lots 5 and 6 and East of
the East line of West Street,
as now located and between
the Northerly and Southerly
line of said Lots 5 and 6 if
said lines were extended
Westerly to the Easterly line
of West Street as now
located.
TOGETHER WITH the
West one-half of the
North-South alley running
through said Block A,
immediately adjoining said
LOTS 1, 2, 3, 4, 5 and 6 on
the East, and more
particularly described in
those certain Orders of
Abandonment recorded
January 19, 1977 in Book
1044, Page 521 as
Document No. 445058, and
recorded on November 14,
1985 in Book 2251, Page
533 as Document No.
1034253, Official Records,
Washoe County, State of
Nevada.
PARCEL 15:
All that certain 20.0 ft. wide
alley connecting West
Fourth Street with West
Fifth Street, Reno, Nevada,
lying within Block B of the
original Town, now City of
Reno, according to the map
thereof, filed in the Office
of the Washoe County
Recorder on June 27, 1871,
and within Block B of the
Evans North Addition,
according to the map
thereof, filed in the office of
the Washoe County
Recorder on December 16,
1879.
PARCEL 16:
All that certain 20.0 ft. wide
alley lying between Lots 7,
8, 9 and 10 of Block A of
the Original Town, now
City of Reno, according to
the map thereof, filed in the
office of the Washoe County
Recorder on June 27, 1871.
PARCEL 17: (Air Rights Only)
All that certain piece or
parcel of land located within
a portion of the Northeast
1/4 of Section 11, Township
19 North, Range 19 East,
M.D.B.&M. more
particularly described as
follows:
That certain air space
located above Sierra Street
commencing at an elevation
of 4,521 and extending
vertically 32 feet to an
elevation of 4,553 feet,
which height is measured
from the finished floor
elevation of the Silver
Legacy Casino at 4,503
feet, and located directly
over that certain parcel of
real property described as
follows:
Commencing at the
Southwest corner of Block B
Reno Townsite as shown on
Record-of-Survey 2665,
recorded January 27, 1994,
thence North 13 degrees 48'48"
West 97.13 feet to the True
Point of Beginning
thence North 13 degrees 48'48"
West 223.17 feet
thence South 76 degrees 11'12"
West 80.00 feet
thence South 13 degrees 48'48" East
223.17 feet
thence North 76 degrees 11'12"
East 80.00 feet to the True
Point of Beginning
PARCEL 18: (Subterranean Rights Only)
All that certain piece or
parcel of land located within
a portion of the Northeast
1/4 of Section 11, Township
19 North, Range 19 East,
M.D.B.&M. more
particularly described as
follows:
That certain subterranean
space located beneath Sierra
Street commencing at an
elevation of 4,480 and
extending vertically 20 feet
to an elevation of 4,500
feet, which height is
measured from the finished
floor elevation of the Silver
Legacy Casino at 4,503
feet, and located directly
below that certain parcel of
real property described as
follows:
Commencing at the
Southwest corner of Block B
Reno Townsite as shown on
Record-of -Survey 2665,
recorded January 27, 1994,
thence North 13 degrees 48'48"
West 181.05 feet to the
True Point of Beginning
thence North 13 degrees 48'48"
West 24.33 feet
thence South 76 degrees 11'12"
West 80.00 feet
thence South 13 degrees 48'48" East
24.33 feet
thence North 76 degrees 11'12"
East 80.00 feet to the True Point of Beginning
EXCEPTING
THEREFROM the above
Parcels 1 through 18, all
those certain parcels as
conveyed to THE CITY OF
RENO, a Nevada municipal
corporation, by Deed of
Dedication recorded March
9, 1995 in Book 4259, Page
956 as Document No.
1876631 of Official
Records, and as amended by
Deed of Dedication recorded
May 5, 1995 in Book 4297,
Page 667 as Document No.
1891266 of Official
Records.
PARCEL 19:
Together with the reciprocal
easement rights, as
contained in those certain
Bridge Easements dated
May ___, 1995 by and
between CIRCUS AND
ELDORADO JOINT
VENTURE, a Nevada
general partnership and
CIRCUS CIRCUS
CASINO, INC., a Nevada
corporation and
ELDORADO HOTEL
ASSOCIATES LIMITED
PARTNERSHIP, a Nevada
limited partnership,
recorded May __ 1995 as
Document Numbers
_________________ and
_________________ Official
Records, Washoe County,
Nevada.
EXHIBIT XXII
[FORM OF SUBORDINATION AND DEBT PUT
AGREEMENT]
RECORDING REQUESTED BY:
AND WHEN RECORDED MAIL TO:
O'Melveny & Myers
400 South Hope Street
Los Angeles, California 90071
Attention: Jack B. Hicks, III, Esq.
(267,718-6)
Space Above Line for Recorder's Use
SUBORDINATION AND DEBT PUT AGREEMENT
Dated as of May 30, 1995
By
CIRCUS CIRCUS ENTERPRISES, INC.
("Subordinated Creditor")
and
CIRCUS AND ELDORADO JOINT VENTURE
("Partnership")
In favor of
FIRST INTERSTATE BANK OF NEVADA, N.A.
Agent for the Lenders Identified Herein
SUBORDINATION AND DEBT PUT AGREEMENT
NOTICE: THIS SUBORDINATION AND DEBT PUT AGREEMENT
RESULTS IN YOUR SECURITY INTEREST IN THE PROPERTY
BECOMING SUBJECT TO SOME OTHER OR LATER SECURITY
INSTRUMENT.
This SUBORDINATION AND DEBT PUT AGREEMENT, dated as
of May 30, 1995 ("Agreement"), is made by CIRCUS CIRCUS ENTERPRISES,
INC., a Nevada corporation (together with its successors and assigns as
holders of the
Subordinated Notes (as defined below), "Subordinated Creditor"), and CIRCUS
AND ELDORADO JOINT VENTURE, a Nevada general partnership
("Partnership"), in favor of FIRST INTERSTATE BANK OF NEVADA, N. A., as
arranger and administrative agent ("in such capacity, "Agent") for the
Lenders
identified below.
R E C I T A L S
WHEREAS, Partnership has entered into that
certain Credit Agreement dated as of even date herewith with the
financial institutions from time to time party thereto (together with
Agent, the "Senior Lenders"), Agent, The Long-Term Credit Bank
of Japan, Ltd., Los Angeles Agency and Societe Generale, as
managing agents, and Bank of America, N.T. & S.A., CIBC Inc.
and Credit Lyonnais, Los Angeles Branch, collectively, as co-agents
(said agreement, as it may hereafter be amended, restated,
supplemented, waived, extended or otherwise modified from time to
time, together with any refinancings thereof, being the "Credit
Agreement", the terms defined therein and not otherwise defined
herein being used herein as therein defined); and
WHEREAS, each Note issued pursuant to the Credit
Agreement is secured by, among other things
(a) that certain Deed of Trust, Fixture Filing and
Security Agreement with Assignment of Rents, executed by
Partnership, as trustor, to First American Title Company of
Nevada, as trustee, for the benefit of Agent, dated as of
even date herewith (the "Senior Deed of Trust") and
recorded in the Official Records of the County of Washoe,
Nevada ("Official Records") prior to the Subordinated
Deed of Trust (defined below);
(b) that certain Assignment of Rents and
Revenues, executed by Partnership, as assignor, in favor of
Agent, as assignee, dated as of even date herewith (the
"Senior Assignment of Rents and Revenues") and
recorded in the Official Records prior to the Subordinated
Assignment of Leases (defined below) and this Agreement
with respect to the real property described in Schedule 1
hereto;
(c) that certain Security Agreement dated as of
even date herewith by and between Partnership and Agent
(the "Senior Security Agreement"); and
(d) UCC-1 fixture filings and financing statements
recorded and filed contemporaneously herewith.
