SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): June 1, 1995
CIRCUS CIRCUS ENTERPRISES, INC.
(Exact name of Registrant as specified in its charter)
Nevada 1-8570 88-0121916
(State or other (Commission file (IRS Employer
jurisdiction of number) Identification No.)
incorporation)
2880 Las Vegas Boulevard South, Las Vegas, Nevada 89109
(Address of principal executive offices)
Registrant's telephone number, including area code: 702-734-0410
INFORMATION TO BE INCLUDED IN THIS REPORT
Item 2. Acquisition or Disposition of Assets.
On June 1, 1995, pursuant to an Agreement and Plan of
Merger by and among the Registrant and M.S.E. Investments,
Incorporated, Last Chance Investments, Incorporated, Gold Strike
Investments, Incorporated, Diamond Gold, Inc., Gold Strike
Aviation, Incorporated, Goldstrike Finance Company, Inc., Oasis
Development Company, Inc., Michael S. Ensign, William A.
Richardson, David R. Belding, Peter A. Simon II and Robert J.
Verchota, as amended (the "Merger Agreement"), and an Exchange
Agreement by and among the Registrant and New Way, Inc., Glenn W.
Schaeffer, Gregg H. Solomon, Antonio C. Alamo, Anthony Korfman
and William Ensign, as amended (the "Exchange Agreement" and,
together with the Merger Agreement, the "Gold Strike
Agreements"), the Registrant acquired a group of affiliated
entities (collectively, the "Gold Strike Entities") which own the
Gold Strike Hotel & Gambling Hall and the Nevada Landing Hotel &
Casino in Jean, Nevada, the Railroad Pass Hotel & Casino in
Henderson, Nevada, a 50% interest in a joint venture partnership
with an affiliate of Hyatt Development Corporation which
partnership owns the Grand Victoria, a riverboat casino and land-
based entertainment complex in Elgin, Illinois (situated
approximately 40 miles northwest of downtown Chicago), a 50%
interest in a joint venture partnership with an affiliate of
Mirage Resorts, Incorporated which partnership is developing a
gaming resort with approximately 3,000 rooms near the south end
of the Las Vegas Strip, and certain other assets (collectively
the "Gold Strike Properties"). It is anticipated that the
Registrant will continue to operate the Gold Strike Properties in
a manner similar to that in which they were operated under their
prior ownership.
Pursuant to the Gold Strike Agreements, the Gold Strike
Entities were acquired by the Registrant (the "Acquisition") in
exchange for the issuance by the Registrant of 16,291,551 shares
of its Common Stock and the issuance by a subsidiary of the
Registrant of shares of the subsidiary's preferred stock which is
convertible into an additional 793,156 shares of the Registrant's
Common Stock, as well as the Registrant's payment of
approximately $12.1 million in cash and its assumption of
approximately $165 million of debt. The cash portion of the
purchase price was funded from the Registrant's revolving credit
facility, and the amount of the total consideration payable by
the Registrant in connection with the Acquisition was determined
through negotiation among the parties. In connection with the
Acquisition, certain of the Gold Strike principals entered into a
five-year standstill agreement with the Registrant, and the
Registrant entered into a registration rights agreement covering
the Common Stock of the Registrant issued or issuable in the
Acquisition.
In accordance with the Gold Strike Agreements, Messrs.
Richardson and Ensign were designated by the Gold Strike
principals for election to the Registrant's Board of Directors.
The Board of Directors, in accordance with the Registrant's
Bylaws, increased the number of directors in Classes II and III
from two (2) to three (3) and filled the vacancies so created by
the election of Mr. Richardson as a Class II director and Mr.
Ensign as a Class III director, in each case for the balance of
the current term of such class. Pursuant to the Merger
Agreement, the Registrant is also obligated, at the end of the
current term of each such designee, to use its best efforts to
cause such designee (or another individual designated by the Gold
Strike principals) to be nominated for election to a full term
when that class next stands for election in 1996 or 1997. For
additional information concerning Messrs. Richardson and Ensign,
see Item 11 of the Registrant's Annual Report on Form 10-K for
the year ended January 31, 1995 and the Registrant's proxy
statement relating to the 1995 annual meeting of its
stockholders.
Pursuant to the terms of the Gold Strike Agreements,
upon the closing of the Acquisition, the Registrant entered into
employment agreements with certain of its executive officers,
including Clyde T. Turner, Kurt D. Sullivan, and Mike Sloan, and
the following Gold Strike executives, who became executive
officers of the Registrant upon the closing of the Acquisition:
Messrs. Ensign and Richardson and Glenn W. Schaeffer. Messrs.
Ensign and Schaeffer formerly were directors and officers of the
Registrant. For additional information concerning the terms of
such employment agreements and options granted to certain of such
individuals, reference is made to the Registrant's proxy
statement relating to the 1995 annual meeting of its
stockholders.
For additional information concerning the Gold Strike
Properties, reference is made to the disclosure appearing under
the heading "Current Expansion Activities -- Pending Acquisition
of Gold Strike Entities" in Item 1 of the Registrant's Annual
Report on Form 10-K for the year ended January 31, 1995.
Item 7. Financial Statements and Exhibits.
(a) and (b)
The financial statements and the pro forma financial
information relating to the transaction described in Item 2 of
this Report (collectively, the "Financial information"), which
are required to be filed as part of this Report pursuant to
paragraphs (a) and (b) of Item 7 of Form 8-K, are not included
with this filing in reliance on Items 7(a)(4) and 7(b)(2) of Form
8-K. It is impracticable to provide the Financial Information at
the time this Report is filed. In accordance with Item 7(a)(4)
of Form 8-K, the Financial Information will be filed by amendment
to this Report on Form 8-K/A as soon as practicable, but not
later than August 14, 1995.
(c) The following documents are filed as Exhibits to
this Report:
Exhibit
Number Description of Exhibit
4(a) $160 million Amended and Restated Reducing Revolving
Credit Agreement, dated as of June 1, 1995, by and
among Goldstrike Finance Company, Inc., (a subsidiary
of the Registrant), the Banks named therein and First
Interstate Bank of Nevada, N.A., as Agent Bank.
10(a) Agreement and Plan of Merger, dated as of March 19,
1995, by and among the Registrant and M.S.E.
Investments, Incorporated, Last Chance Investments,
Incorporated, Goldstrike Investments, Incorporated,
Diamond Gold, Inc., Gold Strike Aviation, Incorporated,
Goldstrike Finance Company, Inc., Oasis Development
Company, Inc., Michael S. Ensign, William A.
Richardson, David R. Belding, Peter A. Simon II and
Robert J. Verchota. (Incorporated by reference to
Exhibit 10(ee) to the Registrant's Annual Report on
Form 10-K for the year ended January 31, 1995).
10(b) First Amendment to Agreement and Plan of Merger, dated
May 30, 1995, by and among the Registrant and M.S.E.
Investments, Incorporated, Last Chance Investments,
Incorporated, Goldstrike Investments, Incorporated,
Diamond Gold, Inc., Gold Strike Aviation, Incorporated,
Goldstrike Finance Company, Inc., Oasis Development
Company, Inc., Michael S. Ensign, William A.
Richardson, David R. Belding, Peter A. Simon II and
Robert J. Verchota. (Incorporated by reference to
Exhibit 99.2 of the Schedule 13D of Michael S. Ensign
relating to the Registrant's common stock filed on June
12, 1995).
<PAGE>
10(c) Exchange Agreement, dated as of March 19, 1995, by and
among the Registrant and New Way, Inc., a wholly owned
subsidiary of the Registrant, Glenn W. Schaeffer, Gregg
H. Solomon, Antonio C. Alamo, Anthony Korfman and
William Ensign. (Incorporated by reference to Exhibit
10(ff) to the Registrant's Annual Report on Form 10-K
for the year ended January 31, 1995).
10(d) First Amendment to Exchange Agreement, dated May 30,
1995, by and among the Registrant and New Way, Inc., a
wholly owned subsidiary of the Registrant, Glenn W.
Schaeffer, Gregg H. Solomon, Antonio C. Alamo, Anthony
Korfman and William Ensign.
10(e) Registration Rights Agreement, dated as of June 1,
1995, by and among the Registrant and Michael S.
Ensign, William S. Richardson, David R. Belding,
Peter A. Simon II, Glenn W. Schaeffer, Gregg H.
Solomon, Antonio C. Alamo, Anthony Korfman, William
Ensign and Robert J. Verchota. (Incorporated by
reference to Exhibit 99.5 of the Schedule 13D of
Michael S. Ensign, relating to the Registrant's Common
Stock, filed on June 12, 1995).
10(f) Standstill Agreement, dated as of June 1, 1995, by and
among the Registrant and Michael S. Ensign, William R.
Richardson, David R. Belding, Peter A. Simon II and
Glenn W. Schaeffer. (Incorporated by reference to
Exhibit 99.4 of the Schedule 13D of Michael S. Ensign,
relating to the Registrant's Common Stock, filed on
June 12, 1995).
10(g)* 1995 Special Stock Option Plan and Forms of Non-
Qualified Stock Option Certificate and Agreement.
(Incorporated by reference to Exhibit 10(gg) to the
Registrant's Annual Report on Form 10-K for the year
ended January 31, 1995).
10(h)* Executive Officer Bonus Plan. (Incorporated by
reference to Exhibit 10(hh) to the Registrant's Annual
Report on Form 10-K for the year ended January 31,
1995).
10(i)* Employment Agreement dated June 1, 1995, by and between
the Registrant and Clyde Turner.
10(j)* Employment Agreement dated June 1, 1995, by and between
the Registrant and Michael Ensign. (Incorporated by
reference to Exhibit 99.3 of the Schedule 13D of
Michael S. Ensign, relating to the Registrant's Common
Stock, filed on June 12, 1995).
10(k)* Employment Agreement dated June 1, 1995, by and between
the Registrant and Glenn W. Schaeffer.
10(l)* Employment Agreement dated June 1, 1995, by and between
the Registrant and William R. Richardson.
(Incorporated by reference to Exhibit 99.3 of the
Schedule 13D of William R. Richardson, relating to the
Registrant's Common Stock, filed on June 12, 1995).
10(m)* Employment Agreement dated June 1, 1995, by and between
the Registrant and Mike H. Sloan.
10(n)* Employment Agreement dated June 1, 1995, by and between
the Registrant and Kurt D. Sullivan.
__________________
* This exhibit is a management contract or compensatory plan or
arrangement filed as an exhibit to 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.
By: CLYDE T. TURNER
Clyde T. Turner
Chairman of the Board
Chief Executive Officer
Dated: June 14, 1995
Exhibit Index
Exhibit
Number Description of Exhibit
4(a) $160 million Amended and Restated Reducing Revolving
Credit Agreement, dated as of June 1, 1995, by and
among Goldstrike Finance Company, Inc., (a subsidiary
of the Registrant), the Banks named therein and First
Interstate Bank of Nevada, N.A., as Agent Bank.
10(d) First Amendment to Exchange Agreement, dated May 30,
1995, by and among the Registrant and New Way, Inc., a
wholly owned subsidiary of the Registrant, Glenn W.
Schaeffer, Gregg H. Solomon, Antonio C. Alamo, Anthony
Korfman and William Ensign.
10(i)* Employment Agreement dated June 1, 1995, by and between
the Registrant and Clyde Turner.
10(k)* Employment Agreement dated June 1, 1995, by and between
the Registrant and Glenn W. Schaeffer.
10(m)* Employment Agreement dated June 1, 1995, by and between
the Registrant and Mike H. Sloan.
10(n)* Employment Agreement dated June 1, 1995, by and between
the Registrant and Kurt D. Sullivan.
Exhibit 4(a)
AMENDED AND RESTATED REDUCING REVOLVING
CREDIT AGREEMENT
THIS AMENDED AND RESTATED REDUCING REVOLVING CREDIT
AGREEMENT ("Credit Agreement") is made and entered into as of
the 1st day of June, 1995, by and among FIRST INTERSTATE BANK
OF NEVADA, N.A., THE LONG-TERM CREDIT BANK OF JAPAN, LTD., Los
Angeles Agency, U.S. BANK OF NEVADA, SOCIETE GENERALE, BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, NBD BANK,
FIRST SECURITY BANK OF IDAHO, N.A., BANK OF AMERICA NEVADA and
BANK OF HAWAII (collectively together with their respective
successors and assigns the "Lenders") and FIRST INTERSTATE
BANK OF NEVADA, N.A., as administrative and collateral agent,
for the Lenders, herein in such capacity called the "Agent
Bank" and together with the Lenders collectively referred to
as the "Banks", parties of the first part, GOLDSTRIKE FINANCE
COMPANY, INC., a Nevada corporation (the "Borrower"), party of
the second part, and RAILROAD PASS INVESTMENT GROUP, a Nevada
general partnership ("RPIG"), JEAN DEVELOPMENT COMPANY, a
Nevada general partnership ("Jean Development"), JEAN
DEVELOPMENT WEST, a Nevada general partnership ("Jean West"),
JEAN DEVELOPMENT NORTH, a Nevada general partnership ("JDN")
and the LAKEVIEW GAMING PARTNERSHIPS JOINT VENTURE, a Nevada
general partnership (the "Nevada Joint Venture" and together
with RPIG, Jean Development, Jean West and JDN being
hereinafter collectively referred to as "Existing Guarantors")
and CIRCUS CIRCUS ENTERPRISES, INC., a Nevada corporation
("Circus" and together with the Existing Guarantors
collectively the "Guarantors"), parties of the third part.
R_E_C_I_T_A_L_S:
WHEREAS:
A. In this Credit Agreement, all capitalized
words and terms shall have the respective meanings and be
construed herein as hereinafter provided in Section 1.01 of
this Credit Agreement and shall be deemed to incorporate such
words and terms as a part hereof in the same manner and with
the same effect as if the same were fully set forth.
B. Borrower, Existing Guarantors, together with
Lakeview Company, a Nevada general partnership ("Lakeview")
and Pioneer Investment Group, a Nevada general partnership
("Pioneer") and the Banks, together with West One Bank, Idaho,
entered into a Reducing Revolving Credit Agreement dated as of
February 11, 1994, as amended by the First Amendment to
Reducing Revolving Credit Agreement dated as of May 10, 1994,
by the Second Amendment to Reducing Revolving Credit Agreement
dated September 16, 1994 and by the Third Amendment to
Reducing Revolving Credit Agreement dated December 30, 1994
(collectively the "Existing Credit Agreement"), pursuant to
which, among other things, Lenders established a reducing
revolving credit facility in an initial principal amount not
to exceed One Hundred Sixty Million Dollars ($160,000,000.00)
outstanding at any one time subject to the conditions,
covenants and understandings therein contained. As of the
Merger Date, The Long-Term Credit Bank of Japan, Ltd., Los
Angeles agency, shall have acquired all rights and interests
of West One Bank, Idaho in and to the Existing Credit
Agreement and Bank Facility Loan Documents.
C. Circus has entered into various agreements
under the terms of which Circus intends to acquire through
merger and exchange transactions with certain Subsidiaries of
Circus: (i) all of the outstanding and issued stock of MSE,
LCI, GSI, DGI and Borrower (collectively the "Acquired
Corporations"), (ii) ownership of all partnership interests
held by the respective partners, other than the partnership
interests owned by the Acquired Corporations, of RPIG, Jean
Development, Jean West, JDN, GSLV and NLI (collectively the
"Acquired Partnerships"), and (iii) other corporations and
interests which are unrelated and not relevant to the Bank
Facility.
D. Under the terms of the Merger, Circus intends
to guaranty the Bank Facility by execution of the Circus
Guaranty. In consideration of the Circus Guaranty, Banks have
agreed to release items of collateral as set forth on the
Schedule of Releases, Terminations and Reconveyances and to
restructure the Bank Facility on the terms and conditions set
forth in this Credit Agreement which is intended to fully
amend, restate and supersede the Existing Credit Agreement.
NOW, THEREFORE, in consideration of the foregoing
and other good and valuable considerations, as hereinafter
described, the parties hereto do promise, covenant and agree
as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions. For the purposes of
this Credit Agreement, each of the following terms shall have
the meaning specified with respect thereto, unless a different
meaning clearly appears from the context:
"Acquired Corporations" shall have the meaning set
forth in Recital Paragraph C.
"Acquired Partnerships" shall have the meaning set
forth in Recital Paragraph C.
"Affiliate(s)" of any Person means any other Person
which, directly or indirectly, controls, is controlled by or
is under common control with such Person. A Person shall be
deemed to be "controlled by" any other Person if such other
Person possesses, directly or indirectly, power to:
(a) vote ten percent (10%) or more of the
equity securities (on a fully diluted basis) having
ordinary voting power for the election of directors
or managing general partners; or
(b) direct or cause the direction of the
management and policies of such Person whether by
contract or otherwise.
"Agency Agreement" shall mean the Agency and
Intercreditor Agreement dated February 11, 1994 as amended by
First Amendment to Agency Agreement dated as of May 10, 1994,
executed by and among Banks, setting forth the respective
rights, duties and obligations of Agent Bank and each of the
Lenders.
"Agency Fee" shall mean the non-refundable fee to be
paid to Agent Bank annually as provided in Section 2.08C in
the annual amount as agreed in writing by and between Borrower
and Agent Bank on the Closing Date.
"Agent Bank" shall mean First Interstate Bank of
Nevada, N.A. in its capacity as administrative and collateral
agent for Lenders.
"Amendment Fee" shall have the meaning ascribed to
such term in Section 2.08A.
"Applicable Alternate Base Rate Margin" shall have
the meaning ascribed to such term in the Circus Reducing
Revolving Loan Agreement.
"Applicable Eurodollar Rate Margin" shall have the
meaning ascribed to such term in the Circus Reducing Revolving
Loan Agreement.
"Authorized Officer(s)" shall mean, relative to the
Borrower, those officers whose signatures and incumbency shall
have been certified to Agent Bank and the Banks as required in
Section 3.04 of the Credit Agreement with the authority and
responsibility to deliver Notices of Borrowing,
Continuation/Conversion Notices and all other requests,
notices, reports, consents, certifications and authorizations
on behalf of Borrower.
"Available Borrowings" shall mean at any time, and
from time to time, the aggregate amount available to Borrower
for Borrowing under the Bank Facility consisting of the
difference between the Maximum Principal Balance which may be
outstanding at any specified date, less the actual amount of
the unpaid principal balance of the Bank Facility as of such
date.
"Bank Facility" shall mean the agreement of Lenders
to establish and fund a reducing revolving line of credit in
favor of Borrower, subject to the terms and conditions set
forth in the Bank Facility Loan Documents, up to the Maximum
Principal Balance as reduced from time to time.
"Bank Facility Loan Documents" shall mean collective
reference to the Credit Agreement, Bank Note, Existing
Guaranty, Circus Guaranty, Security Documents and
Environmental Certificate, together with any other documents
and instruments which may hereafter be executed and delivered
to or for the benefit of Lenders in connection with the Bank
Facility.
"Bank Note" shall mean the Reducing Revolving Credit
Promissory Note dated February 11, 1994, in the original
maximum principal amount of One Hundred Sixty Million Dollars
($160,000,000.00) having an unpaid principal balance of One
Hundred Forty-Seven Thousand Five Hundred Fifty Dollars
($147,550.00) as of the Merger Date, executed by Borrower,
payable to the order of Agent Bank on behalf of the Lenders
evidencing the Bank Facility, a copy of which is marked
"Exhibit B", affixed hereto and by this reference incorporated
herein and made a part hereof, as amended by the First
Amendment to Bank Note.
"Banking Business Day" shall mean a day upon which
the principal administrative offices (or any successor
offices) in the United States of each one of the Lenders and
banking associations in Nevada, California, New York and
London, England are open to conduct regular banking business.
"Bankruptcy Code" shall mean the United States
Bankruptcy Code, as amended, 11 U.S.C. section 101 et seq.
"Banks" shall have the meaning set forth in the
Preamble of this Credit Agreement.
"Borrowing(s)" shall mean such amounts as Borrower
may request by notice to Agent Bank from time to time to be
advanced under the Bank Facility, which shall not exceed at
any given time the Available Borrowings.
"Capital Lease Obligations" means all monetary
obligations of a Person under any leasing or similar
arrangement which, in accordance with Generally Accepted
Accounting Principles, is classified as a capital lease.
"Capital Proceeds" shall mean the net proceeds
(after deducting all reasonable expenses incurred in
connection therewith) available to Existing Guarantors, or any
of them, from (i) partial or total condemnation or destruction
of any part of the Collateral Properties, (ii) sales of
easements, rights of way or similar interests in any portion
of the Collateral Properties, (iii) insurance proceeds (other
than rent insurance and business interruption insurance)
received in connection with damage to or destruction of the
Collateral Properties, (iv) the sale or other disposition of
any portion of the Collateral Properties in accordance with
the provisions of this Credit Agreement (not including,
however, any proceeds received by Existing Guarantors from a
sale of FF&E if such FF&E is replaced by items of equivalent
value and utility, in each case such exclusion to apply only
during any period in which no event of default has occurred
and is continuing), and (v) any other extraordinary receipt of
proceeds not in the ordinary course of business and treated,
for accounting purposes, as capital in nature.
"Circus" shall mean Circus Circus Enterprises, Inc.,
a Nevada corporation.
"Circus Credit Facilities" shall mean collective
reference to the lines of credit, terms, covenants and
conditions set forth in the Circus Reducing Revolving Loan
Agreement and the Circus Short Term Loan Agreement.
"Circus Guaranty" shall mean the General Continuing
Guaranty to be executed by Circus as of the Merger Date under
the terms of which Circus irrevocably and unconditionally
guaranties the prompt payment and performance of Borrower's
promises, covenants and agreements under the Credit Agreement,
the Bank Note, Interest Hedges and each of the Bank Facilities
Loan Documents, a copy of which is marked "Exhibit F", affixed
hereto and by this reference incorporated herein and made a
part hereof.
"Circus Reducing Revolving Loan Agreement" shall
mean the Reducing Revolving Agreement dated as of
September 30, 1993, executed by and among Circus as the
borrower, Bank of America National Trust and Savings
Association as managing agent, The Long-Term Credit Bank of
Japan, Ltd., Los Angeles Agency, First Interstate Bank of
Nevada, N.A., Societe General, Credit Lyonnais, Los Angeles
branch and Credit Lyonnais, Cayman Island branch, as
co-agents, and CIBC, Inc., as co-managing agent, and the banks
named therein, under the terms of which a reducing revolving
line of credit was established up to the aggregate maximum
amount of Five Hundred Million Dollars ($500,000,000.00), as
amended from time to time.
"Circus Short Term Loan Agreement" shall mean the
Revolving Loan Agreement dated as of September 30, 1993,
executed by and among Circus as the borrower, Bank of America
National Trust and Savings Association as managing agent, The
Long-Term Credit Bank of Japan, Ltd., Los Angeles Agency,
First Interstate Bank of Nevada, N.A., Societe General, Credit
Lyonnais, Los Angeles branch and Credit Lyonnais, Cayman
Island branch, as co-agents, and CIBC, Inc., as co-managing
agent, and the banks named therein, under the terms of which
a revolving line of credit was established in the aggregate
maximum amount of Two Hundred Fifty Million Dollars
($250,000,000.00), as amended from time to time.
"Closing Date" shall mean February 14, 1994.
"Collateral" shall mean: (i) a collective reference
to the Jean Collateral, the RPIG Collateral, the Nevada
Landing Collateral, and (ii) any and all other property and/or
intangible rights, interests or benefits inuring to or in
favor of Borrower and/or Existing Guarantors which are in any
manner assigned, pledged, encumbered or otherwise hypothecated
in favor of Lenders to secure the Existing Guaranty and/or
repayment of the Bank Facility.
"Collateral Properties" shall mean collective
reference to the Jean Real Property, Nevada Landing Real
Property and RPIG Real Property, together with any other real
property or interests therein, which may be held by Agent Bank
from time to time to secure repayment of the Bank Facility.
"Contingent Guaranty" means, as to any Person, any
(a) guarantee by that Person of Indebtedness of, or other
obligation performable by, any other Person or (b) assurance
given by that person to an obligee of any other Person with
respect to the performance of an obligation by, or the
financial condition of, such other Person, whether direct,
indirect or contingent, including any purchase or repurchase
agreement covering such obligation or any collateral security
therefor, any agreement to provide funds (by means of loans,
capital contributions or otherwise) to such other Person, any
agreement to support the solvency or level of any balance
sheet item of such other Person or any "keep-well" or other
arrangement of whatever nature given for the purpose of
assuring or holding harmless such obligee against loss with
respect to any obligation of such other Person; provided,
however, that the term Contingent Guaranty shall not include
endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent
Guaranty shall be deemed to be an amount equal to the stated
or determinable amount of the related primary obligation
(unless the Contingent Guaranty is limited by its terms to a
lesser amount, in which case to the extent of such amount) or,
if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the
Person in good faith.
"Continuation/Conversion Notice" shall mean a notice
of continuation or conversion and certificate duly executed by
an Authorized Officer, substantially in the form of that
certain exhibit marked "Exhibit E", affixed hereto and by this
reference incorporated herein and made a part hereof.
"Credit Agreement" shall mean this Amended and
Restated Reducing Revolving Credit Agreement to be executed by
and among Borrower, Guarantors and Banks on the Merger Date
setting forth the terms and conditions of the Bank Facility
subsequent to the Merger Date.
"Deeds of Trust" shall mean collective reference to
the Jean Deed of Trust, Nevada Landing Deed of Trust and RPIG
Deed of Trust.
"Default" shall mean the occurrence of an event with
which the giving of notice or passage of time, or both, would
constitute an Event of Default hereunder.
"Default Rate" shall have the meaning as set forth
in Section 2.09(ii).
"Environmental Certificate" shall mean the
Certificate and Indemnification Regarding Hazardous Substances
dated February 11, 1994, executed by Borrower and Existing
Guarantors, Lakeview and Pioneer as further inducement to the
Lenders to establish the Bank Facility, from which Lakeview
and Pioneer will be fully released from all liability and
obligations as of the Merger Date.
"Event of Default" shall mean any Event of Default
as provided in Section 7.01 hereof.
"Existing Credit Agreement" shall have the meaning
ascribed to such term in Recital Paragraph B of the Credit
Agreement.
"Existing Guarantors" shall collectively mean the
Nevada Joint Venture, Railroad Pass Investment Group, a Nevada
general partnership, doing business as Railroad Pass Casino,
Jean Development Company, a Nevada general partnership doing
business as Gold Strike Hotel & Gambling Hall, Jean
Development West, a Nevada general partnership, doing business
as the Nevada Landing, and Jean Development North, a Nevada
general partnership, but shall not include Lakeview or Pioneer
each of which are to be released from all liability under the
Existing Guaranty as of the Merger Date.
"Existing Guaranty" shall mean the General
Continuing Guaranty dated February 11, 1994, jointly and
severally executed by Existing Guarantors, Lakeview and
Pioneer in favor of Agent Bank on behalf of the Lenders under
the terms of which Existing Guarantors irrevocably and
unconditionally guaranty the prompt payment and performance of
Borrower's and Guarantors' promises, covenants and agreements
under the Credit Agreement, the Bank Note, Interest Rate
Hedges and each of the Bank Facility Loan Documents, a copy of
which is marked "Exhibit G", affixed hereto and by this
reference incorporated herein and made a part hereof, from
which Lakeview and Pioneer will be fully released from all
liability and obligations as of the Merger Date.
"Existing LIBO Loans" shall mean collective
reference to each "LIBO Loan", as defined in the Existing
Credit Agreement, which is outstanding as of the Merger Date
having a LIBO Loan Interest Period ending subsequent to the
Merger Date.
"FF&E" shall mean collective reference to the Jean
FF&E, Nevada Landing FF&E, and RPIG FF&E, together with any
other furniture, fixtures and equipment, including, without
limitation, all gaming devices and associated equipment,
inventories and supplies which may be held by Agent Bank on
behalf of the Lenders from time to time to secure repayment of
the Bank Facility.
"FINV" shall mean First Interstate Bank of Nevada,
N.A.
"First Amendment to Bank Note" shall mean the First
Amendment to Reducing Revolving Credit Promissory Note to be
dated concurrently with the Merger Date and executed by
Borrower and Agent Bank on behalf of the Lenders for the
purpose of modifying the rates of interest to accrue under the
Bank Note subsequent to the Merger Date, a copy of which is
marked "Exhibit C", affixed hereto and by this reference
incorporated herein and made a part hereof.
"Fiscal Quarter" shall have the meaning ascribed to
such term in the Circus Reducing Revolving Loan Agreement.
"Funding Date" shall mean each date upon which the
Borrower requests the Lenders to fund Borrowings in accordance
with the provisions of Section 2.03.
"GAAP" shall mean generally accepted accounting
principles, consistently applied.
"GSI" shall mean Goldstrike Investments, Inc., a
Nevada corporation.
"GSLV" shall mean Gold Strike L.V., a Nevada general
partnership.
"Gaming Permits" shall mean collective reference to
every license, permit or other authorization required to own,
operate and otherwise conduct gaming operations at the Nevada
Operations, including, without limitation, all licenses
granted by the Nevada Gaming Authorities and all other
applicable Governmental Authorities.
"Governmental Authority" or "Governmental
Authorities" shall mean any federal, state, regional, county
or municipal governmental agency, board, commission, officer
or official whose consent or approval is required or whose
regulations must be followed as a prerequisite to (i) the
continued operation and occupancy of the Collateral Properties
and the Nevada Operations or (ii) the performance of any act
or obligation or the observance of any agreement, provision or
condition of whatever nature herein contained.
"Guaranties" shall mean collective reference to the
Existing Guaranty and the Circus Guaranty.
"Hazardous Materials Claims" shall have the meaning
set forth in Section 5.21.
"Hazardous Materials Laws" shall have the meaning
set forth in Section 5.21.
"Hotel/Casino Operations" shall mean collective
reference to the Jean Hotel/Casino Operation, Nevada Landing
Hotel/Casino Operation and Railroad Pass Hotel/Casino
Operation.
"Indebtedness" means, as to any Person (without
duplication), (a) indebtedness of such Person for borrowed
money or for the deferred purchase price of Property
(excluding trade and other accounts payable in the ordinary
course of business in accordance with customary trade terms),
including any Contingent Guaranty for any such indebtedness,
(b) indebtedness of such Person of the nature described in
clause (a) that is non-recourse to the credit of such Person
but is secured by assets of such Person, to the extent of the
value of such assets, (c) Capital Lease Obligations of such
Person, (d) indebtedness of such Person arising under
acceptance facilities or under facilities for the discount of
accounts receivable of such Person, (e) any direct or
contingent obligations of such Person under letters of credit
issued for the account of such Person and (f) any obligations
of such Person under a Swap Agreement.
"Interest Rate Hedge" shall mean a rate swap,
interest cap or rate collar agreement with or through Agent
Bank or any Lender relating to the Bank Facility.
"JDN" shall mean Jean Development North, a Nevada
general partnership.
"JDN Permitted Encumbrances" shall mean, at any
particular time, (i) liens for taxes, assessments or
governmental charges not then due and payable or not then
delinquent, (ii) liens for taxes, assessments or governmental
charges the validity of which are being contested in good
faith by JDN by appropriate proceedings, provided that JDN
shall have maintained adequate reserves with Agent Bank for
the payment of same, (iii) liens, encumbrances and
restrictions on the JDN Real Property which are shown as
exceptions nos. 1-16 on Schedule B of the JDN Title Report,
(iv) liens consented to in writing by Lenders, (v) liens of
legally valid leases for equipment, (vi) purchase money
security interests for gaming devices and equipment, and
(vii) easements, licenses or rights-of-way, hereafter granted
to any Governmental Authority or public utility providing
services to the JDN Real Property.
"JDN Real Property" shall mean collective reference
to the real property described in the JDN Title Report.
"JDN Title Report" shall mean the first amended
preliminary report on title issued by Title Insurance Company,
dated as of December 17, 1993, in connection with its order
no. 93-12-0774JB, a copy of which is marked "Exhibit I",
affixed hereto and by this reference incorporated herein and
made a part hereof.
"Jean Assignment of Equipment Leases, Contracts and
Subleases" shall mean the assignment dated February 11, 1994
and recorded February 14, 1994, in the Official Records of
Clark County, Nevada, in Book 940214, as Instrument No. 00693,
executed by Jean Development, as additional security for the
Existing Guaranty and the Bank Facility.
"Jean Assignment of Permits, Licenses and Contracts"
shall mean the assignment dated February 11, 1994 and recorded
February 14, 1994, in the Official Records of Clark County,
Nevada, in Book 940214, as Instrument No. 00697, duly executed
by Jean Development, whereby Jean Development assigns to Agent
Bank on behalf of Lenders all of its right, title and interest
in and to all permits, licenses and contracts relating to the
Jean Hotel/Casino Operation, except those gaming permits and
licenses which are unassignable.
"Jean Assignment of Rents and Revenues" shall mean
the assignment dated February 11, 1994 and recorded February
14, 1994, in the Official Records of Clark County, Nevada, in
Book 940214, as Instrument No. 00689, whereby Jean Development
assigns to Agent Bank on behalf of Lenders as additional
security for the Existing Guaranty and the Bank Facility all
rents, issues, profits, revenues and income from the Jean Real
Property and the Jean Hotel/Casino Operation and any other
business activity conducted on the Jean Real Property,
together with any and all future expansions thereof, related
thereto or used in connection therewith.
"Jean Assignment of Waste Water Service Agreement"
shall mean the assignment dated February 11, 1994 and recorded
February 14, 1994, in the Official Records of Clark County,
Nevada, in Book 940214, as Instrument No. 00701, duly executed
by Jean Development, whereby Jean Development assigns to Agent
Bank on behalf of Lenders all of its right, title and interest
in and to the Jean Development Waste Water Service Agreement.
"Jean Collateral" shall mean collective reference
to: (i) all of the Jean Real Property and the personal
property, Jean FF&E, contract rights, leases, intangibles and
other interests of Jean Development, which are subject to the
liens and security interests of the Jean Security Documents;
(ii) all rights of Jean Development assigned as additional
security pursuant to the terms of the Jean Security Documents;
and (iii) any and all other property and/or intangible rights,
interest or benefits inuring to or in favor of Jean
Development, which are in any manner assigned, pledged,
encumbered or otherwise hypothecated in favor of Agent Bank to
secure the Existing Guaranty and payment of the Bank Facility.
"Jean Deed of Trust" shall mean the Deed of Trust,
Fixture Filing and Security Agreement with Assignment of Rents
dated February 11, 1994 and recorded February 14, 1994, in the
Official Records of Clark County, Nevada, in Book 940214, as
Instrument No. 00681, encumbering the Jean Real Property, Jean
FF&E and other Collateral therein described for the purpose of
securing the Existing Guaranty and the Bank Facility.
"Jean Development" shall mean Jean Development
Company, a Nevada general partnership, doing business as the
Gold Strike Hotel & Gambling Hall.
"Jean Development Waste Water Service Agreement"
shall mean the Waste Water Service Agreement executed
concurrently with this Credit Agreement by and between MSE,
LCI and GSI as the owners of the waster water treatment
facilities more particularly therein described and Jean
Development as the owner of the Jean Hotel/Casino Operation
under the terms of which MSE, LCI and GSI agree to accept and
treat in accordance with the requirements of all Governmental
Authorities all waste water and other effluent discharged by
the Jean Hotel/Casino Operation for a sixty (60) year period.
"Jean FF&E" shall mean the furniture, fixtures and
equipment and all gaming equipment and devices which have been
installed or are to be installed and used in connection with
the operation of the Jean Hotel/Casino Operation.
"Jean Financing Statements" shall mean the Uniform
Commercial Code financing statements filed in the Office of
the Secretary of State of the State of Nevada on February 25,
1994, under File No. 94-02229, and recorded in the Office of
the County Recorder of Clark County on February 14, 1994, in
Book 940214, as Instrument No. 00685, in order to perfect the
security interest granted to Agent Bank on behalf of Lenders
under the Jean Deed of Trust and other Jean Loan Documents in
accordance with requirements of the Nevada Uniform Commercial
Code.
"Jean Hotel/Casino Operation" shall mean the hotel
and casino business and related activities conducted on the
Jean Real Property under the name of Gold Strike Hotel &
Gambling Hall.
"Jean Permitted Encumbrances" shall mean, at any
particular time, (i) liens for taxes, assessments or
governmental charges not then due and payable or not then
delinquent, (ii) liens for taxes, assessments or governmental
charges the validity of which are being contested in good
faith by Jean Development by appropriate proceedings, provided
that Jean Development shall have maintained adequate reserves
for payment of same, (iii) liens created or contemplated by
the Jean Security Documents, (iv) the liens, encumbrances and
restrictions on the Jean Real Property, Jean FF&E and existing
improvements which are shown as exceptions on Schedule B of
the Title Insurance Policy, (v) liens consented to in writing
by Lenders, (vi) liens of legally valid leases for Jean FF&E,
(vii) purchase money security interests for Jean FF&E, and
(viii) easements, licenses or rights-of-way, hereafter granted
to any Governmental Authority or public utility providing
services to the Jean Real Property.
"Jean Premises" shall mean the Jean Real Property,
together with existing improvements and all other improvements
or property, both personal and real which are now or hereafter
are situate upon the Jean Real Property or used in connection
with the Jean Hotel/Casino Operation.
"Jean Real Property" shall mean collective reference
to the real property described as Parcels 4 through 8 on the
Title Insurance Policy, together with all buildings,
structures, fixtures and other improvements situate thereon,
upon which the Jean Hotel/Casino Operation is conducted.
"Jean Security Documents" shall mean collective
reference to the Jean Deed of Trust, Jean Assignment of Waste
Water Service Agreement, Jean Assignment of Rents and
Revenues, Jean Assignment of Equipment Leases, Contracts and
Subleases, Jean Assignment of Permits, Licenses and Contracts,
Jean Financing Statements, and all other instruments and
agreements required to be executed by or on behalf of Jean
Development in connection with the making of the Bank
Facility.
"Jean West" shall mean Jean Development West, a
Nevada general partnership doing business as Nevada Landing.
"LCI" shall mean Last Chance Investments, Inc., a
Nevada corporation.
"Lakeview" shall mean Lakeview Company, a Nevada
general partnership, doing business as Gold Strike Inn.
"Lenders" shall have the meaning set forth in the
preamble of this Credit Agreement.
"LIBO Loan" shall mean reference to each portion of
the principal balance of the Bank Facility bearing interest
with reference to a LIBO Rate.
"LIBO Loan Interest Period" shall mean either a one
(1) month, three (3) month or six (6) month period for each
portion of the Bank Facility bearing reference to a LIBO Rate.
"LIBO Rate" shall mean, with respect to any LIBO
Loan for any LIBO Loan Interest Period commencing subsequent
to the Merger Date, the rate per annum determined by Agent
Bank, adjusted for reserve requirements and rounded upwards,
if necessary, to the nearest 1/16 of 1%, to be the rate at
which Dollar deposits in immediately available funds are
offered to Agent Bank two Banking Business Days prior to the
beginning of such LIBO Loan Interest Period by prime banks in
the London Interbank Market at or about 11:00 am., London,
England time, for delivery on the first day of such LIBO Loan
Interest Period, for the number of days comprised therein and
in a minimum amount and multiples as set forth in paragraph
C(2) of the Note to which rate shall be added the Applicable
Eurodollar Rate Margin, plus one-half of one percent (.50%).
"MSE" shall mean M.S.E. Investments, Inc., a Nevada
corporation.
"Material Adverse Effect" means any set of
circumstances or events which (a) has or would reasonably be
expected to have any material adverse effect whatsoever upon
the validity or enforceability of the Bank Note, Existing
Guaranty or Circus Guaranty or on any Bank Facility Loan
Document, (b) is or would reasonably be expected to result in
a Material Adverse Event, (c) materially impairs or would
reasonably be expected to materially impair the ability of
Circus and its Subsidiaries taken as a whole to perform
Circus' obligations under the Circus Guaranty, or
(d) materially impairs or would reasonably be expected to
materially impair the ability of the Agent Bank, Banks, or any
of them, to enforce their legal remedies pursuant to the Bank
Facility Loan Documents.