The Loan Documents and the other documents
described in this recital as of any date, whether now as hereafter
existing, as such documents may be consolidated, renewed,
replaced, extended, restated, modified, amended or supplemented
from time to time through such date are hereinafter collectively
referred to as the "Senior Loan Documents."
WHEREAS, Partnership has issued or will issue one
or more notes to Subordinated Creditor evidencing General Partner
Subordinated Debt in substantially the form included in Exhibit
XVIII to the Credit Agreement (the "Subordinated Notes")
pursuant to the Loan Agreement dated as of even date herewith by
and between Subordinated Creditor and Partnership in substantially
the form included in Exhibit XVIII to the Credit Agreement (the
"Subordinated Agreement"); and
WHEREAS, the Subordinated Notes are secured by:
(a) that certain Construction Deed of Trust
executed by Partnership as trustor, to First American Title
Company of Nevada, as trustee, for the benefit of
Subordinated Creditor, dated as of even date herewith (the
"Subordinated Deed of Trust") and recorded in the
Official Records immediately following the Senior Deed of
Trust and the Senior Assignment of Rents and Revenues;
(b) that certain Security Agreement executed by
Partnership, as assignor, in favor of Subordinated Creditor;
and
(c) UCC-1 fixture filings and financing
statements recorded and filed contemporaneously herewith.
The Subordinated Note and the documents described
in this recital and the immediately preceding recital as of any date,
together with any other documents and instruments evidencing,
securing, or pertaining to the Subordinated Note, whether now or
hereafter existing, as such documents may be consolidated,
renewed, replaced, extended, restated, modified, amended or
supplemented from time to time through such date in accordance
with the terms and conditions of this Agreement, are hereinafter
collectively referred to as the "Subordinated Loan Documents;"
and
WHEREAS, Senior Lenders are unwilling to
provide financial accommodations to Partnership unless
Subordinated Creditor and Partnership enter into this Agreement;
and
WHEREAS, it is a condition precedent to the
making of Loans by Senior Lenders under the Credit Agreement
that Partnership and Subordinated Creditor shall have executed and
delivered this Agreement;
NOW, THEREFORE, in consideration of the
premises and in order to induce Senior Lenders to make Loans
under the Credit Agreement, the parties hereto hereby agree as
follows:
1. Certain Defined Terms. For purposes of
this Agreement, the following terms shall have the following
meanings:
a. "Bankruptcy Proceeding" means any
insolvency, reorganization, readjustment of debt, arrangement of
debt, receivership, liquidation or other similar proceeding against
Partnership, or receivership proceedings, or assignment for the
benefit of creditors, or any other marshalling of the assets of
Partnership.
b. "Distribution of Assets" means any
distribution of assets of Partnership of any kind or character in
exchange for or in payment of the Subordinated Debt, whether (a) a
payment, purchase or other acquisition or retirement for cash,
property or securities or (b) by way of cancellation, forgiveness or
offset of the Subordinated Debt against any Indebtedness owed by
Subordinated Creditor to Partnership or (c) payable or deliverable
by reason of the payment of any other Indebtedness of Partnership
being subordinated to the payment of the Subordinated Debt and, in
any case, shall include any assets of any kind or character received
by Subordinated Creditor in connection with the realization of
security for the Subordinated Debt.
c. "payment in full," "paid in full" and any
similar terms mean payment in full in cash of the Senior
Obligations, including, without limitation, all principal, interest
(whether accruing before or after commencement of a Bankruptcy
Proceeding or whether due under the terms of the Credit
Agreement, but not accrued as a result of the commencement of any
such proceeding), costs, fees and expenses (including, without
limitation, reasonable legal fees and expenses) of Senior Lenders
and Agent as required under the Senior Loan Documents and any
advances by Senior Lenders, whether or not deemed obligatory,
made (1) to protect the priority, validity or enforceability of the lien
of the Senior Deed of Trust, (2) to protect the value or the security
of any Collateral pursuant to the Senior Loan Documents, or (3) to
cure any Event of Default or Potential Event of Default under any
of the Senior Loan Documents. For purposes of this Agreement,
the Senior Obligations shall not be deemed to have been paid in full
to the extent any payment thereof has been set aside as a result of
any proceeding in law or equity.
d. "Senior Obligations" means all Obligations
as that term is defined in the Credit Agreement including, without
limitation, all advances made under the Credit Agreement whenever
made on or after the Closing Date, any refundings, renewals or
extensions of any Indebtedness thereunder or other obligation
thereunder and all expenses and attorneys' fees for which
Partnership is now or hereafter becomes liable to pay to any Senior
Lender.
e. "Subordinated Debt" means all obligations
of Partnership to Subordinated Creditor now or hereafter existing
(whether created directly or acquired by assignment or otherwise),
with respect to all Indebtedness of Partnership pursuant to the
Subordinated Agreement and the other Subordinated Loan
Documents, and interest and premium, if any, thereon, fees,
expenses, indemnity payments, all other amounts payable in respect
thereof, and all other amounts due with respect to the foregoing
whether arising from breach or contract, in tort or otherwise.
f. "Enforcement Action" means any
foreclosure proceeding, the exercise of any power of sale, the
taking of a deed or assignment in lieu of foreclosure, the obtaining
of a receiver, or the taking of any other enforcement action against
the Collateral or any part thereof, including the taking (except by
Managing Partner in the ordinary course of business) of possession,
or control of, or the collection of any rents from the Collateral or
any part thereof.
2. Subordination.
a. Subordinated Creditor shall not receive or
accept any Distribution of Assets from Partnership in respect of
principal of or interest on or any other payments in respect of the
Subordinated Debt, pursuant to the Subordinated Agreement, the
Subordinated Deed of Trust or the other Subordinated Loan
Documents unless and until payment in full of all Senior
Obligations, the termination of all Commitments, and the expiration
or cancellation of all Letters of Credit; provided, however, that
Subordinated Creditor may receive payments permitted under
Subsection 7.5 of the Credit Agreement. Upon the occurrence of a
Potential Event of Default or Event of Default, Subordinated
Creditor hereby covenants to promptly pay over to the Senior
Lenders all payments received by Subordinated Creditor during the
90 days preceding the occurrence of such Potential Event of Default
or Event of Default. In no event shall the Subordinated Debt be
prepaid, in whole or in part, except to the extent permitted by
subsection 7.5 of the Credit Agreement, without prior written
consent of each Senior Lender.
b. The Subordinated Deed of Trust and all other
Subordinated Loan Documents, the liens thereof, and the rights,
powers, and privileges of the trustee and of Subordinated Creditor
thereunder are and shall be, with full knowledge and understanding
of the effect thereof, unconditionally subject, subordinate, and
inferior to the Senior Deed of Trust and all other Senior Loan
Documents (including, without limitation, the Senior Security
Agreement) and the liens thereof, and the rights, powers, and
privileges of the trustee thereunder and of Senior Lenders set forth
therein, to the full extent of the Indebtedness now and hereafter
secured by the Senior Deed of Trust and all other Senior Loan
Documents. In addition, Subordinated Creditor acknowledges that
the Subordinated Deed of Trust shall be subject and subordinate to
the Skyway Easements and to all leases of space in the Premises.
The Subordinated Deed of Trust and all other Subordinated Loan
Documents, and all of the terms, covenants and conditions and the
rights, powers and privileges of the trustee and of Subordinated
Creditor thereunder are and shall be subject and subordinate in
priority and payment to all of the terms, covenants and conditions
of the Senior Deed of Trust and the other Senior Loan Documents
(including, without limitation, the Senior Security Agreement) and
the rights, powers and privileges of the trustee and of Senior
Lenders therein, and to the lien of all renewals, extensions,
modifications, amendments, consolidations, spreaders, refinancing,
or replacements of the Senior Deed of Trust and the other Senior
Loan Documents. Trustee under the Senior Deed of Trust and
Agent may take any action whatsoever to enforce any term or
provision of the Senior Deed of Trust and the other Senior Loan
Documents (including, without limitation, the Senior Security
Agreement) or to enforce any rights of Agent and Senior Lenders in
respect of the Collateral, Subordinated Creditor shall have no right
to direct the exercise of any remedy thereunder or with respect
thereto and Trustee under the Senior Deed of Trust and Agent shall
have no liability for any such action.
3. Distributions Held in Trust. If
Subordinated Creditor receives any Distribution of Assets of
Partnership that Subordinated Creditor is not entitled to retain under
the provisions of this Agreement, such payment or assets shall be
delivered forthwith by Subordinated Creditor to Agent for the
benefit of the Senior Lenders for application to the Senior
Obligations, in the form received except for the addition of any
endorsement or assignment necessary to effect a transfer of all
rights therein to Agent for the benefit of the Senior Lenders.
Agent, for the benefit of the Senior Lenders, is irrevocably
authorized to supply any endorsement or assignment required under
this subsection 3 that may have been omitted. Until so delivered
any such payment or collateral shall be held by Subordinated
Creditor in trust for the Senior Lenders and shall not be
commingled with other funds or property of Subordinated Creditor.
4. Instruments; Collateral for Senior
Obligations. If Partnership issues or has issued any instrument or
document evidencing the Subordinated Debt (including, without
limitation, the Subordinated Loan Documents), each such instrument
and document shall bear a conspicuous legend that it is subordinated
to the Senior Obligations. Partnership's and Subordinated
Creditor's books shall be marked to evidence the subordination of
all of the Subordinated Debt to the Senior Obligations. Agent for
the Senior Lenders is authorized to examine such books from time
to time during normal business hours and to make any notations
required by this Agreement.
5. Insolvency, Dissolution, Etc. of
Partnership.
a. In the event of any dissolution, winding up,
liquidation, reorganization or other similar proceedings with respect
to Partnership, its property or its operations (whether in a
Bankruptcy Proceeding or otherwise), all Senior Obligations
(including, without limitation, interest on Senior Obligations at the
rate stated in subsection 2.2E of the Credit Agreement from the
date of filing any petition in bankruptcy to the date of payment
whether or not allowed as a claim) shall first be paid in full before
Subordinated Creditor shall be entitled to receive or retain any
Distribution of Assets of Partnership with respect to the
Subordinated Debt. In any such proceedings, any Distribution of
Assets to which Subordinated Creditor would be entitled if the
Subordinated Debt were not subordinated to the Senior Obligations
shall be paid by the trustee or agent or other person making such
payment or distribution, or by Subordinated Creditor if received by
it, directly to Agent for the benefit of the Senior Lenders to the
extent necessary to make payment in full of all Senior Obligations
remaining unpaid, after giving effect to any concurrent payment or
distribution to or for the benefit of the Senior Lenders.
b. At any time and from time to time after the
occurrence and during the continuation of an Event of Default under
the Senior Loan Documents until payment in full of all Senior
Obligations, the termination of all Commitments, and the expiration
or cancellation of all Letters of Credit, Subordinated Creditor shall
duly and promptly take such action as Agent for the benefit of the
Senior Lenders may reasonably request (i) to collect the
Subordinated Debt for the account of the Senior Lenders and to file
appropriate claims or proofs of claim in respect of the Subordinated
Debt, (ii) to execute and deliver to any Senior Lenders such powers
of attorney, assignments, or other instruments as it may reasonably
request in order to enable it to enforce any and all claims with
respect to, and any security interests and other liens securing
payment of, the Subordinated Debt, and (iii) to collect and receive
any and all payments or distributions that may be payable or
deliverable upon or with respect to the Subordinated Debt.
Subordinated Creditor shall have the rights provided in subsection
20(b) that result from any payment to Senior Lenders under this
subsection 5(b).
6. Power of Attorney.
a. Subordinated Creditor hereby irrevocably
authorizes and empowers Agent for the benefit of the Senior
Lenders (and its representative or representatives) to demand, sue
for, collect and receive all payments and distributions under the
Subordinated Agreement and give acquittance therefor and to file
and enforce claims and proofs of claims or suit and take all such
other actions (including, without limitation, voting the Subordinated
Debt (including in connection with any liquidation, reorganization
or arrangement) or enforcing any security interest or other lien
securing payment of the Subordinated Debt) in the name of
Subordinated Creditor or otherwise, as the Senior Lenders
determine to be necessary or appropriate at any time and from time
to time after the occurrence and during the continuation of an Event
of Default under the Senior Loan Documents; provided however,
that if Agent has failed to file a proof of claim with respect to the
Subordinated Debt in any Bankruptcy Proceeding and 7 or fewer
calendar days remain until the claims' bar date in such proceeding,
then, in such event, Subordinated Creditor may file such proof of
claim. This authorization to file and enforce claims and proofs of
claims and to vote such claims (the "Authorization") includes the
authorization to vote or decline to vote such claims on any matter
whatsoever and specifically includes the authority to vote such
claims to approve a plan of reorganization, including such plan that
provides for the distribution on the Subordinated Debt of only
equity in the reorganized debtor. Additionally, Agent may,
pursuant to the Authorization, decline to take certain actions with
respect to the Subordinated Debt, including, by way of example and
not limitation, declining to request adequate protection for
Subordinated Creditor's collateral or declining to object to any
priming lien thereon. In the event any Governmental Authority or
other Person does not recognize or accept Agent's right to act on
behalf of the Subordinated Creditor pursuant to this Section 6a,
Subordinated Creditor agrees to take such lawful action as is
directed by Agent in accordance with this Section 6a. In no event
shall Subordinated Creditor waive, forgive or cancel any claim
Subordinated Creditor may now or hereafter have against
Partnership.