"Material Adverse Event" shall mean any event or
change which is material and adverse to the financial
condition or business operations of Circus and its
Subsidiaries taken as a whole.
"Maturity Date" shall mean February 1, 2001, as may
be extended from time to time for one (1) year periods in the
manner and subject to the terms of Section 2.12 of this Credit
Agreement.
"Maturity Extension Fee" shall have the meaning set
forth in Section 2.12 hereof.
"Maximum Principal Balance" is the maximum amount of
principal which may be outstanding on the Bank Facility from
time to time which shall be the lesser of: (i) the Maximum
Scheduled Principal Balance as set forth on Exhibit A to the
Note, (ii) the amount to which the Maximum Principal Balance
is voluntarily reduced by Borrower, or (iii) the amount by
which the Maximum Principal Balance is reduced pursuant to
Sections 5.01 and/or 8.02.
"Maximum Scheduled Principal Balance" shall mean the
maximum amount of scheduled principal which may be outstanding
on the Bank Facility from time to time as set forth on
Exhibit A to the Bank Note.
"Merger" shall mean the acquisition of the Acquired
Corporations and Acquired Partnerships by Subsidiaries of
Circus pursuant to an Agreement and Plan of Merger and an
Exchange Agreement.
"Merger Date" shall mean the date upon which the
Merger is completed.
"NLI" shall mean Nevada Landing Partnership, an
Illinois general partnership.
"Negative Covenants" shall have the meaning set
forth in Section 6.01.
"Nevada Gaming Authority" means collective reference
to the Nevada Gaming Commission, the State Gaming Control
Board and any agency of any county, city or other political
subdivision of the State of Nevada which has jurisdiction over
the gaming activities of Borrower, Circus and/or Existing
Guarantors.
"Nevada Joint Venture" shall have the meaning set
forth in the Preamble to this Credit Agreement consisting of
the general partnership created by agreement executed by and
among Existing Guarantors (other than the Nevada Joint
Venture), GSLV and NLI.
"Nevada Joint Venture Agreement" shall mean the
general partnership agreement by which the Nevada Joint
Venture is created.
"Nevada Landing Assignment of Equipment Leases,
Contracts and Subleases" shall mean the assignment dated
February 11, 1994 and recorded February 14, 1994, in the
Official Records of Clark County, Nevada, in Book 940214, as
Instrument No. 00694, executed by Jean West as additional
security for the Existing Guaranty and the Bank Facility.
"Nevada Landing Assignment of Permits, Licenses and
Contracts" shall mean the assignment dated February 11, 1994
and recorded February 14, 1994, in the Official Records of
Clark County, Nevada, in Book 940214, as Instrument No. 00698,
duly executed by Jean West, whereby Jean West assigns to Agent
Bank on behalf of Lenders all of its right, title and interest
in and to all permits, licenses and contracts relating to the
Nevada Landing Hotel/Casino Operation, except those gaming
permits and licenses which are unassignable.
"Nevada Landing Assignment of Rents and Revenues"
shall mean the assignment dated February 11, 1994 and recorded
February 14, 1994, in the Official Records of Clark County,
Nevada, in Book 940214, as Instrument No. 00690, whereby Jean
West assigns to Agent Bank on behalf of Lenders as additional
security for the Existing Guaranty and the Bank Facility all
rents, issues, profits, revenues and income from the Nevada
Landing Real Property and the Nevada Landing Hotel/Casino
Operation and any other business activity conducted on the
Nevada Landing Real Property, together with any and all future
expansions thereof, related thereto or used in connection
therewith.
"Nevada Landing Assignment of Waste Water Service
Agreement" shall mean the assignment dated February 11, 1994
and recorded February 14, 1994, in the Official Records of
Clark County, Nevada, in Book 940214, as Instrument No. 00702,
duly executed by Jean West, whereby Jean West assigns to Agent
Bank on behalf of Lenders all of its right, title and interest
in and to the Nevada Landing Waste Water Service Agreement.
"Nevada Landing Collateral" shall mean collective
reference to (i) all of the Nevada Landing Real Property and
the personal property, the Nevada Landing FF&E, contract
rights, leases, intangibles and other interests of Jean West
which are subject to the liens and security interests of the
Nevada Landing Security Documents; (ii) all rights of Jean
West assigned as additional security pursuant to the terms of
the Nevada Landing Security Documents; and (iii) any and all
other property and/or intangible rights, interest or benefits
inuring to or in favor of Jean West, which are in any manner
assigned, pledged, encumbered or otherwise hypothecated in
favor of Agent Bank to secure the Existing Guaranty and
payment of the Bank Facility.
"Nevada Landing Deed of Trust" shall mean the Deed
of Trust, Fixture Filing and Security Agreement with
Assignment of Rents dated February 11, 1994 and recorded
February 14, 1994, in the Official Records of Clark County,
Nevada, in Book 940214, as Instrument No. 00682, encumbering
the Nevada Landing Real Property, Nevada Landing FF&E and
other Collateral therein described for the purpose of securing
the Existing Guaranty and the Bank Facility.
"Nevada Landing FF&E" shall mean the furniture,
fixtures and equipment and all gaming equipment and devices
which have been installed or are to be installed and used in
connection with the operation of the Nevada Landing
Hotel/Casino Operation.
"Nevada Landing Financing Statements" shall mean the
Uniform Commercial Code financing statements filed in the
Office of the Secretary of State of the State of Nevada on
February 25, 1994, under File No. 94-02229, and in the Office
of the County Recorder of Clark County on February 14, 1994,
in Book 940214 of Official Records as Instrument No. 00685, in
order to perfect the security interest granted to Agent Bank
on behalf of Lenders under the Nevada Landing Deed of Trust
and other Nevada Landing Security Documents in accordance with
requirements of the Nevada Uniform Commercial Code.
"Nevada Landing Hotel/Casino Operation" shall mean
the hotel and casino business and related activities conducted
on the Nevada Landing Real Property under the name of The
Nevada Landing.
"Nevada Landing Permitted Encumbrances" shall mean,
at any particular time, (i) liens for taxes, assessments or
governmental charges not then due and payable or not then
delinquent, (ii) liens for taxes, assessments or governmental
charges the validity of which are being contested in good
faith by Jean West by appropriate proceedings, provided that
Jean West shall have maintained adequate reserves for the
payment of same, (iii) liens which may be created or
contemplated by the Nevada Landing Security Documents, (iv)
liens, encumbrances and restrictions on the Nevada Landing
Real Property, Nevada Landing FF&E and existing improvements
which are shown as exceptions on Schedule B of the Title
Insurance Policy, (v) liens consented to in writing by
Lenders, (vi) liens of legally valid leases for Nevada Landing
FF&E, (vii) purchase money security interests for Nevada
Landing FF&E within the limitations set forth in Section 6.06,
and (viii) easements, licenses or rights-of-way, hereafter
granted to any Governmental Authority or public utility
providing services to the Nevada Landing Real Property.
"Nevada Landing Premises" shall mean the Nevada
Landing Real Property, together with existing improvements and
all other improvements or property, both personal and real
which now are or hereafter are situate upon the Nevada Landing
Real Property or used in connection with the Nevada Landing
Hotel/Casino Operation.
"Nevada Landing Real Property" shall mean collective
reference to the real property described as Parcels 9 and 10
in the Title Insurance Policy, together with all buildings,
structures, fixtures and other improvements situate thereon,
upon which the Nevada Landing Hotel/Casino Operation is
conducted.
"Nevada Landing Security Documents" shall mean a
collective reference to the Nevada Landing Deed of Trust, the
Nevada Landing Assignment of Waste Water Service Agreement,
the Nevada Landing Assignment of Rents and Revenues, Nevada
Landing Assignment of Equipment Leases, Contracts and
Subleases, Nevada Landing Assignment of Permits, Licenses and
Contracts, the Nevada Landing Financing Statements and all
other instruments and agreements required to be executed by or
on behalf of Jean West in connection with the making of the
Bank Facility.
"Nevada Landing Waste Water Service Agreement" shall
mean the Waste Water Service Agreement executed concurrently
with this Credit Agreement by and between MSE, LCI and GSI as
the owners of the waster water treatment facilities more
particularly therein described and Jean West as the owner of
the Nevada Landing Hotel/Casino Operation under the terms of
which MSE, LCI and GSI agree to accept and treat in accordance
with the requirements of all Governmental Authorities all
waste water and other effluent discharged by the Nevada
Landing Hotel/Casino Operation for a sixty (60) year period.
"Nevada Operations" shall mean collective reference
to the Hotel/Casino Operations.
"Nonusage Fee" shall have the meaning set forth in
Section 2.08B hereof.
"Notice of Borrowing" shall have the meaning set
forth in Section 2.03 hereof.
"Permitted Encumbrances" shall mean collective
reference to the Jean Permitted Encumbrances, Nevada Landing
Permitted Encumbrances, RPIG Permitted Encumbrances and JDN
Permitted Encumbrances.
"Person" means any individual, firm, corporation,
trust, association, partnership, joint venture, tribunal or
other entity.
"Pioneer" shall mean Pioneer Investment Group, a
Nevada general partnership.
"Policies of Insurance" shall mean the insurance to
be obtained and maintained by Borrower as provided by Section
5.08 herein.
"Prime Rate" shall mean the rate of interest which
Agent Bank from time to time identifies and publicly announces
as its prime rate and is not necessarily, for example, the
lowest rate of interest which Agent Bank collects from any
borrower or group of borrowers, to which rate shall be added
the Applicable Alternate Base Rate Margin, plus one-half of
one percent (.50%).
"Prime Rate Loan" shall mean reference to that
portion of the unpaid principal balance of the Bank Facility
bearing interest with reference to the Prime Rate on and after
the Merger Date.
"Pro Rata" means, with respect to any Lender, a
percentage equal to such Lender's Syndication Interest in the
Bank Facility as set forth on Schedule of Lenders' Proportions
in Bank Facility, Exhibit A hereto.
"RPIG" shall mean Railroad Pass Investment Group, a
Nevada general partnership, doing business as Railroad Pass
Casino.
"RPIG Assignment of Equipment Leases, Contracts and
Subleases" shall mean the assignment dated February 11, 1994
and recorded February 14, 1994, in the Official Records of
Clark County, Nevada, in Book 940214, as Instrument No. 00695,
executed by RPIG as additional security for the Existing
Guaranty and the Bank Facility.
"RPIG Assignment of Permits, Licenses and Contracts"
shall mean the assignment on behalf of Lenders duly executed
by RPIG, whereby RPIG assigns to Agent Bank on behalf of
Lenders all of its right, title and interest in and to all
permits, licenses and contracts relating to the Railroad Pass
Hotel/Casino Operation, except those gaming permits and
licenses which are unassignable.
"RPIG Assignment of Rents and Revenues" shall mean
the assignment dated February 11, 1994 and recorded
February 14, 1994, in the Official Records of Clark County,
Nevada, in Book 940214, as Instrument No. 00691, whereby RPIG
assigns to Agent Bank on behalf of Lenders as additional
security for the Existing Guaranty and the Bank Facility all
rents, issues, profits, revenues and income from the RPIG Real
Property and the RPIG Hotel/Casino Operation and any other
business activity conducted on the RPIG Real Property,
together with any and all future expansions thereof, related
thereto or used in connection therewith.
"RPIG Collateral" shall mean collective reference to
(i) all of the RPIG Real Property and the personal property,
RPIG FF&E, contract rights, leases, intangibles and other
interests of RPIG which are subject to the liens and security
interests of the RPIG Security Documents; (ii) all rights of
RPIG assigned as additional security pursuant to the terms of
the RPIG Security Documents; and (iii) any and all other
property and/or intangible rights, interest or benefits
inuring to or in favor of RPIG which are in any manner
assigned, pledged, encumbered or otherwise hypothecated in
favor of Agent Bank to secure payment of the Existing Guaranty
and the Bank Facility.
"RPIG Deed of Trust" shall mean the Deed of Trust,
Fixture Filing and Security Agreement with Assignment of Rents
dated February 11, 1994 and recorded February 14, 1994, in the
Official Records of Clark County, Nevada, in Book 940214, as
Instrument No. 00683, encumbering the RPIG Real Property, RPIG
FF&E and other Collateral therein described for the purpose of
securing the Existing Guaranty and the Bank Facility.
"RPIG FF&E" shall mean the furniture, fixtures and
equipment and all gaming equipment and devices which have been
installed or are to be installed and used in connection with
the operation of the Railroad Pass Hotel/Casino Operation.
"RPIG Financing Statements" shall mean the Uniform
Commercial Code financing statements filed in the Office of
the Secretary of State of the State of Nevada on February 25,
1994, under File No. 94-02231 and in the Office of the County
Recorder of Clark County on March 2, 1994, in Book 940302 of
Official Records, as Instrument No. 01215, in order to perfect
the security interest granted to Agent Bank on behalf of
Lenders under the RPIG Deed of Trust and other RPIG Security
Documents in accordance with requirements of the Nevada
Uniform Commercial Code.
"RPIG Permitted Encumbrances" shall mean, at any
particular time, (i) liens for taxes, assessments or
governmental charges not then due and payable or not then
delinquent, (ii) liens for taxes, assessments or governmental
charges the validity of which are being contested in good
faith by RPIG by appropriate proceedings, provided that RPIG
shall have maintained adequate reserves for the payment of
same, (iii) liens created or contemplated by the RPIG Security
Documents, (iv) the liens, encumbrances and restrictions on
the RPIG Real Property, RPIG FF&E and existing improvements
which are shown as exceptions on Schedule B of the Title
Insurance Policy, (v) liens consented to in writing by
Lenders, (vi) liens of legally valid leases for RPIG FF&E,
(vii) purchase money security interests for RPIG FF&E, and
(viii) easements, licenses or rights-of way, hereafter granted
to any Governmental Authority or public utility providing
services to the RPIG Real Property.
"RPIG Premises" shall mean the RPIG Real Property,
together with existing improvements and all other improvements
or property, both personal and real which now or hereafter are
situate upon the RPIG Real Property or used in connection with
the Railroad Pass Hotel/Casino Operation.
"RPIG Real Property" shall mean collective reference
to the real property described as Parcels 1, 2 and 3 in the
Title Insurance Policy, together with all buildings,
structures, fixtures and other improvements situate thereon,
upon which the Railroad Pass Hotel/Casino Operation is
conducted.
"RPIG Security Documents" shall mean a collective
reference to the RPIG Deed of Trust, the RPIG Assignment of
Rents and Revenues, RPIG Assignment of Equipment Leases,
Contracts and Subleases, RPIG Assignment of Permits, Licenses
and Contracts, the RPIG Financing Statements and all other
instruments and agreements required to be executed by or on
behalf of RPIG in connection with the making of the Bank
Facility.
"Railroad Pass Hotel/Casino Operation" shall mean
the hotel and casino business and related activities conducted
on the RPIG Real Property under the name Railroad Pass
Hotel/Casino.
"Reporting Requirements" shall have the meaning set
forth in Section 5.08.
"Schedule of Lenders' Proportions in Bank Facility"
shall mean the schedule setting forth each Lender's
proportionate share in the Bank Facility, a copy of which is
marked "Exhibit A", affixed to the Credit Agreement and by
this reference incorporated herein and made a part hereof as
the same be amended from time to time.
"Schedule of Releases, Terminations and
Reconveyances" shall mean the Schedule attached to the Credit
Agreement as Exhibit H setting forth a list and description of
the releases, terminations, reconveyances and other
modifications to various agreements which are to be made,
executed and delivered by each applicable party thereto as of
the Merger Date for the purpose of releasing the items and
security interests held under the Existing Credit Agreement
which are no longer required under the terms of this Credit
Agreement.
"Security Documents" shall mean collective reference
to the Jean Security Documents, Nevada Landing Security
Documents and the RPIG Security Documents.
"Subsidiary" shall mean, on the date in question,
any Person of which an aggregate of 50% or more of the stock
of any class or classes (or equivalent interests) is owned of
record or beneficially, directly or indirectly, by another
Person and/or any of its Subsidiaries, if the holders of the
stock of such class or classes (or equivalent interests) (a)
are ordinarily, in the absence of contingencies, entitled to
vote for the election of a majority of the directors (or
individuals performing similar functions) of such Person, even
though the right so to vote has been suspended by the
happening of such a contingency, or (b) are entitled, as such
holders, to vote for the election of a majority of the
directors (or individuals performing similar functions) of
such Person, whether or not the right so to vote exists by
reason of the happening of a contingency.
"Swap Agreement" means a written agreement between
Borrower and one or more financial institutions providing for
the "swap" of interest rate payment obligations with respect
to any Indebtedness.
"Syndication Interests" shall mean the proportionate
interest of each of the Lenders in the Bank Facility, as may
be amended from time to time, as set forth on the Schedule of
Lenders' Proportions in Bank Facility, as may be amended from
time to time, a copy of which is marked "Exhibit A", affixed
hereto and by this reference incorporated herein and made a
part hereof.
"Taxes" shall have the meaning set forth in
Section 2.10A.
"Title Insurance Company" shall mean Chicago Title
Insurance Company and its issuing agent, United Title of
Nevada, 4100 West Flamingo, Suite 1000, Las Vegas, Nevada
89103, together with such reinsurers with direct access as are
requested by Lenders or other title insurance company or
companies as may be acceptable to Lenders.
"Title Insurance Policy" shall mean the ALTA Loan
Policy of Title Insurance dated February 14, 1994, at 9:50
a.m., Policy No. 29-0010-107-06942, issued by Title Insurance
Company in the aggregate amount of One Hundred Sixty Million
Dollars ($160,000,000.00) in favor of Agent Bank, as
administrative and collateral agent for Lenders, insuring the
respective priorities of the Jean Deed of Trust, Nevada
Landing Deed of Trust and RPIG Deed of Trust.
Section 1.02. Interpretation and Construction. In
this Credit Agreement, unless the context otherwise requires:
(i) Articles and Sections mentioned by number
only are the respective Articles and Sections of this Credit
Agreement as so numbered;
(ii) Words importing a particular gender mean
and include every other gender, and words importing the
singular number mean and include the plural number and vice
versa;
(iii) Words importing persons mean and include
firms, associations, partnerships (including limited
partnerships), societies, trusts, corporations or other legal
entities, including public or governmental bodies, as well as
natural persons;
(iv) All times specified herein, unless
otherwise specifically referred, shall be the time in Las
Vegas, Nevada;
(v) Any headings preceding the texts of the
several Articles and Sections of this Credit Agreement, and
any table of contents or marginal notes appended to copies
hereof, shall be solely for convenience of reference and shall
not constitute a part of this Credit Agreement, nor shall they
affect its meaning, construction or effect;
(vi) If any clause, definition, provision or
Section of this Credit Agreement shall be determined to be
apparently contrary to or conflicting with any other clause,
definition, provision or Section of this Credit Agreement
then the clause, definition, provision or Section containing
the more specific provisions shall control and govern with
respect to such apparent conflict. The parties hereto do
agree that each has contributed to the drafting of this Credit
Agreement and in all Bank Facility Loan Documents and that the
provisions herein contained shall not be construed against
either Borrower, Guarantors or Lenders as having been the
person or persons responsible for the preparation thereof;
(vii) The terms "herein", "hereunder",
"hereby", "hereto", "hereof" and any similar terms as used in
the Credit Agreement refer to this Credit Agreement; the term
"heretofore" means before the date of execution of this
Credit Agreement; and the term "hereafter" means after the
date of the execution of this Credit Agreement;
(viii) Every affirmative duty, covenant and
obligation of Guarantors hereunder shall be equally applicable
to each of the Guarantors individually and where the context
would result in the best interests or rights of Lenders shall
be construed to mean "Guarantors or any of them";
(ix) All accounting terms used herein which are
not otherwise specifically defined shall be used in accordance
with GAAP consistently applied;
(x) If any clause, provision or Section of this
Credit Agreement shall be ruled invalid or unenforceable by
any court of competent jurisdiction, such holding shall not
invalidate or render unenforceable any of the remaining
provisions hereof;
(xi) This Credit Agreement and all matters
relating hereto shall be governed by and construed and
interpreted in accordance with the laws of the State of
Nevada; and
(xii) Each reference to this Credit Agreement
or any other Bank Facility Loan Document or the Agency
Agreement, or any of them, as used in this Credit Agreement or
in any other Bank Facility Loan Document or the Agency
Agreement shall be deemed a reference to this Credit
Agreement, such Bank Facility Loan Document, or Agency
Agreement, as applicable, as the same may be amended,
modified, supplemented, replaced, renewed or restated from
time to time.
Section 1.03. Use of Defined Terms. Unless
otherwise defined or the context otherwise requires, terms for
which meanings are provided in this Credit Agreement shall
have such meanings when used in the Bank Note and in each Bank
Facility Loan Document and other communication delivered from
time to time in connection with this Credit Agreement or any
other Bank Facility Loan Document.
Section 1.04. Cross-References. Unless otherwise
specified, references in this Credit Agreement and in each
other Bank Facility Loan Document to any Article or Section
are references to such Article or Section of this Credit
Agreement or such other Bank Facility Loan Document, as the
case may be, and, unless otherwise specified, references in
any Article, Section or definition to any clause are
references to such clause of such Article, Section or
definition.
ARTICLE II
AMOUNT, TERMS AND SECURITY OF THE BANK FACILITY
Section 2.01. The Bank Facility.
A. Subject to the conditions and upon the terms
hereinafter set forth and in accordance with the terms and
provisions of the Bank Note, Lenders severally agree in the
proportions set forth on Exhibit A hereto, to lend and advance
to Borrower up to the Maximum Principal Balance (each
individually a "Borrowing" and collectively the "Borrowings"),
such amounts as Borrower may request by notice to Agent Bank
from time to time as provided in Section 2.03.
The Maximum Scheduled Principal Balance of One
Hundred Sixty Million Dollars ($160,000,000.00) as of the
Closing Date shall be reduced semi-annually as of August 1st
and February 1st of each Fiscal Year to the amounts set forth
on Exhibit A to the Bank Note. Provided, however, that the
reduction of Five Million Dollars ($5,000,000.00) scheduled to
occur on February 1, 1995, for the purpose of reducing the
Maximum Scheduled Principal Balance to One Hundred Fifty
Million Dollars ($150,000,000.00) shall be and is hereby
waived and deleted so that the Maximum Scheduled Principal
Balance from August 1, 1994 through July 31, 1995, shall be
One Hundred Fifty-Five Million Dollars ($155,000,000.00). On
August 1, 1995, the Maximum Scheduled Principal Balance shall
be reduced to One Hundred Forty-Five Million Dollars
($145,000,000.00) and thereafter subsequent reductions to the
Maximum Scheduled Principal Balance shall be made in
accordance with and as of the dates shown on Exhibit A to the
Note.
In the event the amount of such reduction or any
portion thereof has been advanced as a Borrowing, the amount
so advanced shall be payable by Borrower as of the applicable
reduction date so that the outstanding principal balance under
the Bank Facility shall not, at any time, exceed the Maximum
Principal Balance as so reduced.
B. Notwithstanding the scheduled reductions
to the Maximum Scheduled Principal Balance as set forth on
Exhibit A to the Bank Note, Borrower may voluntarily further
reduce the Maximum Principal Balance from time to time on the
following conditions:
(i) that each such voluntary reduction be
made in writing by an Authorized Officer, effective
on the fifth (5th) Banking Business Day following
receipt by Agent Bank;
(ii) that each such voluntary reduction shall
be irrevocable and a permanent reduction to the
Maximum Principal Balance; and
(iii) each reduction shall be in increments of
One Million Dollars ($1,000,000.00).
C. In no event shall any Lender be liable to
fund any amounts under the Bank Facility in excess of its
respective Syndication Interest.
D. In no event shall the Maximum Principal
Balance exceed the Maximum Scheduled Principal Balance.
E. Outstanding Borrowings under the Bank Note
and Existing Credit Agreement as of the Merger Date shall be
deemed outstanding Borrowings under the Bank Note and this
Credit Agreement.
Within the foregoing limits, Borrower may
borrow, repay and reborrow until the Maturity Date up to the
Maximum Principal Balance, as set forth hereinabove.
Provided, however, amounts of unpaid principal bearing
interest with reference to a LIBO Rate shall be subject to
breakage costs incident to prepayment as provided in the Bank
Note.
Section 2.02. Use of Proceeds of the Bank Facility.
Available Borrowings may be used by Borrower for any lawful
purpose.
Section 2.03. Notice of Borrowings and Interest
Rate Options.
A. An Authorized Officer of Borrower shall
give Agent Bank on or before 11:00 o'clock a.m. on a Banking
Business Day, at Agent Bank's office specified in Section
2.07, three (3) full Banking Business Days prior written
notice in the form of the Notice of Borrowing ("Notice of
Borrowing"), a copy of which is marked "Exhibit C", affixed
hereto and by this reference incorporated herein and made a
part hereof, for each proposed Borrowing to be made with
reference to a LIBO Rate and at least two (2) full Banking
Business Days prior notice for each proposed Borrowing to be
made with reference to a Prime Rate, specifying the date and
amount of each proposed Borrowing. Agent Bank shall give at
least three (3) Banking Business Days notice in the case of
each Borrowing made with reference to a LIBO Rate and at least
one (1) Banking Business Day notice for each Borrowing to be
made with reference to a Prime Rate to Lenders of the amount
to be funded and specifying the date on which the funds are to
be made available. Not later than 11:00 o'clock a.m. on the
date specified, each Lender shall disburse to Agent Bank the
amount to be advanced by each such Lender in lawful money of
the United States of America and in immediately available
funds. Agent Bank shall make the proceeds of such fundings
received by it on or before 11:00 o'clock a.m. from the
Lenders available to Borrower by depositing, prior to 1:00
o'clock p.m. on the day so received (but not prior to the
Funding Date), in the general deposit account specified by
Borrower maintained with Agent Bank the amounts received from
the Lenders. Each Borrowing shall be in a minimum amount of
One Million Dollars ($1,000,000.00) and in increments of One
Hundred Thousand Dollars ($100,000.00) provided that Borrower
shall be entitled to no more than three (3) Borrowings during
each calendar month.
B. Borrower shall exercise each Interest Rate
Option by delivering a Continuation/Conversion Notice to Agent
Bank executed by an Authorized Officer at the times and in the
manner set forth in Paragraph C(4) of the Bank Note.
Section 2.04. Conditions of Borrowing. Borrowings
will only be made so long as Borrower and Guarantors are in
full compliance with each of the requirements and conditions
precedent set forth in Article III B of this Credit Agreement.
Provided, however, Lenders may, in their sole and absolute
discretion and pursuant to the Agency Agreement, advance
Borrowings notwithstanding the existence of less than full
compliance with the requirements of Article III B and
Borrowings so made shall be deemed to have been made pursuant
to this Credit Agreement.
Section 2.05. The Bank Note. The Bank Facility
shall be evidenced by the Bank Note and shall bear interest
and be due and payable as provided therein. Provided,
however:
A. Existing LIBO Loans shall continue to
accrue interest at the rates determined by Agent Bank at the
commencement of each respective LIBO Loan Interest Period
under the Existing Credit Agreement and shall be paid on the
first day of each month and at the end of each applicable LIBO
Loan Interest Period;
B. Accrued interest on the "Prime Rate Loan",
as defined in the Existing Credit Agreement, remaining unpaid
on the Merger Date shall be paid on the next occurring
regularly scheduled interest payment date;
C. On and after the Merger Date, the Prime
Rate Loan shall bear interest at the Prime Rate; and
D. On and after the Merger Date, each LIBO
Loan shall bear interest with reference to the LIBO Rate as
determined by Agent Bank.
Section 2.06. Security for the Bank Facility. As
security for the due and punctual payment and performance of
the terms and provisions of this Credit Agreement, the Bank
Note and all of the other Bank Facility Loan Documents,
together with any liability of Borrower under any Interest
Rate Hedge, Existing Guarantors have executed and delivered
the Existing Guaranty and the Security Documents as of the
Closing Date and Circus has executed and delivered the Circus
Guaranty as of the Merger Date. As of the Merger Date,
Lakeview and Pioneer shall be released from the Existing
Guaranty and the Environmental Certificate.
Section 2.07. Place and Manner of Payment. All
amounts payable by Borrower to the Lenders pursuant to the
Bank Facility shall be made on a Banking Business Day in
lawful money of the United States of America and in
immediately available funds. Other than the scheduled
reductions of principal and payment of interest as set forth
in the Bank Note, Borrower shall not make repayments of the
outstanding balance of principal owing under the Bank Note
more frequently than one such repayment during each calendar
week. All amounts payable by Borrower shall be made to Agent
Bank at its office located at First Interstate Bank of Nevada,
N.A., Gaming Division, 3800 Howard Hughes Parkway, Las Vegas,
Nevada 89109, Att'n: Brad Peterson, V.P. If such payment is
received by Agent Bank prior to 10:00 o'clock a.m., or 11:00
o'clock a.m., if extended as provided hereinbelow, Agent Bank
shall credit Borrower with such payment on the day so received
and shall disburse to the appropriate Lenders on the same day
the Pro Rata amounts of payments relating to the Bank Facility
based on the respective Syndication Interests, in immediately
available funds. If such payment is received by Agent Bank
after 10:00 o'clock a.m. or 11:00 o'clock a.m., if extended as
provided hereinbelow, Agent Bank shall credit Borrower with
such payment as of the next Banking Business Day and disburse
to the appropriate Lenders on the next Banking Business Day
such Pro Rata amounts of such payment relating to the Bank
Facility based on the respective Syndication Interests, in
immediately available funds. Any payment on the Bank Facility
made by Borrower to Agent Bank pursuant to the terms of this
Credit Agreement or the Bank Note for the account of Lenders
shall constitute payment to the appropriate Lenders. The
10:00 o'clock a.m. payment deadline referred to hereinabove
shall be extended as provided hereinabove for one (1)
additional hour to 11:00 o'clock a.m. if before the end of the
prior Banking Business Day, Borrower gives Agent Bank notice,
either oral or written, of Borrower's intention to make such
payment prior to 11:00 o'clock a.m. of the next Banking
Business Day. If the Bank Note or any payment required to be
made thereon or hereunder, is or becomes due and payable on a
day other than a Banking Business Day, the due date thereof
shall be extended to the next succeeding Banking Business Day
and interest thereon shall be payable at the then applicable
rate during such extension.
Section 2.08. Loan Fees, Non-Usage Fees and Agency
Fees.
A. On the Merger Date, Borrower shall pay to
Agent Bank for Pro Rata disbursement to Lenders in
consideration of the terms and agreements set forth in this
Credit Agreement, a non-refundable fee (the "Amendment Fee")
in the amount of One Hundred Ninety-Three Thousand Seven
Hundred Fifty Dollars ($193,750.00).
B. Borrower shall pay to Agent Bank for Pro
Rata disbursement to Lenders and in consideration for their
respective commitments to advance Borrowings under the Bank
Facility a fee (the "Nonusage Fee") in the amount of one-half
of one percent (1/2 of 1%) per annum of the daily average of
Available Borrowings under the Bank Facility, computed on the
basis of a three hundred sixty-five (365) or when appropriate
three hundred sixty-six (366) day year. The Nonusage Fee
shall be calculated quarterly commencing in the Fiscal Quarter
in which the Closing Date occurs and shall be payable on the
first day of the second calendar month following the end of
each respective Fiscal Quarter.
C. On the Closing Date and on each
anniversary of the Closing Date, Borrower shall pay Agent
Bank, to be retained by Agent Bank for its own account, the
Agency Fee.
Section 2.09. Late Charges and Default Rate.
(i) If any payment due under the Bank Note is
not paid within five (5) Banking Business Days of the date
such payment is due, Borrower promises to pay a late charge in
the amount of five percent (5%) of the amount of such
delinquent payment and Agent Bank need not accept any late
payment made unless it is accompanied by such five percent
late payment charge. Any late charge shall be paid to Lenders
in proportion to their respective Syndication Interests.
(ii) In the event of the existence of an Event
of Default, commencing on the fifth (5th) day following the
mailing of written notice thereof by Agent Bank, the total of
the unpaid balance of the principal and the then accrued and
unpaid interest owing under the Bank Note shall collectively
commence accruing interest at a rate equal to five percent
(5%) over the Prime Rate (the "Default Rate") until such time
as all payments and additional interest are paid, together
with the curing of any Events of Default which may exist, at
which time the interest rate shall revert to that rate of
interest otherwise accruing pursuant to the terms of the Bank
Note.
(iii) In the event of the occurrence of an
Event of Default, Borrower agrees to pay all costs of
collection, including a reasonable attorney's fee, in addition
to and at the time of the payment of such sum of money and/or
the performance of such acts as may be required to cure such
default. In the event legal action is commenced for the
collection of any sums owing hereunder or under the terms of
the Bank Note the undersigned agree that any judgment issued
as a consequence of such action against Borrower shall bear
interest at the Default Rate until fully paid.
Section 2.10. Net Payments.
A. All payments under this Credit Agreement
and the Bank Note shall be made without set-off, deduction or
counterclaim and in such amounts as may be necessary in order
that all such payments, after deduction or withholding for or
on account of any present or future taxes, levies, imposts,
duties or other charges of whatsoever nature imposed by the
United States or any Governmental Authority, other than any
tax on or measured by the overall net income of the Lenders
pursuant to the income tax laws of the United States or any
State, or the jurisdiction where each Lender's principal
office is located (collectively, the "Taxes"), shall not be
less than the amounts otherwise specified to be paid under
this Credit Agreement and the Bank Note. A certificate as to
any additional amounts payable to the Lenders under this
Section 2.10 submitted to the Borrower by the Lenders shall
show in reasonable detail an accounting of the amount payable
and the calculations used to determine in good faith such
amount and shall be conclusive absent manifest error. Any
amounts payable by the Borrower under this Section 2.10 with
respect to past payments shall be due within twenty (20)
Banking Business Days following receipt by the Borrower of
such certificate from the Lenders; any such amounts payable
with respect to future payments shall be due concurrently with
such future payments. With respect to each deduction or
withholding for or on account of any Taxes, the Borrower shall
promptly furnish to the Lenders such certificates, receipts
and other documents as may be required (in the reasonable
judgment of the Lenders) to establish any tax credit to which
the Lenders may be entitled. Without in any way affecting any
of its rights under this Section 2.10, each Lender agrees
that, upon its becoming aware that any of the present or
future payments due it under this Credit Agreement would be
subject to deduction for Taxes, it will notify the Borrower in
writing and each Lender further agrees that it will use
reasonable efforts not disadvantageous to it (in its sole
determination) in order to avoid or minimize, as the case may
be, the payment by the Borrower of any additional amounts for
Taxes pursuant to this Section 2.10. Each Lender represents,
to the best of its knowledge, that as of the Closing Date no
such additional taxes or charges are being imposed by the
United States or any Governmental Authority.
B. The foregoing obligation to pay such
additional amounts shall not apply:
(i) if the Lender is not a domestic
banking organization and is not, on the Closing
Date and on the date of any change in its principal
office, either entitled to submit a Form 1001
(relating to the Lender and entitling it to a
complete exemption from withholding on all interest
to be received by it under this Credit Agreement
and the Note in respect of the Bank Facility) or
Form 4224 (relating to all interest to be received
by the Lender under this Credit Agreement in
respect of the Bank Facility) (and in that regard
the Lender shall on such date deliver to the
Borrower duplicate such Forms 1001 or 4224, as
appropriate), or
(ii) to any Taxes imposed solely by
reason of the failure by any Lender to comply with
applicable certification, information,
documentation or other reporting requirements
concerning the nationality, residence, identity or
connections with the United States of America of
such Lender if such compliance is required by
statute or regulation of the United States of
America as a precondition to relief or exemption
from such Taxes.
For the purposes of this Section 2.10B, (x) "Form 1001" shall
mean Form 1001 (Ownership, Exemption, or Reduced Rate
Certificate) of the Department of the Treasury of the United
States of America, (y) "Form 4224" shall mean Form 4224
(Exemption from Withholding of Tax on Income Effectively
Connected with the Conduct of a Trade or Business in the
United States) of the Department of the Treasury of the United
States of America (or in relation to either such Form such
successor and related forms as may from time to time be
adopted by the relevant taxing authorities of the United
States of America to document a claim of the kind to which
such Form relates).
C. Within thirty (30) days after paying any
amount to any Lender from which it is required by law to make
any deduction or withholding, and within thirty days (30)
after it is required by law to remit such deduction or
withholding to any relevant taxing or other authority, the
Borrower shall deliver to such Lender evidence satisfactory to
the Lender of such deduction, withholding or payment, as the
case may be.
Section 2.11. Increased Costs. If, with regard to
any presently existing law, rule, regulation or reserve
requirement, or if after the date hereof the adoption, or any
change in, of any applicable law, rule or regulation
(including without limitation Regulation D of the Board of
Governors of the Federal Reserve System and any successor
thereto), or any change 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 with any
request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank or comparable
agency:
A. Shall subject any Lender to any tax, duty
or other charge with respect to the Bank Facility, the Bank
Note or such Lender's obligation to make any funding of the
Bank Facility, or shall change the basis of taxation of
payments to such Lender of the principal of, or interest on,
the Bank Facility or any other amounts due under the Bank Note
in respect of the Bank Facility or such Lender's obligation to
fund the Bank Facility (except for changes in the rate of tax
on the overall net income of such Lender imposed by the United
States or any Governmental Authority pursuant to the income
tax laws of the United States or any State, or the
jurisdiction where each Lender's principal office is located);
or
B. With respect to the Bank Facility or the
obligation of the Lenders to advance any Borrowing under the
Bank Facility, shall impose, modify or deem applicable any
reserve imposed by the Board of Governors of the Federal
Reserve System, special deposit, capitalization, capital
adequacy or similar requirement against assets of, deposits
with or for the account of, or credit extended by, any Lender;
or
C. Shall impose on any Lender any other
condition affecting the Bank Facility, the Bank Note or such
Lender's obligation to advance any Borrowing under the Bank
Facility;
and the result of any of the foregoing is to increase the cost
to (or in the case of Regulation D or reserve requirements
referred to above or a successor thereto, to impose a cost on)
such Lender of making or maintaining the Bank Facility, or to
reduce the rate of return on capital of the Lender or the
amount of any sum received or receivable by such Lender under
the Bank Note, then within ten (10) days after demand by such
Lender (which demand shall be accompanied by a certificate
setting forth the basis of such demand), the Borrower shall
pay directly to such Lender such additional amount or amounts
as will compensate such Lender for such increased cost (or in
the case of Regulation D or reserve requirements or capital
adequacy referred to above or a successor thereto, such costs
which may be imposed upon such Lender) or such reduction of
the rate of return on capital or of any sum received or
receivable under the Bank Note. Each Lender agrees to use its
reasonable efforts to minimize such increased or imposed costs
or such reduction.
Section 2.12. Extension of Maturity Date. The
entire balance of the principal sum, together with the unpaid
interest thereon accrued, shall be fully due and payable on
the Maturity Date. Provided, however, on or before one
hundred eighty (180) days prior to the Maturity Date, but in
no event prior to three hundred sixty-five (365) days prior to
the Maturity Date, or any extension thereof, Borrower through
an Authorized Officer may request a one (1) year extension of
the Maturity Date which may or may not be granted in the sole
and absolute discretion of Lenders. Such extension, if
granted by the Lenders must be agreed upon by all of the
Lenders and evidenced by written approval of each Lender
delivered to Borrower on or before forty-five (45) days
following receipt of such request for extension by the Agent
Bank. Each such extension shall be subject to the payment of
an extension fee equal to one-eight of one percent (1/8 of 1%)
of the Maximum Principal Balance as of the Maturity Date, and
any extension thereof ("Maturity Extension Fee"). In the
event of the extension of the Maturity Date, the amount of
availability under the Bank Facility shall continue to be
reduced as determined by Lenders at the time of such
extension.