Subordinated Creditor agrees that, upon the
commencement of any Bankruptcy Proceeding or action or
proceeding against Partnership to recover all or any part of the
Subordinated Debt prior to payment in full of all Senior
Obligations, the termination of all Commitments, and the expiration
or cancellation of all Letters of Credit, Agent, on behalf of Senior
Lenders, shall have the right to vote the rights of Subordinated
Creditor in any such Bankruptcy Proceeding, or action or
proceeding against Partnership to recover all or any part of the
Subordinated Debt, in a manner that benefits Senior Lenders and
without regard to whether Subordinated Creditor is benefitted or
receives more than equity interests in Partnership in exchange for
its claims against Partnership.
b. In no event shall any Senior Lender be liable
to Subordinated Creditor for any failure to prove the Subordinated
Debt, to exercise any right with respect thereto or to collect any
sums payable thereon. Subordinated Creditor agrees to protect,
indemnify, pay and save harmless, Agent and Senior Obligation
Holders from and against any and all claims or demands, asserted
by (or on behalf of) Subordinated Creditor and any and all
liabilities, damages, losses, costs, charges and expenses (including
reasonable fees, expenses and disbursements of counsel) related
thereto that Agent or Senior Lender or both may incur or be subject
to as a consequence, direct or indirect of any action in foreclosure
under the Senior Deed of Trust or other Senior Loan Documents.
7. Agreements by Subordinated Creditor.
a. Subordinated Creditor has reviewed the
Credit Agreement, and Subordinated Creditor hereby consents to
and approves of the provisions contained therein. Subordinated
Creditor acknowledges that there are no conditions precedent to the
effectiveness of this Agreement other than execution by Senior
Lenders of the Credit Agreement, and that this Agreement is in full
force and effect and is binding on Subordinated Creditor upon
Subordinated Creditor's execution and delivery of this Agreement,
regardless of whether the Senior Lenders obtain collateral or any
guaranties from others or take any other action contemplated by
Subordinated Creditor. Without affecting the rights of Senior
Lenders or Partnership under the Credit Agreement, Subordinated
Creditor agrees that, except to the extent that the Credit Agreement
provides for the consent of or notice to Subordinated Creditor, the
Senior Lenders may, at any time and from time to time, without the
consent of or notice to Subordinated Creditor, without incurring
responsibility to Subordinated Creditor, and without impairing or
releasing the rights of any of the Senior Lenders, or any of the
obligations of Subordinated Creditor hereunder:
(i) change the amount, manner, place or terms
of payment or change or extend the time of payment of or
renew or alter Senior Obligations or amend the Credit
Agreement in any manner or enter into or amend in any
manner any other agreement relating to the Senior
Obligations (provided, however, that no such amendment
shall, without the consent of Subordinated Creditor, affect
Subordinated Creditor's right to receive payments as
permitted by subsection 7.5 of the Credit Agreement);
(ii) Sell, exchange, release or otherwise deal with
any property by whomever at any time pledged or
mortgaged to secure, or however securing, the Senior
Obligations;
(iii) Release anyone (including any guarantor)
liable in any manner for the payment or collection of the
Senior Obligations;
(iv) Exercise or refrain from exercising any rights
against Partnership and others (including any guarantor or
Subordinated Creditor);
(v) Apply any sums by whomever paid or
however realized to the Senior Obligations; or
(vi) Take any other action that otherwise might be
deemed to impair the rights of Subordinated Creditor.
Subordinated Creditor's obligations hereunder shall
be performed in accordance with and to the extent required by this
Agreement regardless of any law, regulation or order now or
hereafter in effect in any jurisdiction affecting any of the terms of
the Notes or the Credit Agreement or any other document related
thereto or the rights of the Senior Lenders with respect thereto.
The obligations of Subordinated Creditor under this Agreement shall
be absolute and unconditional irrespective of:
(i) any lack of genuineness, legality, validity,
enforceability or value of the Credit Agreement, the Notes
or any other agreement or instrument relating thereto or any
Collateral;
(ii) any failure to pay any taxes that may be
payable with respect to the issuance or transfer of the
Notes; or any failure to obtain any authorization or approval
from or other action by, or to notify or file with, any
Governmental Authority required in connection with the
issuance or transfer of the Notes;
(iii) any impossibility or impracticality of
performance, force majeure, any act of any government, or
any other circumstance that might constitute a defense
available to, or a discharge of, the Partnership in respect of
the Notes or the Credit Agreement or Subordinated Creditor
in respect of this Agreement or any other circumstance,
event or happening whatsoever, whether foreseen or
unforeseen and whether similar or dissimilar to anything
referred to above in this Section;
(iv) the fact that the Senior Obligations or any
claim for the Senior Obligations is subordinated, avoided or
disallowed, in whole or in part, under the Bankruptcy Code
or other applicable law; or
(v) whether any Person to whom Senior Lenders
make disbursements of the proceeds of the Loans in
accordance with the Credit Agreement applies such
proceeds for purposes other than those provided for in the
Credit Agreement and any such application shall not defeat
the subordination herein in whole or in part.
b. Subordinated Creditor (i) will not, without
the prior written consent of the Senior Lenders, accelerate the
Subordinated Debt, and (ii) agrees that until payment in full of all
Senior Obligations, the termination of all Commitments, and the
expiration or cancellation of all Letters of Credit, Subordinated
Creditor shall neither commence nor join with any other creditor of
Partnership to commence any Bankruptcy Proceeding or commence
any action or proceeding against Partnership to recover all or any
part of the Subordinated Debt before any Governmental Authority
or other entity with power to bind the parties to its decisions.
c. Subordinated Creditor agrees that, until
payment in full of all Senior Obligations, the termination of all
Commitments, and the expiration or cancellation of all Letters of
Credit, the Subordinated Loan and the lien of the Subordinated
Loan Documents shall be subordinate to all leases of space in the
Collateral. Senior Lenders and Subordinated Creditor hereby agree
that Senior Lenders shall be entitled to seek the appointment of a
receiver for the Collateral to collect rents, pursuant to the terms of
Senior Loan Documents and the Subordinated Loan Documents,
respectively, and this Agreement.
8. Waivers. Partnership and Subordinated
Creditor each hereby waives any defense based on the adequacy of
a remedy at law that might be asserted as a bar to the remedy of
specific performance of this Agreement in any action brought
therefor by any Senior Lender. To the fullest extent permitted by
law, Partnership and Subordinated Creditor each hereby further
waives: promptness, diligence, presentment, demand, protest, notice
of protest, notice of default or dishonor, notice of payment or
nonpayment and any and all other notices and demands of any kind
in connection with all negotiable instruments evidencing all or any
portion of the Senior Obligations or the Subordinated Debt to which
Partnership or Subordinated Creditor may be a party; notice of the
acceptance of this Agreement; notice of any loans made, extensions
granted or other actions taken in reliance hereon; all other demands
and notices of every kind in connection with this Agreement, the
Senior Obligations or the Subordinated Debt; any right to require
marshalling of the assets of Partnership; any defense based on any
statute or rule of law that provides that the obligation of a surety
must be neither larger in amount nor in other respects more
burdensome than that of the principal; any provisions of law that
conflict with this Agreement and any legal or equitable discharge of
Subordinated Creditor's obligations hereunder; the benefit of any
statute of limitations; any rights of setoff, recoupment and
counterclaim, promptness and diligence by Agent or Senior
Lenders; any defenses arising from the incapacity, lack of authority
or any disability or other defense of Partnership; any defense based
on any Senior Lender's errors or omissions in the administration of
the Obligations (other than willful misconduct); any defenses or
benefits that may be derived from or afforded by law that limit or
exonerate guarantors or sureties, including, without limitation,
Nevada Revised Statutes Sections 40.430-40.459, 40-475 and
40.485 as permitted by Nevada Revised Statute Section 40.495, and
any successor provisions; and any right to require that the Senior
Lenders exhaust any right or take any action against Partnership or
any other person or entity or any collateral or pursue any other
remedy in the power of Senior Lenders whatsoever..
9. Representations and Warranties.
Subordinated Creditor hereby represents, warrants and covenants to
the Senior Lenders, which representations, warranties and covenants
shall be true and correct as of the date hereof and throughout the
term of this Agreement, that:
a. Subordinated Creditor has not heretofore
assigned or transferred any of the Subordinated Debt, any interest
therein or any collateral or security pertaining thereto; Subordinated
Creditor is the true and lawful holder and owner of the
Subordinated Note; the Subordinated Note and the Subordinated
Agreement delivered to the Senior Lenders are true and correct and
have not been amended or modified in any way; and the
Subordinated Note is free and clear of any defense, offset,
counterclaim or other adverse claims and any liens, encumbrances
or security interests.
b. There are no agreements or understandings,
written or oral, by Subordinated Creditor with Partnership other
than as set forth in the Subordinated Agreement and the Joint
Venture Agreement with respect to the obligations evidenced by the
Subordinated Agreement and Subordinated Creditor has not
heretofore given any subordination in respect of the Subordinated
Debt.
c. Each of the representations and warranties
given by Subordinated Creditor in the Circus Completion Guaranty
is true, correct and complete in all material respects and is
incorporated in this Agreement as if set forth fully in this
Agreement.
10. Negative Covenants. Until payment in full
of all Senior Obligations, the termination of all Commitments, and
the expiration or cancellation of all Letters of Credit, without the
consent of all Senior Lenders:
a. Except as expressly permitted in this
Agreement and the Credit Agreement, Partnership shall not, directly
or indirectly, make any payment on account of or grant a security
interest in, mortgage, pledge, assign or transfer any properties to
satisfy or secure all or any part of the Subordinated Debt or in any
way amend or modify the Subordinated Note, the Subordinated
Agreement or any other Subordinated Loan Document.
b. Except as expressly permitted in this
Agreement, Subordinated Creditor shall not demand or accept,
directly or indirectly, from Partnership or any Affiliate of
Partnership, any payment or collateral to satisfy or secure all or any
part of or exercise any remedy under the Subordinated Debt nor
shall Subordinated Creditor release, exchange, extend the time of
payment of, compromise, set off or otherwise discharge or enforce
any part of the Subordinated Debt or in any way amend or modify
the Subordinated Debt, the Subordinated Loan Documents or this
Agreement.
c. Subordinated Creditor shall not hereafter give
any subordination in respect of the Subordinated Debt, convert any
or all of the Subordinated Debt to capital stock or other securities of
Partnership, or transfer or assign any of the Subordinated Debt to
any person other than the Senior Lenders without the consent of
Senior Lenders.
d. Partnership will not issue any instrument,
security or other writing evidencing any part of the Subordinated
Debt other than the Subordinated Note, and Subordinated Creditor
shall not receive any such writing or transfer or assign any of the
Subordinated Debt, except upon the prior written approval of the
Senior Lenders.
e. The Subordinated Debt and the Subordinated
Loan Documents shall not be cross-defaulted or cross-collateralized
with any other loan or any security interest encumbering any other
property other than pursuant to the provisions of the Credit
Agreement and the Subordinated Agreement (it being understood
that a cross-default is a default of an obligor that occurs under the
terms of one agreement as a direct and express result of a default
by such obligor under the terms of another agreement).
f. Subordinated Creditor shall not transfer or
assign the Subordinated Debt or the Subordinated Loan Documents
or any claim that Subordinated Creditor has or may have against
Partnership or the Premises, without Senior Lenders' prior written
consent, which may be granted or denied in Senior Lenders' sole
and complete discretion. In the event that Subordinated Creditor,
its nominee or designee, obtains title to the Collateral pursuant to an
Enforcement Action or otherwise, Subordinated Creditor shall not
thereafter transfer its interest in the Collateral without Senior
Lenders' prior written consent, which may be granted or denied in
Senior Lenders' sole and complete discretion. Neither Partnership
nor Subordinated Creditor otherwise shall take or permit any action
prejudicial to or inconsistent with the priority of the Senior Lenders
over Subordinated Creditor that is created by this Agreement.
11. Put and Call Option.
a. In the event that Subordinated Creditor
violates any provision of subsection 6(a) or 7(b) or begins any
Enforcement Action or (other than as expressly permitted by
subsection 6(a)) attempts to assert any of its rights in any
Bankruptcy Proceeding which assertion could prevent Agent on
behalf of Senior Lenders from exercising the rights granted to
Agent and Senior Lenders by Subordinated Creditor in accordance
with subsection 6(a) or challenges or attempts to invalidate the
rights granted to Agent and Senior Lenders in subsection 6(a),
then, and upon the demand of Agent on behalf of the Senior
Lenders, Subordinated Creditor will, at the time, in the manner and
otherwise as hereinafter set forth, cause the Senior Obligations to be
paid in full. Such payment in full shall be made by Subordinated
Creditor not later than 12:00 noon (Pacific Time) on a Business
Day at the Funding and Payment Office not less than 5 (five) days
after the date of such demand for purchase, at a purchase price of
the total of the then unpaid principal amount of the Loans, plus
unpaid interest thereon accrued (or that otherwise would accrue but
for the commencement of a Bankruptcy Proceeding) to the date of
payment in full of such purchase price, plus the unpaid amount of
all other Senior Obligations (collectively, the "Purchase Price").
The Purchase Price shall be paid by Subordinated Creditor in
immediately available funds to the Agent. Promptly after such
payment, each Senior Lender holding a Note shall deliver and
endorse such Note without recourse over to Subordinated Creditor
and shall assign its interests under the Collateral Documents to
Subordinated Creditor. Subordinated Creditor hereby agrees that
the payment in full of the Purchase Price made by it hereunder shall
be without recourse to or representation or warranty (other than the
representation and warranty by each Senior Lender that it is the
legal and beneficial owner of the Senior Obligations held by such
Senior Lender free and clear of any adverse claim) by any such
Senior Lenders.