ARTICLE III
CONDITIONS PRECEDENT TO THE MERGER DATE
AND TO THE FUNDING OF BORROWINGS
A. Merger Conditions. The occurrence of the Merger
Date is subject to and contingent upon each of the following:
Section 3.01. The Circus Guaranty. The Circus
Guaranty shall be executed by a duly authorized officer of
Circus and the original thereof delivered to Agent Bank.
Section 3.02. First Amendment to Bank Note. The
First Amendment to Bank Note shall be executed by an
Authorized Officer of Borrower and the original thereof
delivered to Agent Bank.
Section 3.03. Circus Corporate Resolution. Agent
Bank shall have received from Circus a Certificate of
Corporate Resolution executed by the secretary of Circus and
attested by its president, vice-president or treasurer
authorizing Circus to enter into this Credit Agreement and the
Circus Guaranty.
Section 3.04. Designation of Authorized Officers.
Agent Bank shall received from Borrower a designation by
resolution of the Authorized Officers of Borrower who are
authorized to give Notice of Borrowings,
Continuation/Conversion notices and all other notices and
certifications on behalf of Borrower.
Section 3.05. Bank Facility Loan Documents and
Security Documents. Each of the Bank Facility Loan Documents
and Security Documents shall be in full force and effect and
enforceable in accordance with their respective terms.
Section 3.06. Payment of Amendment Fee. Payment by
Borrower of the Amendment Fee as provided in Section 2.08A.
Section 3.07. Reimbursement for Expenses and Fees.
Reimbursement to Agent Bank by Borrower for all reasonable
fees and out-of-pocket expenses incurred by Agent Bank in
connection with this Credit Agreement and the Merger,
including, but not limited to the reasonable attorney's fees
of Henderson & Nelson, and all other like expenses remaining
unpaid as of the Merger Date.
Section 3.08. Releases, Terminations and
Reconveyances by Agent Bank on behalf of Lenders. Agent Bank
shall deliver to each applicable party the documents and
instruments as set forth on the Schedule of Releases,
Terminations and Reconveyances.
Section 3.09. No Injunction or Other Litigation.
No law or regulation shall prohibit, and no order, judgment or
decree of any Governmental Authority shall, and no litigation
shall be pending or threatened which in the reasonable
judgment of the Agent Bank would or might, enjoin, prohibit,
limit or restrain the execution and delivery of this Credit
Agreement, the Circus Guaranty or the making or continuance of
any Borrowing hereunder.
Section 3.10. Additional Documents and Statements.
Such additional documents, affidavits, certificates and
opinions as Lenders may reasonably require to insure
compliance with this Credit Agreement. The statements set
forth in Section 3.12 shall be true and correct.
B. Conditions Precedent to all Borrowings. The
obligation of each Lender and Agent Bank to advance any
Borrowing requested to be made or issued on any Funding Date
is subject to the occurrence of each of the following
conditions precedent as of such Funding Date:
Section 3.11. Notice of Borrowing. With respect to
any Borrowing, the Agent Bank shall have received in
accordance with Section 2.03, on or before each Funding Date
an original Notice of Borrowing duly executed by an Authorized
Officer or facsimile copy thereof, to be promptly followed by
an original.
Section 3.12. Certain Statements. On each Funding
Date and as of the Merger Date the following statements shall
be true and correct:
(i) The representations and warranties
contained in Article IV hereof and the other Bank Facility
Loan Documents (other than representations and warranties
which expressly speak only as of a different date) are true
and correct on and as of the Funding Date and as of the Merger
Date in all material respects as though made on and as of that
date, except to the extent that such representations and
warranties are not true and correct as a result of a change
which is permitted by this Credit Agreement;
(ii) The representations and certifications
contained in the Environmental Certificate are true and
correct (other than representations and warranties which
expressly speak only as of a different date);
(iii) No Material Adverse Effect to the
financial condition of Borrower or any Guarantor or to the
Collateral shall have occurred; and
(iv) No event has occurred or as a result of
any Borrowings contemplated hereby would occur and is
continuing, or would result from the making thereof, which
constitutes an Event of Default hereunder or would constitute
an Event of Default hereunder but for the requirement that
notice be given or time elapsed, or both.
Section 3.13. Gaming Permits. Guarantors shall have
all Gaming Permits material to or required for the conduct of
their respective gaming businesses and the conduct of games of
chance at the Collateral Properties and such Gaming Permits
shall not then be suspended, enjoined or prohibited (for any
length of time) by any Nevada Gaming Authority or any other
Governmental Authority.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
To induce Lenders to enter into this Credit
Agreement and to advance Borrowings under the Bank Facility
hereunder, Borrower and Guarantors make the following
representations and warranties as of the Merger Date, each of
which shall be deemed to be continuing representations and
warranties so long as any amount hereunder shall be available
for Borrowing and until payment in full of the Bank Note:
Section 4.01. Organization; Power and Author-
ization.
A. Borrower is a corporation duly organized
and validly existing under the laws of the State of Nevada.
Borrower (i) is authorized to do business in the jurisdictions
in which its respective ownership of property or conduct of
business legally requires such authorization, (ii) has all
requisite power, authority and legal right to execute and
deliver any document, agreement or certificate to which it is
a party or by which it is bound in connection with the Bank
Facility to consummate the transactions and perform its
respective obligations hereunder, and to own its respective
properties and assets and to carry on and conduct its business
as presently conducted or proposed to be conducted, and (iii)
has taken all necessary action to authorize the execution,
delivery and performance of this Credit Agreement and the
other Bank Facility Loan Documents to which it is a party or
by which it is bound and to consummate the transactions
contemplated hereunder and thereunder.
B. Each Existing Guarantor is a general
partnership duly organized and validly existing under the laws
of the State of Nevada. Each Existing Guarantor (i) is
authorized to do business in the jurisdictions in which its
ownership of property or conduct of business legally requires
such authorization, (ii) has all requisite power, authority
and legal right to execute and deliver any document, agreement
or certificate to which it is a party or by which it is bound
in connection with the Bank Facility, to consummate the
transactions and perform its obligations hereunder, and to own
its respective Collateral Property and assets and to carry on
and conduct its business as presently conducted or proposed to
be conducted, and (iii) has taken all necessary action to
authorize the execution, delivery and performance of this
Credit Agreement, the Existing Guaranty, the Deeds of Trust
and the other Bank Facility Loan Documents to which it is a
party or by which it is bound and to consummate the
transactions contemplated hereunder and thereunder. The
Guarantors' Partnership Agreements, copies of which have been
delivered to Lenders, are in full force and effect and have
not been amended except in connection with the Merger as
disclosed therein and no act has occurred which would cause
the dissolution of any of the partnerships.
C. Each of MSE, LCI, GSI and DGI is a
corporation duly organized and validly existing under the laws
of the State of Nevada. Each of MSE, LCI, GSI and DGI (i) is
authorized to do business in the State of Nevada, (ii) has all
requisite power, authority and legal right to execute and
deliver any document, agreement or certificate to which it is
a party or by which it is bound in connection with the Bank
Facility, to consummate the transactions and perform its
obligations hereunder and thereunder, and to own its
properties and assets and to carry on and conduct its business
as presently conducted or proposed to be conducted, and
(iii) has taken all necessary action to authorize the
execution, delivery and performance of this Credit Agreement,
the Existing Guaranty, the Deeds of Trust and the other Bank
Facility Loan Documents to which it is a party or by which it
is bound and to consummate the transactions contemplated
hereunder and thereunder.
D. The Nevada Joint Venture is in full force
and effect and the Nevada Joint Venture Agreement has not been
amended or modified except for the purpose of removing
Lakeview and Pioneer as partners thereof and adding GSLV and
NLI as partners thereof or as disclosed in writing to Lenders.
The Nevada Joint Venture: (i) is a fair and equitable
allocation and distribution of the proceeds of the Bank
Facility, (ii) contains recourse and indemnity provisions
between its members for a fair and equitable allocation of
liabilities and contributions between them, and
(iii) constitutes adequate consideration to each of the
Existing Guarantors for the execution and delivery of the
Existing Guaranty and the encumbrance of their respective
Collateral Properties under the Bank Facility Loan Documents
and as contemplated from time to time under the terms of this
Credit Agreement.
E. Circus is a corporation duly organized and
validly existing under the laws of the State of Nevada and has
all requisite power, authority and legal right to execute and
deliver this Credit Agreement and the Circus Guaranty and to
consummate the transaction and perform its obligations
hereunder and thereunder and has taken all necessary action to
authorize the execution, delivery and performance of this
Credit Agreement and the Circus Guaranty.
Section 4.02. No Conflict With, Violation of or
Default Under the Circus Credit Facilities. The execution and
delivery of this Credit Agreement and the Circus Guaranty and
the continued terms and provisions of the Bank Note, the
Existing Guaranty, the Deeds of Trust and each other Bank
Facility Loan Document do not conflict with or result in a
breach or violation of the Circus Credit Facilities or any
provision of any existing law, rule, regulation, order, writ,
injunction or decree of any court or Governmental Authority to
which Borrower or any Guarantor is subject.
Section 4.03. Litigation. Except as disclosed on
the Litigation Certificate, Exhibit J attached hereto, to the
best knowledge of Borrower and each of the Existing
Guarantors, after due inquiry and investigation, there is no
action, suit, proceeding, inquiry, hearing or investigation
pending or threatened, in any court of law or in equity, or
before any Governmental Authority, wherein an unfavorable
determination, decision, decree, ruling or finding would (i)
result in any material adverse change in the Collateral
Properties or in their respective business, financial
condition or operations, (ii) materially adversely affect the
transactions contemplated by this Credit Agreement and the
other Bank Facility Loan Documents and their respective
ability to perform their obligations hereunder and thereunder,
or (iii) materially adversely affect the validity or
enforceability of this Credit Agreement and the other Bank
Facility Loan Documents. To the best knowledge of Borrower
and each of the Guarantors, after due inquiry and
investigation, neither Borrower nor any of the Guarantors are
in violation of or default with respect to any order, writ,
injunction, decree or demand of any such court or Governmental
Authority.
Section 4.04. Agreements Legal, Binding, Valid and
Enforceable. This Credit Agreement, the Bank Note, the
Existing Guaranty, the Circus Guaranty, the Deeds of Trust and
all other Bank Facility Loan Documents as executed and
delivered by Borrower and/or Guarantors, as applicable, in
connection with the Bank Facility will constitute and continue
to constitute legal, valid and binding obligations of Borrower
and Guarantors, as the case may be, enforceable against
Borrower and Guarantor in accordance with their respective
terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium and other
laws of general application relating to or affecting the
enforcement of creditors' rights and the exercise of judicial
discretion in accordance with general principles of equity
(regardless of whether enforcement is considered in a
proceeding in equity or at law).
Section 4.05. Information and Financial Data
Accurate; Financial Statements; No Material Adverse Change.
All information and financial and other data previously
furnished by Borrower and Guarantors to Lenders or Agent Bank
on behalf of Lenders are true, correct and complete in all
material respects as of the date thereof, and there has been
no Material Adverse Effect with respect thereto to the Merger
Date since the dates thereof.
Section 4.06. Governmental Approvals. All timely
consents, approvals, orders or authorizations of, or
registrations, declarations, notices or filings with any
Governmental Authority which may be required in connection
with the Merger and the valid execution and delivery of this
Credit Agreement and the Circus Guaranty and the other Bank
Facility Loan Documents by Borrower and Guarantors, as
applicable, and the carry-out or performance of any of the
transactions required or contemplated hereunder, or
thereunder, by Borrower and/or Guarantors, have been obtained
or accomplished or prior to the Merger Date will have been
obtained or accomplished and are in full force and effect or
will be in full force and effect as of the Merger Date. All
timely consents, approvals, orders or authorizations of, or
registrations, declarations, notices or filings with any
Governmental Authority which may be required by Borrower and
Existing Guarantors, as applicable, in connection with the use
and operation of the Collateral Properties have been obtained
or accomplished and are in full force and effect.
Section 4.07. Payment of Taxes. Borrower and each
of the Guarantors have duly filed or caused to be filed all
federal, state and local tax reports and returns which are
required to be filed by them and have paid or made provisions
for the payment of, all taxes, assessments, fees and other
governmental charges which have or may have become due
pursuant to said returns or otherwise pursuant to any
assessment received by Borrower or any of the Guarantors, as
the case may be, except such taxes, if any, as are being
contested in good faith by Borrower or any of the Guarantors,
as the case may be, by appropriate proceedings and for which
Borrower or such Guarantor, as applicable, has maintained
adequate reserves for the payment thereof.
Section 4.08. Title to Collateral Properties.
Existing Guarantors shall have good and marketable title to
the respective Collateral Properties and the JDN Real Property
as of the Merger Date. All such properties and assets are not
subject to any liens, encumbrances or restrictions except
Permitted Encumbrances. All roads, easements and rights of
way necessary for the full utilization of the Collateral
Properties have been completed or obtained.
Section 4.09. No Untrue Statements. All state-
ments, representations and warranties made by Borrower and
Guarantors in this Credit Agreement, any other Bank Facility
Loan Document and any other agreement, document, certificate
or instrument previously furnished or to be furnished by
Borrower and/or Guarantors to Lenders under or in accordance
with this Credit Agreement, (i) are and shall be true, correct
and complete in all material respects, at the time they were
made and on and as of the Merger Date, (ii) do not and shall
not contain any untrue statement of a material fact, and (iii)
do not and shall not omit to state a material fact necessary
in order to make the information contained herein or therein
not misleading or incomplete. Borrower and Guarantors
understand that all such statements, representations and
warranties shall be deemed to have been relied upon by Lenders
as a material inducement to enter into this Credit Agreement.
Section 4.10. Brokerage Commissions. No person is
entitled to receive any brokerage commission, finder's fee or
similar fee or payment in connection with the consummation of
the transactions contemplated by this Credit Agreement. No
brokerage or other fee, commission or compensation is to be
paid by Lenders with respect to the transactions contemplated
hereby, and Borrower and Guarantors agree to indemnify Lenders
against any such claims for brokerage fees or commissions and
to pay all expenses including, without limitation, reasonable
attorney's fees incurred by Lenders in connection with the
defense of any action or proceeding brought to collect any
such brokerage fees or commissions.
Section 4.11. No Defaults. Neither Borrower nor
any of the Guarantors are in violation of or in default with
respect to any applicable laws and/or regulations which
materially and adversely affect the business, financial
condition or operations of the Collateral Properties or of the
Borrower or the Guarantors. Neither Borrower nor any of the
Guarantors are in violation or default (nor is there any
waiver in effect which, if not in effect, would result in a
violation or default) in any material and adverse respect
under any indenture, evidence of indebtedness, loan or
financing agreement or other agreement or instrument of
whatever nature to which it is party or by which it is bound
(except for any defaults previously brought to Lenders'
attention in writing, for which Borrower or such Guarantor has
received a waiver from Lenders), a default under which might
have consequences that would materially adversely affect the
business, financial condition or operations of the Collateral
Properties or of the Borrower or any of the Guarantors.
Section 4.12. Availability of Utility Services and
Facilities. All utility services and facilities necessary for
the Collateral Properties, including, without limitation,
electrical, water, gas and sewage services and facilities are
or will be available at the boundaries of the Collateral
Properties when needed and all utility services necessary for
the operation of the Collateral Properties as the Nevada
Operations are available at or within the boundaries of the
Collateral Properties. The Nevada Landing Waste Water Service
Agreement and Jean Development Waste Water Service Agreement
are in full force and effect and provide for the treatment of
all waste water and effluent discharged from the Nevada
Landing Hotel/Casino Operation and the Jean Hotel/Casino
Operation, respectively.
Section 4.13. Policies of Insurance. Each of the
copies of the Policies of Insurance relating to the Collateral
Properties delivered to Lenders by Existing Guarantors (i) is
a true, correct and complete copy of the respective original
thereof as in effect on the date hereof, and no amendments or
modifications of any of said documents or instruments not
included in such copies have been made, and (ii) has not been
terminated and is in full force and effect. No Existing
Guarantor is in default in the observance or performance of
its respective obligations under said documents and
instruments, and each Existing Guarantor has done all things
required to be done as of the date of this Credit Agreement to
keep unimpaired its rights thereunder.
Section 4.14. Gaming Permits. All Gaming Permits
required to be held by Existing Guarantors are current and in
good standing and Existing Guarantors presently hold all
Gaming Permits necessary for the Nevada Operations.
Section 4.15. Environmental Certificate. The
representations and certifications contained in the
Environmental Certificate are true and correct.
ARTICLE V
GENERAL COVENANTS
To induce Lenders to enter into this Credit
Agreement and to advance Borrowings under the Bank Facility
hereunder, Borrower and each of the Guarantors covenant to
Lenders as follows:
A. Affirmative Covenants.
Section 5.01. FF&E. All FF&E that is purchased and
installed in the Collateral Properties shall be purchased free
and clear of any liens, encumbrances or claims, other than
Permitted Encumbrances. If Existing Guarantors should sell,
transfer, convey or otherwise dispose of any FF&E in excess of
Two Hundred Fifty Thousand Dollars ($250,000.00) in the
aggregate during any Fiscal Year and not replace such FF&E
with purchased items of equivalent value and utility or
replace said FF&E with leased FF&E of equivalent value and
utility, within the permissible leasing and purchase agreement
limitation set forth herein within one hundred eighty (180)
days, or in the event Existing Guarantors sell, transfer,
convey or otherwise dispose of any FF&E during any period in
which an Event of Default has occurred and is continuing,
Borrower shall be required to immediately, permanently reduce
the Maximum Principal Balance of the Bank Facility by the
amount of the Capital Proceeds of the FF&E so disposed of,
subject, however, to the right of Lenders to verify to their
reasonable satisfaction the amount of said Capital Proceeds;
in the event Lenders and Borrower do not agree as to the value
of the FF&E disposed of and the amount of the Capital
Proceeds, then Borrower, at its sole cost and expense, shall
obtain a written appraisal from an appraiser reasonably
satisfactory to Lenders, setting forth said values and
amounts, and Lenders agree to accept the results of said
appraisal. The Maximum Principal Balance shall immediately be
reduced without duplication by the amount of such appraisal.
Section 5.02. Permits; Licenses and Legal
Requirements. Each Existing Guarantor shall comply in all
material respects with and keep in full force and effect, as
and when required, all permits, licenses and approvals
obtained from any Governmental Authorities which are required
for the operation and use of the Collateral Properties as the
Nevada Operations. Each Existing Guarantor shall comply in
all material respects with all applicable material existing
and future laws, rules, regulations, orders, ordinances and
requirements of all Governmental Authorities, and with all
recorded restrictions affecting the Collateral Properties.
Section 5.03. Protection Against Lien Claims. Each
Existing Guarantor shall promptly pay and discharge or cause
to be paid and discharged all claims and liens for labor done
and materials and services supplied and furnished in
connection with the Collateral Properties in accordance with
this Section 5.03. If any mechanic's lien or materialman's
lien shall be recorded, filed or suffered to exist against
the Collateral Properties or any interest therein by reason of
work, labor, services or materials supplied, furnished or
claimed to have been supplied and furnished in connection with
the Collateral Properties, said lien or claim shall be paid,
released and discharged of record within sixty (60) days after
the filing or recording thereof, or Existing Guarantors shall
have caused said mechanic's lien or materialman's lien to be
released of record pursuant to the provisions set forth in the
Nevada Revised Statutes 108.2413, et. seq., within one hundred
twenty (120) days of the date of the recordation of the
mechanic's lien or materialman's lien in the office of the
County Recorder of Clark County, Nevada.
Section 5.04. Notice of Changes in Partnership
Status. At all times throughout the term of the Bank
Facility, Borrower shall give prior written notice to Agent
Bank of any change in the partnership status of any Existing
Guarantor. Borrower or Existing Guarantors, as applicable,
will execute such documentation as may be reasonably required
by Agent Bank for the purpose of preserving the interests of
the Banks in the Collateral.
Section 5.05. No Change in Character of Business.
At all times throughout the term of the Bank Facility (i) the
Collateral Properties shall each be operated by the respective
Existing Guarantor which currently operates such Collateral
Property, and (ii) no Existing Guarantor shall effect a
material change in the nature and character of its business at
the Collateral Properties as presently conducted and as
presently contemplated.
Section 5.06. Preservation and Maintenance of
Properties and Assets.
(a) At all times throughout the term of the
Bank Facility, (i) Borrower and each of the Existing
Guarantors shall operate, maintain and preserve all rights,
privileges, franchises, licenses, gaming licenses and other
properties and assets necessary to conduct its business, in
accordance with all applicable governmental laws, ordinances,
approvals, rules and regulations and requirements, including,
but not limited to, zoning, sanitary, pollution, building,
environmental and safety laws and ordinances, rules and
regulations promulgated thereunder, and (ii) Borrower and
Existing Guarantors shall not consolidate with, remove,
demolish, materially alter, discontinue the use of, sell,
transfer, assign, hypothecate or otherwise dispose of to any
Person, any part of its properties and assets necessary for
the continuance of its business, as presently conducted and as
presently contemplated, other than in the normal course of
business or as otherwise permitted pursuant to this Credit
Agreement.
(b) In the event Borrower, any Guarantor, or
any Affiliate and/or Subsidiary thereof, shall acquire any
other real property or rights to the use of real property
which is directly used in any material manner in connection
with the Collateral Properties, or any of them, Borrower and
Guarantors shall concurrently with the acquisition of such
real property or the rights to the use of such real property,
execute or cause the execution of such documents as may be
necessary to add such real property or rights to the use of
real property as Collateral under the Bank Facility.
Section 5.07. Repair of Properties and Assets. At
all times throughout the term of the Bank Facility, Existing
Guarantors shall, at their own cost and expense, (i) maintain,
preserve and keep in a manner consistent with hotel and gaming
casino operating practices applicable to a hotel/casino
operation operating in the Clark County, Nevada area, their
assets and properties, including, but not limited to, the
Collateral Properties and all FF&E owned or leased by Existing
Guarantors in good and substantial repair, working order and
condition, ordinary wear and tear excepted, (ii) from time to
time, make or cause to be made, all necessary and proper
repairs, replacements, renewals, improvements and betterments
thereto, and (iii) from time to time, make such substitutions,
additions, modifications and improvements as may be necessary
and as shall not impair the structural integrity, operating
efficiency and economic value of said assets and properties.
All alterations, replacements, renewals, or additions made
pursuant to this Section 5.07 shall become and constitute a
part of said assets and property and subject, inter alia, to
the provisions of Section 5.01 and subject to the lien of the
Security Documents.
Section 5.08. Circus Information and Reporting
Requirements.
(i) At all times throughout the term of the
Bank Facility, Circus shall deliver to Agent Bank, at Circus'
sole expense, with sufficient copies for distribution to each
of the Lenders, each information and reporting requirement at
the times and in the manner as set forth in Article VII of the
Circus Reducing Revolving Loan Agreement entitled "Information
and Reporting Requirements" (herein collectively referred to
as the "Reporting Requirements") a copy of which as in
existence on the Merger Date are marked "Exhibit K", affixed
hereto and by this reference incorporated herein and made a
part hereof, together with incorporation by this reference of
such additional defined terms and other provisions of the
Circus Reducing Revolving Loan Agreement as may be necessary
for definitive meaning and interpretation of such Reporting
Requirements.
(ii) Throughout the term of the Bank Facility,
Borrower and Guarantors shall furnish to Lenders any financial
information or other information bearing on the financial
status of the Borrower, Guarantors, the Collateral or the Bank
Facility which is reasonably requested by any Lender.
Section 5.09. Insurance. Existing Guarantors shall
obtain, or cause to be obtained, and shall maintain or cause
to be maintained, at all times throughout the term of the Bank
Facility with respect to the Collateral Properties and the
Hotel/Casino Operations, at their own cost and expense, and
shall have deposited with Agent Bank prior to the Merger Date:
(i) Comprehensive general public liability
insurance in an amount reasonable and customary in the
hotel/casino industry and acceptable to Agent Bank;
(ii) Worker's compensation insurance and
employer's liability insurance in such amounts as may be
required by statute;
(iii) Flood insurance if the property is
located in an area designated by the Secretary of Housing and
Urban Development as a special flood hazard area, and then in
the maximum insurable amount;
(iv) Business interruption insurance in
amounts sufficient to pay operating expenses, lost rental
income and debt service for a period of up to six (6) months;
(v) Casualty insurance against loss by fire
and other risks of physical loss or damage to the Collateral
Properties in amounts not less than the full replacement cost
of all improvements, plus the cost of debris removal;
(vi) Any other insurance reasonably requested
by Agent Bank in such amounts and covering such risks as may
be reasonably required; and
(vii) All policies of insurance required to be
maintained by Guarantors shall be issued by companies
satisfactory to Agent Bank and shall have coverages and
endorsements and be written for such amount as Agent Bank may
reasonably require. All policies of insurance on the
Collateral Properties required to be maintained by Guarantors
must name Agent Bank as mortgagee (in the case of property
insurance) or additional insured (in the case of liability
insurance), must insure the interest of Agent Bank in the
property as mortgagee and must provide that no cancellation or
modification of the policies will be made without thirty (30)
days' prior written notice to Agent Bank.
Section 5.10. Taxes. Throughout the term of the
Bank Facility, Borrower and each of the Existing Guarantors
shall prepare and timely file or cause to be prepared and
timely filed all federal, state and local tax returns required
to be filed by it, and Borrower and each of the Existing
Guarantors shall promptly pay and discharge all taxes,
assessments and other governmental charges or levies imposed
upon it, or in respect of any of its properties and assets
except such taxes, if any, as are being contested in good
faith by any Borrower or any Existing Guarantor as provided in
Section 4.07 herein.
Section 5.11. Permitted Encumbrances Only. At all
times throughout the term of the Bank Facility, neither
Borrower nor any Existing Guarantor shall create, incur,
assume or suffer to exist any mortgage, deed of trust, pledge,
lien, security interest, encumbrance, attachment, levy,
distraint, or other judicial process and burdens of every kind
and nature except the Permitted Encumbrances on or with
respect to the Collateral Properties and the JDN Real
Property, except (a) with respect to matters described in
Sections 5.03 and 5.10 such items as are being contested in
the manner described therein, and (b) with respect to any
other items, if any, as are being contested in good faith by
appropriate proceedings and for which such Borrower and
Existing Guarantors have maintained adequate reserves for the
payment thereof.
Section 5.12. Advances. At any time during the
term of the Bank Facility, if Borrower or Existing Guarantors
should fail (i) to perform or observe, or (ii) to cause to be
performed or observed, any covenant or obligation of Borrower
or Existing Guarantors under this Credit Agreement or any of
the other Bank Facility Loan Documents, then Agent Bank, upon
the giving of reasonable notice, may (but shall be under no
obligation to) take such steps as are necessary to remedy any
such non-performance or non-observance and provide for payment
thereof. All amounts advanced by Agent Bank pursuant to this
Section 5.12 shall become an additional joint and several
obligation of Borrower and Guarantors to Lenders secured by
the Deeds of Trust and other Bank Facility Loan Documents,
shall reduce the amount of Available Borrowings and shall
become due and payable by Borrower on the next interest
payment date, together with interest thereon at a rate per
annum equal to the Default Rate (such interest to be
calculated from the date of such advancement to the date of
payment thereof by Borrower).
Section 5.13. Further Assurances. Borrower and
Guarantors will do, execute, acknowledge and deliver, or cause
to be done, executed, acknowledged and delivered, such
amendments or supplements hereto or to any of the Bank
Facility Loan Documents and such further documents,
instruments and transfers as the Lenders or Agent Bank may
reasonably require for the curing of any defect in the
execution or acknowledgement hereof or in any of the Bank
Facility Loan Documents, or in the description of the
Collateral Properties or other Collateral or for the proper
evidencing of giving notice of each lien or security interest
securing repayment of the Bank Facility. Further, upon the
execution and delivery of the Deeds of Trust and each of the
Bank Facility Loan Documents and thereafter, from time to
time, Borrower and Existing Guarantors shall cause the Deeds
of Trust and each of the Bank Facility Loan Documents and each
amendment and supplement thereto to be filed, registered and
recorded and to be refiled, re-registered and re-recorded in
such manner and in such places as may be required by the
Lenders or Agent Bank, in order to publish notice of and fully
protect the liens of the Deeds of Trust and the Bank Facility
Loan Documents and to protect or continue to perfect the
security interests created by the Deeds of Trust and Bank
Facility Loan Documents in the Collateral Properties and
Collateral and to perform or cause to be performed from time
to time any other actions required by law and execute or cause
to be executed any and all instruments of further assurance
that may be necessary for such publication, perfection,
continuation and protection.
Section 5.14. Indemnification. Borrower and each
of the Guarantors agree to and do hereby jointly and severally
indemnify, protect, defend and save harmless Agent Bank and
each of the Lenders and their respective trustees, officers,
employees, agents, attorneys and shareholders (individually an
"Indemnified Party" and collectively the "Indemnified
Parties") from and against any and all losses, damages,
expenses or liabilities of any kind or nature from any suits,
claims, or demand, including reasonable counsel fees incurred
in investigating or defending such claim, suffered by any of
them and caused by, relating to, arising out of, resulting
from, or in any way connected with this Credit Agreement and
the transactions contemplated herein; provided, however,
Borrower and Guarantors shall not be obligated to indemnify,
protect, defend and save harmless an Indemnified Party if the
loss, damage, expense or liability was caused by (i) the gross
negligence or intentional misconduct of such Indemnified
Party, or (ii) the breach of this Credit Agreement by such
Indemnified Party. In case any action shall be brought
against any Indemnified Party based upon any of the above and
in respect to which indemnity may be sought against Borrower
and Guarantors, Agent Bank shall promptly notify Borrower and
each of the Guarantors in writing, and Borrower and Guarantors
shall assume the defense thereof, including the employment of
counsel selected by Borrower and Guarantors and reasonably
satisfactory to Indemnified Party, the payment of all costs
and expenses and the right to negotiate and consent to
settlement. Upon reasonable determination made by Indemnified
Party that a conflict of interest would otherwise exist, the
applicable Indemnified Party shall have the right to employ
separate counsel in any such action and to participate in the
defense thereof. Borrower and Guarantors shall not be liable
for any settlement of any such action effected without its
consent, but if settled with Borrower's and Guarantors'
consent, or if there be a final judgment for the claimant in
any such action, Borrower and each of the Guarantors agree to
indemnify, defend and save harmless such Indemnified Parties
from and against any loss or liability by reason of such
settlement or judgment. The provisions of this Section 5.14
shall survive the termination of this Credit Agreement and the
repayment of the Bank Facility.
Section 5.15. Inspection of the Collateral
Properties. At all times during the term of the Bank
Facility, Existing Guarantors shall provide or cause to be
provided to Lenders and any authorized representatives of
Lenders, accompanied by representatives of Existing
Guarantors, the reasonable right of entry and free access to
the Collateral Properties to inspect same on reasonable prior
notice to Existing Guarantors.
Section 5.16. Compliance With Other Loan Documents.
Borrower and each of the Guarantors shall comply with each and
every term, condition and agreement contained in the Bank
Facility Loan Documents.
Section 5.17. Suits or Actions Affecting Borrower
and/or Guarantors. Throughout the term of the Bank Facility,
Borrower and each of the Guarantors shall promptly advise
Agent Bank in writing within ten (10) days of Borrower's
and/or Guarantors' knowledge thereof of (i) any claims,
litigation, proceedings or disputes (whether or not
purportedly on behalf of Borrower and/or Guarantors) against,
or to the actual knowledge of any Borrower and/or Guarantors
threatened or affecting Borrower or any Guarantor which
involve sums in excess of Ten Million Dollars ($10,000,000.00)
in excess of insurance coverage not subject to a reservation
of rights or which, if adversely determined, would have a
Material Adverse Effect on the Collateral Properties or the
business, operations or financial conditions of Circus and its
Subsidiaries taken as a whole, (ii) any material labor
controversy resulting in or threatening to result in a strike
against the Collateral Properties, or (iii) any proposal by
any Governmental Authority to acquire any of the material
assets or business of Borrower or any Guarantor.
Section 5.18. Account Analysis of Operating
Accounts. All operating and payroll accounts maintained by
Borrower and/or Existing Guarantors at a branch of the Agent
Bank during the term of the Bank Facility shall be maintained
on at least a break-even basis, in accordance with monthly
analysis reports.
Section 5.19. Notice to State Gaming Control Board.
Borrower and each of the Guarantors shall make all required
reports and disclosures to the Nevada State Gaming Control
Board, including, but not limited to, reporting this Bank
Facility transaction within the time period required by
Regulation 8.130(2) of the Regulations of Nevada Gaming
Commission and State Gaming Control Board.
Section 5.20. Tradenames, Trademarks and
Servicemarks. Borrower and Existing Guarantors shall not
assign or in any other manner alienate their interest in any
tradenames, trademarks or servicemarks relating or pertaining
to the Collateral Properties or the Nevada Operations during
the term of the Bank Facility.
Section 5.21. Notice of Hazardous Materials.
Within ten (10) days after an executive officer of Borrower or
any Existing Guarantor obtaining actual knowledge thereof,
Borrower and Existing Guarantors shall immediately advise
Agent Bank in writing of (i) any and all enforcement, clean-
up, removal or other governmental or regulatory actions
instituted, completed or threatened pursuant to any applicable
federal, state or local laws, ordinances or regulations
relating to any Hazardous Materials (as defined in the
Environmental Certificate) affecting the Collateral Properties
("Hazardous Materials Laws"); (ii) all claims made or
threatened by any third party against Borrower or any Existing
Guarantor or the Collateral Properties relating to damage,
contribution, cost recovery compensation, loss or injury
resulting from any Hazardous Materials (the matters set forth
in clauses (i) and (ii) above are hereinafter referred to as
"Hazardous Materials Claims"); and (iii) the discovery of any
occurrence or condition on any real property adjoining or in
the vicinity of the Collateral Properties that could cause the
Borrower or any Existing Guarantor or any part thereof to be
classified as a "border-zone property" under the provisions
of, or to be otherwise subject to any restrictions on the
ownership, occupancy, transferability or use of the Collateral
Properties under, any Hazardous Materials Laws.
Section 5.22. Waste Water Service Agreement.
Nevada Landing shall not amend, modify or terminate the Nevada
Landing Waste Water Service Agreement without the prior
written approval of Agent Bank, which approval shall not be
unreasonably withheld so long as such amendment, modification
or termination does not have a material adverse effect on the
Nevada Landing Hotel/Casino Operation. Jean Development shall
not amend, modify or terminate the Jean Development Waste
Water Service Agreement without the prior written approval of
Agent Bank, which approval shall not be unreasonably withheld
so long as such amendment, modification or termination does
not have a material adverse effect on the Jean Hotel/Casino
Operation.
Section 5.23. Consent to Releases, Terminations and
Reconveyances. Borrower, Existing Guarantors and Circus agree
and do hereby evidence their respective consent to and do
hereby waive any and all defenses which might or could arise
or be asserted by them, or any of them, by reason of or
relating to: (i) the release of Lakeview and Pioneer from all
liabilities and obligations under the Existing Guaranty and
Environmental Certificate as of the Merger Date, (ii) the
release and termination of all security interests in the
Lakeview Collateral, as defined in the Existing Credit
Agreement, evidenced by the Lakeview Security Documents, as
defined in the Existing Credit Agreement, as of the Merger
Date, and (iii) each and every release, termination,
reconveyance and other items, documents and actions to be
taken by Agent Bank in connection with the occurrence of the
Merger Date as set forth on the Schedule of Releases,
Terminations and Reconveyances.
ARTICLE VI
NEGATIVE COVENANTS
Section 6.01. Incorporation of Negative Covenants.
Until payment in full of all sums owing hereunder and under
the Bank Note and the obligation to advance Borrowings
hereunder has terminated, Circus shall not and shall not
permit any of its Restricted Subsidiaries (as defined in the
Circus Reducing Revolving Loan Agreement) to, unless first
approved by Lenders in accordance with the voting percentages
as required in the Agency Agreement, to pay, make, permit or
do any of the acts set forth in Article VI of the Circus
Reducing Revolving Loan Agreement entitled "Negative
Covenants" (herein collectively referred to as the "Negative
Covenants") a copy of which as in existence on the Merger Date
is marked "Exhibit L", affixed hereto and by this reference
incorporated herein and made a part hereof, together with
incorporation by this reference of such additional defined
terms and other provisions of the Circus Reducing Revolving
Loan Agreement as may be necessary for definitive meaning and
interpretation of such Negative Covenants.
ARTICLE VII
EVENTS OF DEFAULT
Section 7.01. Events of Default. Any of the
following events and the passage of any applicable notice and
cure periods shall constitute an Event of Default hereunder:
(i) Any representation or warranty made by
Borrower or any Guarantor pursuant to or in connection with
this Credit Agreement, the Bank Note, the Existing Guaranty,
the Circus Guaranty, the Environmental Certificate, or any
other Bank Facility Loan Document or in any report,
certificate, financial statement or other writing furnished by
Borrower or any Guarantor in connection herewith, shall prove
to be false, incorrect or misleading in any materially adverse
aspect as of the date when made or as certified in any Notice
of Borrowing.
(ii) Borrower shall have defaulted in the
payment of any principal or interest on the Bank Note when
due, and such default continues for a period of more than five
(5) days;
(iii) Borrower shall have defaulted under the
terms of any other obligation owing Agent Bank and/or Lenders,
or any of them, including, without limitation, any default of
Borrower under any Interest Rate Hedge, which default
continues beyond any applicable grace period therein
contained;
(iv) Borrower shall have defaulted in the
payment of any late charge, fees, expenses, indemnities or any
other amount owing under any Bank Facility Loan Document for
a period of five (5) days after notice thereof to Borrower
from Agent Bank;
(v) Circus shall fail to comply with the
provisions of any Reporting Requirement or Negative Covenant
beyond any applicable grace or cure period; Borrower or any
Guarantor shall fail duly and punctually to perform or comply
with any other term, covenant, condition or promise contained
in this Credit Agreement, the Bank Note, the Existing
Guaranty, the Circus Guaranty, the Deeds of Trust or any other
Bank Facility Loan Document and in each such case, such
failure shall continue for the lesser of thirty (30) days
after Borrower or any Guarantor first become aware of the
existence of such failure or ten (10) days after written
notice thereof is delivered to Borrower and Guarantors by
Agent Bank or any Lender of such failure;
(vi) Borrower or any Guarantor shall commence
a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to it or its debts
under the Bankruptcy Code or any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the
appointment of a trustee, receiver, liquidator, custodian or
other similar official, for any substantial part of its
property, or shall consent to any such relief or to the
appointment or taking possession by any such official in any
involuntary case or other proceeding against it;
(vii) An involuntary case or other proceeding
shall be commenced against Borrower or any Guarantor seeking
liquidation, reorganization or other relief with respect to
itself or its debts under the Bankruptcy Code or any
bankruptcy, insolvency or other similar law now or hereafter
in effect or seeking the appointment of a trustee, receiver,
liquidator, custodian or other similar official, for any
substantial part of its property, and such involuntary case or
other proceeding shall remain undismissed and unstayed for a
period of one hundred twenty (120) days;
(viii) Borrower or any Guarantor makes an
assignment for the benefit of its creditors, or admits in
writing its inability to pay its debts generally as they
become due;
(ix) Borrower or any Guarantor shall fail to
pay when due in accordance with its terms and provisions any
other Indebtedness of Borrower or such Guarantor in excess of
Ten Million Dollars ($10,000,000.00) or which failure
materially impairs the security interests of Lenders and
continues beyond the period of grace, if any, therefor;
(x) The occurrence of any Event of Default
under the Circus Reducing Revolving Loan Agreement or of an
event of default or an event which with the lapse of time or
notice or both would become an event of default under or in
respect of any agreement covering Indebtedness in excess of
Ten Million Dollars ($10,000,000.00) by which Borrower or any
Guarantor are bound or which causes or permits acceleration of
any Indebtedness of Borrower or any Guarantor in excess of Ten
Million Dollars ($10,000,000.00);
(xi) Default, revocation, termination or
repudiation of any of Circus's promises, obligations or
covenants under the Circus Guaranty;
(xii) Any Existing Guarantor shall be
voluntarily or involuntarily divested of title or possession
of its respective Collateral Property or shall lease or in any
other manner, voluntarily or involuntarily alienate any of its
interest in its respective Collateral Property or Nevada
Operations, other than the Permitted Encumbrances;
(xiii) Default, revocation, termination or
repudiation of any of Existing Guarantors' promises,
obligations or covenants under the Existing Guaranty;
(xiv) (a) The loss or suspension, other than
on account of forces majeure, of any Existing Guarantors'
nonrestricted Gaming Permits or (b) the failure of any
Existing Guarantors to maintain gaming activities in the
Collateral Properties other than on account of forces majeure
at least to the same general extent as is presently conducted
thereon, which failure to maintain such gaming activities
continues for a period in excess of thirty (30) consecutive
days; or
(xv) Any order, judgment or decree shall be
entered against Borrower or any Guarantor decreeing its
involuntary dissolution or split up and such order shall
remain undischarged and unstayed for a period in excess of
thirty (30) days, or Borrower or any Guarantor shall otherwise
dissolve or cease to exist.