(b) IF SUBORDINATED CREDITOR SHALL
FAIL TO PAY THE PURCHASE PRICE, AS AFORESAID,
SUBORDINATED CREDITOR (I) AGREES THAT IT WILL BE
UNCONDITIONALLY LIABLE TO THE SENIOR LENDERS
FOR LIQUIDATED DAMAGES (FOR THE LOSS OF A
BARGAIN AND NOT AS A PENALTY), FOR THE AMOUNT
OF SUCH PURCHASE PRICE PLUS 10% OF THE AMOUNT
OF THE PURCHASE PRICE AND ALL COSTS AND
EXPENSES, IF ANY, INCURRED BY THE SENIOR LENDERS
IN ENFORCING THIS AGREEMENT AND (II) IRREVOCABLY
WAIVES TO THE FULL EXTENT PERMITTED BY
APPLICABLE LAW ANY RIGHT OR DEFENSE
SUBORDINATED CREDITOR MAY HAVE TO CAUSE THE
SENIOR LENDERS TO PROVE THE CAUSE OR AMOUNT OF
SUCH DAMAGES OR TO MITIGATE THE SAME. THE
AMOUNT PAID TO AND RETAINED BY SENIOR LENDERS
UNDER THIS SECTION ARE LIQUIDATED DAMAGES AND
SHALL BE SENIOR LENDERS' SOLE REMEDY IN THE
EVENT OF SUBORDINATED CREDITOR'S FAILURE TO PAY
THE PURCHASE PRICE. THE PARTIES HERETO
EXPRESSLY AGREE AND ACKNOWLEDGE THAT SENIOR
LENDERS' ACTUAL DAMAGES IN THE EVENT OF A
DEFAULT BY SUBORDINATED CREDITOR WOULD BE
EXTREMELY DIFFICULT OR IMPRACTICAL TO ASCERTAIN
AND THAT THE AMOUNT OF THE PURCHASE PRICE PLUS
10% OF THE AMOUNT OF THE PURCHASE PRICE
REPRESENTS THE PARTIES REASONABLE ESTIMATE OF
SUCH DAMAGES. NOTWITHSTANDING ANYTHING TO THE
CONTRARY CONTAINED IN THIS SECTION 11(b), SENIOR
LENDERS AND SUBORDINATED CREDITOR AGREE THAT
THIS LIQUIDATED DAMAGES PROVISION IS NOT
INTENDED AND SHOULD NOT BE DEEMED OR
CONSTRUED TO LIMIT IN ANY WAY SUBORDINATED
CREDITOR'S INDEMNITY OBLIGATIONS UNDER SECTIONS
6 AND 12.
(c) At any time after the occurrence and during the
continuation of an Event of Default under the Senior Loan
Documents Subordinated Creditor shall be entitled, but shall not be
obligated, to pay in full or cause payment in full of the Purchase
Price. Subordinated Creditor shall give each Senior Lender and
Agent written notice of its intention to make such payment no less
than 5 Business Days prior to the proposed payment date. Such
payment shall be made no later than noon on such proposed
payment date in the amount of the Purchase Price described in
subsection 11(a) above at the Funding and Payment Office in
immediately available Funds to the Agent. Promptly after such
payment, each Senior Lender holding a Note shall deliver and
endorse such Note without recourse over to Subordinated Creditor
and shall assign its interests under the Collateral Documents to
Subordinated Creditor. Subordinated Creditor agrees that the
payment in full of the Senior Obligations made by it hereunder shall
be without recourse to or representation or warranty (other than the
representation and warranty by each Senior Lender that it is the
legal and beneficial owner of the Senior Obligations held by such
Senior Lender free and clear of any adverse claims) by any such
Senior Lenders.
12. Taxes, Authorizations, Etc. (a)
Subordinated Creditor will pay any stamp or other tax (including
any interest and penalties) with respect to the payment in full of the
Senior Obligations pursuant to Section 11 of this Agreement. If any
such tax is paid by the Senior Lenders, Subordinated Creditor will,
upon demand of the Senior Lenders and whether or not such tax
shall be correctly or legally asserted, indemnify the Senior Lenders
for such payment, together with any interest, penalties and expenses
in connection therewith.
(b) Subordinated Creditor will use its best efforts
to obtain any authorization or approval (including exchange control
approval) or other action by, and will give any notice to or make
any filing with, any Governmental Authority required in connection
with the transfer of the Notes to Subordinated Creditor upon any
purchase pursuant to this Agreement.
13. Financial Matters. Subordinated Creditor
has established adequate and independent means of obtaining from
Partnership on a continuing basis financial and other information
pertaining to the financial condition of Partnership. Subordinated
Creditor agrees to keep adequately informed from such means of
any facts, events or circumstances that might in any way affect
Subordinated Creditor's risks hereunder, and Subordinated Creditor
further agrees that no Senior Lender shall have any obligation to
disclose to Subordinated Creditor information or material acquired
by such Senior Lender in the course of its relationship with
Partnership. Subordinated Creditor understands that there may be
various agreements among the Senior Lenders and Partnership
evidencing and governing the Senior Obligations and Subordinated
Creditor acknowledges and agrees that such agreements are not
intended to confer any benefits on Subordinated Creditor and that
no Senior Lender shall have any obligation to Subordinated Creditor
or any other Person to exercise any rights, enforce any remedies, or
take any actions that may be available to it under such agreements.
14. Reliance. Subordinated Creditor understands
that in reliance upon the terms and provisions of this Agreement,
specific monetary and other obligations are being entered into and
will be entered into by the Senior Lenders that would not be made
or entered into but for reliance on this Agreement. Subordinated
Creditor further understands that this Agreement constitutes a
continuing offer to all persons who become holders of, or continue
to hold Senior Obligations (whether such Senior Obligations was
created or acquired before or after the date of this Agreement).
15. Insurance Proceeds and Condemnation
Awards. In the event of a casualty to the buildings or
improvements constructed on the Premises or a condemnation or
taking under a power of eminent domain of the Premises, or the
buildings or improvements thereon, Senior Lenders shall have a
first and prior interest in and to any payments, awards, proceeds,
distributions, or consideration arising from any such event (the
"Award"), provided that if the amount of the Award is in excess of
all Senior Obligations, such excess Award shall be paid to or held
by Senior Lenders (or any other person) for the benefit of the
persons or entities legally entitled thereto. Notwithstanding the
foregoing, in the event of casualty or condemnation, Senior Lenders
shall release the Awards from any such event to Partnership if and
to the extent required by the terms and conditions of the Senior
Loan Documents in order to repair and restore the Premises in
accordance with the terms and provisions of the Senior Loan
Documents. Awards made available to Partnership for the repair or
restoration of the buildings or improvements on the Premises shall
not be subject to attachment by Subordinated Creditor.
16. Amendments, Etc. No amendment,
modification, termination or waiver of any provision of this
Agreement, or consent to any departure by Subordinated Creditor or
Partnership therefrom, shall in any event be effective without the
written concurrence of Requisite Lenders under the Credit
Agreement. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given.
17. Entire Agreement. This writing is intended
by Subordinated Creditor, Partnership and Senior Lenders as the
final expression of their agreement with respect to the matters
covered hereby. No course of dealing, course of performance or
trade usage, and no parol evidence of any nature, shall be used to
supplement or modify any terms of this Agreement. There are no
conditions to the full effectiveness of this Agreement, other than
execution by Senior Lenders of the Credit Agreement. If there is
any conflict between the terms hereof and the terms of any other
documents executed in connection with the Credit Agreement, the
terms of such documents shall be read together so as to provide the
Senior Lenders with the broadest possible range of rights and
remedies.
18. Notices. Any communications between and
among Agent, Senior Lenders, Subordinated Creditor and
Partnership and any notices or requests provided herein to be given
may be given by mailing the same, postage prepaid, or by telex,
facsimile transmission or cable by 5:00 p.m. (Pacific Time) on a
Business Day to each such party at its address set forth in the Credit
Agreement, on the signature pages hereof or to such other addresses
as each such party may in writing hereafter indicate. Any notice,
request or demand to or upon Agent or Senior Lenders or
Subordinated Creditor or Partnership under or relating to this
Agreement shall not be effective until received.
19. Expenses. Subordinated Creditor and
Partnership jointly and severally agree to pay, upon demand, to
Agent for the benefit of the Senior Lenders the amount of any and
all reasonable expenses, including the reasonable fees and expenses
of their respective counsel, that the Senior Lenders may incur in
connection with the exercise or enforcement of any of their rights or
interests hereunder.