Section 7.02. Default Remedies. Upon the
occurrence of any Event of Default, Lenders may, at their
option, declare the unpaid balance of the Bank Note, together
with the interest thereon, to be fully due and payable, and
may, at their option, exercise any or all of the following
remedies:
(i) The Lenders may terminate their
obligation to make any advances for Borrowings and may declare
all outstanding unpaid Indebtedness hereunder and under the
Bank Note and other Bank Facility Loan Documents together with
all accrued interest thereon immediately due and payable
without presentation, demand, protest or notice of any kind.
This remedy will be deemed to have been automatically
exercised on the occurrence of any event set out in
Sections 7.01(vi), (vii) or (viii).
(ii) Any and all remedies available to Lenders
under the Bank Facility Loan Documents, including, without
limitation rights of set-off against Borrower and/or
Guarantors.
(iii) Lenders may enter upon and take
possession of any Collateral Properties on which they hold as
security for the Existing Guaranty.
(iv) Lenders may employ watchmen at Borrower's
and Existing Guarantors' expense to protect the Collateral
Properties from depredation or injury.
(v) Any other remedies available to Lenders
at law or in equity, including requesting the appointment of
a receiver to perform any acts required of Borrower and
Existing Guarantors under this Credit Agreement, and Borrower
and Existing Guarantors hereby specifically consent to any
such request by Lenders.
For the purpose of carrying out this section
and exercising these rights, powers and privileges, Borrower
and Existing Guarantors hereby irrevocably constitute and
appoint Agent Bank as their true and lawful attorney-in-fact
to execute, acknowledge and deliver any instruments and do and
perform any acts such as are referred to in this paragraph in
the name and on behalf of Borrower. Agent Bank on behalf of
Lenders may exercise one or more of Lenders' remedies
simultaneously and all its remedies are nonexclusive and
cumulative. Lenders shall not be required to pursue or
exhaust any Collateral or remedy before pursuing any other
Collateral or remedy. Lenders' failure to exercise any remedy
for a particular default shall not be deemed a waiver of (a)
such remedy, nor their rights to exercise any other remedy for
that default, nor (b) their right to exercise that remedy for
any subsequent default.
Section 7.03. Application of Proceeds. All
payments and proceeds received and all amounts held or
realized from the sale or other disposition of the Collateral
shall be applied in the following order of priority:
(i) First, to the payment of all fees, costs
and expenses (including reasonable attorney's fees and
expenses) incurred by Agent Bank and its agents or
representatives in connection with the realization upon any of
the Collateral;
(ii) Next, to the payment in full of any other
amounts due under this Credit Agreement, the Deeds of Trust,
any applicable Collateral Document Package or any other Bank
Facility Loan Documents (other than the Bank Note);
(iii) Next, to the balance of interest
remaining unpaid on the Bank Note;
(iv) Next, to the balance of principal
remaining unpaid on the Bank Note;
(v) Next, the balance, if any, of such payments
or proceeds to whomever may be legally entitled thereto.
Section 7.04. Notices. In order to entitle Agent
Bank and/or Lenders to exercise any remedy available
hereunder, it shall not be necessary for Agent Bank and/or
Lenders to give any notice, other than such notice as may be
required expressly herein.
Section 7.05. Agreement to Pay Attorney's Fees,
Costs and Expenses. Upon the occurrence of an Event of
Default, as a result of which Agent Bank and/or Lenders shall
require and employ attorneys or incur other costs and expenses
for the collection of payments due or to become due or the
enforcement or performance or observance of any obligation or
agreement on the part of Borrower and/or Guarantors contained
herein, Borrower and Guarantors shall, on demand, pay to Agent
Bank and Lenders the reasonable fee of such attorneys
(including the allocated costs of services of in-house
counsel) and such other costs and expenses so incurred by
Agent Bank and Lenders.
Section 7.06. No Additional Waiver Implied by One
Waiver. In the event any agreement contained in this Credit
Agreement should be breached by either party and thereafter
waived by the other party, such waiver shall be limited to the
particular breach so waived and shall not be deemed to waive
any other breach hereunder.
Section 7.07. Licensing of Agent Bank and Lenders.
If Borrower and/or Guarantors shall be in default hereunder or
under any of the Bank Facility Loan Documents and it shall
become necessary, or in the opinion of Agent Bank and Lenders
advisable, for an agent, receiver or other representative of
Agent Bank and Lenders to become licensed under the provisions
of the laws of the State of Nevada, or rules and regulations
adopted pursuant thereto, as a condition to receiving the
benefit of any Collateral Property encumbered by the Deeds of
Trust or other Bank Facility Loan Documents for the benefit of
Lenders or otherwise to enforce their rights hereunder,
Borrower and each of the Existing Guarantors do hereby give
their consent to the granting of such license or licenses and
agree to execute such further documents as may be required in
connection with the evidencing of such consent.
Section 7.08. Exercise of Rights Subject to
Applicable Law. All rights, remedies and powers provided by
this Article VII may be exercised only to the extent that the
exercise thereof does not violate any applicable provision of
the laws of any Governmental Authority and all of the
provisions of this Article VII are intended to be subject to
all applicable mandatory provisions of law that may be
controlling and to be limited to the extent necessary so that
they will not render this Credit Agreement invalid,
unenforceable or not entitled to be recorded or filed under
the provisions of any applicable law.
Section 7.09. Discontinuance of Proceedings. In
case Agent Bank and/or Lenders shall have proceeded to enforce
any right, power or remedy under this Credit Agreement, the
Bank Note, the Existing Guaranty, the Circus Guaranty, the
Deeds of Trust or any other Bank Facility Loan Document by
foreclosure, entry or otherwise, and such proceedings shall
have been discontinued or abandoned for any reason or shall
have been determined adversely to Lenders, then and in every
such case Borrower, Guarantors, Agent Bank and Lenders shall
be restored to their former positions and rights hereunder
with respect to the Collateral, and all rights, remedies and
powers of Agent Bank and Lenders shall continue as if such
proceedings had not been taken, subject to any binding rule by
the applicable court or other tribunal in any such proceeding.
ARTICLE VIII
DAMAGE, DESTRUCTION AND CONDEMNATION
Section 8.01. No Abatement of Payments. If all or
any part of the Collateral Properties shall be materially
damaged or destroyed, or if title to or the temporary use of
the whole or any part of any of the Collateral Properties
shall be taken or condemned by a competent authority for any
public use or purpose, there shall be no abatement or
reduction in the amounts payable by Borrower and/or Guarantors
hereunder or under the Bank Note, or under the Guaranties, and
Borrower and Guarantors shall continue to be obligated to make
such payments.
Section 8.02. Distribution of Capital Proceeds Upon
Occurrence of Fire, Casualty, or Condemnation. All monies
received from fire, earthquake, flood and hazard extended
insurance policies covering any of the Collateral Properties
or from condemnation or similar actions in regard to said
Collateral Properties, shall be paid directly to Agent Bank.
In the event an Event of Default shall have occurred hereunder
and is continuing, the amount of such monies shall be applied
by Agent Bank to reduce the Maximum Principal Balance. In the
event the amount paid to Lenders is equal to or less than
Three Million Dollars ($3,000,000.00) such amount shall be
paid directly to Guarantors unless an Event of Default shall
have occurred and then be continuing, for the purpose of
repairing or replacing the property destroyed or condemned or
to reimburse Guarantors for the costs of such repair or
replacement incurred prior to the date of such release. In
the event the amount paid to Lenders is greater than Three
Million Dollars ($3,000,000.00), the entire amount so
collected shall, unless an Event of Default has occurred
hereunder and is then continuing, be released to Guarantors
for repair or replacement of the property destroyed or
condemned or to reimburse Guarantors for the costs of such
repair or replacement incurred prior to the date of such
release in accordance with the following terms and conditions:
(a) The repairs, replacements and rebuilding
shall be made in accordance with plans and specifications
approved by Lenders and in accordance with all applicable
laws, ordinances, rules, regulations and requirements of
Governmental Authorities;
(b) Guarantors shall provide Lenders with a
detailed estimate of the costs of such repairs or restora-
tions;
(c) Guarantors satisfy the Lenders that after
the reconstruction is completed, the value of the Collateral
Properties, as determined by the Lenders in their reasonable
discretion, will not be less than the appraised value of the
Collateral Properties as determined by the Lenders pursuant to
this Credit Agreement;
(d) In the Lenders' sole reasonable opinion,
any undisbursed portion of the Bank Facility contemplated
hereunder, after deposit of such proceeds, is sufficient to
pay all costs of reconstruction of the Nevada Operation or
other Collateral Property damaged, destroyed or condemned; or
if the undisbursed portion of such Bank Facility is not
sufficient, Guarantors shall deposit additional funds with the
Agent Bank, sufficient to pay such additional costs of
reconstructing the Collateral Property;
(e) Guarantors have delivered to the Lenders
a construction contract for the work of reconstruction in form
and content acceptable to the Lenders with a contractor
acceptable to the Lenders;
(f) The Lenders in their reasonable
discretion have determined that after the work of
reconstruction is completed, the Nevada Operation damaged,
destroyed or condemned will produce income sufficient to pay
all costs of operations and maintenance of the applicable
Collateral Property with a reasonable reserve for repairs, and
service all debts secured by the applicable Collateral
Property;
(g) No Default or Event of Default has
occurred and is continuing hereunder;
(h) Borrower has deposited with the Agent Bank
that amount reasonably determined by the Lenders (taking into
consideration the amount of Borrowings available and the
amount of proceeds, if any, of insurance policies covering
loss or rental income in connection with the Nevada Operation
damaged, destroyed or condemned accruing and immediately
forthcoming to the Agent Bank) to be sufficient to service the
Indebtedness secured hereby during the period of
reconstruction, as reasonably estimated by the Lenders;
(i) Before commencing any such work,
Guarantors shall, at their own cost and expense, furnish
Lenders with appropriate endorsements, if needed, to the fire
insurance policy which Guarantors are then presently
maintaining, to cover all of the risks during the course of
such work;
(j) Such work shall be commenced by
Guarantors within one hundred twenty (120) days after (i)
settlement shall have been made with the insurance companies,
and (ii) all the necessary governmental approvals shall have
been obtained, and such work shall be completed within a
reasonable time, free and clear of all liens and encumbrances
so as not to interfere with the lien of the Deeds of Trust;
(k) Disbursements of such insurance or
condemnation proceeds shall be made in the customary manner
used by Agent Bank for the disbursement of construction loans;
and
(l) That in the event the insurance or
condemnation proceeds are inadequate to repair or replace the
property destroyed or condemned and Lenders elect to, or are
required to release all or a portion of the funds collected
for such repair or replacement, Guarantors agree to deposit
with Lenders sufficient funds to cover the difference between
the costs of repair or replacement and the funds released by
Lenders to Guarantors for such repair or replacement of the
property destroyed.
ARTICLE IX
GENERAL CONDITIONS
The following conditions shall be applicable
throughout the terms of this Credit Agreement:
Section 9.01. Failure to Exercise Rights. Nothing
herein contained shall impose upon Banks, Borrower or
Guarantors any obligation to enforce any terms, covenants or
conditions contained herein. Failure of Banks, Borrower or
Guarantors, in any one or more instances, to insist upon
strict performance by Banks, Borrower or Guarantors of any
terms, covenants or conditions of this Credit Agreement, or
the other Bank Facility Loan Documents, shall not be
considered or taken as a waiver or relinquishment by Banks,
Borrower or Guarantors of their right to insist upon and to
enforce in the future, by injunction or other appropriate
legal or equitable remedy, strict compliance by Banks,
Borrower or Guarantors with all the terms, covenants and
conditions of this Credit Agreement, and the other Bank
Facility Loan Documents. The consent of Banks, Borrower or
Guarantors to any act or omission by Banks, Borrower or
Guarantors shall not be construed to be a consent to any other
or subsequent act or omission or to waive the requirement for
Banks', Borrower's or Guarantors' consent to be obtained in
any future or other instance.
Section 9.02. Successors and Assigns. All of the
terms, covenants, warranties and conditions contained in this
Credit Agreement shall be binding upon and inure to the sole
and exclusive benefit of, the parties hereto and their
respective successors and assigns.
Section 9.03. Notices. Each Notice of Borrowings
and Continuation/Conversion Notice shall only be effective
upon actual receipt by Agent Bank. Unless otherwise indicated
differently, all notices, payments, requests, reports,
information or demand which any party hereto may desire or may
be required to give to any other party hereunder, shall be in
writing and shall be personally delivered or sent by telegram,
telex, telecopies or first-class certified or registered
United States mail, postage prepaid, return receipt requested,
and sent to the party at its address appearing below or such
other address as any party shall hereafter inform the other
party hereto by written notice given as aforesaid:
If to Borrower: Goldstrike Finance Company
1 Main Street
Jean, Nevada 89019
Attn: David R. Belding
If to Guarantors: c/o Circus Circus
Enterprises, Inc.
2880 Las Vegas Boulevard South
Las Vegas, Nevada 89109
Attn: Chief Financial Officers
If to Lenders: c/o First Interstate Bank
of Nevada, N.A., Agent Bank
Gaming Division
3800 Howard Hughes Parkway
Las Vegas, Nevada 89109
Attn: Brad Peterson, V.P.
With copy to: Timothy J. Henderson
Henderson & Nelson
164-B Hubbard Way
Reno, Nevada 89523
All notices, payments, requests, reports, information or
demands so given shall be deemed effective upon receipt or, if
mailed, upon receipt or the expiration of the fifth (5th) day
following the date of mailing, whichever occurs first, except
that any notice of change of address shall be effective only
upon receipt by the party to whom said notice is addressed.
Section 9.04. Modification In Writing. This Credit
Agreement, together with the Bank Facility Loan Documents, is
the entire agreement between the parties and supersedes all
prior agreements whether written or oral with respect to the
subject matter hereof, including, but not limited to, the
Commitment Letter and any term sheets furnished by Lenders to
Borrower and/or Guarantors. Neither this Credit Agreement,
the Bank Facility Loan Documents nor any provision therein may
be changed, waived, discharged or terminated orally, but only
by an instrument in writing signed by Borrower, Guarantors and
Lenders.
Section 9.05. Incorporation of Terms. Borrower and
Guarantors agree that the Bank Note shall be made subject to
all the terms, covenants, conditions, obligations,
stipulations and agreements contained in this Credit Agreement
to the same extent and effect as if fully set forth in and
made a part of the Bank Note, and Borrower, Guarantors and
Lenders agree that this Credit Agreement is made subject to
all the terms, covenants, conditions, obligations,
stipulations and agreements contained in the Bank Note to the
same extent and effect as if fully set forth herein and made
a part of this Credit Agreement, until this Credit Agreement
is terminated by the repayment to Lenders of all principal,
interest and other sums and expenses due and owing on the Bank
Note. Notwithstanding any of the foregoing, if any provisions
in this Credit Agreement or the Bank Facility Loan Documents
are inconsistent with the Bank Note or the provisions of the
other Bank Facility Loan Documents, this Credit Agreement
shall control. Further, if any provisions of the Commitment
Letter are inconsistent with this Credit Agreement or any
other Bank Facility Loan Documents, this Credit Agreement, or
where applicable, such other Bank Facility Loan Documents,
shall control.
Section 9.06. Other Agreements. If the terms of
any documents, certificates or agreements delivered in
connection with this Credit Agreement, are inconsistent or
conflict with the terms of the Bank Facility Loan Documents,
Borrower and Guarantors shall use their best efforts to amend
such document, certificate or agreement to the satisfaction of
the Lenders to remove such inconsistency.
Section 9.07. Counterparts. This Credit Agreement
may be executed by the parties hereto in any number of
separate counterparts with the same effect as if the
signatures hereto and hereby were upon the same instrument.
All such counterparts shall together constitute but one and
the same documents.
Section 9.08. Rights, Power and Remedies are
Cumulative. None of the rights, powers and remedies conferred
upon or reserved to Banks, Borrower or Guarantors in this
Credit Agreement are intended to be exclusive of any other
available right, power or remedy, but each and every such
right, power and remedy shall be cumulative and not
alternative, and shall be in addition to every right, power
and remedy herein specifically given or now or hereafter
existing at law, in equity or by statute. Any forbearance,
delay or omission by Banks, Borrower or Guarantors in the
exercise of any right, power or remedy shall not impair any
such right, power or remedy or be considered or taken as a
waiver or relinquishment of the right to insist upon and to
enforce in the future, by injunction or other appropriate
legal or equitable remedy, any of said rights, power and
remedies given to Banks, Borrower or Guarantors herein. The
exercise of any right or partial exercise thereof by Banks,
Borrower or Guarantors shall not preclude the further exercise
thereof, and the same shall continue in full force and effect
until specifically waived by an instrument in writing executed
by Banks, Borrower and/or Guarantors, as the case may be.
Section 9.09. Continuing Representations. All
agreements, representations and warranties made herein shall
survive the execution and delivery of this Credit Agreement,
the making of the Bank Facility hereunder and the execution
and delivery of the Bank Note.
Section 9.10. Assignment of Bank Facility Loan
Documents by Borrower and Guarantors. Borrower and Guarantors
may not assign any of their right, title or interest in this
Credit Agreement, Bank Facility Loan Documents and the Bank
Facility, nor may Borrower and Guarantors delegate any of
their obligations and duties under the Bank Facility Loan
Documents and the Bank Facility. Any attempted assignment or
delegation in contravention of the foregoing shall be null and
void.
Section 9.11. Action by Lenders. Whenever Lenders
shall have the right to make an election, or to exercise any
right, or their consent shall be required for any action under
this Credit Agreement or the Bank Facility Loan Documents,
then such election, exercise or consent shall be given or made
for all Lenders by Agent Bank. Notices, reports and other
documents required to be given by Borrower and/or Guarantors
to Lenders hereunder may be given by Borrower and/or
Guarantors to Agent Bank on behalf of Lenders and the delivery
to Agent Bank on behalf of Lenders shall constitute delivery
to Lenders. In the event any payment or payments are received
by a Lender other than Agent Bank, Borrower and Guarantors
consent to such payments being shared and distributed as
provided in the Agency Agreement.
Section 9.12. Time of Essence. Time shall be of
the essence of this Credit Agreement and each of the Bank
Facility Loan Documents.
Section 9.13. Choice of Law and Forum. This Credit
Agreement and each of the Bank Facility Loan Documents shall
be governed by and construed in accordance with the law of the
State of Nevada. Borrower and Guarantors further agree that,
subject to the Arbitration provisions set forth below in
Section 9.14, the full and exclusive forum for the
determination of any action relating to this Credit Agreement,
the Bank Facility Loan Documents, or any other document or
instruments delivered in favor of Lenders pursuant to the
terms hereof shall be either an appropriate Court of the State
of Nevada or the United States District Court or United States
Bankruptcy Court for the District of Nevada.
Section 9.14. Arbitration.
A. Upon the request of any party, whether
made before or after the institution of any legal proceeding,
any action, dispute, claim or controversy of any kind (e.g.,
whether in contract or in tort, statutory or common law, legal
or equitable) ("Dispute") now existing or hereafter arising
between the parties in any way arising out of, pertaining to
or in connection with the Credit Agreement, Bank Facility Loan
Documents or any related agreements, documents, or instruments
(collectively the "Documents"), may, by summary proceedings
(e.g., a plea in abatement or motion to stay further
proceedings), bring an action in court to compel arbitration
of any Dispute.
B. All Disputes between the parties shall be
resolved by binding arbitration governed by the Nevada Uniform
Arbitration Act, Nevada Revised Statutes Chapter 38 or, if not
then in effect, by the Commercial Arbitration Rules of the
American Arbitration Association. Judgment upon the award
rendered by the arbitrators may be entered in any court having
jurisdiction.
C. No provision of, nor the exercise of any
rights under this arbitration clause shall limit the rights of
any party, and the parties shall have the right during any
Dispute, to seek, use and employ ancillary or preliminary
remedies, judicial or otherwise, for the purposes of realizing
upon, preserving, protecting or foreclosing upon any property,
real or personal, which is involved in a Dispute, or which is
subject to, or described in, the Documents, including, without
limitation, rights and remedies relating to: (i) foreclosing
against any real or personal property collateral or other
security by the exercise of a power of sale under the Security
Documents or other security agreement or instrument, or
applicable law, (ii) exercising self-help remedies (including
setoff rights) or (iii) obtaining provisional or ancillary
remedies such as injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver from a court
having jurisdiction before, during or after the pendency of
any arbitration. The institution and maintenance of an action
for judicial relief or pursuit of provisional or ancillary
remedies or exercise of self-help remedies shall not
constitute a waiver of the right of any party, including the
plaintiff, to submit the Dispute to arbitration nor render
inapplicable the compulsory arbitration provision hereof.
Section 9.15. Waiver of Jury Trial. TO THE MAXIMUM
EXTENT PERMITTED BY LAW, BORROWER, GUARANTORS AND EACH OF THE
BANKS EACH MUTUALLY HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL
BY JURY OF ANY ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR
PROCEEDING ARISING UNDER OR WITH RESPECT TO THIS CREDIT
AGREEMENT, THE BANK NOTE OR ANY OF THE BANK FACILITY LOAN
DOCUMENTS, OR IN ANY WAY CONNECTED WITH, RELATED TO, OR
INCIDENTAL TO THE DEALINGS OF BORROWER, GUARANTORS AND BANKS
WITH RESPECT TO THIS CREDIT AGREEMENT, THE BANK NOTE OR ANY OF
THE BANK FACILITY LOAN DOCUMENTS, OR THE TRANSACTIONS RELATED
HERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER
ARISING, AND IRRESPECTIVE OF WHETHER SOUNDING IN CONTRACT,
TORT, OR OTHERWISE. TO THE MAXIMUM EXTENT PERMITTED BY LAW,
BORROWER, GUARANTORS AND EACH OF THE BANKS EACH MUTUALLY AGREE
THAT ANY SUCH ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR
PROCEEDINGS SHALL BE DECIDED BY A BENCH TRIAL WITHOUT A JURY
AND THAT THE DEFENDING PARTY MAY FILE AN ORIGINAL COUNTERPART
OF THIS SECTION WITH ANY COURT OR OTHER TRIBUNAL AS WRITTEN
EVIDENCE OF THE CONSENT OF THE COMPLAINING PARTY TO THE WAIVER
OF ITS RIGHT TO TRIAL BY JURY.
Section 9.16. Scope of Approval and Review. Any
inspection of the Collateral Properties or Hotel/Casino
Operations or financial information of Borrower or Guarantors
shall be deemed to be made solely for Banks' internal purposes
and shall not be relied upon by the Borrower, Guarantors or
any third party. In no event shall Banks be deemed or
construed to be joint venturers or partners of Borrower and/or
Guarantors.
Section 9.17. Severability of Provisions. In the
event any one or more of the provisions contained in this
Credit Agreement should be invalid, illegal or unenforceable
in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way
be affected or impaired thereby.
Section 9.18. Cumulative Nature of Covenants. All
covenants contained herein are cumulative and not exclusive of
each other covenant. Any action allowed by any covenant shall
be allowed only if such action is not prohibited by any other
covenant.
Section 9.19. Costs to Prevailing Party. If any
action or proceeding is brought by any party against any other
party under this Credit Agreement or any of the other Bank
Facility Loan Documents, the prevailing party shall be
entitled to recover such costs and attorneys fees as the court
in such action or proceeding may adjudge reasonable.
Section 9.20. Bank Facility Loan Documents. All of
the Bank Facility Loan Documents (other than the Credit
Agreement) shall be held in the name of FINV as the Agent Bank
of all Lenders hereunder pursuant to the terms of the Agency
Agreement.
Section 9.21. No Actual Knowledge of Default. By
execution of this Credit Agreement, each of the Banks hereby
respectively certify and affirm to Circus that as of the
Merger Date to their actual respective knowledge no Default or
Event of Default has occurred or remains continuing under the
Bank Facility Loan Documents.
Section 9.22. Execution and Delivery of Releases,
Terminations and Reconveyances. By execution of this Credit
Agreement, each of the Banks agree and hereby evidence their
respective consent to the execution and delivery by Agent Bank
to or for the benefit of each applicable Person of each of the
documents, instruments, releases, terminations and
reconveyances set forth on the Schedule of Releases,
Terminations and Reconveyances, Exhibit H hereto.
Section 9.23. Amendment and Restatement. This
Credit Agreement fully amends, supersedes and restates the
Existing Credit Agreement as of the Merger Date in its
entirety and all loans and advances outstanding under the Bank
Facility shall be deemed outstanding Borrowings hereunder.
Section 9.24. Exhibits Attached. Exhibits are
attached hereto and incorporated herein and made a part hereof
as follows:
Exhibit A - Schedule of Lenders' Proportions in
Bank Facility
Exhibit B - Bank Note
Exhibit C - First Amendment to Bank Note
Exhibit D - Notice of Borrowing
Exhibit E - Continuation/Conversion Notice
Exhibit F - Circus Guaranty
Exhibit G - Existing Guaranty
Exhibit H - Schedule of Releases, Terminations and
Reconveyances
Exhibit I - JDN Title Report
Exhibit J - Litigation Certificate
Exhibit K - Reporting Requirements
Exhibit L - Negative Covenants
IN WITNESS WHEREOF, the parties hereto have executed
the foregoing instrument on the day and year first written
above.
BORROWER:
GOLDSTRIKE FINANCE COMPANY,
INC., a Nevada corporation
By MICHAEL S. ENSIGN
Title PRESIDENT
GUARANTORS:
RAILROAD PASS INVESTMENT
GROUP, a Nevada general
partnership
By: LAST CHANCE INVESTMENTS,
INC., a Nevada corporation,
General Partner
By WILLIAM R. RICHARDSON
Title PRESIDENT
And: M.S.E. INVESTMENTS, INC.,
a Nevada corporation,
General Partner
By MICHAEL S. ENSIGN
Title PRESIDENT
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada corporation,
General Partner
By DAVID R. BELDING
Title PRESIDENT
JEAN DEVELOPMENT COMPANY,
a Nevada general partnership
By: LAST CHANCE INVESTMENTS,
INC., a Nevada corporation
General Partner
By WILLIAM R. RICHARDSON
Title PRESIDENT
And: M.S.E. INVESTMENTS, INC.,
a Nevada corporation,
General Partner
By MICHAEL S. ENSIGN
Title PRESIDENT
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada corporation,
General Partner
By DAVID R. BELDING
Title PRESIDENT
JEAN DEVELOPMENT WEST,
a Nevada general partnership
By: LAST CHANCE INVESTMENTS, INC., a
Nevada corporation, General Partner
By WILLIAM R. RICHARDSON
Title PRESIDENT
And: M.S.E. INVESTMENTS,
INC., a Nevada corporation,
General Partner
By MICHAEL S. ENSIGN
Title PRESIDENT
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada corporation,
General Partner
By DAVID R. BELDING
Title PRESIDENT
And: DIAMOND GOLD, INC.,
a Nevada corporation,
General Partner
By PETER A. SIMON
Title PRESIDENT
JEAN DEVELOPMENT NORTH,
a Nevada general partnership
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By WILLIAM R. RICHARDSON
Title PRESIDENT
And: M.S.E. INVESTMENTS,
INC., a Nevada corporation,
General Partner
By MICHAEL S. ENSIGN
Title PRESIDENT
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada corporation,
General Partner
By DAVID R. BELDING
Title PRESIDENT
And: DIAMOND GOLD, INC.,
a Nevada corporation,
General Partner
By PETER A. SIMON
Title PRESIDENT
LAKEVIEW GAMING PARTNERSHIPS
JOINT VENTURE, a Nevada
general partnership
By: RAILROAD PASS INVESTMENT
GROUP, dba RAILROAD PASS
CASINO, a Nevada general
partnership, GeneralPartner
By: LAST CHANCE INVESTMENTS, INC., a
Nevada corporation, General Partner
By WILLIAM R. RICHARDSON
Title PRESIDENT
And: M.S.E. INVESTMENTS, INC., a Nevada
corporation, General Partner
By MICHAEL S. ENSIGN
Title PRESIDENT
And: GOLDSTRIKE INVESTMENTS, INC.,
a Nevada corporation, General Partner
By DAVID R. BELDING
Title PRESIDENT
LAKEVIEW GAMING PARTNERSHIPS
JOINT VENTURE, a Nevada
general partnership
And
By: JEAN DEVELOPMENT COMPANY,
dba GOLD STRIKE HOTEL &
GAMBLING HALL, a Nevada
general partnership,
General Partner
By: LAST CHANCE INVESTMENTS, INC., a
Nevada corporation, General Partner
By WILLIAM R. RICHARDSON
Title PRESIDENT
And: M.S.E. INVESTMENTS, INC., a Nevada
corporation, General Partner
By MICHAEL S. ENSIGN
Title PRESIDENT
And: GOLDSTRIKE INVESTMENTS,INC.,
a Nevada corporation, General Partner
By DAVID R. BELDING
Title PRESIDENT
LAKEVIEW GAMING PARTNERSHIPS
JOINT VENTURE, a Nevada
general partnership
And
By: JEAN DEVELOPMENT WEST, dba
NEVADA LANDING, a Nevada
general partnership,
General Partner
By: LAST CHANCE INVESTMENTS, INC., a
Nevada corporation,
General Partner
By WILLIAM R. RICHARDSON
Title PRESIDENT
And: M.S.E. INVESTMENTS, INC.,
a Nevada corporation,
General Partner
By MICHAEL S. ENSIGN
Title PRESIDENT
And: GOLDSTRIKE INVESTMENTS, INC.,
a Nevada corporation,
General Partner
By DAVID R. BELDING
Title PRESIDENT
And: DIAMOND GOLD, INC.,
a Nevada corporation,
General Partner
By PETER A. SIMON
Title PRESIDENT
LAKEVIEW GAMING PARTNERSHIPS
JOINT VENTURE, a Nevada
general partnership
And
By: JEAN DEVELOPMENT NORTH,
a Nevada general partnership,
General Partner
By: LAST CHANCE INVESTMENTS, INC.,
a Nevada corporation,
General Partner
By WILLIAM R. RICHARDSON
Title PRESIDENT
And: M.S.E. INVESTMENTS,
INC., a Nevada corporation,
General Partner
By MICHAEL S. ENSIGN
Title PRESIDENT
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada corporation,
General Partner
By DAVID R. BELDING
Title PRESIDENT
And: DIAMOND GOLD, INC.,
a Nevada corporation,
General Partner
By PETER A. SIMON
Title PRESIDENT
CIRCUS CIRCUS ENTERPRISES, INC.,
a Nevada corporation
By CLYDE T. TURNER
Title PRESIDENT
LENDERS:
FIRST INTERSTATE BANK
OF NEVADA, N.A.
By BRAD PETERSON
Title VICE PRESIDENT
THE LONG-TERM CREDIT BANK
OF JAPAN, LTD., Los Angeles Agency
By MOTOKAZU UEMATSU
Title DEPUTY GENERAL MANAGER
U.S. BANK OF NEVADA
By AMY ROBINSON
Title VICE PRESIDENT
SOCIETE GENERALE
By DONALD L. SCHUBERT
Title VICE PRESIDENT
BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION
By JON VARNELL
Title MANAGING DIRECTOR
NBD BANK
By__________________________
Title_______________________
FIRST SECURITY BANK OF
IDAHO, N.A.
By__________________________
Title_______________________
BANK OF AMERICA NEVADA
By ALAN F. GORDON
Title VICE PRESIDENT
BANK OF HAWAII
By JOSEPH T. DONALSON
Title VICE PRESIDENT
AGENT BANK:
FIRST INTERSTATE BANK OF
NEVADA, N.A.
By__________________________
Title_______________________
EXHIBIT A
SCHEDULE OF LENDERS' PROPORTIONS IN BANK FACILITY
NAME OF LENDER
PROPORTIONATE
ORIGINAL MAXIMUM
PRINCIPAL AMOUNT
OF BANK FACILITY
PERCENTAGE OF
SYNDICATION
INTEREST
First Interstate Bank of
Nevada, N.A.
$ 35,000,000.00
21.875%
The Long-Term Credit Bank of
Japan, Ltd., Los Angeles
Agency
30,000,000.00
18.75%
U.S. Bank of Nevada
20,000,000.00
12.50%
Societe Generale
20,000,000.00
12.50%
Bank of America National
Trust and Savings
Association
16,000,000.00
10.00%
NBD Bank
15,000,000.00
9.375%
First Security Bank of
Idaho, N.A.
10,000,000.00
6.25%
Bank of America Nevada
9,000,000.00
5.625%
Bank of Hawaii
5,000,000.00
3.125%
TOTAL
$160,000,000.00
100%
EXHIBIT B
BANK NOTE
EXHIBIT C
FIRST AMENDMENT TO
REDUCING REVOLVING CREDIT PROMISSORY NOTE
THIS FIRST AMENDMENT TO REDUCING REVOLVING CREDIT
PROMISSORY NOTE ("First Amendment to Bank Note") is made and
entered into as of the ___ day of ____________, 1995, by and
between GOLDSTRIKE FINANCE COMPANY, INC., a Nevada corporation
("Borrower") and FIRST INTERSTATE BANK OF NEVADA, N.A., as the
administrative and collateral agent for each of the Lenders as
described and defined in the Credit Agreement hereinafter
defined ("Agent Bank").
R_E_C_I_T_A_L_S:
WHEREAS:
A. On or about February 11, 1994, Borrower executed a
Reducing Revolving Credit Promissory Note (the "Original Bank
Note") in the principal amount of One Hundred Sixty Million
Dollars ($160,000,000.00), payable to the order of Agent Bank.
B. For the purposes of this First Amendment to Bank
Note, all capitalized words and terms shall have the
respective meanings and be construed as provided in
Paragraph C(1) of the Original Bank Note, as amended hereby.
C. Effective as of the Merger Date, Borrower and Agent
Bank intend to modify the rates of interest to accrue under
the terms of the Bank Note, all as more particularly herein
described.
NOW, THEREFORE, in consideration of the foregoing and
other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, the parties
hereto do agree to amend the Original Bank Note as follows:
1. Paragraph C(1) of the Original Bank Note entitled
"Definitions" shall be and is hereby amended by the following
modifications and additions to the definitions as set forth
hereinbelow, which shall fully supersede and restate each
redefined definition as originally set forth in the Original
Bank Note:
Applicable Alternate Base Rate Margin shall have the
meaning as defined in Section 1.01 of the Credit
Agreement.
Applicable Eurodollar Rate Margin shall have the meaning
as defined in Section 1.01 of the Credit Agreement.
Applicable Margin shall have the meaning as defined in
Section 1.01 of the Existing Credit Agreement.
Bank Note shall mean the Original Bank Note as amended by
this First Amendment to Bank Note.
Existing Credit Agreement shall have the meaning as
defined in Section 1.01 of the Credit Agreement.
Existing LIBO Loans shall have the meaning as defined in
Section 1.01 of the Credit Agreement.
Lenders shall have the meaning as defined in Section 1.01
of the Credit Agreement.
Merger Date shall have the meaning as defined in
Section 1.01 of the Credit Agreement.
Credit Agreement shall mean that certain Amended and
Restated Reducing Revolving Credit Agreement of even date
with the First Amendment to Bank Note executed by and
among Borrower, Guarantors, Agent Bank and Lenders.
First Amendment to Bank Note shall mean this First
Amendment to Reducing Revolving Credit Promissory Note.
LIBO Loan shall mean each portion of the total unpaid
principal hereunder which bears interest at a rate
determined by reference to a LIBO Rate.
LIBO Rate shall mean, with respect to any LIBO Loan for
any Interest Period, the rate per annum determined by
Agent Bank, adjusted for reserve requirements and rounded
upwards, if necessary, to the nearest 1/16 of 1%, to be
the rate at which Dollar deposits in immediately
available funds are offered to Agent Bank two (2) Banking
Business Days prior to the beginning of such Interest
Period by prime banks in the London Interbank Market at
or about 11:00 am., London, England time, for delivery on
the first day of such Interest Period, for the number of
days comprised therein and in a minimum amount and
multiples as set forth in Section C(2) of the Original
Bank Note to which rate shall be added: (i) the
Applicable Margin with respect to the Existing LIBO
Loans, or (ii) the Applicable Eurodollar Rate Margin,
plus one-half of one percent (.50%) with respect to the
LIBO Loans made on and after the Merger Date.
Original Bank Note shall have the meaning set forth in
Recital Paragraph A of the First Amendment to Bank Note.
Prime Rate shall mean the rate of interest per annum
which Agent Bank from time to time identifies and
publicly announces as its prime rate and is not
necessarily, for example, the lowest rate of interest
which Agent Bank collects from any borrower or group of
borrowers, to which rate shall be added: (i) the
Applicable Margin with respect to the Prime Rate Loan for
all periods from the Closing Date until the Merger Date,
or (ii) the Applicable Alternate Base Rate Margin, plus
one-half of one percent (.50%) with respect to the Prime
Rate Loan on and after the Merger Date.
Prime Rate Loan shall mean each portion of the total
unpaid principal hereunder which bears interest at a rate
determined by reference to the Prime Rate.
2. Paragraph A entitled "Interest Rate" shall be and is
hereby amended and restated in its entirety as follows:
A. Interest Rate. Interest shall accrue on the
entire outstanding principal balance at the Prime Rate,
unless Borrower elects pursuant to Subparagraph C(4) to
have interest accrue on a portion or portions of the
outstanding principal balance at a LIBO Rate ("Interest
Rate Option"), in which case interest on such portion or
portions shall accrue at a rate equal to such LIBO Rate.
Interest shall be due and payable on the first day of the
month following the Closing Date, on the first day of
each successive month thereafter, and on the Maturity
Date.
(1) Existing LIBO Loans shall continue to
accrue interest at the rates determined by Agent Bank at
the commencement of each respective LIBO Loan Interest
Period under the Existing Credit Agreement and shall be
paid on the first day of each month and at the end of
each applicable LIBO Loan Interest Period;
(2) Accrued interest on the "Prime Rate Loan",
as defined in the Existing Credit Agreement, remaining
unpaid on the Merger Date shall be paid on the next
occurring regularly scheduled interest payment date;
(3) On and after the Merger Date, the Prime
Rate Loan shall bear interest at the Prime Rate; and
(4) On and after the Merger Date, each LIBO
Loan shall bear interest with reference to the LIBO Rate.
3. Paragraph J entitled "Security" shall be and is
hereby amended and restated in its entirety as follows:
"Security. This Bank Note is secured by the
Security Documents described in the Credit Agreement."
4. All other terms and provisions of the Original Bank
Note shall remain unchanged except as specifically modified
herein.
IN WITNESS WHEREOF, the parties hereto have executed this
First Amendment to Bank Note as of the day and year first
above written.
BORROWER:
GOLDSTRIKE FINANCE COMPANY,
INC., a Nevada corporation
By__________________________
Title_______________________
AGENT BANK:
FIRST INTERSTATE BANK OF
NEVADA, N.A., Agent Bank
By__________________________
Title_______________________
EXHIBIT D
FORM OF
NOTICE OF BORROWING
TO: FIRST INTERSTATE BANK OF NEVADA, N.A. in its capacity as
Agent Bank under that certain Amended and Restated
Reducing Revolving Credit Agreement, dated as of May ___,
1995 (as amended, supplemented or otherwise modified from
time to time, the "Credit Agreement"), by and among
GOLDSTRIKE FINANCE COMPANY, INC., a Nevada corporation
("Borrower"), LAKEVIEW GAMING PARTNERSHIPS JOINT VENTURE,
a Nevada general partnership, RAILROAD PASS INVESTMENT
GROUP, a Nevada general partnership, JEAN DEVELOPMENT
COMPANY, a Nevada general partnership, JEAN DEVELOPMENT
WEST, a Nevada general partnership and JEAN DEVELOPMENT
NORTH, a Nevada general partnership (collectively
"Existing Guarantors"), CIRCUS CIRCUS ENTERPRISES, INC.,
a Nevada corporation ("Circus" and together with the
Existing Guarantors collectively the "Guarantors"), and
FIRST INTERSTATE BANK OF NEVADA, N.A., FIRST INTERSTATE
BANK OF ARIZONA, N.A., THE LONG-TERM CREDIT BANK OF
JAPAN, LTD., Los Angeles Agency, U.S. BANK OF NEVADA,
SOCIETE GENERALE, BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, NBD BANK, FIRST SECURITY BANK OF
IDAHO, N.A., BANK OF AMERICA NEVADA and BANK OF HAWAII
(collectively, together with their respective successors
and assigns, the "Lenders"). Capitalized terms used
herein without definition shall have the meanings
attributed to them in the Credit Agreement.
Ladies and Gentlemen:
Pursuant to Section 2.03 of the Credit Agreement, this
Notice of Borrowing represents Borrower's request to borrow on
___________, 19___ (the "Funding Date") from the Lenders in
proportion to their respective Syndication Interests an
aggregate principal amount of ____________________________
($_____________) in [Prime Rate] [LIBO Rate Loan for which the
initial LIBO Loan Interest Period is requested to be a
_____________ (___) month period]. Proceeds of such Borrowing
are to be disbursed on the Funding Date in immediately
available funds to Borrower's account at Agent Bank's Main
Branch at 3800 Howard Hughes Parkway, Las Vegas, Nevada,
Account No. _________________.
Borrower hereby certifies that (a) the representations
and warranties as set forth in Article IV of the Credit
Agreement and in any other Bank Facility Loan Document (other
than representations and warranties which expressly speak only
as of a different date), shall be true and correct in all
material respects on and as of the Funding Date; (b) no Event
of Default or event with the giving of notice or passage of
time, or both, would become an Event of Default has occurred
and is continuing under the Credit Agreement or any other Bank
Facility Loan Document or will result from the making of the
requested Borrowing; (c) Borrower has and shall have satisfied
all conditions precedent under Article III B of, and performed
in all material respects all agreements contained in, the
Credit Agreement and the other Bank Facility Loan Documents
required to be performed by it on or before the Funding Date
(unless otherwise waived pursuant to the terms of the Credit
Agreement); and (d) Borrower and Guarantors have all Gaming
Permits which are material or required for the conduct of
their gaming businesses, and neither any Nevada Gaming
Authority or other Governmental Authority has suspended,
enjoined or prohibited, for any length of time, the conduct of
games of chance at the Collateral Properties.
This Notice of Borrowing is dated ___________, 19__.
GOLDSTRIKE FINANCE COMPANY,
INC., a Nevada corporation
By__________________________
Title_______________________
EXHIBIT E
CONTINUATION/CONVERSION NOTICE
First Interstate Bank of
Nevada, N.A., Agent Bank
Gaming Division
3800 Howard Hughes Parkway
Las Vegas, Nevada 89109
Attn: Brad Peterson, V.P.
Re: Amended and Restated Reducing Revolving Credit Agreement
dated as of May ____, 1995
Ladies and Gentlemen:
This Continuation/Conversion Notice ("Continuation/
Conversion Notice") is delivered to you pursuant to Section
C(4) of that certain Reducing Revolving Credit Promissory
Note, dated as of February 11, 1994, as amended by First
Amendment to Reducing Revolving Credit Promissory Note dated
May ___, 1995 (together with all amendments, if any, from time
to time made thereto, the "Bank Note"), executed by Goldstrike
Finance Company, Inc., a Nevada corporation (the "Borrower"),
payable to First Interstate Bank of Nevada, N.A., as Agent
Bank for First Interstate Bank of Nevada, N.A., The Long-Term
Credit Bank of Japan, Ltd., Los Angeles Agency, U.S. Bank of
Nevada, Societe Generale, Bank of America National Trust and
Savings Association, First Security Bank of Idaho, N.A., Bank
of America Nevada and Bank of Hawaii (collectively, together
with their respective successors and assigns, the "Lenders").
Unless otherwise defined herein or the context otherwise
requires, terms used herein have the meanings provided in
Section 1.01 of the Amended and Restated Reducing Revolving
Credit Agreement ("Credit Agreement") dated May ___, 1995, by
and among Borrower, as Borrower, Lakeview Gaming Partnerships
Joint Venture, a Nevada general partnership, Railroad Pass
Investment Group, a Nevada general partnership, Jean
Development Company, a Nevada general partnership, Jean
Development West, a Nevada general partnership and Jean
Development North, a Nevada general partnership (collectively
"Existing Guarantors"), as Guarantors, Circus Circus
Enterprises, Inc., a Nevada corporation ("Circus" and together
with the Existing Guarantors, collectively the "Guarantors")
and Lenders.
The Borrower hereby requests that:
1. ($____________) of the presently outstanding
principal amount of the Bank Facility;
2. and presently being maintained as [Prime Rate
Loan] [LIBO Loan having an Interest Period ending on
___________________, 19___];
3. be [Converted into] [continued as];
4. [LIBO Loan having an Interest Period of
__________ months] [Prime Rate Loan] as of ___________,
199__.
The Borrower hereby:
a. certifies and warrants that no Event of Default
has occurred and is continuing and no event exists which
with the lapse of time or notice, or both, would become
and Event of default;
b. certifies that the representations and
warranties contained in Article IV of the Credit
Agreement and in the other Bank Facility Loan Documents
are true and correct in all material respects;
c. certifies that Borrower and Guarantors are in
full compliance with each covenant contained in Article V
of the Credit Agreement and in the other Bank Facility
Loan Documents; and
d. agree that if prior to the time of such
continuation or Conversion any matter certified to herein
by Borrower will not be true and correct at such time as
if then made, they will immediately so notify the Agent
Bank.
Except to the extent, if any, that prior to the time of the
continuation or Conversion requested hereby the Agent Bank
shall receive written notice to the contrary from the
Borrower, each matter certified to herein shall be deemed to
be certified at the date of such continuation or Conversion as
if then made.
The Borrower has caused this Continuation/ Conversion
Notice to be executed and delivered, and the certifications
and warranties contained herein to be made, by its Authorized
Officer this ___ day of ______________, 19__.
GOLDSTRIKE FINANCE COMPANY,
INC., a Nevada corporation
By__________________________
Title_______________________
EXHIBIT F
GENERAL CONTINUING GUARANTY
THIS GENERAL CONTINUING GUARANTY ("Guaranty"), dated as
of _______________, 1995, is executed and delivered by CIRCUS
CIRCUS ENTERPRISES, INC., a Nevada corporation (hereinafter
referred to as "Guarantor"), in favor of the Beneficiary
referred to below, and in light of the following:
R_E_C_I_T_A_L_S:
WHEREAS:
A. Reference is made to that certain Amended and
Restated Reducing Revolving Credit Agreement (as it may
hereafter be modified, amended, renewed, restated or extended
the "Credit Agreement"), executed concurrently herewith by and
among Goldstrike Finance Company, Inc., a Nevada corporation,
as Borrower (hereinafter referred to as "Borrower"), Lakeview
Gaming Partnerships Joint Venture, a Nevada general
partnership, Railroad Pass Investment Group, a Nevada general
partnership, Jean Development Company, a Nevada general
partnership, Jean Development West, a Nevada general
partnership and Jean Development North, a Nevada general
partnership ("Existing Guarantors") as the Existing
Guarantors, and First Interstate Bank of Nevada, N.A., The
Long-Term Credit Bank of Japan, Ltd., Los Angeles Agency, U.S.
Bank of Nevada, Societe Generale, Bank of America National
Trust and Savings Association, NBD Bank, First Security Bank
of Idaho, N.A., Bank of America Nevada and Bank of Hawaii,
collectively defined herein and therein as "Lenders", and
First Interstate Bank of Nevada, N.A. as the administrative
and collateral agent for the Lenders, therein and herein, in
such capacity called "Agent Bank".
B. For the purpose of this Guaranty, all capitalized
terms not otherwise specifically defined herein shall have the
same meaning given them in Section 1.01 of the Credit
Agreement as though fully restated verbatim.
C. In order to induce Lenders to consent to the Merger,
execute the Credit Agreement and concurrently therewith
release various pledges and security interests as more
particularly described in the Credit Agreement and in
consideration of the loans, advances and other financial
accommodations extended and to be extended to Borrower,
Guarantor has agreed to guaranty the Guarantied Obligations,
provided that notwithstanding any other provision hereof to
the contrary, the principal amount so guarantied shall not
exceed One Hundred Fifty-Five Million Dollars
($155,000,000.00) plus interest, premium, fees, costs and
other amounts due with respect thereto under the Bank Facility
Loan Documents.
NOW, THEREFORE, in consideration of the foregoing,
Guarantor hereby agrees, in favor of Beneficiary, as follows:
1. Definitions and Construction.
(a) Definitions. The following terms, as used in
this Guaranty, shall have the following meanings:
"Agent Bank" shall mean First Interstate Bank of
Nevada, N.A. as the administrative and collateral agent for
each of the Lenders under the Credit Agreement.
"Bank Note" shall mean the Reducing Revolving Credit
Promissory Note dated February 11, 1994, in the original
principal sum of One Hundred Sixty Million Dollars
($160,000,000.00) as amended concurrently herewith by First
Amendment to Reducing Revolving Credit Promissory Note,
executed by Borrower, payable to the order of Agent Bank on
behalf of the Lenders evidencing the Bank Facility.
"Beneficiary" shall mean Agent Bank on behalf of
itself and each of the Lenders.
"Borrower" shall mean Goldstrike Finance Company,
Inc., a Nevada corporation.
"Credit Agreement" shall have the meaning set forth
by Recital A of this Guaranty.
"Existing Guarantors" shall have the meaning set
forth by Recital A of this Guaranty.
"Guarantied Obligations" shall mean: (a) the due
and punctual payment of the principal of, and interest
(including post petition interest and including any and all
interest which, but for the application of the provisions of
the Bankruptcy Code, would have accrued on such amounts) on,
and premium, if any, on the Bank Note; (b) the due and
punctual payment of all present or future Indebtedness owing
by Borrower and/or Existing Guarantors, or any of them; and
(c) the due and punctual payment and performance of each and
every duty, liability and obligation of Borrower and Existing
Guarantors under the Credit Agreement.
"Guarantor" shall mean Circus Circus Enterprises,
Inc., a Nevada corporation.
"Guaranty" shall have the meaning set forth in the
preamble to this document.
"Indebtedness" shall mean any and all obligations,
indebtedness, or liabilities of any kind or character owed to
Beneficiary on behalf of Lenders and arising directly or
indirectly out of or in connection with the Credit Agreement,
the Bank Note, the Existing Guaranty, the Environmental
Certificate, any Interest Rate Hedge, or any of the other Bank
Facility Loan Documents, including all such obligations,
indebtedness, or liabilities, whether for principal, interest
(including post petition interest and including any and all
interest which, but for the application of the provisions of
the Bankruptcy Code, would have accrued on such amounts),
premium, reimbursement obligations, fees, costs, expenses
(including attorneys' fees), or indemnity obligations, whether
heretofore, now, or hereafter made, incurred, or created,
whether voluntarily or involuntarily made, incurred, or
created, whether secured or unsecured (and if secured,
regardless of the nature or extent of the security), whether
absolute or contingent, liquidated or unliquidated, or
determined or indeterminate, whether Borrower is liable
individually or jointly with others, and whether recovery is
or hereafter becomes barred by any statute of limitations or
otherwise becomes unenforceable for any reason whatsoever,
including any act or failure to act by Beneficiary.
"Lenders" shall mean collective reference to First
Interstate Bank of Nevada, N.A., The Long-Term Credit Bank of
Japan, Ltd., Los Angeles Agency, U.S. Bank of Nevada, Societe
Generale, Bank of America National Trust and Savings
Association, NBD Bank, First Security Bank of Idaho, N.A.,
Bank of America Nevada and Bank of Hawaii and to their
respective successors and assigns.
(b) Construction. Unless the context of this
Guaranty clearly requires otherwise, references to the plural
include the singular, references to the singular include the
plural, the part includes the whole, the term "including" is
not limiting, and the term "or" has the inclusive meaning
represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and other similar terms refer
to this Guaranty as a whole and not to any particular
provision of this Guaranty. Any reference in this Guaranty to
any of the following documents includes any and all
alterations, amendments, extensions, modifications, renewals,
or supplements thereto or thereof, as applicable: the Bank
Facility Loan Documents; the Credit Agreement; the Existing
Guaranty; this Guaranty; the Environmental Certificate; and
the Bank Note.
2. Guarantied Obligations. Guarantor hereby
irrevocably and unconditionally guaranties to Beneficiary, as
and for its own debt, until final and indefeasible payment
thereof has been made, (a) the due and punctual payment of the
Guarantied Obligations, in each case when the same shall
become due and payable, whether at maturity, pursuant to a
mandatory payment requirement, by acceleration, or otherwise;
it being the intent of Guarantor that the guaranty set forth
herein shall be a guaranty of payment and not a guaranty of
collection; and (b) the punctual and faithful performance,
keeping, observance, and fulfillment by Borrower and each of
the Existing Guarantors of all of the agreements, conditions,
covenants, and obligations of Borrower and Existing Guarantors
contained in the Credit Agreement, the Bank Note, the Existing
Guaranty, the Environmental Certificate, any Interest Rate
Hedge and under each of the other Bank Facility Loan
Documents.
3. Continuing Guaranty. This Guaranty includes
Guarantied Obligations arising under successive transactions
continuing, compromising, extending, increasing, modifying,
releasing, or renewing the Guarantied Obligations, changing
the interest rate, payment terms, or other terms and
conditions thereof, or creating new or additional Guarantied
Obligations after prior Guarantied Obligations have been
satisfied in whole or in part. To the maximum extent
permitted by law, Guarantor hereby waives any right to revoke
this Guaranty as to future Indebtedness. If such a revocation
is effective notwithstanding the foregoing waiver, Guarantor
acknowledges and agrees that (a) no such revocation shall be
effective until written notice thereof has been received and
acknowledged by Beneficiary, (b) no such revocation shall
apply to any Guarantied Obligations in existence on such date
(including any subsequent continuation, extension, or renewal
thereof, or change in the interest rate, payment terms, or
other terms and conditions thereof to the extent permitted by
law), (c) no such revocation shall apply to any Guarantied
Obligations made or created after such date to the extent made
or created pursuant to a legally binding commitment of
Beneficiary in existence on the date of such revocation, (d)
no payment by Guarantor, Existing Guarantor, Borrower, or from
any other source, prior to the date of such revocation shall
reduce the maximum obligation of Guarantor hereunder, and (e)
any payment by Borrower, Existing Guarantors or from any
source other than Guarantor subsequent to the date of such
revocation shall first be applied to that portion of the
Guarantied Obligations as to which the revocation is effective
and which is not, therefore, guarantied hereunder.
4. Performance under this Guaranty. In the event that
Borrower or Existing Guarantors fail to make any payment of
any Guarantied Obligations on or before the due date thereof,
or if Borrower or Existing Guarantors shall fail to perform,
keep, observe, or fulfill any other obligations referred to in
clause (b) and/or clause (c) of Section 2 hereof in the manner
provided in the Credit Agreement, the Bank Note, the Existing
Guaranty, or the other Bank Facility Loan Documents, as
applicable, Guarantor immediately shall cause such payment to
be made or each of such obligations to be performed, kept,
observed, or fulfilled.
5. Primary Obligations. This Guaranty is a primary and
original obligation of Guarantor, is not merely the creation
of a surety relationship, and is an absolute, unconditional,
and continuing guaranty of payment and performance which shall
remain in full force and effect without respect to future
changes in conditions, including any change of law or any
invalidity or irregularity with respect to the issuance of the
Bank Note. Guarantor agrees that it is directly, jointly and
severally with Existing Guarantors and any other guarantor of
the Guarantied Obligations, liable to Beneficiary, that the
obligations of Guarantor hereunder is independent of the
obligations of Borrower, Existing Guarantors or any other
guarantor, and that a separate action may be brought against
Guarantor, whether such action is brought against Borrower,
Existing Guarantors or any other guarantor whether Borrower,
Existing Guarantors or any such other guarantor is joined in
such action. Guarantor agrees that its liability hereunder
shall be immediate and shall not be contingent upon the
exercise or enforcement by Beneficiary of whatever remedies it
may have against Borrower, Existing Guarantors or any other
guarantor, or the enforcement of any lien or realization upon
any security Beneficiary may at any time possess. Guarantor
agrees that any release which may be given by Beneficiary to
Borrower, Existing Guarantors or any other guarantor shall not
release Guarantor. Guarantor consents and agrees that
Beneficiary shall be under no obligation to marshal any
property or assets of Borrower, Existing Guarantors or any
other guarantor in favor of Guarantor, or against or in
payment of any or all of the Guarantied Obligations.
6. Waivers.
(a) Guarantor hereby waives: (i) notice of
acceptance hereof; (ii) notice of any Borrowings, advances,
loans or other financial accommodations made or extended under
the Credit Agreement, or the creation or existence of any
Guarantied Obligations; (iii) notice of the amount of the
Guarantied Obligations, subject, however, to Guarantor's right
to make inquiry of Agent Bank to ascertain the amount of the
Guarantied Obligations at any reasonable time; (iv) notice of
any adverse change in the financial condition of Borrower or
Existing Guarantors or of any other fact that might increase
Guarantor's risk hereunder; (v) notice of presentment for
payment, demand, protest, and notice thereof as to the Bank
Note or any other instrument; (vi) notice of any Default or
Event of Default under the Credit Agreement; and (vii) all
other notices (except if such notice is specifically required
to be given to Guarantor under this Guaranty or any other Bank
Facility Loan Document to which Guarantor is a party) and
demands to which Guarantor might otherwise be entitled.
(b) To the fullest extent permitted by applicable
law, Guarantor waives the right by statute or otherwise to
require Beneficiary to institute suit against Borrower or
Existing Guarantors or to exhaust any rights and remedies
which Beneficiary has or may have against Borrower or Existing
Guarantors. In this regard, Guarantor agrees that it is bound
to the payment of each and all Guarantied Obligations, whether
now existing or hereafter accruing, as fully as if such
Guarantied Obligations were directly owing to Beneficiary by
Guarantor. Guarantor further waives any defense arising by
reason of any disability or other defense (other than the
defense that the Guarantied Obligations shall have been fully
and finally performed and indefeasibly paid) of Borrower or
Existing Guarantors or by reason of the cessation from any
cause whatsoever of the liability of Borrower or Existing
Guarantors in respect thereof.
(c) To the maximum extent permitted by law,
Guarantor hereby waives: (i) any rights to assert against
Beneficiary any defense (legal or equitable), set-off,
counterclaim, or claim which Guarantor may now or at any time
hereafter have against Borrower or Existing Guarantors or any
other party liable to Beneficiary; (ii) any defense, set-off,
counterclaim, or claim, of any kind or nature, arising
directly or indirectly from the present or future lack of
perfection, sufficiency, validity, or enforceability of the
Guarantied Obligations or any security therefor; (iii) any
defense arising by reason of any claim or defense based upon
an election of remedies by Beneficiary; (iv) the benefit of
any statute of limitations affecting Guarantor's liability
hereunder or the enforcement thereof, and any act which shall
defer or delay the operation of any statute of limitations
applicable to the Guarantied Obligations shall similarly
operate to defer or delay the operation of such statute of
limitations applicable to Guarantor's liability hereunder; and
(v) any defense or benefit that may be derived from or
afforded by law which limits the liability of or exonerates
guaranties or sureties including, without limitation, the
benefits of Nevada Revised Statutes section 40.430 - 40.459, 40.475
and 40.485 as permitted by Nevada Revised Statutes section 40.495
(1989).
(d) Guarantor agrees that Beneficiary, in its sole
discretion and without affecting the liability of Guarantor
under this Guaranty, may foreclose (pursuant to the terms of
the Credit Agreement or otherwise) the Security Documents and
the interests in real property secured thereby by non-judicial
sale. Guarantor hereby authorizes and empowers Beneficiary to
exercise, in its sole discretion, any rights and remedies, or
any combination thereof, which may then be available, since it
is the intent and purpose of Guarantor that the obligations
hereunder shall be absolute, independent and unconditional
under any and all circumstances. Notwithstanding any
foreclosure of the lien of any Security Document with respect
to any or all of any real or personal property secured
thereby, whether by the exercise of the power of sale
contained therein, by an action for judicial foreclosure or by
an acceptance of a deed in lieu of foreclosure, Guarantor
shall remain bound under this Guaranty including its
obligation to pay any deficiency following a non-judicial
foreclosure.
(e) Guarantor also hereby waives any claim, right
or remedy which Guarantor may now have or hereafter acquire
against the Borrower or Existing Guarantors that arises
hereunder and/or from the performance by Guarantor hereunder
including, without limitation, any claim, remedy or right of
subrogation, reimbursement, exoneration, contribution,
indemnification, or participation in any claim, right or
remedy of Beneficiary against the Borrower or any security
which Beneficiary now has or hereafter acquires, whether or
not such claim, right or remedy arises in equity, under
contract, by statute, under common law or otherwise.
7. Releases. Guarantor consents and agrees that,
without notice to or by Guarantor and without affecting or
impairing the obligations of Guarantor hereunder, Beneficiary
may, by action or inaction, compromise or settle, extend the
period of duration or the time for the payment, or discharge
the performance of, or may refuse to, or otherwise not
enforce, or may, by action or inaction, release all or any one
or more parties to, any one or more of the Credit Agreement,
the Bank Note, the Existing Guaranty, or any of the other Bank
Facility Loan Documents or may grant other indulgences to
Borrower or Existing Guarantors in respect thereof, or may
amend or modify in any manner and at any time (or from time to
time) any one or more of the Credit Agreement, the Bank Note,
the Existing Guaranty or any of the other Bank Facility Loan
Documents, or may, by action or inaction, release or
substitute any other guarantor, if any, of the Guarantied
Obligations, or may enforce, exchange, release, or waive, by
action or inaction, any security for the Guarantied
Obligations (including the Collateral) or any other guaranty
of the Guarantied Obligations, or any portion thereof.
8. No Election. Beneficiary shall have the right to
seek recourse against Guarantor to the fullest extent provided
for herein and no election by Beneficiary to proceed in one
form of action or proceeding, or against any party, or on any
obligation, shall constitute a waiver of Beneficiary's right
to proceed in any other form of action or proceeding or
against other parties unless Beneficiary has expressly waived
such right in writing. Specifically, but without limiting the
generality of the foregoing, no action or proceeding by
Beneficiary under any document or instrument evidencing the
Guarantied Obligations shall serve to diminish the liability
of Guarantor under this Guaranty except to the extent that
Beneficiary finally and unconditionally shall have realized
indefeasible payment by such action or proceeding.
9. Indefeasible Payment. The Guarantied Obligations
shall not be considered indefeasibly paid for purposes of this
Guaranty unless and until all payments to Beneficiary are no
longer subject to any right on the part of any person
whomsoever, including Borrower or Existing Guarantors, the
Borrower or Existing Guarantors as a debtor in possession, or
any trustee (whether appointed under the Bankruptcy Code or
otherwise) of Borrower's or Existing Guarantors' assets to
invalidate or set aside such payments or to seek to recoup the
amount of such payments or any portion thereof, or to declare
same to be fraudulent or preferential. In the event that, for
any reason, all or any portion of such payments to Beneficiary
are set aside or restored, whether voluntarily or
involuntarily, after the making thereof, the obligation or
part thereof intended to be satisfied thereby shall be revived
and continued in full force and effect as if said payment or
payments had not been made and Guarantor shall be liable for
the full amount Beneficiary is required to repay plus any and
all costs and expenses (including attorneys' fees) paid by
Beneficiary in connection therewith.
10. Financial Condition of Borrower. Guarantor
represents and warrants to Beneficiary that it is currently
informed of the financial condition of Borrower and the
Existing Guarantors and of all other circumstances which a
diligent inquiry would reveal and which bear upon the risk of
nonpayment of the Guarantied Obligations. Guarantor further
represents and warrants to Beneficiary that it has read and
understands the terms and conditions of the Credit Agreement,
the Bank Note, the Existing Guaranty, and the other Bank
Facility Loan Documents. Guarantor hereby covenants that it
will continue to keep itself informed of Borrower's and each
Existing Guarantor's financial condition, the financial
condition of other guarantors, if any, and of all other
circumstances which bear upon the risk of nonpayment or
nonperformance of the Guarantied Obligations.
11. Subordination. Any indebtedness of Borrower or any
Existing Guarantor now or hereafter held by Guarantor is
hereby subordinated to the indebtedness of Borrower to
Beneficiary; and from and after the occurrence of a Default or
an Event of Default under the Credit Agreement and for so long
as such a Default or Event of Default shall continue such
indebtedness of Borrower or any Existing Guarantor to
Guarantor shall be collected, enforced and received by
Guarantor as trustee for Borrower or such Existing Guarantor,
as applicable, and paid over to Beneficiary on account of the
indebtedness of Borrower or such Existing Guarantor, as
applicable, to Beneficiary but without reducing or affecting
in any manner the liability of Guarantor under the other
provisions of this Guaranty.
12. Payments; Application. All payments to be made
hereunder by Guarantor shall be made in lawful money of the
United States of America at the time of payment, shall be made
in immediately available funds, and shall be made without
deduction (whether for taxes or otherwise), counterclaim or
offset. All payments made by Guarantor hereunder shall be
applied as follows: first, to all reasonable costs and
expenses (including attorneys' fees) incurred by Beneficiary
in enforcing this Guaranty or in collecting the Guarantied
Obligations; second, to all accrued and unpaid interest,
premium, if any, and fees owing to Beneficiary constituting
Guarantied Obligations; and third, to the balance of the
Guarantied Obligations.
13. Expenses. Guarantor agrees to pay Beneficiary's
reasonable out-of-pocket costs and expenses, including, but
not limited to, legal fees and disbursements, incurred in any
effort (which shall include those incurred in investigations
of and advising on matters relating to the Beneficiary's
rights and remedies) to collect or enforce any of sums owing
under this Guaranty whether or not any lawsuit is filed.
Until paid to the Beneficiary such sums will bear interest at
the Default Rate set forth in the Credit Agreement.
14. Costs to Prevailing Party. If any action or
proceeding is brought by any party against any other party
under this Guaranty, the prevailing party shall be entitled to
recover such costs and attorney's fees as the court in such
action or proceeding may adjudge reasonable.
15. 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, sent by telefacsimile, telexed, or sent by
courier service or United States mail and shall be deemed to
have been given when delivered in person or by courier
service, upon receipt of a telefacsimile or telex or five (5)
Banking Business Days after deposit in the United States mail
(registered or certified, with postage prepaid and properly
addressed). For the purposes hereof, the addresses of the
parties hereto (until notice of a change thereof is delivered
as provided in this Section 15) shall be as set forth below,
or, as to each party, at such other address as may be
designated by such party in a written notice to all of the
other parties:
If to Guarantor: Circus Circus Enterprises, Inc.
2800 Las Vegas Blvd. South
Las Vegas, NV 89114
Attn: Chief Financial Officer
If to Beneficiary: First Interstate Bank of
Nevada, N.A., Agent Bank
Gaming Division
P.O. Box 98588
Las Vegas, NV 89193-8588
Attn: Brad Peterson, V.P.
With a copy to: Timothy J. Henderson, Esq.
Henderson & Nelson
164 Hubbard Way, Suite B
Reno, NV 89502
16. Cumulative Remedies. No remedy under this Guaranty,
under the Credit Agreement, the Bank Note, the Existing
Guaranty, or any Bank Facility Loan Document is intended to be
exclusive of any other remedy, but each and every remedy shall
be cumulative and in addition to any and every other remedy
given under this Guaranty, under the Credit Agreement, the
Bank Note, the Existing Guaranty, or any other Bank Facility
Loan Document, and those provided by law. No delay or
omission by Beneficiary to exercise any right under this
Guaranty shall impair any such right nor be construed to be a
waiver thereof. No failure on the part of Beneficiary to
exercise, and no delay in exercising, any right under this
Guaranty shall operate as a waiver thereof; nor shall any
single or partial exercise of any right under this Guaranty
preclude any other or further exercise thereof or the exercise
of any other right.
17. Security. This Guaranty is unsecured.
18. Severability of Provisions. Any provision of this
Guaranty which is prohibited or unenforceable under applicable
law, shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof.
19. Entire Agreement; Amendments. This Guaranty,
together with the Credit Agreement, constitutes the entire
agreement between Guarantor and Beneficiary pertaining to the
subject matter contained herein. This Guaranty may not be
altered, amended, or modified, nor may any provisions hereof
be waived or noncompliance therewith consented to, except by
means of a writing executed by Guarantor and Beneficiary. Any
such alteration, amendment, modification, waiver, or consent
shall be effective only to the extent specified therein and
for the specific purpose for which given. No course of
dealing and no delay or waiver of any right or default under
this Guaranty shall be deemed a waiver of any other, similar
or dissimilar, right or default or otherwise prejudice the
rights and remedies hereunder.
20. Successors and Assigns. This Guaranty shall be
binding upon Guarantor and its successors and assigns and
shall inure to the benefit of the successors and assigns of
Beneficiary; provided, however, Guarantor shall not assign
this Guaranty or delegate any of its duties hereunder without
Beneficiary's prior written consent and any unconsented to
assignment shall be absolutely void. In the event of any
assignment or other transfer of rights by Beneficiary, the
rights and benefits herein conferred upon Beneficiary shall
automatically extend to and be vested in such assignee or
other transferee.
21. Choice of Law and Venue; Service of Process. THE
VALIDITY OF THIS GUARANTY, ITS CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT, AND THE RIGHTS OF GUARANTOR AND BENEFICIARY,
SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEVADA,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTOR WITH RESPECT 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 ASSETS, GENERALLY AND
UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE
AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY ANY
FINAL JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
GUARANTY FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS AVAILABLE.
22. Waiver of Jury Trial. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, GUARANTOR AND BENEFICIARY EACH MUTUALLY
HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY
ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING
UNDER OR WITH RESPECT TO THIS GUARANTY, OR IN ANY WAY
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE DEALINGS OF
GUARANTOR AND BENEFICIARY WITH RESPECT TO THIS GUARANTY, OR
THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE MAXIMUM
EXTENT PERMITTED BY LAW, GUARANTOR AND BENEFICIARY EACH
MUTUALLY HEREBY AGREE THAT ANY SUCH ACTION, CAUSE OF ACTION,
CLAIM, DEMAND, OR PROCEEDINGS SHALL BE DECIDED BY A COURT
TRIAL WITHOUT A JURY AND THAT THE DEFENDING PARTY MAY FILE AN
ORIGINAL COUNTERPART OF THIS SECTION WITH ANY COURT OR OTHER
TRIBUNAL AS WRITTEN EVIDENCE OF THE CONSENT OF THE COMPLAINING
PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
23. Arbitration.
a. Upon the request of Guarantor or Beneficiary
whether made before or after the institution of any legal
proceeding, any action, dispute, claim or controversy of any
kind (e.g., whether in contract or in tort, statutory or
common law, legal or equitable) ("Dispute") now existing or
hereafter arising between the parties in any way arising out
of, pertaining to or in connection with this Guaranty, the
Credit Agreement, Bank Facility Loan Documents or any related
agreements, documents, or instruments (collectively the
"Documents"), may, by summary proceedings (e.g., a plea in
abatement or motion to stay further proceedings), bring an
action in court to compel arbitration of any Dispute.
b. All Disputes between Guarantor and Beneficiary
shall be resolved by binding arbitration governed by the
Nevada Uniform Arbitration Act, Nevada Revised Statutes
Chapter 38, or, if not then in effect, by the Commercial
Arbitration Rules of the American Arbitration Association.
Judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction.
c. No provision of, nor the exercise of any rights
under this arbitration clause shall limit the rights of
Guarantor or Beneficiary, and the Guarantor and Beneficiary,
shall have the right during any Dispute, to seek, use and
employ ancillary or preliminary remedies, judicial or
otherwise, for the purposes of realizing upon, preserving,
protecting or foreclosing upon any property, real or personal,
which is involved in a Dispute, or which is subject to, or
described in, the Documents, including, without limitation,
rights and remedies relating to: (i) foreclosing against any
real or personal property collateral or other security by the
exercise of a power of sale under the Security Documents or
other security agreement or instrument, or applicable law,
(ii) exercising self-help remedies (including setoff rights)
or (iii) obtaining provisional or ancillary remedies such as
injunctive relief, sequestration, attachment, garnishment or
the appointment of a receiver from a court having jurisdiction
before, during or after the pendency of any arbitration. The
institution and maintenance of an action for judicial relief
or pursuit of provisional or ancillary remedies or exercise of
self-help remedies shall not constitute a waiver of the right
of Guarantor and/or Borrower, including the plaintiff, to
submit the Dispute to arbitration nor render inapplicable the
compulsory arbitration provision hereof.
IN WITNESS WHEREOF, the undersigned have executed and
delivered this Guaranty as of the day and year first written
above.
GUARANTOR:
CIRCUS CIRCUS ENTERPRISES,
INC., a Nevada corporation
By__________________________
Title_______________________
EXHIBIT G
GENERAL CONTINUING GUARANTY
THIS GENERAL CONTINUING GUARANTY ("Guaranty"), dated as
of February _____, 1994, is executed and delivered by LAKEVIEW
GAMING PARTNERSHIPS JOINT VENTURE, a Nevada general
partnership, RAILROAD PASS INVESTMENT GROUP, a Nevada general
partnership, LAKEVIEW COMPANY, a Nevada general partnership,
JEAN DEVELOPMENT COMPANY, a Nevada general partnership, JEAN
DEVELOPMENT WEST, a Nevada general partnership, JEAN
DEVELOPMENT NORTH, a Nevada general partnership, and PIONEER
INVESTMENT GROUP, a Nevada general partnership (hereinafter
each individually referred to as a "Guarantor" and
collectively referred to as "Guarantors"), in favor of the
Beneficiary, referred to below, and in light of the following:
R_E_C_I_T_A_L_S:
WHEREAS:
A. Borrower, Guarantors and Beneficiary are,
contemporaneously herewith, entering into that certain
Reducing Revolving Credit Agreement, executed by and among
Goldstrike Finance Company, Inc., a Nevada corporation, as
Borrower (hereinafter referred to as "Borrower"), Guarantors
as Guarantors, and First Interstate Bank of Nevada, N.A., The
Long-Term Credit Bank of Japan, Ltd., Los Angeles Agency, U.S.
Bank of Nevada, NBD Bank, N.A., Bank of America National Trust
and Savings Association, First Security Bank of Idaho, N.A.,
West One Bank, Idaho and Bank of America Nevada, collectively
defined herein and therein as "Lenders", and First Interstate
Bank of Nevada, N.A. as the administrative and collateral
agent for the Lenders, therein and herein, in such capacity
called "Agent Bank." All references herein to the "Credit
Agreement" shall be to such Reducing Revolving Credit
Agreement as it may hereafter be modified, amended, renewed,
restated or extended.
B. For the purpose of this Guaranty, all capitalized
terms not otherwise specifically defined herein shall have the
same meaning given them in Section 1.01 of the Credit
Agreement as though fully restated verbatim.
C. In order to induce Lenders to establish the Bank
Facility for the benefit of Borrower pursuant to the Credit
Agreement, and in consideration of the GFC Credit Line
established by Borrower for the benefit of the Nevada Joint
Venture, and in consideration of the loans, advances and other
financial accommodations to be extended by Borrower to the
Nevada Joint Venture pursuant to the GFC Credit Line,
Guarantors have agreed to guaranty the Guarantied Obligations.
NOW, THEREFORE, in consideration of the foregoing,
Guarantors hereby jointly and severally agree, in favor of
Beneficiary, as follows:
1. Definitions and Construction.
(a) Definitions. The following terms, as used in
this Guaranty, shall have the following meanings:
"Agent Bank" shall mean First Interstate Bank of
Nevada, N.A. as the administrative and collateral agent for
each of the Lenders under the Credit Agreement.
"Bank Note" shall mean the Reducing Revolving Credit
Promissory Note in the original principal sum of One Hundred
Sixty Million Dollars ($160,000,000.00) to be executed by
Borrower on the Closing Date payable to the order of Agent
Bank on behalf of the Lenders evidencing the Bank Facility.
"Beneficiary" shall mean Agent Bank on behalf of
itself and each of the Lenders.
"Borrower" shall mean Goldstrike Finance Company,
Inc., a Nevada corporation.
"Credit Agreement" shall have the meaning set forth
by Recital A of this Guaranty.
"Guarantied Obligations" shall mean: (a) the due
and punctual payment of the principal of, and interest
(including post petition interest and including any and all
interest which, but for the application of the provisions of
the Bankruptcy Code, would have accrued on such amounts) on,
and premium, if any, on the Bank Note; (b) the due and
punctual payment of all present or future Indebtedness owing
by Borrower and/or Guarantors, or any of them; and (c) the due
and punctual payment and performance of each and every duty,
liability and obligation of Borrower and Guarantors under the
Credit Agreement.
"Guarantor(s)" shall have the meaning set forth in
the preamble to this Guaranty.
"Guaranty" shall have the meaning set forth in the
preamble to this document.
"Indebtedness" shall mean any and all obligations,
indebtedness, or liabilities of any kind or character owed to
Beneficiary on behalf of Lenders and arising directly or
indirectly out of or in connection with the Credit Agreement,
the Bank Note, the Environmental Certificate, any Interest
Rate Hedge, or any of the other Bank Facility Loan Documents,
including all such obligations, indebtedness, or liabilities,
whether for principal, interest (including post petition
interest and including any and all interest which, but for the
application of the provisions of the Bankruptcy Code, would
have accrued on such amounts), premium, reimbursement
obligations, fees, costs, expenses (including attorneys'
fees), or indemnity obligations, whether heretofore, now, or
hereafter made, incurred, or created, whether voluntarily or
involuntarily made, incurred, or created, whether secured or
unsecured (and if secured, regardless of the nature or extent
of the security), whether absolute or contingent, liquidated
or unliquidated, or determined or indeterminate, whether
Borrower is liable individually or jointly with others, and
whether recovery is or hereafter becomes barred by any statute
of limitations or otherwise becomes unenforceable for any
reason whatsoever, including any act or failure to act by
Beneficiary.
"Lenders" shall mean collective reference to First
Interstate Bank of Nevada, N.A., The Long-Term Credit Bank of
Japan, Ltd., Los Angeles Agency, U.S. Bank of Nevada, NBD
Bank, N.A., Bank of America National Trust and Savings
Association, First Security Bank of Idaho, N.A., West One
Bank, Idaho and Bank of America Nevada and to their respective
successors and assigns.
(b) Construction. Unless the context of this
Guaranty clearly requires otherwise, references to the plural
include the singular, references to the singular include the
plural, the part includes the whole, the term "including" is
not limiting, and the term "or" has the inclusive meaning
represented by the phrase "and/or." The words "hereof,"
"herein," "hereby," "hereunder," and other similar terms refer
to this Guaranty as a whole and not to any particular
provision of this Guaranty. Any reference in this Guaranty to
any of the following documents includes any and all
alterations, amendments, extensions, modifications, renewals,
or supplements thereto or thereof, as applicable: the Bank
Facility Loan Documents; the Credit Agreement; this Guaranty;
the Environmental Certificate; and the Bank Note.