20. Validity of the Subordinated Debt and
Senior Obligations.
a. The provisions of this Agreement
subordinating the Subordinated Debt are solely for the purpose of
defining the relative rights of the Senior Lenders and Subordinated
Creditor and shall not impair, as between Subordinated Creditor and
Partnership, the obligation of Partnership, which is unconditional
and absolute, to pay the Subordinated Debt in accordance with its
terms, nor shall any such provisions, except as otherwise set forth
herein, prevent Subordinated Creditor from exercising all remedies
otherwise permitted by applicable law or under any instrument or
agreement evidencing the Subordinated Debt upon default
thereunder, subject to the rights of the Senior Lenders hereunder to
receive cash, property or securities or any other Distribution of
Assets otherwise payable or deliverable to Subordinated Creditor
until the payment in full of all Senior Obligations, the termination
of all Commitments, and the expiration or cancellation of all Letters
of Credit. This agreement shall provide no rights or remedies to
any Person other than Agent, Senior Lenders and Subordinated
Creditor.
b. Subordinated Creditor shall be subrogated to
all rights of the Senior Lenders against Partnership in respect of any
amounts paid to the Senior Lenders directly or indirectly by
Subordinated Creditor pursuant to the provisions of this Agreement;
provided that Subordinated Creditor shall not be entitled to enforce,
or to receive any payments arising out of or based upon, such right
of subrogation until payment in full of all Senior Obligations
(including without limitation, any Protective Advances), the
termination of all Commitments and the expiration or cancellation
of all Letters of Credit.
c. This Agreement is effective notwithstanding
any defect in the validity or enforceability of any instrument or
document evidencing the Senior Obligations.
21. Termination. This Agreement is a
continuing agreement and shall remain in full force and effect until
three-hundred sixty-seven (367) days after payment in full of all
Senior Obligations, the termination of all Commitments, and the
expiration or cancellation of all Letters of Credit. Neither the
dissolution nor the bankruptcy or dissolution of Subordinated
Creditor shall effect a termination hereof. Until payment in full of
all Senior Obligations, the termination of all Commitments, and the
expiration or cancellation of all Letters of Credit, any Senior
Lender may, without notice to Subordinated Creditor, extend or
continue credit and make other financial accommodations to or for
the account of Partnership in reliance upon this Agreement.
22. Successors. This Agreement shall be binding
upon Subordinated Creditor and its successors and assigns. This
Agreement shall inure to the benefit of Senior Lenders, Agent,
Partnership and their respective successors and assigns.
Subordinated Creditor shall not assign this Agreement or any of the
rights or obligations of Subordinated Creditor hereunder without the
prior written consent of all Senior Lenders. Subject to subsection
10.1 of the Credit Agreement and as part of an assignment,
participation or any transfer of its interests in any Loan, any Senior
Lenders may, without notice or consent, assign its interest in this
Agreement in whole or in part. The terms and provisions of this
Agreement shall inure to the benefit of any transferee or assignee of
any Loan, and in the event of such transfer or assignment the rights
and privileges herein conferred upon Senior Lenders and Agent
shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof.
23. Counterparts. This Agreement may be
executed in one or more counterparts and by different parties hereto
in separate 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; signature
pages may be detached from multiple separate counterparts and
attached to a single counterpart so that all signature pages are
physically attached to the same document.
24. Duties of Senior Lenders Limited. THE
RIGHTS GRANTED TO THE SENIOR LENDERS IN THIS
AGREEMENT ARE SOLELY FOR THEIR PROTECTION
AND NOTHING HEREIN CONTAINED (I) IMPOSES ON
ANY SENIOR LENDER ANY DUTIES WITH RESPECT TO
ANY PROPERTY EITHER OF PARTNERSHIP OR OF
SUBORDINATED CREDITOR HERETOFORE OR
HEREAFTER RECEIVED BY ANY SENIOR LENDER NOR
(II) SHALL BE DEEMED TO CONSTITUTE ANY SENIOR
LENDER THE AGENT OF SUBORDINATED CREDITOR
FOR ANY PURPOSE NOR CREATE ANY FIDUCIARY DUTY
BETWEEN ANY SENIOR LENDER AND SUBORDINATED
CREDITOR. AS BETWEEN SENIOR LENDERS AND
SUBORDINATED CREDITOR, NO SENIOR LENDER HAS
ANY DUTY TO PRESERVE RIGHTS AGAINST PRIOR
PARTIES ON ANY INSTRUMENT OR CHATTEL PAPER
RECEIVED FROM PARTNERSHIP OR SUBORDINATED
CREDITOR AS COLLATERAL SECURITY FOR THE
SENIOR OBLIGATIONS OR ANY PORTION THEREOF. AS
BETWEEN SENIOR LENDERS AND SUBORDINATED
CREDITOR, NO ACTION OR INACTION WITH RESPECT
TO ANY COLLATERAL FOR THE SENIOR OBLIGATIONS;
NOR ANY AMENDMENT TO ANY OF THE SENIOR LOAN
DOCUMENTS OR ANY OTHER INSTRUMENT OR
AGREEMENT RELATING TO, SECURING OR
GUARANTEEING ANY OF THE SENIOR OBLIGATIONS;
NOR ANY EXERCISE OR NON-EXERCISE OF ANY RIGHT,
POWER OR REMEDY UNDER OR IN RESPECT OF ANY OF
THE SENIOR OBLIGATIONS OR ANY INSTRUMENT OR
AGREEMENT RELATING TO, SECURING OR
GUARANTEEING ANY OF THE SENIOR OBLIGATIONS;
NOR ANY WAIVER, CONSENT, RELEASE, INDULGENCE,
EXTENSION, RENEWAL, MODIFICATION, DELAY OR
OTHER ACTION, INACTION OR OMISSION IN RESPECT
OF ANY OF THE SENIOR OBLIGATIONS OR ANY
INSTRUMENT OR AGREEMENT RELATING TO,
SECURING OR GUARANTEEING ANY OF THE SENIOR
OBLIGATIONS SHALL IN ANY EVENT GIVE RISE TO ANY
CLAIM AGAINST ANY SENIOR LENDER OR ANY
OFFICER, DIRECTOR, EMPLOYEE OR AGENT OF SUCH
SENIOR LENDER.
25. Additional Documentation. Partnership and
Subordinated Creditor shall execute and deliver to the Agent such
further instruments and shall take such further action as Agent or
any Senior Lender may at any time reasonably request in order to
carry out the provisions and intent of this Agreement.
26. Severability. In case any provision in or
obligation under this Agreement shall be held invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions or obligations or of such
provision or obligation in any other jurisdiction, shall not in any
way be affected or impaired thereby.
27. Waiver of Jury Trial. SUBORDINATED
CREDITOR, PARTNERSHIP, AGENT AND EACH SENIOR
LENDER EACH HEREBY AGREES TO WAIVE ITS
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM
OR CAUSE OF ACTION BASED UPON OR ARISING OUT
OF THIS AGREEMENT. The scope of this waiver is intended to
be all-encompassing of any and all disputes that may be filed in any
court and that relate to the subject matter of this transaction,
including without limitation, contract claims, tort claims, breach of
duty claims, and all other common law and statutory claims.