2. Guarantied Obligations. Guarantors hereby jointly
and severally, irrevocably and unconditionally guaranty to
Beneficiary, as and for their own debt, until final and
indefeasible payment thereof has been made, (a) the due and
punctual payment of the Guarantied Obligations, in each case
when the same shall become due and payable, whether at
maturity, pursuant to a mandatory payment requirement, by
acceleration, or otherwise; it being the intent of Guarantors
that the guaranty set forth herein shall be a guaranty of
payment and not a guaranty of collection; (b) the punctual and
faithful performance, keeping, observance, and fulfillment by
Borrower of all of the agreements, conditions, covenants, and
obligations of Borrower contained in the Credit Agreement, the
Bank Note, the Environmental Certificate, any Interest Rate
Hedge and under each of the other Bank Facility Loan
Documents; and (c) the punctual and faithful performance,
keeping, observance and fulfillment by each of the Guarantors
of all of the agreements, conditions, covenants and
obligations of each of the Guarantors contained in the Credit
Agreement, the Environmental Certificate, any Interest Rate
Hedge and under each of the other Bank Facility Loan
Documents.
3. Continuing Guaranty. This Guaranty includes
Guarantied Obligations arising under successive transactions
continuing, compromising, extending, increasing, modifying,
releasing, or renewing the Guarantied Obligations, changing
the interest rate, payment terms, or other terms and
conditions thereof, or creating new or additional Guarantied
Obligations after prior Guarantied Obligations have been
satisfied in whole or in part. To the maximum extent
permitted by law, Guarantors hereby waive any right to revoke
this Guaranty as to future Indebtedness. If such a revocation
is effective notwithstanding the foregoing waiver, Guarantors
acknowledge and agree that (a) no such revocation shall be
effective until written notice thereof has been received and
acknowledged by Beneficiary, (b) no such revocation shall
apply to any Guarantied Obligations in existence on such date
(including any subsequent continuation, extension, or renewal
thereof, or change in the interest rate, payment terms, or
other terms and conditions thereof to the extent permitted by
law), (c) no such revocation shall apply to any Guarantied
Obligations made or created after such date to the extent made
or created pursuant to a legally binding commitment of
Beneficiary in existence on the date of such revocation, (d)
no payment by Guarantors, Borrower, or from any other source,
prior to the date of such revocation shall reduce the maximum
obligation of Guarantors hereunder, and (e) any payment by
Borrower or from any source other than Guarantors subsequent
to the date of such revocation shall first be applied to that
portion of the Guarantied Obligations as to which the
revocation is effective and which is not, therefore,
guarantied hereunder.
4. Performance under this Guaranty. In the event that
Borrower fails to make any payment of any Guarantied
Obligations on or before the due date thereof, or if Borrower
shall fail to perform, keep, observe, or fulfill any other
obligations referred to in clause (b) and/or clause (c) of
Section 2 hereof in the manner provided in the Credit
Agreement, the Bank Note, or the other Bank Facility Loan
Documents, as applicable, Guarantors immediately shall cause
such payment to be made or each of such obligations to be
performed, kept, observed, or fulfilled.
5. Primary Obligations. This Guaranty is a primary and
original obligation of Guarantors, is not merely the creation
of a surety relationship, and is an absolute, unconditional,
and continuing guaranty of payment and performance which shall
remain in full force and effect without respect to future
changes in conditions, including any change of law or any
invalidity or irregularity with respect to the issuance of the
Bank Note. Guarantors agree that they are directly, jointly
and severally with any other guarantor of the Guarantied
Obligations, liable to Beneficiary, that the obligations of
Guarantors hereunder are independent of the obligations of
Borrower or any other guarantor, and that a separate action
may be brought against Guarantors, whether such action is
brought against Borrower or any other guarantor whether
Borrower or any such other guarantor is joined in such action.
Guarantors agree that their liability hereunder shall be
immediate and shall not be contingent upon the exercise or
enforcement by Beneficiary of whatever remedies they may have
against Borrower or any other guarantor, or the enforcement of
any lien or realization upon any security Beneficiary may at
any time possess. Guarantors agree that any release which may
be given by Beneficiary to Borrower or any other guarantor
shall not release Guarantors. Guarantors consent and agree
that Beneficiary shall be under no obligation to marshal any
property or assets of Borrower or any other guarantor in favor
of Guarantors, or against or in payment of any or all of the
Guarantied Obligations.
6. Waivers.
(a) Guarantors hereby waive: (i) notice of
acceptance hereof; (ii) notice of any Borrowings, advances,
loans or other financial accommodations made or extended under
the Credit Agreement, or the creation or existence of any
Guarantied Obligations; (iii) notice of the amount of the
Guarantied Obligations, subject, however, to Guarantors' right
to make inquiry of Agent Bank to ascertain the amount of the
Guarantied Obligations at any reasonable time; (iv) notice of
any adverse change in the financial condition of Borrower or
of any other fact that might increase Guarantors' risk
hereunder; (v) notice of presentment for payment, demand,
protest, and notice thereof as to the Bank Note or any other
instrument; (vi) notice of any Default or Event of Default
under the Credit Agreement; and (vii) all other notices
(except if such notice is specifically required to be given to
Guarantors under this Guaranty or any other Bank Facility Loan
Document to which Guarantors are party) and demands to which
Guarantors might otherwise be entitled.
(b) To the fullest extent permitted by applicable
law, Guarantors waive the right by statute or otherwise to
require Beneficiary to institute suit against Borrower or to
exhaust any rights and remedies which Beneficiary has or may
have against Borrower. In this regard, Guarantors agree that
they are bound to the payment of each and all Guarantied
Obligations, whether now existing or hereafter accruing, as
fully as if such Guarantied Obligations were directly owing to
Beneficiary by Guarantors. Guarantors further waive any
defense arising by reason of any disability or other defense
(other than the defense that the Guarantied Obligations shall
have been fully and finally performed and indefeasibly paid)
of Borrower or by reason of the cessation from any cause
whatsoever of the liability of Borrower in respect thereof.
(c) To the maximum extent permitted by law, each
Guarantor hereby waives: (i) any rights to assert against
Beneficiary any defense (legal or equitable), set-off,
counterclaim, or claim which Guarantors may now or at any time
hereafter have against Borrower or any other party liable to
Beneficiary; (ii) any defense, set-off, counterclaim, or
claim, of any kind or nature, arising directly or indirectly
from the present or future lack of perfection, sufficiency,
validity, or enforceability of the Guarantied Obligations or
any security therefor; (iii) any defense arising by reason of
any claim or defense based upon an election of remedies by
Beneficiary; (iv) the benefit of any statute of limitations
affecting Guarantors' liability hereunder or the enforcement
thereof, and any act which shall defer or delay the operation
of any statute of limitations applicable to the Guarantied
Obligations shall similarly operate to defer or delay the
operation of such statute of limitations applicable to
Guarantors' liability hereunder; and (v) any defense or
benefit that may be derived from or afforded by law which
limits the liability of or exonerates guaranties or sureties
including, without limitation, the benefits of Nevada Revised
Statutes section 40.430 - 40.459, 40.475 and 40.485 as permitted by
Nevada Revised Statutes section 40.495 (1989).
(d) Guarantors agree that Beneficiary, in its sole
discretion and without affecting the liability of Guarantors
under this Guaranty, may foreclose (pursuant to the terms of
the Credit Agreement or otherwise) the Security Documents and
the interests in real property secured thereby by non-judicial
sale. Guarantors hereby authorize and empower Beneficiary to
exercise, in its sole discretion, any rights and remedies, or
any combination thereof, which may then be available, since it
is the intent and purpose of Guarantors that the obligations
hereunder shall be absolute, independent and unconditional
under any and all circumstances. Notwithstanding any
foreclosure of the lien of any Security Document with respect
to any or all of any real or personal property secured
thereby, whether by the exercise of the power of sale
contained therein, by an action for judicial foreclosure or by
an acceptance of a deed in lieu of foreclosure, Guarantors
shall remain bound under this Guaranty including its
obligation to pay any deficiency following a non-judicial
foreclosure.
(e) Except as otherwise provided in the Nevada
Joint Venture Agreement, Guarantors also hereby waive any
claim, right or remedy which such Guarantors may now have or
hereafter acquire against the Borrower that arises hereunder
and/or from the performance by Guarantors hereunder including,
without limitation, any claim, remedy or right of subrogation,
reimbursement, exoneration, contribution, indemnification, or
participation in any claim, right or remedy of Beneficiary
against the Borrower or any security which Beneficiary now has
or hereafter acquires, whether or not such claim, right or
remedy arises in equity, under contract, by statute, under
common law or otherwise.
7. Releases. Guarantors consent and agree that,
without notice to or by Guarantors and without affecting or
impairing the obligations of Guarantors hereunder, Beneficiary
may, by action or inaction, compromise or settle, extend the
period of duration or the time for the payment, or discharge
the performance of, or may refuse to, or otherwise not
enforce, or may, by action or inaction, release all or any one
or more parties to, any one or more of the Credit Agreement,
the Bank Note, or any of the other Bank Facility Loan
Documents or may grant other indulgences to Borrower in
respect thereof, or may amend or modify in any manner and at
any time (or from time to time) any one or more of the Credit
Agreement, the Bank Note, or any of the other Bank Facility
Loan Documents, or may, by action or inaction, release or
substitute any other guarantor, if any, of the Guarantied
Obligations, or may enforce, exchange, release, or waive, by
action or inaction, any security for the Guarantied
Obligations (including the Collateral) or any other guaranty
of the Guarantied Obligations, or any portion thereof.
8. No Election. Beneficiary shall have the right to
seek recourse against Guarantors to the fullest extent
provided for herein and no election by Beneficiary to proceed
in one form of action or proceeding, or against any party, or
on any obligation, shall constitute a waiver of Beneficiary's
right to proceed in any other form of action or proceeding or
against other parties unless Beneficiary has expressly waived
such right in writing. Specifically, but without limiting the
generality of the foregoing, no action or proceeding by
Beneficiary under any document or instrument evidencing the
Guarantied Obligations shall serve to diminish the liability
of Guarantors under this Guaranty except to the extent that
Beneficiary finally and unconditionally shall have realized
indefeasible payment by such action or proceeding.
9. Indefeasible Payment. The Guarantied Obligations
shall not be considered indefeasibly paid for purposes of this
Guaranty unless and until all payments to Beneficiary are no
longer subject to any right on the part of any person
whomsoever, including Borrower, the Borrower as a debtor in
possession, or any trustee (whether appointed under the
Bankruptcy Code or otherwise) of Borrower's assets to
invalidate or set aside such payments or to seek to recoup the
amount of such payments or any portion thereof, or to declare
same to be fraudulent or preferential. In the event that, for
any reason, all or any portion of such payments to Beneficiary
are set aside or restored, whether voluntarily or
involuntarily, after the making thereof, the obligation or
part thereof intended to be satisfied thereby shall be revived
and continued in full force and effect as if said payment or
payments had not been made and Guarantors shall be liable for
the full amount Beneficiary is required to repay plus any and
all costs and expenses (including attorneys' fees) paid by
Beneficiary in connection therewith.
10. Financial Condition of Borrower. Guarantors
represent and warrant to Beneficiary that they are currently
informed of the financial condition of Borrower and of all
other circumstances which a diligent inquiry would reveal and
which bear upon the risk of nonpayment of the Guarantied
Obligations. Guarantors further represent and warrant to
Beneficiary that they have each read and understand the terms
and conditions of the Credit Agreement, the Bank Note, and the
other Bank Facility Loan Documents. Guarantors hereby
covenant that they will continue to keep themselves informed
of Borrower's financial condition, the financial condition of
other guarantors, if any, and of all other circumstances which
bear upon the risk of nonpayment or nonperformance of the
Guarantied Obligations.
11. Subordination. Any indebtedness of Borrower now or
hereafter held by Guarantors is hereby subordinated to the
indebtedness of Borrower to Beneficiary; and from and after
the occurrence of a Default or an Event of Default under the
Credit Agreement and for so long as such a Default or Event of
Default shall continue such indebtedness of Borrower to
Guarantors shall be collected, enforced and received by
Guarantors as trustee for Borrower and paid over to
Beneficiary on account of the indebtedness of Borrower to
Beneficiary but without reducing or affecting in any manner
the liability of Guarantors under the other provisions of this
Guaranty.
12. Payments; Application. All payments to be made
hereunder by Guarantors shall be made in lawful money of the
United States of America at the time of payment, shall be made
in immediately available funds, and shall be made without
deduction (whether for taxes or otherwise), counterclaim or
offset. All payments made by Guarantors hereunder shall be
applied as follows: first, to all reasonable costs and
expenses (including attorneys' fees) incurred by Beneficiary
in enforcing this Guaranty or in collecting the Guarantied
Obligations; second, to all accrued and unpaid interest,
premium, if any, and fees owing to Beneficiary constituting
Guarantied Obligations; and third, to the balance of the
Guarantied Obligations.
13. Expenses. Guarantors agree to pay Beneficiary's
reasonable out-of-pocket costs and expenses, including, but
not limited to, legal fees and disbursements, incurred in any
effort (which shall include those incurred in investigations
of and advising on matters relating to the Beneficiary's
rights and remedies) to collect or enforce any of sums owing
under this Guaranty whether or not any lawsuit is filed.
Until paid to the Beneficiary such sums will bear interest at
the Default Rate set forth in the Credit Agreement.
14. Costs to Prevailing Party. If any action or
proceeding is brought by any party against any other party
under this Guaranty, the prevailing party shall be entitled to
recover such costs and attorney's fees as the court in such
action or proceeding may adjudge reasonable.
15. 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, sent by telefacsimile, telexed, or sent by
courier service or United States mail and shall be deemed to
have been given when delivered in person or by courier
service, upon receipt of a telefacsimile or telex or five (5)
Banking Business Days after deposit in the United States mail
(registered or certified, with postage prepaid and properly
addressed). For the purposes hereof, the addresses of the
parties hereto (until notice of a change thereof is delivered
as provided in this Section 15) shall be as set forth below,
or, as to each party, at such other address as may be
designated by such party in a written notice to all of the
other parties:
If to Guarantors: c/o Lakeview Company
Gold Strike Inn
Highway 93
Boulder City, NV 89005
Attn: David R. Belding
If to Beneficiary: First Interstate Bank of
Nevada, N.A., Agent Bank
Gaming Division
P.O. Box 98588
Las Vegas, NV 89193-8588
Attn: Brad Peterson, V.P.
With a copy to: Timothy J. Henderson, Esq.
Henderson & Nelson
164 Hubbard Way, Suite B
Reno, NV 89502
16. Cumulative Remedies. No remedy under this Guaranty,
under the Credit Agreement, the Bank Note, or any Bank
Facility Loan Document is intended to be exclusive of any
other remedy, but each and every remedy shall be cumulative
and in addition to any and every other remedy given under this
Guaranty, under the Credit Agreement, the Bank Note, or any
other Bank Facility Loan Document, and those provided by law.
No delay or omission by Beneficiary to exercise any right
under this Guaranty shall impair any such right nor be
construed to be a waiver thereof. No failure on the part of
Beneficiary to exercise, and no delay in exercising, any right
under this Guaranty shall operate as a waiver thereof; nor
shall any single or partial exercise of any right under this
Guaranty preclude any other or further exercise thereof or the
exercise of any other right.
17. Security. This Guaranty and the payment and
performance of every obligation, warranty, representation,
covenant, agreement and promise of Guarantors, and each of
them, contained in this Guaranty are secured by the Security
Documents, the Elgin Pledge and the Mississippi Pledge.
18. Severability of Provisions. Any provision of this
Guaranty which is prohibited or unenforceable under applicable
law, shall be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions
hereof.
19. Entire Agreement; Amendments. This Guaranty,
together with the Credit Agreement, constitutes the entire
agreement between Guarantors and Beneficiary pertaining to the
subject matter contained herein. This Guaranty may not be
altered, amended, or modified, nor may any provisions hereof
be waived or noncompliance therewith consented to, except by
means of a writing executed by Guarantors and Beneficiary.
Any such alteration, amendment, modification, waiver, or
consent shall be effective only to the extent specified
therein and for the specific purpose for which given. No
course of dealing and no delay or waiver of any right or
default under this Guaranty shall be deemed a waiver of any
other, similar or dissimilar, right or default or otherwise
prejudice the rights and remedies hereunder.
20. Successors and Assigns. This Guaranty shall be
binding upon Guarantors and their respective successors and
assigns and shall inure to the benefit of the successors and
assigns of Beneficiary; provided, however, Guarantors shall
not assign this Guaranty or delegate any of their duties
hereunder without Beneficiary's prior written consent and any
unconsented to assignment shall be absolutely void. In the
event of any assignment or other transfer of rights by
Beneficiary, the rights and benefits herein conferred upon
Beneficiary shall automatically extend to and be vested in
such assignee or other transferee.
21. Choice of Law and Venue; Service of Process. THE
VALIDITY OF THIS GUARANTY, ITS CONSTRUCTION, INTERPRETATION,
AND ENFORCEMENT, AND THE RIGHTS OF GUARANTORS AND BENEFICIARY,
SHALL BE DETERMINED UNDER, GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF NEVADA,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OF LAW. ALL
JUDICIAL PROCEEDINGS BROUGHT AGAINST GUARANTORS WITH RESPECT
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, GUARANTORS ACCEPT,
FOR THEMSELVES AND IN CONNECTION WITH THEIR RESPECTIVE ASSETS,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION
OF THE AFORESAID COURTS, AND IRREVOCABLY AGREE TO BE BOUND BY
ANY FINAL JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS
GUARANTY FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS AVAILABLE.
22. Waiver of Jury Trial. TO THE MAXIMUM EXTENT
PERMITTED BY LAW, GUARANTORS AND BENEFICIARY EACH MUTUALLY
HEREBY EXPRESSLY WAIVE ANY RIGHT TO TRIAL BY JURY OF ANY
ACTION, CAUSE OF ACTION, CLAIM, DEMAND, OR PROCEEDING ARISING
UNDER OR WITH RESPECT TO THIS GUARANTY, OR IN ANY WAY
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE DEALINGS OF
GUARANTORS AND BENEFICIARY WITH RESPECT TO THIS GUARANTY, OR
THE TRANSACTIONS RELATED HERETO, IN EACH CASE WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND IRRESPECTIVE OF WHETHER
SOUNDING IN CONTRACT, TORT, OR OTHERWISE. TO THE MAXIMUM
EXTENT PERMITTED BY LAW, GUARANTORS AND BENEFICIARY EACH
MUTUALLY HEREBY AGREE THAT ANY SUCH ACTION, CAUSE OF ACTION,
CLAIM, DEMAND, OR PROCEEDINGS SHALL BE DECIDED BY A COURT
TRIAL WITHOUT A JURY AND THAT THE DEFENDING PARTY MAY FILE AN
ORIGINAL COUNTERPART OF THIS SECTION WITH ANY COURT OR OTHER
TRIBUNAL AS WRITTEN EVIDENCE OF THE CONSENT OF THE COMPLAINING
PARTY TO THE WAIVER OF ITS RIGHT TO TRIAL BY JURY.
23. Arbitration.
a. Upon the request of Guarantor or Beneficiary
whether made before or after the institution of any legal
proceeding, any action, dispute, claim or controversy of any
kind (e.g., whether in contract or in tort, statutory or
common law, legal or equitable) ("Dispute") now existing or
hereafter arising between the parties in any way arising out
of, pertaining to or in connection with this Guaranty, the
Credit Agreement, Bank Facility Loan Documents or any related
agreements, documents, or instruments (collectively the
"Documents"), may, by summary proceedings (e.g., a plea in
abatement or motion to stay further proceedings), bring an
action in court to compel arbitration of any Dispute.
b. All Disputes between Guarantors and Beneficiary
shall be resolved by binding arbitration governed by the
Nevada Uniform Arbitration Act, Nevada Revised Statutes
Chapter 38, or, if not then in effect, by the Commercial
Arbitration Rules of the American Arbitration Association.
Judgment upon the award rendered by the arbitrators may be
entered in any court having jurisdiction.
c. No provision of, nor the exercise of any rights
under this arbitration clause shall limit the rights of
Guarantors or Beneficiary, and the Guarantors and Beneficiary,
shall have the right during any Dispute, to seek, use and
employ ancillary or preliminary remedies, judicial or
otherwise, for the purposes of realizing upon, preserving,
protecting or foreclosing upon any property, real or personal,
which is involved in a Dispute, or which is subject to, or
described in, the Documents, including, without limitation,
rights and remedies relating to: (i) foreclosing against any
real or personal property collateral or other security by the
exercise of a power of sale under the Security Documents or
other security agreement or instrument, or applicable law,
(ii) exercising self-help remedies (including setoff rights)
or (iii) obtaining provisional or ancillary remedies such as
injunctive relief, sequestration, attachment, garnishment or
the appointment of a receiver from a court having jurisdiction
before, during or after the pendency of any arbitration. The
institution and maintenance of an action for judicial relief
or pursuit of provisional or ancillary remedies or exercise of
self-help remedies shall not constitute a waiver of the right
of Guarantors and/or Borrower, including the plaintiff, to
submit the Dispute to arbitration nor render inapplicable the
compulsory arbitration provision hereof.
IN WITNESS WHEREOF, the undersigned have executed and
delivered this Guaranty as of the day and year first written
above.
GUARANTORS:
RAILROAD PASS INVESTMENT
GROUP, dba RAILROAD PASS
CASINO, a Nevada general
partnership
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
And: ________________________
Robert J. Verchota,
General Partner
LAKEVIEW COMPANY, dba
GOLD STRIKE INN,
a Nevada general partner
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
JEAN DEVELOPMENT COMPANY,
dba GOLD STRIKE HOTEL &
GAMBLING HALL, a Nevada
general partnership
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
<PAGE>
JEAN DEVELOPMENT WEST, dba
NEVADA LANDING, a
Nevada general partnership
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
And: DIAMOND GOLD, INC.,
a Nevada corporation,
General Partner
By______________________
Peter A. Simon, II,
President
JEAN DEVELOPMENT NORTH,
a Nevada general partnership
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
And: DIAMOND GOLD, INC.,
a Nevada corporation,
General Partner
By______________________
Peter A. Simon, II,
President
PIONEER INVESTMENT GROUP,
a Nevada general partnership
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
LAKEVIEW GAMING PARTNERSHIPS
JOINT VENTURE, a Nevada
general partnership
By: RAILROAD PASS INVESTMENT
GROUP, dba RAILROAD PASS
CASINO, a Nevada general
partnership, General
Partner
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By_____________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By_____________________
David R. Belding,
President
And: _______________________
Robert J. Verchota,
General Partner
By: LAKEVIEW COMPANY, dba
GOLD STRIKE INN, a
Nevada general partnership,
General Partner
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
LAKEVIEW GAMING PARTNERSHIPS
JOINT VENTURE, a Nevada
general partnership
By: JEAN DEVELOPMENT COMPANY,
dba GOLD STRIKE HOTEL &
GAMBLING HALL, a Nevada
general partnership,
General Partner
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
By: JEAN DEVELOPMENT WEST, dba
NEVADA LANDING, a
Nevada general partnership,
General Partner
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
And: DIAMOND GOLD, INC.,
a Nevada corporation,
General Partner
By______________________
Peter A. Simon, II,
President
LAKEVIEW GAMING PARTNERSHIPS
JOINT VENTURE, a Nevada
general partnership
By: JEAN DEVELOPMENT NORTH,
a Nevada general partnership,
General Partner
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
And: DIAMOND GOLD, INC.,
a Nevada corporation,
General Partner
By______________________
Peter A. Simon, II,
President
By: PIONEER INVESTMENT GROUP,
a Nevada general partnership,
General Partner
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
EXHIBIT H
SCHEDULE OF RELEASES,
TERMINATIONS AND RECONVEYANCES
DOCUMENT
NUMBER
DOCUMENT
DESCRIPTION
TO BE
EXECUTED BY
DISPOSITION
1
Mississippi Riverboat
Note, Amendments and
Endorsements
------
Return to Nevada
Joint Venture
2
Endorsement to
Mississippi Riverboat
Note in favor of
Nevada Joint Venture
Agent Bank
Return to Nevada
Joint Venture
3
Termination of Amended
and Restated Security
Agreement (Mississippi
Pledge)
Agent Bank
Deliver to
Nevada Joint
Venture
4
Elgin Riverboat Note,
Amendments and
Endorsements
------
Return to Nevada
Joint Venture
5
Endorsement to Second
Amended and Restated
Promissory Note (Elgin
Riverboat Note) in
favor of Nevada Joint
Venture
Agent Bank
Return to Nevada
Joint Venture
6
Termination of
Security Agreement
(Elgin Pledge)
Agent Bank
Return to Nevada
Joint Venture
7
GFC Credit Line Note
and Endorsement
------
Return to GFC
8
Endorsement to GFC
Credit Line Note in
favor of GFC
Agent Bank
Deliver to GFC
9
Termination of
Security Agreement
(GFC Pledge)
Agent Bank
Deliver to GFC
10
Non-Restricted
Revolving Note in the
principal amount of
$1,320,000, payable to
the order of Simon
Mark
"Canceled"
Return to GFC
11
Non-Restricted
Revolving Note in the
principal amount of
$2,240,000, payable to
the order of Verchota
Mark
"Canceled"
Return to GFC
12
Non-Restricted
Revolving Note in the
principal amount of
$3,340,000, payable to
the order of Belding
Mark
"Canceled"
Return to GFC
13
Non-Restricted
Revolving Note in the
principal amount of
$6,520,000, payable to
the order of
Richardson
Mark
"Canceled"
Return to GFC
14
Non-Restricted
Revolving Note in the
principal amount of
$6,580,000, payable to
the order of Ensign
Mark
"Canceled"
Return to GFC
15
Restricted Term Note
in the principal sum
of $10,500,000,
payable to the order
of Belding
Mark
"Canceled"
Return to GFC
16
Restricted Term Note
in the principal sum
of $19,500,000,
payable to the order
of Richardson
Mark
"Canceled"
Return to GFC
17
Restricted Term Note
in the principal sum
of $20,000,000,
payable to the order
of Ensign
Mark
"Canceled"
Return to GFC
18
Termination of Payment
Subordination
Agreement executed by
Agent Bank
Agent Bank
Deliver to
Ensign,
Richardson,
Belding,
Verchota and
Simon
19
Release of Assignments
(Gold Strike
Inn/Lakeview)
Agent Bank
Deliver to
Lakeview Company
for recordation
in Clark County
Official Records
20
UCC-1 Termination
(Clark County/
Secretary of State)
Agent Bank
Deliver to
Lakeview Company
for recording in
Clark County and
filing with the
Secretary of
State
21
Authorization and
Request for Full
Reconveyance (Lakeview
Deed of Trust)
Agent Bank
Deliver to Title
Company
22
Deed of Full
Reconveyance (Lakeview
Deed of Trust)
Title
Company
Record in Clark
County Official
Records
23
Release from Guaranty
(Lakeview/Pioneer)
Agent Bank
Deliver to
Lakeview/Pioneer
24
Release from
Environmental
Certificate (Lakeview/
Pioneer)
Agent Bank
Deliver to
Lakeview/Pioneer
25
Termination of UCC-1
Financing Statement
(Ensign Custody
Account)
Agent Bank
Deliver to
Ensign for
filing with
Nevada Secretary
of State
26
Termination of UCC-1
Financing Statement
(Richardson Custody
Account)
Agent Bank
Deliver to
Richardson for
filing with
Nevada Secretary
of State
27
Termination of UCC-1
Financing Statement
(Belding Custody
Account)
Agent Bank
Deliver to
Belding for
filing with
Nevada Secretary
of State
28
Termination of UCC-1
Financing Statement
(Simon Custody
Account)
Agent Bank
Deliver to Simon
for filing with
Nevada Secretary
of State
29
Termination of UCC-1
Financing Statement
(Verchota Custody
Account)
Agent Bank
Deliver to
Verchota for
filing with
Nevada Secretary
of State
30
Termination of
Security Agreement,
Account Pledge,
Assignment of Trust
Account and
Acknowledgement
(Ensign)
Agent Bank
Deliver to
Ensign
31
Termination of
Security Agreement,
Account Pledge,
Assignment of Trust
Account and
Acknowledgement
(Richardson)
Agent Bank
Deliver to
Richardson
32
Termination of
Security Agreement,
Account Pledge,
Assignment of Trust
Account and
Acknowledgement
(Belding)
Agent Bank
Deliver to
Belding
33
Termination of
Security Agreement,
Account Pledge,
Assignment of Trust
Account and
Acknowledgement
(Simon)
Agent Bank
Deliver to Simon
34
Termination of
Security Agreement,
Account Pledge,
Assignment of Trust
Account and
Acknowledgement
(Verchota)
Agent Bank
Deliver to
Verchota
35
Limited Continuing
Guaranty (Ensign)
Mark
"Canceled"
Return to Ensign
36
Limited Continuing
Guaranty (Richardson)
Mark
"Canceled"
Return to
Richardson
37
Limited Continuing
Guaranty (Belding)
Mark
"Canceled"
Return to
Belding
38
Limited Continuing
Guaranty (Simon)
Mark
"Canceled"
Return to Simon
39
Limited Continuing
Guaranty (Verchota)
Mark
"Canceled"
Return to
Verchota
40
Termination of Non-
Managed Trust and
Custody Agreement
(Ensign)
Ensign,
Custodian
and Agent
Duplicate
original to
Ensign and
Custodian
41
Termination of Non-
Managed Trust and
Custody Agreement
(Richardson)
Richardson,
Custodian
and Agent
Duplicate
original to
Richardson and
Custodian
42
Termination of Non-
Managed Trust and
Custody Agreement
(Belding)
Belding,
Custodian
and Agent
Duplicate
original to
Belding and
Custodian
43
Termination of Non-
Managed Trust and
Custody Agreement
(Simon)
Simon,
Custodian
and Agent
Duplicate
original to
Simon and
Custodian
44
Termination of Non-
Managed Trust and
Custody Agreement
(Verchota)
Verchota,
Custodian
and Agent
Duplicate
original to
Verchota and
Custodian
EXHIBIT I
JDN TITLE REPORT
EXHIBIT J
LITIGATION CERTIFICATE
TO: FIRST INTERSTATE BANK OF NEVADA, N.A. in its capacity as
Agent Bank under that certain Reducing Revolving Credit
Agreement, dated as of ________________ (as amended,
supplemented or otherwise modified from time to time, the
"Credit Agreement"), by and among GOLDSTRIKE FINANCE
COMPANY, INC., a Nevada corporation ("Borrower"),
RAILROAD PASS INVESTMENT GROUP, a Nevada general
partnership, LAKEVIEW COMPANY, a Nevada general
partnership, JEAN DEVELOPMENT COMPANY, a Nevada general
partnership, JEAN DEVELOPMENT WEST, a Nevada general
partnership, JEAN DEVELOPMENT NORTH, a Nevada general
partnership, PIONEER INVESTMENT GROUP, a Nevada general
partnership and LAKEVIEW GAMING PARTNERSHIPS JOINT
VENTURE, a Nevada general partnership (collectively
"Guarantors"), and FIRST INTERSTATE BANK OF NEVADA, N.A.,
THE LONG-TERM CREDIT BANK OF JAPAN, LTD., Los Angeles
Agency, U.S. BANK OF NEVADA, NBD BANK, N.A., BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, FIRST
SECURITY BANK OF IDAHO, N.A., WEST ONE BANK, IDAHO and
BANK OF AMERICA NEVADA (collectively, together with their
respective successors and assigns, the "Lenders").
Capitalized terms used herein without definition shall
have the meanings attributed to them in the Credit
Agreement.
Ladies and Gentlemen:
To the best knowledge of Borrower and each of the
Guarantors:
a. there are two (2) claims for minor personal
injuries which have been made against Jean Development
Company, dba Gold Strike Hotel & Gambling Hall. Both claims
are fully covered by the company's insurance carrier subject
to a Fifteen Thousand Dollar ($15,000.00) deductible for each
claim;
b. there are two (2) claims for minor personal
injuries which have been made against Lakeview Company, dba
Gold Strike Inn & Casino. Both claims are fully covered by
the company's insurance carrier subject to a Fifteen Thousand
Dollar ($15,000.00) deductible for each claim;
c. there are two (2) claims for minor personal
injuries which have been made against Jean Development West,
dba Nevada Landing. Both claims are fully covered by the
company's insurance carrier subject to a Fifteen Thousand
Dollar ($15,000.00) deductible for each claim.
To the best knowledge of Borrower and each of the
Guarantors, after due inquiry and investigation, there are no
actions, suits, proceedings, inquiries, hearings or
investigations pending or threatened, in any court of law or
in equity, other than as described hereinabove, or before any
Governmental Authority. To the best knowledge of Borrower and
each of the Guarantors, after due inquiry and investigation,
neither Borrower nor any of the Guarantors are in violation of
or default with respect to any order, writ, injunction, decree
or demand of any such court or Governmental Authority.
BORROWER:
GOLDSTRIKE FINANCE COMPANY,
INC., a Nevada corporation
By__________________________
Title_______________________
GUARANTORS:
RAILROAD PASS INVESTMENT
GROUP, dba RAILROAD PASS
CASINO, a Nevada general
partnership
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By_______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
And: ________________________
Robert J. Verchota,
General Partner<PAGE>
LAKEVIEW COMPANY, dba
GOLD STRIKE INN, a
Nevada general partnership
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By_______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
JEAN DEVELOPMENT COMPANY,
dba GOLD STRIKE HOTEL &
GAMBLING HALL, a Nevada
general partnership
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By_______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
JEAN DEVELOPMENT WEST, dba
NEVADA LANDING, a
Nevada general partnership
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By_______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
And: DIAMOND GOLD, INC.,
a Nevada corporation,
General Partner
By______________________
Peter A. Simon, II,
President
JEAN DEVELOPMENT NORTH,
a Nevada general partnership
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By_______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
And: DIAMOND GOLD, INC.,
a Nevada corporation,
General Partner
By______________________
Peter A. Simon, II,
President
PIONEER INVESTMENT GROUP,
a Nevada general partnership
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By_______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
LAKEVIEW GAMING PARTNERSHIPS
JOINT VENTURE, a Nevada
general partnership
By: RAILROAD PASS INVESTMENT
GROUP, dba RAILROAD PASS
CASINO, a Nevada general
partnership, General
Partner
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By_____________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By_____________________
David R. Belding,
President
And: _______________________
Robert J. Verchota,
General Partner
By: LAKEVIEW COMPANY, dba
GOLD STRIKE INN, a
Nevada general partnership,
General Partner
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
LAKEVIEW GAMING PARTNERSHIPS
JOINT VENTURE, a Nevada
general partnership
By: JEAN DEVELOPMENT COMPANY,
dba GOLD STRIKE HOTEL &
GAMBLING HALL, a Nevada
general partnership,
General Partner
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
By: JEAN DEVELOPMENT WEST, dba
NEVADA LANDING, a
Nevada general partnership,
General Partner
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
And: DIAMOND GOLD, INC.,
a Nevada corporation,
General Partner
By______________________
Peter A. Simon, II,
President
LAKEVIEW GAMING PARTNERSHIPS
JOINT VENTURE, a Nevada
general partnership
By: JEAN DEVELOPMENT NORTH,
a Nevada general partnership,
General Partner
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
And: DIAMOND GOLD, INC.,
a Nevada corporation,
General Partner
By______________________
Peter A. Simon, II,
President
By: PIONEER INVESTMENT GROUP,
a Nevada general partnership,
General Partner
By: LAST CHANCE
INVESTMENTS, INC., a
Nevada corporation,
General Partner
By______________________
William A. Richardson,
President
And: M.S.E. INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
Michael S. Ensign,
President
And: GOLDSTRIKE INVESTMENTS,
INC., a Nevada
corporation,
General Partner
By______________________
David R. Belding,
President
EXHIBIT K
REPORTING REQUIREMENTS
See reporting requirements in Circus Circus Enterprises,
Inc.'s Reducing Revolving Loan Agreement, as amended, dated
September 30, 1993.
EXHIBIT L
NEGATIVE COVENANTS
See reporting requirements in Circus Circus Enterprises,
Inc.'s Reducing Revolving Loan Agreement, as amended, dated
September 30, 1993.
Exhibit 10(d)
FIRST AMENDMENT TO EXCHANGE AGREEMENT
THIS FIRST AMENDMENT TO EXCHANGE AGREEMENT, dated May 30, 1995,
is made and entered into by and among CIRCUS CIRCUS ENTERPRISES, INC., a Nevada
corporation, NEW WAY, INC., a Nevada corporation, GLENN W. SCHAEFFER, GREGG
H. SOLOMON, ANTONIO C. ALAMO, ANTHONY KORFMAN and WILLIAM ENSIGN.
Capitalized terms used but not otherwise defined herein shall have the
respective meanings
ascribed to them in the Exchange Agreement (as defined below).
RECITALS
WHEREAS, the parties hereto entered into an Exchange Agreement,
dated as of
March 19, 1995 (the Exchange Agreement ); and
WHEREAS, the parties hereto desire to amend the Exchange Agreement.
NOW THEREFORE, in consideration of the foregoing and other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties
hereto do agree to amend the Exchange Agreement as follows:
1. Section 3.1 (b) of the Exchange Agreement entitled
Capitalization shall
be and is hereby amended to read in its entirety as follows:
The authorized capital stock of the Company consists of 450,000,000
shares of common
stock, par value $.01-2/3 per share (the "Company Common Stock") and
75,000,000
shares of preferred stock. As of the date of this Agreement (i)
85,852,798 shares of the
Company Common Stock are validly issued and outstanding, fully paid and
nonassessable, (ii) no shares of Preferred Stock are issued and
outstanding and (iii)
5,617,204 shares of the Company Common Stock are issuable upon exercise of
outstanding Options heretofore granted. Except as contemplated by
clauses (i) through
(iii) above, the MSE Agreement, or this Agreement, and except for the
rights to purchase
one one-hundredth (1/100th) of a share of Series A Junior Participating
Preferred Stock
of the Company issued pursuant to the Rights Agreement, dated as of July
14, 1994, by
and between the Company and First Chicago Trust Company of New York,
there are no
other shares of capital stock, or other equity securities of the Company
outstanding, and
no other outstanding options, warrants, rights to subscribe to
(including any preemptive
rights), calls or commitments of any character whatsoever to which the
Company or any
of its subsidiaries is a party or may be bound, requiring the issuance
or sale of shares
of any capital stock or other equity securities of the Company or
securities or rights
convertible into or exchangeable for such shares or other equity
securities, and there are
no contracts, commitments, understandings or arrangements by which the
Company is
or may become bound to issue additional shares of its capital stock or
other equity
securities or options, warrants or rights to purchase or acquire any
additional shares of
its capital stock or other equity securities or securities convertible
into or exchangeable
for such shares or other equity securities.
2. Section 3.3(d) of the Exchange Agreement entitled Investment
Representations shall be and is hereby amended to read in its entirety as
follows:
(a) Such Minority Investor understands that the shares of Preferred
Stock, and the
shares of the Company Common Stock issuable upon exchange of such shares
(collectively, the "Securities"), to be issued and delivered to him
pursuant to the terms
of this Agreement have not been registered pursuant to the registration
requirements of
the Securities Act of 1933, as amended (the "Securities Act") by reason
of the reliance
on an exemption from the registration requirements of the Securities Act
pursuant to
Section 4(2) thereof.
(b) Such Minority Investor (i) has the capacity to protect his own
interests in
connection with the transactions contemplated hereby, (ii) is able to
bear the economic
risk thereof, (iii) is knowledgeable, sophisticated and experienced in
business and
financial matters and has previously invested in securities similar to
the Preferred Stock,
and (iv) is an "accredited investor" (as such term is defined in Rule
501(a) of Regulation
D under the Securities Act) or if not an "accredited investor," has
either alone or with
his "purchaser representative" (as such term is defined in Rule 501(h)
of Regulation D
under the Securities Act) such knowledge and experience in financial
matters that he is
capable of evaluating the merits and risks of an investment in the
Preferred Stock. The
Company has delivered or made available to each of the Minority
Investors such
documents, materials and information pertaining to the Company as he
may have
requested and has afforded him an opportunity to ask questions of and
receive answers
from the Company and its executive officers and representatives.
(c) Such Minority Investor understands that the Securities to be issued
pursuant to the
terms of this Agreement may not be sold, transferred or otherwise
disposed of without
registration under the Securities Act or an exemption therefrom, and
that in the absence
of an effective registration statement covering the same or an
available exemption from
registration under the Securities Act, such Securities must be held
indefinitely. In the
absence of an effective registration statement under the Securities Act
or an exemption
therefrom, each of the Minority Investors will not sell, transfer or
otherwise dispose of
any Securities received pursuant to the terms of this Agreement, except
in a manner
consistent with his representations set forth in this Section.
(d) Such Minority Investor understands and acknowledges that each
certificate
representing the Securities issued to him pursuant to the terms of this
Agreement will
bear a legend to the following effect:
The securities represented by this certificate have not been
registered
under the securities act of 1933, as amended. Such securities may
not be
offered, sold, or otherwise transferred, pledged or hypothecated
except
pursuant to (i) a registration statement with respect to such
securities,
which is effective under such act, or (ii) any exemption from
registration
under such act relating to the disposition of securities,
including rule 144,
provided an opinion of counsel is furnished, reasonably
satisfactory in
form and substance to the company, that an exemption from the
registration requirements of such act is available.
(e) Such Minority Investor represents that he has carefully read this
Section and
discussed its requirements and other applicable limitations upon his
ability to sell,
transfer or otherwise dispose of the Securities received pursuant to the
terms of this
Agreement to the extent that he felt necessary with his counsel and will
not make any
sale, transfer or other disposition of such Securities in violation of
the Securities Act or
the rules and regulations thereunder.
3. This Amendment shall be and is hereby incorporated in and
forms a part
of the Exchange Agreement, and shall be effective as of March 19, 1995.
4. This Amendment may be executed in any number of counterparts,
each
of which shall be deemed an original, but all of which together will
constitute one and the same
instrument.
5. All other terms and provisions of the Exchange Agreement
shall remain
unchanged except as specifically modified herein.
[Signature page to follow]<PAGE>
IN WITNESS WHEREOF,
each party has executed this Amendment as of the date first
above written.
CIRCUS CIRCUS ENTERPRISES, INC.,
a Nevada corporation
By: CLYDE T. TURNER
Name: CLYDE T. TURNER
Title: Chief Executive Officer
NEW WAY, INC.,
a Nevada corporation
By: CLYDE T. TURNER
Name: CLYDE T. TURNER
Title: President
GLENN W. SCHAEFFER
Glenn W. Schaeffer
GREGG H. SOLOMON
Gregg H. Solomon
ANTONIO C. ALAMO
Antonio C. Alamo
ANTHONY KORFMAN
Anthony Korfman
WILLIAM ENSIGN
William Ensign
Exhibit 10(i)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into
this 1st day of June, 1995, by and between Circus Circus
Enterprises, Inc., a Nevada corporation (the "Company") and
Clyde Turner ("Executive").
W I T N E S S E T H:
WHEREAS, Executive and the Company deem it
to be in their respective best interests to enter into an agreement
providing for the Company's employment of Executive pursuant
to the terms herein stated;
NOW, THEREFORE, in consideration of the
premises and the mutual promises and agreements contained
herein, it is hereby agreed as follows:
1. Effective Date. This Agreement shall be
effective as of the 1st day of June, 1995, which date shall be re-
ferred to herein as the "Effective Date".
2. Position and Duties.
(a) The Company hereby employs Execu-
tive as its Chairman of the Board and Chief Executive Officer
commencing as of the Effective Date for the "Term of Employ-
ment" (as herein defined below). In this capacity, Executive
shall devote his best efforts and his full business time and
attention to the performance of the services customarily incident
to such offices and position and to such other services of a
senior executive nature as may be reasonably requested by the
Board of Directors (the "Board") of the Company which may
include services for one or more subsidiaries or affiliates of the
Company. Executive shall in his capacity as an employee and
officer of the Company be responsible to and obey the
reasonable and lawful directives of the Board.
(b) Executive shall devote his full time
and attention to such duties, except for sick leave, reasonable
vacations, and excused leaves of absence as more particularly
provided herein. Executive shall use his best efforts during the
Term of Employment to protect, encourage, and promote the
interests of the Company.
3. Compensation.
(a) Base Salary. The Company shall pay
to Executive during the Term of Employment a minimum salary
at the rate of eight hundred thousand dollars ($800,000) per
calendar year and agrees that such salary shall be reviewed at
least annually. Such salary shall be subject to mandatory annual
increases for each year during the Term of Employment equal to
5% of the rate of such salary in effect immediately prior to each
such increase, with further discretionary increases as determined
by the Board of Directors. Such salary shall be payable in
accordance with the Company's normal payroll procedures.
(Executive's annual salary, as set forth above or as it may be
increased from time to time as set forth herein, shall be referred
to hereinafter as "Base Salary.") At no time during the Term of
Employment shall Executive's Base Salary be decreased from
the amount of Base Salary then in effect.
(b) Performance Bonus. In addition to
the compensation otherwise payable to Executive pursuant to
this Agreement, Executive shall be eligible to receive an annual
bonus ("Bonus") pursuant to a performance bonus plan (the
"Bonus Plan") which shall be established by the Company for its
senior executive officers and which shall provide for bonus
compensation to be payable based upon the financial and other
performance of the Company and its senior executives. It is
intended that the Bonus Plan shall conform to the requirements
applicable to "qualified performance based compensation" under
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). During the Term of Employment,
Executive's targeted annual bonus under the Bonus Plan shall
not be less than 100% of Executive's then current Base Salary.
(c) Long Term Incentive/Stock
Options. Executive has been granted a stock option to purchase
the Company's common stock as set forth in that certain Non-
Qualified Stock Option Certificate and Agreement dated as of
March 19, 1995 and attached hereto as Exhibit A.
4. Benefits. During the Term of Employment:
(a) Executive shall be eligible to partic-
ipate in any life, health and long-term disability insurance
programs, pension and retirement programs, stock option and
other incentive compensation programs, and other fringe benefit
programs made available to senior executive employees of the
Company from time to time, and Executive shall be entitled to
receive such other fringe benefits as may be granted to him
from time to time by the Company's Board of Directors.
(b) Executive shall be allowed vacations
and leaves of absence with pay on the same basis as other senior
executive employees of the Company.
(c) The Company shall reimburse
Executive for reasonable business expenses incurred in
performing Executive's duties and promoting the business of the
Company, including, but not limited to, reasonable entertain-
ment expenses, travel and lodging expenses, following presenta-
tion of documentation in accordance with the Company's busi-
ness expense reimbursement policies.
(d) Executive shall be added as an addi-
tional named insured under all liability insurance policies now in
force or hereafter obtained covering any officer or director of
the Company in his or her capacity as an officer or director.
Company shall indemnify Executive in his capacity as an officer
or director and hold him harmless from any cost, expense or
liability arising out of or relating to any acts or decisions made
by him on behalf of or in the course of performing services for
the Company (to the maximum extent provided by the
Company's Bylaws and applicable law).
5. Term; Termination of Employment. As used
herein, the phrase "Term of Employment" shall mean the period
commencing on the Effective Date and ending three (3) years
from the Effective Date provided that as of the expiration date
of each of (i) the initial three (3) year Term of Employment and
(ii) if applicable, any Renewal Period (as defined below), the
Term of Employment shall automatically be extended for a three
(3) year period (each a "Renewal Period") unless either the
Company or Executive provides six (6) months' notice to the
contrary. Notwithstanding the foregoing, the Term of
Employment shall expire on the first to occur of the following:
(a) Termination by the Company Without
Cause or By Executive With Good Reason. Notwithstanding
anything to the contrary in this Agreement, whether express or
implied, the Company may, at any time, terminate Executive's
employment for any reason other than Cause (as defined below)
by giving Executive at least 60 days' prior written notice of the
effective date of termination. In the event Executive's
employment hereunder is terminated by the Company other than
for Cause or by Executive for Good Reason (as defined below),
Executive shall be entitled to receive (x) his Base Salary as he
would have received such amounts during the period commenc-
ing on the effective date of such termination and ending on the
third anniversary thereof (the "Salary Continuation Period"), as
if Executive were still employed hereunder during the Salary
Continuation Period; (y) if it has not previously been paid to
Executive, any Bonus to which Executive had become entitled
under the Bonus Plan prior to the effective date of such
termination; and (z) annual Bonuses during the Salary
Continuation Period in an amount equal to the product of
Executive's Base Salary on the effective date of such termination
and the minimum targeted bonus percentage specified in Section
3(b), payable in the ordinary course and prorated, as applicable,
for any partial fiscal year of the Bonus Plan ending on the final
day of the Salary Continuation Period. In addition, all of
Executive's stock options with respect to the Company's stock
shall become immediately and fully exercisable. During the
Salary Continuation Period, Executive and his spouse and
dependents shall be entitled to continue to be covered by all
group medical, health and accident insurance or other such
health care arrangements in which Executive was a participant
as of the date of such termination, at the same coverage level
and on the same terms and conditions which applied
immediately prior to the date of Executive's termination of
employment, until Executive obtains alternative comparable
coverage under another group plan, which coverage does not
contain any pre-existing condition exclusions or limitations;
provided, however, that if, as the result of the termination of
Executive's employment, Executive and/or his otherwise eligible
dependents or beneficiaries shall become ineligible for benefits
under any one or more of the Company's benefit plans, the
Company shall continue to provide Executive and his eligible
dependents or beneficiaries, through other means, with benefits
at a level at least equivalent to the level of benefits for which
Executive and his dependents and beneficiaries were eligible
under such plans immediately prior to the date of Executive's
termination of employment. At the termination of the benefits
coverage under the preceding sentence, Executive and his
spouse and dependents shall be entitled to continuation coverage
pursuant to Section 4980B of the Internal Revenue Code of
1986, as amended, Sections 601-608 of the Employee
Retirement Income Security Act of 1974, as amended, and
under any other applicable law, to the extent required by such
laws, as if Executive had terminated employment with the
Company on the date such benefits coverage terminates.
For purposes of this Agreement, "Good Reason" shall
mean, without the express written consent of Executive, the
occurrence of any of the following events unless such events are
fully corrected within 30 days following written notification by
Executive to the Company that he intends to terminate his
employment hereunder for one of the reasons set forth below:
(i) a material breach by the
Company of any material provision of this
Agreement, including, but not limited to, the
assignment to Executive of any duties inconsistent
with Executive's position in the Company or an
adverse alteration in the nature or status of
Executive's responsibilities;
(ii) the Company's requiring the
Executive to be based anywhere other than the
metropolitan area where he currently works and
resides;
(iii) the occurrence of a "Change
in Control" as defined below; and
(iv) the Company's notifying
Executive that it does not consent to any
automatic three-year extension of the Term of
Employment.
For purposes of this Agreement a "Change in Control"
shall mean an event as a result of which: (i) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Securities
and Exchange Act of 1934 (the "Exchange Act")), is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more
than 50% of the total voting power of the voting stock of the
Company; (ii) the Company consolidates with, or merges with
or into another corporation or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its
assets to any person, or any corporation consolidates with, or
merges with or into, the Company, in any such event pursuant
to a transaction in which the outstanding voting stock of the
Company is changed into or exchanged for cash, securities or
other property, other than any such transaction where (A) the
outstanding voting stock of the Company is changed into or
exchanged for (x) voting stock of the surviving or transferee
corporation or (y) cash, securities (whether or not including
voting stock) or other property, and (B) the holders of the
voting stock of the Company immediately prior to such
transaction own, directly or indirectly, not less than 50% of the
voting power of the voting stock of the surviving corporation
immediately after such transaction; or (iii) during any period of
two consecutive years, individuals who at the beginning of such
period constituted the Board of the Company (together with any
new directors whose election by such Board or whose nomi-
nation for election by the stockholders of the Company was
approved by a vote of 66-2/3% of the directors then still in
office who were either directors at the beginning of such period
or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
Board of the Company then in office; or (iv) the Company is
liquidated or dissolved or adopts a plan of liquidation, provided
however that a Change in Control shall not include any going
private or leveraged buy-out transaction which is sponsored by
Executive or in which Executive acquires an equity interest
materially in excess of his equity interest in the Company
immediately prior to such transaction (each of the events de-
scribed in (i), (ii), (iii) or (iv) above, as provided otherwise by
the preceding clause being referred to herein as a "Change in
Control").
(b) Termination for Cause. The
Company shall have the right to terminate Executive's
employment at any time for Cause by giving Executive written
notice of the effective date of termination (which effective date
may, except as otherwise provided below, be the date of such
notice). If the Company terminates Executive's employment for
Cause, Executive shall be paid his unpaid Base Salary through
the date of termination and the amount of any unpaid Bonus to
which Executive had become entitled under the Bonus Plan prior
to the effective date of such termination and the Company shall
have no further obligation hereunder from and after the effective
date of termination and the Company shall have all other rights
and remedies available under this or any other agreement and at
law or in equity.
For purposes of this Agreement only, Cause shall mean:
i) fraud, misappropriation, embezzle-
ment, or other act of material mis-
conduct against the Company or
any of its affiliates;
ii) substantial and willful failure to
perform specific and lawful direc-
tives of the Board, as reasonably
determined by the Board;
iii) willful and knowing violation of
any rules or regulations of any
governmental or regulatory body,
which is materially injurious to the
financial condition of the Company;
iv) conviction of or plea of guilty or
nolo contendere to a felony; or
v) Executive's loss of any personal
gaming or related regulatory
approval or license required to
perform his duties under this
Agreement;
provided, however, that with regard to subparagraph ii) above,
Executive may not be terminated for Cause unless and until the
Board has given him reasonable written notice of its intended
actions and specifically describing the alleged events, activities
or omissions giving rise thereto and with respect to those events,
activities or omissions for which a cure is possible, a reasonable
opportunity to cure such breach; and provided, further, that for
purposes of determining whether any such Cause is present, no
act or failure to act by Executive shall be considered "willful" if
done or omitted to be done by Executive in good faith and in the
reasonable belief that such act or omission was in the best
interest of the Company and/or required by applicable law.
(c) Termination on Account of Death. In
the event of Executive's death while in the employ of the
Company, his employment hereunder shall terminate on the date
of his death and Executive shall be paid his unpaid Base Salary
through the date of termination and the amount of any unpaid
Bonus to which Executive had become entitled under the Bonus
Plan prior to the effective date of such termination. In addition,
any other benefits payable on behalf of Executive shall be deter-
mined under the Company's insurance and other compensation
and benefit plans and programs then in effect in accordance with
the terms of such programs.
(d) Voluntary Termination by Executive.
In the event that Executive's employment with the Company is
voluntarily terminated by Executive other than for Good Reason,
Executive shall be paid his unpaid Base Salary through the date
of termination and the amount of any unpaid Bonus to which
Executive had become entitled under the Bonus Plan prior to the
effective date of such termination, and the Company shall have
no further obligation hereunder from and after the effective date
of termination and the Company shall have all other rights and
remedies available under this Agreement or any other agreement
and at law or in equity. Executive shall give the Company at
least 30 days' advance written notice of his intention to
terminate his employment hereunder.
(e) Termination on Account of Disability.
To the extent not prohibited by The Americans With Disabilities
Act of 1990 or Chapter 613 of the Nevada Revised Statutes, if,
as a result of Executive's incapacity due to physical or mental
illness (as determined in good faith by a physician acceptable to
the Company and Executive), Executive shall have been absent
from the full-time performance of his duties with the Company
for 120 consecutive days during any twelve (12) month period
or if a physician acceptable to the Company advises the
Company that it is likely that Executive will be unable to return
to the full-time performance of his duties for 120 consecutive
days during the succeeding twelve (12) month period, his em-
ployment may be terminated for "Disability." During any
period that Executive fails to perform his full-time duties with
the Company as a result of incapacity due to physical or mental
illness, he shall continue to receive his Base Salary, Bonus and
other benefits provided hereunder, together with all compen-
sation payable to him under the Company's disability plan or
program or other similar plan during such period, until
Executive's employment hereunder is terminated pursuant to this
Section 5(e). Thereafter, Executive's benefits shall be deter-
mined under the Company's retirement, insurance, and other
compensation and benefit plans and programs then in effect, in
accordance with the terms of such programs.
6. Confidential Information, Non-Solicitation and
Non-Competition.
(a) During the Term of Employment
and for three (3) years thereafter, Executive shall not, except as
may be required to perform his duties hereunder or as required
by applicable law, disclose to others or use, whether directly or
indirectly, any Confidential Information regarding the Company.
"Confidential Information" shall mean information about the
Company, its subsidiaries and affiliates, and their respective
clients and customers that is not available to the general public
and that was learned by Executive in the course of his em-
ployment by the Company, including (without limitation) any
proprietary knowledge, trade secrets, data, formulae, informa-
tion, and client and customer lists and all papers, resumes,
records (including computer records) and the documents contain-
ing such Confidential Information. Executive acknowledges that
such Confidential Information is specialized, unique in nature
and of great value to the Company, and that such information
gives the Company a competitive advantage. Upon the
termination of his employment for any reason whatsoever,
Executive shall promptly deliver to the Company all documents,
computer tapes and disks (and all copies thereof) containing any
Confidential Information.
(b) During the period that Executive is
receiving payments under this Agreement (which Executive may
elect to terminate at any time), Executive shall not, directly or
indirectly in any manner or capacity (e.g., as an advisor,
principal, agent, partner, officer, director, shareholder,
employee, member of any association or otherwise) engage in,
work for, consult, provide advice or assistance or otherwise
participate in any activity which is competitive with the business
of the Company in any geographic area in which the Company
is now or shall then be doing business. Executive further agrees
that during such period he will not assist or encourage any other
person in carrying out any activity that would be prohibited by
the foregoing provisions of this Section 6 if such activity were
carried out by Executive and, in particular, Executive agrees
that he will not induce any employee of the Company to carry
out any such activity; provided, however, that the "beneficial
ownership" by Executive, either individually or as a member of
a "group," as such terms are used in Rule 13d of the General
Rules and Regulations under the Exchange Act, of not more
than five percent (5%) of the voting stock of any publicly held
corporation shall not be a violation of this Agreement. It is fur-
ther expressly agreed that the Company will or would suffer
irreparable injury if Executive were to compete with the
Company or any subsidiary or affiliate of the Company in viola-
tion of this Agreement and that the Company would by reason
of such competition be entitled to injunctive relief in a court of
appropriate jurisdiction, and Executive further consents and
stipulates to the entry of such injunctive relief in such a court
prohibiting Executive from competing with the Company or any
subsidiary or affiliate of the Company in violation of this
Agreement.
(c) During the Term of Employment
and for three (3) years thereafter, Executive shall not, directly
or indirectly, influence or attempt to influence customers or
suppliers of the Company or any of its subsidiaries or affiliates,
to divert their business to any competitor of the Company.
(d) Executive recognizes that he will
possess confidential information about other employees of the
Company relating to their education, experience, skills, abilities,
compensation and benefits, and interpersonal relationships with
customers of the Company. Executive recognizes that the
information he will possess about these other employees is not
generally known, is of substantial value to the Company in
developing its business and in securing and retaining customers,
and will be acquired by him because of his business position
with the Company. Executive agrees that, during the Term of
Employment, and for a period of three (3) years thereafter, he
will not, directly or indirectly, solicit or recruit any employee of
the Company for the purpose of being employed by him or by
any competitor of the Company on whose behalf he is acting as
an agent, representative or employee and that he will not convey
any such confidential information or trade secrets about other
employees of the Company to any other person.
(e) If it is determined by a court of
competent jurisdiction in any state that any restriction in this
Section 6 is excessive in duration or scope or is unreasonable or
unenforceable under the laws of that state, it is the intention of
the parties that such restriction may be modified or amended by
the court to render it enforceable to the maximum extent
permitted by the law of that state.
7. No Offset - No Mitigation. Executive shall
not be required to mitigate damages under this Agreement by
seeking other comparable employment. The amount of any pay-
ment or benefit provided for in this Agreement, including
welfare benefits, shall not be reduced by any compensation or
benefits earned by or provided to him as the result of employ-
ment by another employer, except as provided otherwise in
Section 5(a) with respect to health and insurance benefits
provided during the Salary Continuation Period.
8. Designated Beneficiary. In the event of the
death of Executive while in the employ of the Company, or at
any time thereafter during which amounts remain payable to
Executive under Section 5, such payments (other than the right
to continuation of welfare benefits) shall thereafter be made to
such person or persons as Executive may specifically designate
(successively or contingently) to receive payments under this
Agreement following Executive's death by filing a written
beneficiary designation with the Company during Executive's
lifetime. Such beneficiary designation shall be in such form as
may be prescribed by the Company and may be amended from
time to time or may be revoked by Executive pursuant to written
instruments filed with the Company during his lifetime.
Beneficiaries designated by Executive may be any natural or
legal person or persons, including a fiduciary, such as a trustee
or a trust or the legal representative of an estate. Unless
otherwise provided by the beneficiary designation filed by
Executive, if all of the persons so designated die before
Executive on the occurrence of a contingency not contemplated
in such beneficiary designation, then the amounts payable under
this Agreement shall be paid to Executive's estate.
9. Taxes. All payments to be made to Executive
under this Agreement will be subject to any applicable
withholding of federal, state and local income and employment
taxes.
10. Miscellaneous. This Agreement shall also be
subject to the following miscellaneous considerations:
(a) Executive and the Company each
represent and warrant to the other that he or it has the authoriza-
tion, power and right to deliver, execute, and fully perform his
or its obligations under this Agreement in accordance with its
terms.
(b) This Agreement contains a complete
statement of all the arrangements between the parties with
respect to Executive's employment by the Company, this Agree-
ment supersedes all prior and existing negotiations and
agreements between the parties concerning Executive's employ-
ment, and this Agreement can only be changed or modified
pursuant to a written instrument duly executed by each of the
parties hereto.
(c) If any provision of this Agreement or
any portion thereof is declared invalid, illegal, or incapable of
being enforced by any court of competent jurisdiction, the
remainder of such provisions and all of the remaining provisions
of this Agreement shall continue in full force and effect.
(d) This Agreement shall be governed by
and construed in accordance with the internal laws of the State
of Nevada, except to the extent governed by federal law.
(e) The Company may assign this Agree-
ment to any direct or indirect subsidiary or parent of the
Company or joint venture in which the Company has an interest,
or any successor (whether by merger, consolidation, purchase or
otherwise) to all or substantially all of the stock, assets or
business of the Company and this Agreement shall be binding
upon and inure to the benefit of such successors and assigns.
Except as expressly provided herein, Executive may not sell,
transfer, assign, or pledge any of his rights or interests pursuant
to this Agreement.
(f) Any rights of Executive hereunder
shall be in addition to any rights Executive may otherwise have
under benefit plans, agreements, or arrangements of the Compa-
ny to which he is a party or in which he is a participant,
including, but not limited to, any Company-sponsored employee
benefit plans. Provisions of this Agreement shall not in any
way abrogate Executive's rights under such other plans,
agreements, or arrangements.
(g) For the purpose of this Agreement,
notices and all other communications provided for in this Agree-
ment shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States certified or
registered mail, return receipt requested, postage prepaid,
addressed to the named Executive at the address set forth below
under his signature; provided that all notices to the Company
shall be directed to the attention of the Board with a copy to the
Secretary of the Company, or to such other address as either
party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effec-
tive only upon receipt.
(h) Section 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.
(i) Failure to insist upon strict compliance
with any of the terms, covenants, or conditions hereof shall not
be deemed a waiver of such term, covenant, or condition, nor
shall any waiver or relinquishment of, or failure to insist upon
strict compliance with, any right or power hereunder at any one
or more times be deemed a waiver or relinquishment of such
right or power at any other time or times.
(j) This Agreement may be executed in
several counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same instrument.
11. Resolution of Disputes. Any dispute or
controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration, conducted before a
panel of three arbitrators in Las Vegas, Nevada in accordance
with the rules of the American Arbitration Association then in
effect. The Company and Executive hereby agree that the
arbitrator will not have the authority to award punitive damages,
damages for emotional distress or any other damages that are
not contractual in nature. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided,
however, that the Company shall be entitled to seek a
restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation of the
provisions of Section 6, and Executive consents that such re-
straining order or injunction may be granted without the neces-
sity of the Company's posting any bond except to the extent
otherwise required by applicable law. The expense of such
arbitration shall be borne by the Company.
12. Attorneys' Fees. Should either party hereto
or their successors retain counsel for the purpose of enforcing,
or preventing the breach of, any provision hereof, including, but
not limited to, by instituting any action or proceeding in
arbitration or a court to enforce any provision hereof or to
enjoin a breach of any provision of this Agreement, or for a
declaration of such party's rights or obligations under the
Agreement, or for any other remedy, whether in arbitration or
in a court of law, then the successful party shall be entitled to
be reimbursed by the other party for all costs and expenses
incurred thereby, including, but not limited to, reasonable fees
and expenses of attorneys and expert witnesses, including costs
of appeal. If such successful party shall recover judgment in
any such action or proceeding, such costs, expenses and fees
may be included in and as part of such judgment. The
successful party shall be the party who is entitled to recover his
costs of suit, whether or not the suit proceeds to final judgment.
If no costs are awarded, the successful party shall be determined
by the arbitrator or court, as the case may be.
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the day and year first above
written.
EXECUTIVE COMPANY
CLYDE T. TURNER CIRCUS CIRCUS
ENTERPRISES, INC.
By: CLYDE T. TURNER By: CLYDE T. TURNER
Title: Chairman of the Board and Title: Chairman of the Board and
Chief Executive Officer Chief Executive Officer
Address:
2880 Las Vegas Blvd., South
Las Vegas, Nevada 89109
Exhibit 10(k)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into
this 1st day of June, 1995, by and between Circus Circus
Enterprises, Inc., a Nevada corporation (the "Company") and
Glenn W. Schaeffer ("Executive").
W I T N E S S E T H:
WHEREAS, Executive and the Company deem it
to be in their respective best interests to enter into an agreement
providing for the Company's employment of Executive pursuant
to the terms herein stated;
NOW, THEREFORE, in consideration of the
premises and the mutual promises and agreements contained
herein, it is hereby agreed as follows:
1. Effective Date. This Agreement shall be
effective as of the 1st day of June, 1995, which date shall be re-
ferred to herein as the "Effective Date".
2. Position and Duties.
(a) The Company hereby employs Execu-
tive as its President, Treasurer and Chief Financial Officer
commencing as of the Effective Date for the "Term of Employ-
ment" (as herein defined below). In this capacity, Executive
shall devote his best efforts and his full business time and
attention to the performance of the services customarily incident
to such offices and position and to such other services of a
senior executive nature as may be reasonably requested by the
Board of Directors (the "Board") of the Company which may
include services for one or more subsidiaries or affiliates of the
Company. Executive shall in his capacity as an employee and
officer of the Company be responsible to and obey the
reasonable and lawful directives of the Board and of any officers
("Supervising Officers") to whom he shall report.
(b) Executive shall devote his full time
and attention to such duties, except for sick leave, reasonable
vacations, and excused leaves of absence as more particularly
provided herein. Executive shall use his best efforts during the
Term of Employment to protect, encourage, and promote the
interests of the Company.
3. Compensation.
(a) Base Salary. The Company shall pay
to Executive during the Term of Employment a minimum salary
at the rate of six hundred thousand dollars ($600,000) per calen-
dar year and agrees that such salary shall be reviewed at least
annually. Such salary shall be subject to mandatory annual
increases for each year during the Term of Employment equal to
5% of the rate of such salary in effect immediately prior to each
such increase, with further discretionary increases as determined
by the Board of Directors. Such salary shall be payable in
accordance with the Company's normal payroll procedures.
(Executive's annual salary, as set forth above or as it may be
increased from time to time as set forth herein, shall be referred
to hereinafter as "Base Salary.") At no time during the Term of
Employment shall Executive's Base Salary be decreased from
the amount of Base Salary then in effect.
(b) Performance Bonus. In addition to
the compensation otherwise payable to Executive pursuant to
this Agreement, Executive shall be eligible to receive an annual
bonus ("Bonus") pursuant to a performance bonus plan (the
"Bonus Plan") which shall be established by the Company for its
senior executive officers and which shall provide for bonus
compensation to be payable based upon the financial and other
performance of the Company and its senior executives. It is
intended that the Bonus Plan shall conform to the requirements
applicable to "qualified performance based compensation" under
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). During the Term of Employment,
Executive's targeted annual bonus under the Bonus Plan shall
not be less than 100% of Executive's then current Base Salary.
(c) Long Term Incentive/Stock Options.
Executive has been granted stock options to purchase the
Company's common stock as set forth in those certain Non-
Qualified Stock Option Certificates and Agreements dated as of
March 19, 1995 and attached hereto as Exhibits A, B and C.
4. Benefits. During the Term of Employment:
(a) Executive shall be eligible to partic-
ipate in any life, health and long-term disability insurance
programs, pension and retirement programs, stock option and
other incentive compensation programs, and other fringe benefit
programs made available to senior executive employees of the
Company from time to time, and Executive shall be entitled to
receive such other fringe benefits as may be granted to him
from time to time by the Company's Board of Directors.
(b) Executive shall be allowed vacations
and leaves of absence with pay on the same basis as other senior
executive employees of the Company.
(c) The Company shall reimburse
Executive for reasonable business expenses incurred in
performing Executive's duties and promoting the business of the
Company, including, but not limited to, reasonable entertain-
ment expenses, travel and lodging expenses, following presenta-
tion of documentation in accordance with the Company's busi-
ness expense reimbursement policies.
(d) Executive shall be added as an addi-
tional named insured under all liability insurance policies now in
force or hereafter obtained covering any officer or director of
the Company in his or her capacity as an officer or director.
Company shall indemnify Executive in his capacity as an officer
or director and hold him harmless from any cost, expense or
liability arising out of or relating to any acts or decisions made
by him on behalf of or in the course of performing services for
the Company (to the maximum extent provided by the
Company's Bylaws and applicable law).
5. Term; Termination of Employment. As used
herein, the phrase "Term of Employment" shall mean the period
commencing on the Effective Date and ending three (3) years
from the Effective Date, provided that as of the expiration date
of each of (i) the initial three (3) year Term of Employment and
(ii) if applicable, any Renewal Period (as defined below), the
Term of Employment shall automatically be extended for a one
(1) year period (each a "Renewal Period") unless either the
Company or Executive provides six (6) months' notice to the
contrary. Notwithstanding the foregoing, the Term of
Employment shall expire on the first to occur of the following:
(a) Termination by the Company Without
Cause or By Executive With Good Reason. Notwithstanding
anything to the contrary in this Agreement, whether express or
implied, the Company may, at any time, terminate Executive's
employment for any reason other than Cause (as defined below)
by giving Executive at least 60 days' prior written notice of the
effective date of termination. In the event Executive's
employment hereunder is terminated by the Company other than
for Cause or by Executive for Good Reason (as defined below),
Executive shall be entitled to receive (x) his Base Salary as he
would have received such amounts during the period commenc-
ing on the effective date of such termination and ending on the
later of (i) the expiration of the Term of Employment or (ii) the
date that is twelve (12) months following the effective date of
such termination (the "Salary Continuation Period"), as if
Executive were still employed hereunder during the Salary
Continuation Period; (y) if it has not previously been paid to
Executive, any Bonus to which Executive had become entitled
under the Bonus Plan prior to the effective date of such
termination; and (z) annual Bonuses during the Salary
Continuation Period in an amount equal to the product of
Executive's Base Salary on the effective date of such termination
and the minimum targeted bonus percentage specified in Section
3(b), payable in the ordinary course and prorated, as applicable,
for any partial fiscal year of the Bonus Plan ending on the final
day of the Salary Continuation Period. In addition, all of
Executive's stock options with respect to the Company's stock
shall become immediately and fully exercisable. During the
Salary Continuation Period, Executive and his spouse and
dependents shall be entitled to continue to be covered by all
group medical, health and accident insurance or other such
health care arrangements in which Executive was a participant
as of the date of such termination, at the same coverage level
and on the same terms and conditions which applied
immediately prior to the date of Executive's termination of
employment, until Executive obtains alternative comparable
coverage under another group plan, which coverage does not
contain any pre-existing condition exclusions or limitations;
provided, however, that if, as the result of the termination of
Executive's employment, Executive and/or his otherwise eligible
dependents or beneficiaries shall become ineligible for benefits
under any one or more of the Company's benefit plans, the
Company shall continue to provide Executive and his eligible
dependents or beneficiaries, through other means, with benefits
at a level at least equivalent to the level of benefits for which
Executive and his dependents and beneficiaries were eligible
under such plans immediately prior to the date of Executive's
termination of employment. At the termination of the benefits
coverage under the preceding sentence, Executive and his
spouse and dependents shall be entitled to continuation coverage
pursuant to Section 4980B of the Internal Revenue Code of
1986, as amended, Sections 601-608 of the Employee
Retirement Income Security Act of 1974, as amended, and
under any other applicable law, to the extent required by such
laws, as if Executive had terminated employment with the
Company on the date such benefits coverage terminates.
For purposes of this Agreement, "Good Reason" shall
mean, without the express written consent of Executive, the
occurrence of any of the following events unless such events are
fully corrected within 30 days following written notification by
Executive to the Company that he intends to terminate his
employment hereunder for one of the reasons set forth below:
i) a material breach by the Company
of any material provision of this
Agreement, including, without
limitation, the assignment to
Executive of any duties inconsistent
with Executive's position in the
Company or an adverse alteration
in the nature or status of
Executive's responsibilities,
provided, however, that the
Company shall have the right to
remove Executive from the position
of Treasurer and such removal shall
not alone constitute "Good Reason"
hereunder;
ii) the Company's requiring Executive
to be based anywhere other than the
metropolitan area where he
currently works and resides;
iii) the occurrence of a "Change in
Control" as defined below; or
iv) the Company's notifying Executive
that it does not consent to any
automatic one-year extension of the
Term of Employment.
For purposes of this Agreement a "Change in Control"
shall mean an event as a result of which: (i) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Securities
and Exchange Act of 1934 (the "Exchange Act")), is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more
than 50% of the total voting power of the voting stock of the
Company; (ii) the Company consolidates with, or merges with
or into another corporation or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its
assets to any person, or any corporation consolidates with, or
merges with or into, the Company, in any such event pursuant
to a transaction in which the outstanding voting stock of the
Company is changed into or exchanged for cash, securities or
other property, other than any such transaction where (A) the
outstanding voting stock of the Company is changed into or
exchanged for (x) voting stock of the surviving or transferee
corporation or (y) cash, securities (whether or not including
voting stock) or other property, and (B) the holders of the
voting stock of the Company immediately prior to such
transaction own, directly or indirectly, not less than 50% of the
voting power of the voting stock of the surviving corporation
immediately after such transaction; or (iii) during any period of
two consecutive years, individuals who at the beginning of such
period constituted the Board of the Company (together with any
new directors whose election by such Board or whose nomi-
nation for election by the stockholders of the Company was
approved by a vote of 66-2/3% of the directors then still in
office who were either directors at the beginning of such period
or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
Board of the Company then in office; or (iv) the Company is
liquidated or dissolved or adopts a plan of liquidation, provided
however that a Change in Control shall not include any going
private or leveraged buy-out transaction which is sponsored by
Executive or in which Executive acquires an equity interest
materially in excess of his equity interest in the Company
immediately prior to such transaction (each of the events de-
scribed in (i), (ii), (iii) or (iv) above, as provided otherwise by
the preceding clause being referred to herein as a "Change in
Control").
(b) Termination for Cause. The
Company shall have the right to terminate Executive's
employment at any time for Cause by giving Executive written
notice of the effective date of termination (which effective date
may, except as otherwise provided below, be the date of such
notice). If the Company terminates Executive's employment for
Cause, Executive shall be paid his unpaid Base Salary through
the date of termination and the amount of any unpaid Bonus to
which Executive had become entitled under the Bonus Plan prior
to the effective date of such termination and the Company shall
have no further obligation hereunder from and after the effective
date of termination and the Company shall have all other rights
and remedies available under this or any other agreement and at
law or in equity.
For purposes of this Agreement only, Cause shall mean:
i) fraud, misappropriation, embezzle-
ment, or other act of material mis-
conduct against the Company or
any of its affiliates;
ii) substantial and willful failure to
perform specific and lawful direc-
tives of the Board or any Supervis-
ing Officer, as reasonably deter-
mined by the Board;
iii) willful and knowing violation of
any rules or regulations of any
governmental or regulatory body,
which is materially injurious to the
financial condition of the Company;
iv) conviction of or plea of guilty or
nolo contendere to a felony;
v) Executive's loss of any personal
gaming or related regulatory
approval or license required to
perform his duties under this
Agreement; or
vi) a final determination by a court of
competent jurisdiction that
Executive breached the Standstill
Agreement of even date herewith
by and among Circus Circus
Enterprises, Inc., a Nevada
corporation, Michael S. Ensign,
William R. Richardson, David R.
Belding, Peter A. Simon II, and
Glenn W. Schaeffer;
provided, however, that with regard to subparagraph ii) above,
Executive may not be terminated for Cause unless and until the
Board has given him reasonable written notice of its intended
actions and specifically describing the alleged events, activities
or omissions giving rise thereto and with respect to those events,
activities or omissions for which a cure is possible, a reasonable
opportunity to cure such breach; and provided, further, that for
purposes of determining whether any such Cause is present, no
act or failure to act by Executive shall be considered "willful" if
done or omitted to be done by Executive in good faith and in the
reasonable belief that such act or omission was in the best
interest of the Company and/or required by applicable law.
(c) Termination on Account of Death. In
the event of Executive's death while in the employ of the
Company, his employment hereunder shall terminate on the date
of his death and Executive shall be paid his unpaid Base Salary
through the date of termination and the amount of any unpaid
Bonus to which Executive had become entitled under the Bonus
Plan prior to the effective date of such termination. In addition,
any other benefits payable on behalf of Executive shall be deter-
mined under the Company's insurance and other compensation
and benefit plans and programs then in effect in accordance with
the terms of such programs.
(d) Voluntary Termination by Executive.
In the event that Executive's employment with the Company is
voluntarily terminated by Executive other than for Good Reason,
Executive shall be paid his unpaid Base Salary through the date
of termination and the amount of any unpaid Bonus to which
Executive had become entitled under the Bonus Plan prior to the
effective date of such termination, and the Company shall have
no further obligation hereunder from and after the effective date
of termination and the Company shall have all other rights and
remedies available under this Agreement or any other agreement
and at law or in equity. Executive shall give the Company at
least 30 days' advance written notice of his intention to
terminate his employment hereunder.
(e) Termination on Account of Disability.
To the extent not prohibited by The Americans With Disabilities
Act of 1990 or Chapter 613 of the Nevada Revised Statutes, if,
as a result of Executive's incapacity due to physical or mental
illness (as determined in good faith by a physician acceptable to
the Company and Executive), Executive shall have been absent
from the full-time performance of his duties with the Company
for 120 consecutive days during any twelve (12) month period
or if a physician acceptable to the Company advises the
Company that it is likely that Executive will be unable to return
to the full-time performance of his duties for 120 consecutive
days during the succeeding twelve (12) month period, his em-
ployment may be terminated for "Disability." During any
period that Executive fails to perform his full-time duties with
the Company as a result of incapacity due to physical or mental
illness, he shall continue to receive his Base Salary, Bonus and
other benefits provided hereunder, together with all compen-
sation payable to him under the Company's disability plan or
program or other similar plan during such period, until
Executive's employment hereunder is terminated pursuant to this
Section 5(e). Thereafter, Executive's benefits shall be deter-
mined under the Company's retirement, insurance, and other
compensation and benefit plans and programs then in effect, in
accordance with the terms of such programs.