Subordinated Creditor, Partnership, and by their acceptance of the
benefits hereof, Agent and each Senior Lender each (i)
acknowledges that this waiver is a material inducement for
Subordinated Creditor, Partnership, Agent and each Senior Lender
Holder to enter into a business relationship, that each has already
relied on this waiver in entering into this Agreement and that each
will continue to rely on the waiver in related future dealings (ii)
further warrants and represents that each has reviewed this waiver
with legal counsel, and that each knowingly and voluntarily waives
jury trial rights following consultation with legal counsel. THIS
WAIVER IS IRREVOCABLE, MEANING THAT IT MAY
NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THE WAIVER SHALL APPLY TO ANY SUBSEQUENT
AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a
trial by the court.
28. Governing Law. THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED AND
ENFORCED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF NEVADA, WITHOUT REGARD TO
CONFLICTS OF LAWS PRINCIPLES.
29. Consent to Jurisdiction and Service of
Process. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST SUBORDINATED CREDITOR ARISING OUT OF
OR RELATING TO THIS AGREEMENT MAY BE BROUGHT
IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEVADA, AND BY
EXECUTION AND DELIVERY OF THIS AGREEMENT
SUBORDINATED CREDITOR ACCEPTS FOR ITSELF AND
IN CONNECTION WITH ITS PROPERTIES, GENERALLY
AND UNCONDITIONALLY, THE EXCLUSIVE
JURISDICTION OF THE AFORESAID COURTS AND
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS
AND IRREVOCABLY AGREES TO BE BOUND BY ANY
JUDGMENT RENDERED THEREBY IN CONNECTION
WITH THIS AGREEMENT. Subordinated Creditor hereby
agrees that service of all process in any such proceeding in any such
court may be made by registered or certified mail, return receipt
requested, to Subordinated Creditor at its address provided in
Section 18, such service being hereby acknowledged by
Subordinated Creditor to be sufficient for personal jurisdiction in
any action against Subordinated Creditor in any such court and to
be otherwise effective and binding service in every respect.
Nothing herein shall affect the right to serve process in any other
manner permitted by law.
30. All Action Required to be Lawful. No
provision of this Agreement shall require any party hereto to take
any action or fail to take any action that would violate any Gaming
Law.
31. Capacity of Subordinated Creditor. This
Agreement applies to Subordinated Creditor only in its capacity as a
holder of General Partner Subordinated Debt.
[Remainder of Page Intentionally Left Blank]
<PAGE>
IN WITNESS WHEREOF, Subordinated Creditor
and Partnership each has caused this Agreement to be duly executed
and delivered for the benefit of the Senior Lenders by its officer
thereunto duly authorized as of the date first above written.
Partnership
CIRCUS AND ELDORADO JOINT
VENTURE
a Nevada general partnership
By: GALLEON, INC.,
a Nevada Corporation
Its: Managing General Partner
By:
_________________________
Title:________________________
Notice
Address: c/o Circus Circus
Enterprises, Inc.
2880 Las Vegas
Boulevard South
Las Vegas, Nevada
89109
Attention: General
Counsel
By: ELDORADO LIMITED
LIABILITY COMPANY
Its: General Partner
By: ELDORADO HOTEL
ASSOCIATES
LIMITED
PARTNERSHIP, a Nevada
Limited Partnership
Its: manager
By: HOTEL-
CASINO
MANAGEMEN
T, INC.,
a Nevada
corporation
Its: general partner
By:
____________________
Title:___________________
By: RECREATIONA
L
ENTERPRISES,
INC., a Nevada
corporation
Its: general partner
By:_____________________
Title:__________________
Notice
Address: c/o Eldorado Hotel
Casino
345 N. Virginia Street
Reno, Nevada 89508
Attention: General
Counsel
By: EXECUTIVE COMMITTEE
By:
________________________
Title:_______________________
By:
________________________
Title:_______________________
NOTICE: THIS SUBORDINATION AND DEBT PUT
AGREEMENT CONTAINS PROVISIONS THAT
ALLOW THE PERSON OBLIGATED ON YOUR
REAL PROPERTY SECURITY TO OBTAIN A
LOAN, A PORTION OF WHICH MAY BE
EXPENDED FOR OTHER PURPOSES THAN
IMPROVEMENT OF THE PROPERTY.
SUBORDINATED CREDITOR
CIRCUS CIRCUS ENTERPRISES,
INC.
By:
___________________________
Title:
Notice
Address: 2880 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Attention: General Counsel
<PAGE>
Accepted this _____ day of
______________, 1995:
AGENT
FIRST INTERSTATE BANK OF NEVADA,
N.A.
By:__________________________
Title:_______________________
Notice
Address: Suite 400
3800 Howard Hughes Parkway
Las Vegas, Nevada 89109
Attention:_________________
<PAGE>
STATE OF NEVADA )
) ss
COUNTY OF )
This instrument was acknowledged before me on May ___, 1995, by
____________________________________ as
______________________________________________ of/for CIRCUS AND
ELDORADO JOINT VENTURE.
____________________________
Notary Public
STATE OF NEVADA )
) ss
COUNTY OF )
This instrument was acknowledged before me on May ___, 1995, by
____________________________________ as
______________________________________________ of/for CIRCUS AND
ELDORADO JOINT VENTURE.
____________________________
Notary Public
<PAGE>
STATE OF NEVADA )
) ss
COUNTY OF )
This instrument was acknowledged before me on May ___, 1995, by
____________________________________ as
______________________________________________ of/for CIRCUS AND
ELDORADO JOINT VENTURE.
____________________________
Notary Public
STATE OF NEVADA )
) ss
COUNTY OF )
This instrument was acknowledged before me on May ___, 1995, by
____________________________________ as
______________________________________________ of/for CIRCUS AND
ELDORADO JOINT VENTURE.
____________________________
Notary Public
<PAGE>
STATE OF NEVADA )
) ss
COUNTY OF )
This instrument was acknowledged before me on May ___, 1995, by
____________________________________ as
______________________________________________ of/for CIRCUS CIRCUS
ENTERPRISES, INC.
____________________________
Notary Public
STATE OF NEVADA )
) ss
COUNTY OF )
This instrument was acknowledged before me on May ___, 1995, by
____________________________________ as
______________________________________________ of/for FIRST INTERSTATE
BANK OF NEVADA, N.A.
____________________________
Notary Public
<PAGE>
SCHEDULE 1
Description of Real Property
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> QTR-1
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> APR-30-1995
<CASH> 76,981
<SECURITIES> 0
<RECEIVABLES> 14,988
<ALLOWANCES> 0
<INVENTORY> 21,461
<CURRENT-ASSETS> 131,194
<PP&E> 1,733,276
<DEPRECIATION> 434,001
<TOTAL-ASSETS> 1,662,503
<CURRENT-LIABILITIES> 116,778
<BONDS> 709,312
<COMMON> 1,607
0
0
<OTHER-SE> 724,146
<TOTAL-LIABILITY-AND-EQUITY> 1,662,503
<SALES> 295,033
<TOTAL-REVENUES> 295,033
<CGS> 0
<TOTAL-COSTS> 219,096
<OTHER-EXPENSES> 4,891
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,679
<INCOME-PRETAX> 61,367
<INCOME-TAX> 21,967
<INCOME-CONTINUING> 39,400
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 39,400
<EPS-PRIMARY> .46
<EPS-DILUTED> .46
</TABLE>