6. Confidential Information, Non-Solicitation and
Non-Competition.
(a) During the Term of Employment
and for three (3) years thereafter, Executive shall not, except as
may be required to perform his duties hereunder or as required
by applicable law, disclose to others or use, whether directly or
indirectly, any Confidential Information regarding the Company.
"Confidential Information" shall mean information about the
Company, its subsidiaries and affiliates, and their respective
clients and customers that is not available to the general public
and that was learned by Executive in the course of his em-
ployment by the Company, including (without limitation) any
proprietary knowledge, trade secrets, data, formulae, informa-
tion, and client and customer lists and all papers, resumes,
records (including computer records) and the documents contain-
ing such Confidential Information. Executive acknowledges that
such Confidential Information is specialized, unique in nature
and of great value to the Company, and that such information
gives the Company a competitive advantage. Upon the
termination of his employment for any reason whatsoever,
Executive shall promptly deliver to the Company all documents,
computer tapes and disks (and all copies thereof) containing any
Confidential Information.
(b) During the period that Executive is
receiving payments under this Agreement (which Executive may
elect to terminate at any time), Executive shall not, directly or
indirectly in any manner or capacity (e.g., as an advisor,
principal, agent, partner, officer, director, shareholder,
employee, member of any association or otherwise) engage in,
work for, consult, provide advice or assistance or otherwise
participate in any activity which is competitive with the business
of the Company in any geographic area in which the Company
is now or shall then be doing business. Executive further agrees
that during such period he will not assist or encourage any other
person in carrying out any activity that would be prohibited by
the foregoing provisions of this Section 6 if such activity were
carried out by Executive and, in particular, Executive agrees
that he will not induce any employee of the Company to carry
out any such activity; provided, however, that the "beneficial
ownership" by Executive, either individually or as a member of
a "group," as such terms are used in Rule 13d of the General
Rules and Regulations under the Exchange Act, of not more
than five percent (5%) of the voting stock of any publicly held
corporation shall not be a violation of this Agreement. It is fur-
ther expressly agreed that the Company will or would suffer
irreparable injury if Executive were to compete with the
Company or any subsidiary or affiliate of the Company in viola-
tion of this Agreement and that the Company would by reason
of such competition be entitled to injunctive relief in a court of
appropriate jurisdiction, and Executive further consents and
stipulates to the entry of such injunctive relief in such a court
prohibiting Executive from competing with the Company or any
subsidiary or affiliate of the Company in violation of this
Agreement.
(c) During the Term of Employment
and for three (3) years thereafter, Executive shall not, directly
or indirectly, influence or attempt to influence customers or
suppliers of the Company or any of its subsidiaries or affiliates,
to divert their business to any competitor of the Company.
(d) Executive recognizes that he will
possess confidential information about other employees of the
Company relating to their education, experience, skills, abilities,
compensation and benefits, and interpersonal relationships with
customers of the Company. Executive recognizes that the
information he will possess about these other employees is not
generally known, is of substantial value to the Company in
developing its business and in securing and retaining customers,
and will be acquired by him because of his business position
with the Company. Executive agrees that, during the Term of
Employment, and for a period of three (3) years thereafter, he
will not, directly or indirectly, solicit or recruit any employee of
the Company for the purpose of being employed by him or by
any competitor of the Company on whose behalf he is acting as
an agent, representative or employee and that he will not convey
any such confidential information or trade secrets about other
employees of the Company to any other person.
(e) If it is determined by a court of
competent jurisdiction in any state that any restriction in this
Section 6 is excessive in duration or scope or is unreasonable or
unenforceable under the laws of that state, it is the intention of
the parties that such restriction may be modified or amended by
the court to render it enforceable to the maximum extent
permitted by the law of that state.
7. No Offset - No Mitigation. Executive shall
not be required to mitigate damages under this Agreement by
seeking other comparable employment. The amount of any pay-
ment or benefit provided for in this Agreement, including
welfare benefits, shall not be reduced by any compensation or
benefits earned by or provided to him as the result of employ-
ment by another employer, except as provided otherwise in
Section 5(a) with respect to health and insurance benefits
provided during the Salary Continuation Period.
8. Designated Beneficiary. In the event of the
death of Executive while in the employ of the Company, or at
any time thereafter during which amounts remain payable to
Executive under Section 5, such payments (other than the right
to continuation of welfare benefits) shall thereafter be made to
such person or persons as Executive may specifically designate
(successively or contingently) to receive payments under this
Agreement following Executive's death by filing a written
beneficiary designation with the Company during Executive's
lifetime. Such beneficiary designation shall be in such form as
may be prescribed by the Company and may be amended from
time to time or may be revoked by Executive pursuant to written
instruments filed with the Company during his lifetime.
Beneficiaries designated by Executive may be any natural or
legal person or persons, including a fiduciary, such as a trustee
or a trust or the legal representative of an estate. Unless
otherwise provided by the beneficiary designation filed by
Executive, if all of the persons so designated die before
Executive on the occurrence of a contingency not contemplated
in such beneficiary designation, then the amounts payable under
this Agreement shall be paid to Executive's estate.
9. Taxes. All payments to be made to Executive
under this Agreement will be subject to any applicable
withholding of federal, state and local income and employment
taxes.
10. Miscellaneous. This Agreement shall also be
subject to the following miscellaneous considerations:
(a) Executive and the Company each
represent and warrant to the other that he or it has the authoriza-
tion, power and right to deliver, execute, and fully perform his
or its obligations under this Agreement in accordance with its
terms.
(b) This Agreement contains a complete
statement of all the arrangements between the parties with
respect to Executive's employment by the Company, this Agree-
ment supersedes all prior and existing negotiations and
agreements between the parties concerning Executive's employ-
ment, and this Agreement can only be changed or modified
pursuant to a written instrument duly executed by each of the
parties hereto.
(c) If any provision of this Agreement or
any portion thereof is declared invalid, illegal, or incapable of
being enforced by any court of competent jurisdiction, the
remainder of such provisions and all of the remaining provisions
of this Agreement shall continue in full force and effect.
(d) This Agreement shall be governed by
and construed in accordance with the internal laws of the State
of Nevada, except to the extent governed by federal law.
(e) The Company may assign this Agree-
ment to any direct or indirect subsidiary or parent of the
Company or joint venture in which the Company has an interest,
or any successor (whether by merger, consolidation, purchase or
otherwise) to all or substantially all of the stock, assets or
business of the Company and this Agreement shall be binding
upon and inure to the benefit of such successors and assigns.
Except as expressly provided herein, Executive may not sell,
transfer, assign, or pledge any of his rights or interests pursuant
to this Agreement.
(f) Any rights of Executive hereunder
shall be in addition to any rights Executive may otherwise have
under benefit plans, agreements, or arrangements of the Compa-
ny to which he is a party or in which he is a participant,
including, but not limited to, any Company-sponsored employee
benefit plans. Provisions of this Agreement shall not in any
way abrogate Executive's rights under such other plans,
agreements, or arrangements.
(g) For the purpose of this Agreement,
notices and all other communications provided for in this Agree-
ment shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States certified or
registered mail, return receipt requested, postage prepaid,
addressed to the named Executive at the address set forth below
under his signature; provided that all notices to the Company
shall be directed to the attention of the Board with a copy to the
Secretary of the Company, or to such other address as either
party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effec-
tive only upon receipt.
(h) Section 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.
(i) Failure to insist upon strict compliance
with any of the terms, covenants, or conditions hereof shall not
be deemed a waiver of such term, covenant, or condition, nor
shall any waiver or relinquishment of, or failure to insist upon
strict compliance with, any right or power hereunder at any one
or more times be deemed a waiver or relinquishment of such
right or power at any other time or times.
(j) This Agreement may be executed in
several counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same instrument.
11. Resolution of Disputes. Any dispute or
controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration, conducted before a
panel of three arbitrators in Las Vegas, Nevada in accordance
with the rules of the American Arbitration Association then in
effect. The Company and Executive hereby agree that the
arbitrator will not have the authority to award punitive damages,
damages for emotional distress or any other damages that are
not contractual in nature. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided,
however, that the Company shall be entitled to seek a
restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation of the
provisions of Section 6, and Executive consents that such re-
straining order or injunction may be granted without the neces-
sity of the Company's posting any bond except to the extent
otherwise required by applicable law. The expense of such
arbitration shall be borne by the Company.
12. Attorneys' Fees. Should either party hereto
or their successors retain counsel for the purpose of enforcing,
or preventing the breach of, any provision hereof, including, but
not limited to, by instituting any action or proceeding in
arbitration or a court to enforce any provision hereof or to
enjoin a breach of any provision of this Agreement, or for a
declaration of such party's rights or obligations under the
Agreement, or for any other remedy, whether in arbitration or
in a court of law, then the successful party shall be entitled to
be reimbursed by the other party for all costs and expenses
incurred thereby, including, but not limited to, reasonable fees
and expenses of attorneys and expert witnesses, including costs
of appeal. If such successful party shall recover judgment in
any such action or proceeding, such costs, expenses and fees
may be included in and as part of such judgment. The
successful party shall be the party who is entitled to recover his
costs of suit, whether or not the suit proceeds to final judgment.
If no costs are awarded, the successful party shall be determined
by the arbitrator or court, as the case may be.
<PAGE>
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the day and year first above
written.
EXECUTIVE COMPANY
GLENN W. SCHAEFFER CIRCUS CIRCUS ENTERPRISES, INC.
By: GLENN W. SCHAEFFER By: CLYDE T.TURNER
Title: President, Treasurer and Title: Chief Executive Officer
Chief Financial Officer
Address:
2880 Las Vegas Blvd., South
Las Vegas, Nevada 89109
Exhibit 10(m)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into
this 1st day of June, 1995, by and between Circus Circus
Enterprises, Inc., a Nevada corporation (the "Company") and
Mike H. Sloan ("Executive").
W I T N E S S E T H:
WHEREAS, Executive and the Company deem it
to be in their respective best interests to enter into an agreement
providing for the Company's employment of Executive pursuant
to the terms herein stated;
NOW, THEREFORE, in consideration of the
premises and the mutual promises and agreements contained
herein, it is hereby agreed as follows:
1. Effective Date. This Agreement shall be
effective as of the 1st day of June, 1995, which date shall be re-
ferred to herein as the "Effective Date".
2. Position and Duties.
(a) The Company hereby employs Execu-
tive as its Senior Vice President and General Counsel
commencing as of the Effective Date for the "Term of Employ-
ment" (as herein defined below). In this capacity, Executive
shall devote his best efforts and his full business time and
attention to the performance of the services customarily incident
to such offices and position and to such other services of a
senior executive nature as may be reasonably requested by the
Board of Directors (the "Board") of the Company which may
include services for one or more subsidiaries or affiliates of the
Company. Executive shall in his capacity as an employee and
officer of the Company be responsible to and obey the
reasonable and lawful directives of the Board and of any officers
("Supervising Officers") to whom he shall report.
(b) Executive shall devote his full time
and attention to such duties, except for sick leave, reasonable
vacations, and excused leaves of absence as more particularly
provided herein. Executive shall use his best efforts during the
Term of Employment to protect, encourage, and promote the
interests of the Company.
3. Compensation.
(a) Base Salary. The Company shall pay
to Executive during the Term of Employment a minimum salary
at the rate of three hundred thousand dollars ($300,000) per
calendar year and agrees that such salary shall be reviewed at
least annually. Such salary shall be payable in accordance with
the Company's normal payroll procedures. (Executive's annual
salary, as set forth above or as it may be increased from time to
time as set forth herein, shall be referred to hereinafter as "Base
Salary.") At no time during the Term of Employment shall
Executive's Base Salary be decreased from the amount of Base
Salary then in effect.
(b) Performance Bonus. In addition to
the compensation otherwise payable to Executive pursuant to
this Agreement, Executive shall be eligible to receive an annual
bonus ("Bonus") pursuant to a performance bonus plan (the
"Bonus Plan") which shall be established by the Company for its
senior executive officers and which shall provide for bonus
compensation to be payable based upon the financial and other
performance of the Company and its senior executives. It is
intended that the Bonus Plan shall conform to the requirements
applicable to "qualified performance based compensation" under
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). During the Term of Employment,
Executive's targeted annual bonus under the Bonus Plan shall
not be less than 100% of Executive's then current Base Salary.
4. Benefits. During the Term of Employment:
(a) Executive shall be eligible to partic-
ipate in any life, health and long-term disability insurance
programs, pension and retirement programs, stock option and
other incentive compensation programs, and other fringe benefit
programs made available to senior executive employees of the
Company from time to time, and Executive shall be entitled to
receive such other fringe benefits as may be granted to him
from time to time by the Company's Board of Directors.
(b) Executive shall be allowed vacations
and leaves of absence with pay on the same basis as other senior
executive employees of the Company.
(c) The Company shall reimburse
Executive for reasonable business expenses incurred in
performing Executive's duties and promoting the business of the
Company, including, but not limited to, reasonable entertain-
ment expenses, travel and lodging expenses, following presenta-
tion of documentation in accordance with the Company's busi-
ness expense reimbursement policies.
(d) Executive shall be added as an addi-
tional named insured under all liability insurance policies now in
force or hereafter obtained covering any officer or director of
the Company in his or her capacity as an officer or director.
Company shall indemnify Executive in his capacity as an officer
or director and hold him harmless from any cost, expense or
liability arising out of or relating to any acts or decisions made
by him on behalf of or in the course of performing services for
the Company (to the maximum extent provided by the
Company's Bylaws and applicable law).
5. Term; Termination of Employment. As used
herein, the phrase "Term of Employment" shall mean the period
commencing on the Effective Date and ending three (3) years
from the Effective Date, provided that as of the expiration date
of each of (i) the initial three (3) year Term of Employment and
(ii) if applicable, any Renewal Period (as defined below), the
Term of Employment shall automatically be extended for a one
(1) year period (each a "Renewal Period") unless either the
Company or Executive provides six (6) months' notice to the
contrary. Notwithstanding the foregoing, the Term of
Employment shall expire on the first to occur of the following:
(a) Termination by the Company Without
Cause or By Executive With Good Reason. Notwithstanding
anything to the contrary in this Agreement, whether express or
implied, the Company may, at any time, terminate Executive's
employment for any reason other than Cause (as defined below)
by giving Executive at least 60 days' prior written notice of the
effective date of termination. In the event Executive's
employment hereunder is terminated by the Company other than
for Cause or by Executive for Good Reason (as defined below),
Executive shall be entitled to receive (x) his Base Salary as he
would have received such amounts during the period commenc-
ing on the effective date of such termination and ending on the
later of (i) the expiration of the Term of Employment or (ii) the
date that is twelve (12) months following the effective date of
such termination (the "Salary Continuation Period"), as if
Executive were still employed hereunder during the Salary
Continuation Period; (y) if it has not previously been paid to
Executive, any Bonus to which Executive had become entitled
under the Bonus Plan prior to the effective date of such
termination; and (z) annual Bonuses during the Salary
Continuation Period in an amount equal to the product of
Executive's Base Salary on the effective date of such termination
and the minimum targeted bonus percentage specified in Section
3(b), payable in the ordinary course and prorated, as applicable,
for any partial fiscal year of the Bonus Plan ending on the final
day of the Salary Continuation Period. In addition, all of
Executive's stock options with respect to the Company's stock
shall become immediately and fully exercisable. During the
Salary Continuation Period, Executive and his spouse and
dependents shall be entitled to continue to be covered by all
group medical, health and accident insurance or other such
health care arrangements in which Executive was a participant
as of the date of such termination, at the same coverage level
and on the same terms and conditions which applied
immediately prior to the date of Executive's termination of
employment, until Executive obtains alternative comparable
coverage under another group plan, which coverage does not
contain any pre-existing condition exclusions or limitations;
provided, however, that if, as the result of the termination of
Executive's employment, Executive and/or his otherwise eligible
dependents or beneficiaries shall become ineligible for benefits
under any one or more of the Company's benefit plans, the
Company shall continue to provide Executive and his eligible
dependents or beneficiaries, through other means, with benefits
at a level at least equivalent to the level of benefits for which
Executive and his dependents and beneficiaries were eligible
under such plans immediately prior to the date of Executive's
termination of employment. At the termination of the benefits
coverage under the preceding sentence, Executive and his
spouse and dependents shall be entitled to continuation coverage
pursuant to Section 4980B of the Internal Revenue Code of
1986, as amended, Sections 601-608 of the Employee
Retirement Income Security Act of 1974, as amended, and
under any other applicable law, to the extent required by such
laws, as if Executive had terminated employment with the
Company on the date such benefits coverage terminates.
For purposes of this Agreement, "Good Reason" shall
mean, without the express written consent of Executive, the
occurrence of any of the following events unless such events are
fully corrected within 30 days following written notification by
Executive to the Company that he intends to terminate his
employment hereunder for one of the reasons set forth below:
i) a material breach by the Company
of any material provision of this
Agreement;
ii) the Company's requiring Executive
to be based anywhere other than the
metropolitan area where he
currently works and resides for a
period in excess of eighteen (18)
months;
iii) the occurrence of a "Change in
Control" as defined below; or
iv) the Company's notifying Executive
that it does not consent to any
automatic one-year extension of the
Term of Employment.
For purposes of this Agreement a "Change in Control"
shall mean an event as a result of which: (i) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Securities
and Exchange Act of 1934 (the "Exchange Act")), is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more
than 50% of the total voting power of the voting stock of the
Company; (ii) the Company consolidates with, or merges with
or into another corporation or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its
assets to any person, or any corporation consolidates with, or
merges with or into, the Company, in any such event pursuant
to a transaction in which the outstanding voting stock of the
Company is changed into or exchanged for cash, securities or
other property, other than any such transaction where (A) the
outstanding voting stock of the Company is changed into or
exchanged for (x) voting stock of the surviving or transferee
corporation or (y) cash, securities (whether or not including
voting stock) or other property, and (B) the holders of the
voting stock of the Company immediately prior to such
transaction own, directly or indirectly, not less than 50% of the
voting power of the voting stock of the surviving corporation
immediately after such transaction; or (iii) during any period of
two consecutive years, individuals who at the beginning of such
period constituted the Board of the Company (together with any
new directors whose election by such Board or whose nomi-
nation for election by the stockholders of the Company was
approved by a vote of 66-2/3% of the directors then still in
office who were either directors at the beginning of such period
or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
Board of the Company then in office; or (iv) the Company is
liquidated or dissolved or adopts a plan of liquidation, provided
however that a Change in Control shall not include any going
private or leveraged buy-out transaction which is sponsored by
Executive or in which Executive acquires an equity interest
materially in excess of his equity interest in the Company
immediately prior to such transaction (each of the events de-
scribed in (i), (ii), (iii) or (iv) above, as provided otherwise by
the preceding clause being referred to herein as a "Change in
Control").
(b) Termination for Cause. The
Company shall have the right to terminate Executive's
employment at any time for Cause by giving Executive written
notice of the effective date of termination (which effective date
may, except as otherwise provided below, be the date of such
notice). If the Company terminates Executive's employment for
Cause, Executive shall be paid his unpaid Base Salary through
the date of termination and the amount of any unpaid Bonus to
which Executive had become entitled under the Bonus Plan prior
to the effective date of such termination and the Company shall
have no further obligation hereunder from and after the effective
date of termination and the Company shall have all other rights
and remedies available under this or any other agreement and at
law or in equity.
For purposes of this Agreement only, Cause shall mean:
i) fraud, misappropriation, embezzle-
ment, or other act of material mis-
conduct against the Company or
any of its affiliates;
ii) substantial and willful failure to
perform specific and lawful direc-
tives of the Board or any Supervis-
ing Officer, as reasonably deter-
mined by the Board;
iii) willful and knowing violation of
any rules or regulations of any
governmental or regulatory body,
which is materially injurious to the
financial condition of the Company;
or
iv) conviction of or plea of guilty or
nolo contendere to a felony; or
v) Executive's loss of any personal
gaming or related regulatory
approval or license required to
perform his duties under this
Agreement;
provided, however, that with regard to subparagraph ii) above,
Executive may not be terminated for Cause unless and until the
Board has given him reasonable written notice of its intended
actions and specifically describing the alleged events, activities
or omissions giving rise thereto and with respect to those events,
activities or omissions for which a cure is possible, a reasonable
opportunity to cure such breach; and provided, further, that for
purposes of determining whether any such Cause is present, no
act or failure to act by Executive shall be considered "willful" if
done or omitted to be done by Executive in good faith and in the
reasonable belief that such act or omission was in the best
interest of the Company and/or required by applicable law.
(c) Termination on Account of Death. In
the event of Executive's death while in the employ of the
Company, his employment hereunder shall terminate on the date
of his death and Executive shall be paid his unpaid Base Salary
through the date of termination and the amount of any unpaid
Bonus to which Executive had become entitled under the Bonus
Plan prior to the effective date of such termination. In addition,
any other benefits payable on behalf of Executive shall be deter-
mined under the Company's insurance and other compensation
and benefit plans and programs then in effect in accordance with
the terms of such programs.
(d) Voluntary Termination by Executive.
In the event that Executive's employment with the Company is
voluntarily terminated by Executive other than for Good Reason,
Executive shall be paid his unpaid Base Salary through the date
of termination and the amount of any unpaid Bonus to which
Executive had become entitled under the Bonus Plan prior to the
effective date of such termination, and the Company shall have
no further obligation hereunder from and after the effective date
of termination and the Company shall have all other rights and
remedies available under this Agreement or any other agreement
and at law or in equity. Executive shall give the Company at
least 30 days' advance written notice of his intention to
terminate his employment hereunder.
(e) Termination on Account of Disability.
To the extent not prohibited by The Americans With Disabilities
Act of 1990 or Chapter 613 of the Nevada Revised Statutes, if,
as a result of Executive's incapacity due to physical or mental
illness (as determined in good faith by a physician acceptable to
the Company and Executive), Executive shall have been absent
from the full-time performance of his duties with the Company
for 120 consecutive days during any twelve (12) month period
or if a physician acceptable to the Company advises the
Company that it is likely that Executive will be unable to return
to the full-time performance of his duties for 120 consecutive
days during the succeeding twelve (12) month period, his em-
ployment may be terminated for "Disability." During any
period that Executive fails to perform his full-time duties with
the Company as a result of incapacity due to physical or mental
illness, he shall continue to receive his Base Salary, Bonus and
other benefits provided hereunder, together with all compen-
sation payable to him under the Company's disability plan or
program or other similar plan during such period, until
Executive's employment hereunder is terminated pursuant to this
Section 5(e). Thereafter, Executive's benefits shall be deter-
mined under the Company's retirement, insurance, and other
compensation and benefit plans and programs then in effect, in
accordance with the terms of such programs.
6. Confidential Information, Non-Solicitation and
Non-Competition.
(a) During the Term of Employment
and for three (3) years thereafter, Executive shall not, except as
may be required to perform his duties hereunder or as required
by applicable law, disclose to others or use, whether directly or
indirectly, any Confidential Information regarding the Company.
"Confidential Information" shall mean information about the
Company, its subsidiaries and affiliates, and their respective
clients and customers that is not available to the general public
and that was learned by Executive in the course of his em-
ployment by the Company, including (without limitation) any
proprietary knowledge, trade secrets, data, formulae, informa-
tion, and client and customer lists and all papers, resumes,
records (including computer records) and the documents contain-
ing such Confidential Information. Executive acknowledges that
such Confidential Information is specialized, unique in nature
and of great value to the Company, and that such information
gives the Company a competitive advantage. Upon the
termination of his employment for any reason whatsoever,
Executive shall promptly deliver to the Company all documents,
computer tapes and disks (and all copies thereof) containing any
Confidential Information.
(b) During the period that Executive is
receiving payments under this Agreement (which Executive may
elect to terminate at any time), Executive shall not, directly or
indirectly in any manner or capacity (e.g., as an advisor,
principal, agent, partner, officer, director, shareholder,
employee, member of any association or otherwise) engage in,
work for, consult, provide advice or assistance or otherwise
participate in any activity which is competitive with the business
of the Company in any geographic area in which the Company
is now or shall then be doing business. Executive further agrees
that during such period he will not assist or encourage any other
person in carrying out any activity that would be prohibited by
the foregoing provisions of this Section 6 if such activity were
carried out by Executive and, in particular, Executive agrees
that he will not induce any employee of the Company to carry
out any such activity; provided, however, that the "beneficial
ownership" by Executive, either individually or as a member of
a "group," as such terms are used in Rule 13d of the General
Rules and Regulations under the Exchange Act, of not more
than five percent (5%) of the voting stock of any publicly held
corporation shall not be a violation of this Agreement. It is fur-
ther expressly agreed that the Company will or would suffer
irreparable injury if Executive were to compete with the
Company or any subsidiary or affiliate of the Company in viola-
tion of this Agreement and that the Company would by reason
of such competition be entitled to injunctive relief in a court of
appropriate jurisdiction, and Executive further consents and
stipulates to the entry of such injunctive relief in such a court
prohibiting Executive from competing with the Company or any
subsidiary or affiliate of the Company in violation of this
Agreement.
(c) During the Term of Employment
and for three (3) years thereafter, Executive shall not, directly
or indirectly, influence or attempt to influence customers or
suppliers of the Company or any of its subsidiaries or affiliates,
to divert their business to any competitor of the Company.
(d) Executive recognizes that he will
possess confidential information about other employees of the
Company relating to their education, experience, skills, abilities,
compensation and benefits, and interpersonal relationships with
customers of the Company. Executive recognizes that the
information he will possess about these other employees is not
generally known, is of substantial value to the Company in
developing its business and in securing and retaining customers,
and will be acquired by him because of his business position
with the Company. Executive agrees that, during the Term of
Employment, and for a period of three (3) years thereafter, he
will not, directly or indirectly, solicit or recruit any employee of
the Company for the purpose of being employed by him or by
any competitor of the Company on whose behalf he is acting as
an agent, representative or employee and that he will not convey
any such confidential information or trade secrets about other
employees of the Company to any other person.
(e) If it is determined by a court of
competent jurisdiction in any state that any restriction in this
Section 6 is excessive in duration or scope or is unreasonable or
unenforceable under the laws of that state, it is the intention of
the parties that such restriction may be modified or amended by
the court to render it enforceable to the maximum extent
permitted by the law of that state.
7. No Offset - No Mitigation. Executive shall
not be required to mitigate damages under this Agreement by
seeking other comparable employment. The amount of any pay-
ment or benefit provided for in this Agreement, including
welfare benefits, shall not be reduced by any compensation or
benefits earned by or provided to him as the result of employ-
ment by another employer, except as provided otherwise in
Section 5(a) with respect to health and insurance benefits
provided during the Salary Continuation Period.
8. Designated Beneficiary. In the event of the
death of Executive while in the employ of the Company, or at
any time thereafter during which amounts remain payable to
Executive under Section 5, such payments (other than the right
to continuation of welfare benefits) shall thereafter be made to
such person or persons as Executive may specifically designate
(successively or contingently) to receive payments under this
Agreement following Executive's death by filing a written
beneficiary designation with the Company during Executive's
lifetime. Such beneficiary designation shall be in such form as
may be prescribed by the Company and may be amended from
time to time or may be revoked by Executive pursuant to written
instruments filed with the Company during his lifetime.
Beneficiaries designated by Executive may be any natural or
legal person or persons, including a fiduciary, such as a trustee
or a trust or the legal representative of an estate. Unless
otherwise provided by the beneficiary designation filed by
Executive, if all of the persons so designated die before
Executive on the occurrence of a contingency not contemplated
in such beneficiary designation, then the amounts payable under
this Agreement shall be paid to Executive's estate.
9. Taxes. All payments to be made to Executive
under this Agreement will be subject to any applicable
withholding of federal, state and local income and employment
taxes.
10. Miscellaneous. This Agreement shall also be
subject to the following miscellaneous considerations:
(a) Executive and the Company each
represent and warrant to the other that he or it has the authoriza-
tion, power and right to deliver, execute, and fully perform his
or its obligations under this Agreement in accordance with its
terms.
(b) This Agreement contains a complete
statement of all the arrangements between the parties with
respect to Executive's employment by the Company, this Agree-
ment supersedes all prior and existing negotiations and
agreements between the parties concerning Executive's employ-
ment, and this Agreement can only be changed or modified
pursuant to a written instrument duly executed by each of the
parties hereto.
(c) If any provision of this Agreement or
any portion thereof is declared invalid, illegal, or incapable of
being enforced by any court of competent jurisdiction, the
remainder of such provisions and all of the remaining provisions
of this Agreement shall continue in full force and effect.
(d) This Agreement shall be governed by
and construed in accordance with the internal laws of the State
of Nevada, except to the extent governed by federal law.
(e) The Company may assign this Agree-
ment to any direct or indirect subsidiary or parent of the
Company or joint venture in which the Company has an interest,
or any successor (whether by merger, consolidation, purchase or
otherwise) to all or substantially all of the stock, assets or
business of the Company and this Agreement shall be binding
upon and inure to the benefit of such successors and assigns.
Except as expressly provided herein, Executive may not sell,
transfer, assign, or pledge any of his rights or interests pursuant
to this Agreement.
(f) Any rights of Executive hereunder
shall be in addition to any rights Executive may otherwise have
under benefit plans, agreements, or arrangements of the Compa-
ny to which he is a party or in which he is a participant,
including, but not limited to, any Company-sponsored employee
benefit plans. Provisions of this Agreement shall not in any
way abrogate Executive's rights under such other plans,
agreements, or arrangements.
(g) For the purpose of this Agreement,
notices and all other communications provided for in this Agree-
ment shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States certified or
registered mail, return receipt requested, postage prepaid,
addressed to the named Executive at the address set forth below
under his signature; provided that all notices to the Company
shall be directed to the attention of the Board with a copy to the
Secretary of the Company, or to such other address as either
party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effec-
tive only upon receipt.
(h) Section 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.
(i) Failure to insist upon strict compliance
with any of the terms, covenants, or conditions hereof shall not
be deemed a waiver of such term, covenant, or condition, nor
shall any waiver or relinquishment of, or failure to insist upon
strict compliance with, any right or power hereunder at any one
or more times be deemed a waiver or relinquishment of such
right or power at any other time or times.
(j) This Agreement may be executed in
several counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same instrument.
11. Resolution of Disputes. Any dispute or
controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration, conducted before a
panel of three arbitrators in Las Vegas, Nevada in accordance
with the rules of the American Arbitration Association then in
effect. The Company and Executive hereby agree that the
arbitrator will not have the authority to award punitive damages,
damages for emotional distress or any other damages that are
not contractual in nature. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided,
however, that the Company shall be entitled to seek a
restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation of the
provisions of Section 6, and Executive consents that such re-
straining order or injunction may be granted without the neces-
sity of the Company's posting any bond except to the extent
otherwise required by applicable law. The expense of such
arbitration shall be borne by the Company.
12. Attorneys' Fees. Should either party hereto
or their successors retain counsel for the purpose of enforcing,
or preventing the breach of, any provision hereof, including, but
not limited to, by instituting any action or proceeding in
arbitration or a court to enforce any provision hereof or to
enjoin a breach of any provision of this Agreement, or for a
declaration of such party's rights or obligations under the
Agreement, or for any other remedy, whether in arbitration or
in a court of law, then the successful party shall be entitled to
be reimbursed by the other party for all costs and expenses
incurred thereby, including, but not limited to, reasonable fees
and expenses of attorneys and expert witnesses, including costs
of appeal. If such successful party shall recover judgment in
any such action or proceeding, such costs, expenses and fees
may be included in and as part of such judgment. The
successful party shall be the party who is entitled to recover his
costs of suit, whether or not the suit proceeds to final judgment.
If no costs are awarded, the successful party shall be determined
by the arbitrator or court, as the case may be.
<PAGE>
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the day and year first above
written.
EXECUTIVE COMPANY
MIKE H. SLOAN CIRCUS CIRCUS
ENTERPRISES, INC.
By: MIKE H. SLOAN By: CLYDE T. TURNER
Title: Senior Vice President and Title: Chief Executive Officer
General Counsel
Address:
2880 Las Vegas Blvd., South
Las Vegas, Nevada 89109
Exhibit 10(n)
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into
this 1st day of June, 1995, by and between Circus Circus
Enterprises, Inc., a Nevada corporation (the "Company") and
Kurt D. Sullivan ("Executive").
W I T N E S S E T H:
WHEREAS, Executive and the Company deem it
to be in their respective best interests to enter into an agreement
providing for the Company's employment of Executive pursuant
to the terms herein stated;
NOW, THEREFORE, in consideration of the
premises and the mutual promises and agreements contained
herein, it is hereby agreed as follows:
1. Effective Date. This Agreement shall be
effective as of the 1st day of June, 1995, which date shall be re-
ferred to herein as the "Effective Date".
2. Position and Duties.
(a) The Company hereby employs Execu-
tive as its Senior Vice President-Operations commencing as of
the Effective Date for the "Term of Employment" (as herein de-
fined below). In this capacity, Executive shall devote his best
efforts and his full business time and attention to the
performance of the services customarily incident to such offices
and position and to such other services of a senior executive
nature as may be reasonably requested by the Board of Directors
(the "Board") of the Company which may include services for
one or more subsidiaries or affiliates of the Company.
Executive shall in his capacity as an employee and officer of the
Company be responsible to and obey the reasonable and lawful
directives of the Board and of any officers ("Supervising
Officers") to whom he shall report.
(b) Executive shall devote his full time
and attention to such duties, except for sick leave, reasonable
vacations, and excused leaves of absence as more particularly
provided herein. Executive shall use his best efforts during the
Term of Employment to protect, encourage, and promote the
interests of the Company.
3. Compensation.
(a) Base Salary. The Company shall pay
to Executive during the Term of Employment a minimum salary
at the rate of four hundred thousand dollars ($400,000) per
calendar year and agrees that such salary shall be reviewed at
least annually. Such salary shall be payable in accordance with
the Company's normal payroll procedures. (Executive's annual
salary, as set forth above or as it may be increased from time to
time as set forth herein, shall be referred to hereinafter as "Base
Salary.") At no time during the Term of Employment shall
Executive's Base Salary be decreased from the amount of Base
Salary then in effect.
(b) Performance Bonus. In addition to
the compensation otherwise payable to Executive pursuant to
this Agreement, Executive shall be eligible to receive an annual
bonus ("Bonus") pursuant to a performance bonus plan (the
"Bonus Plan") which shall be established by the Company for its
senior executive officers and which shall provide for bonus
compensation to be payable based upon the financial and other
performance of the Company and its senior executives. It is
intended that the Bonus Plan shall conform to the requirements
applicable to "qualified performance based compensation" under
Section 162(m) of the Internal Revenue Code of 1986, as
amended (the "Code"). During the Term of Employment,
Executive's targeted annual bonus under the Bonus Plan shall
not be less than 100% of Executive's then current Base Salary.
A minimum of 50% of Executive's targeted annual bonus under
the Bonus Plan shall be guaranteed for the first year of the Term
of Employment.
4. Benefits. During the Term of Employment:
(a) Executive shall be eligible to partic-
ipate in any life, health and long-term disability insurance
programs, pension and retirement programs, stock option and
other incentive compensation programs, and other fringe benefit
programs made available to senior executive employees of the
Company from time to time, and Executive shall be entitled to
receive such other fringe benefits as may be granted to him
from time to time by the Company's Board of Directors.
(b) Executive shall be allowed vacations
and leaves of absence with pay on the same basis as other senior
executive employees of the Company.
(c) The Company shall reimburse
Executive for reasonable business expenses incurred in
performing Executive's duties and promoting the business of the
Company, including, but not limited to, reasonable entertain-
ment expenses, travel and lodging expenses, following presenta-
tion of documentation in accordance with the Company's busi-
ness expense reimbursement policies.
(d) Executive shall be added as an addi-
tional named insured under all liability insurance policies now in
force or hereafter obtained covering any officer or director of
the Company in his or her capacity as an officer or director.
Company shall indemnify Executive in his capacity as an officer
or director and hold him harmless from any cost, expense or
liability arising out of or relating to any acts or decisions made
by him on behalf of or in the course of performing services for
the Company (to the maximum extent provided by the
Company's Bylaws and applicable law).
5. Term; Termination of Employment. As used
herein, the phrase "Term of Employment" shall mean the period
commencing on the Effective Date and ending three (3) years
from the Effective Date, provided that as of the expiration date
of each of (i) the initial three (3) year Term of Employment and
(ii) if applicable, any Renewal Period (as defined below), the
Term of Employment shall automatically be extended for a one
(1) year period (each a "Renewal Period") unless either the
Company or Executive provides six (6) months' notice to the
contrary. Notwithstanding the foregoing, the Term of
Employment shall expire on the first to occur of the following:
(a) Termination by the Company Without
Cause or By Executive With Good Reason. Notwithstanding
anything to the contrary in this Agreement, whether express or
implied, the Company may, at any time, terminate Executive's
employment for any reason other than Cause (as defined below)
by giving Executive at least 60 days' prior written notice of the
effective date of termination. In the event Executive's
employment hereunder is terminated by the Company other than
for Cause or by Executive for Good Reason (as defined below),
Executive shall be entitled to receive (x) his Base Salary as he
would have received such amounts during the period commenc-
ing on the effective date of such termination and ending on the
later of (i) the expiration of the Term of Employment or (ii) the
date that is twelve (12) months following the effective date of
such termination (the "Salary Continuation Period"), as if
Executive were still employed hereunder during the Salary
Continuation Period; (y) if it has not previously been paid to
Executive, any Bonus to which Executive had become entitled
under the Bonus Plan prior to the effective date of such
termination; and (z) annual Bonuses during the Salary
Continuation Period in an amount equal to the product of
Executive's Base Salary on the effective date of such termination
and the minimum targeted bonus percentage specified in Section
3(b), payable in the ordinary course and prorated, as applicable,
for any partial fiscal year of the Bonus Plan ending on the final
day of the Salary Continuation Period. In addition, all of
Executive's stock options with respect to the Company's stock
shall become immediately and fully exercisable. During the
Salary Continuation Period, Executive and his spouse and
dependents shall be entitled to continue to be covered by all
group medical, health and accident insurance or other such
health care arrangements in which Executive was a participant
as of the date of such termination, at the same coverage level
and on the same terms and conditions which applied
immediately prior to the date of Executive's termination of
employment, until Executive obtains alternative comparable
coverage under another group plan, which coverage does not
contain any pre-existing condition exclusions or limitations;
provided, however, that if, as the result of the termination of
Executive's employment, Executive and/or his otherwise eligible
dependents or beneficiaries shall become ineligible for benefits
under any one or more of the Company's benefit plans, the
Company shall continue to provide Executive and his eligible
dependents or beneficiaries, through other means, with benefits
at a level at least equivalent to the level of benefits for which
Executive and his dependents and beneficiaries were eligible
under such plans immediately prior to the date of Executive's
termination of employment. At the termination of the benefits
coverage under the preceding sentence, Executive and his
spouse and dependents shall be entitled to continuation coverage
pursuant to Section 4980B of the Internal Revenue Code of
1986, as amended, Sections 601-608 of the Employee
Retirement Income Security Act of 1974, as amended, and
under any other applicable law, to the extent required by such
laws, as if Executive had terminated employment with the
Company on the date such benefits coverage terminates.
For purposes of this Agreement, "Good Reason" shall
mean, without the express written consent of Executive, the
occurrence of any of the following events unless such events are
fully corrected within 30 days following written notification by
Executive to the Company that he intends to terminate his
employment hereunder for one of the reasons set forth below:
i) a material breach by the Company
of any material provision of this
Agreement;
ii) the Company's requiring Executive
to be based anywhere other than the
metropolitan area where he
currently works and resides for a
period in excess of eighteen (18)
months;
iii) the occurrence of a "Change in
Control" as defined below; or
iv) the Company's notifying Executive
that it does not consent to any
automatic one-year extension of the
Term of Employment.
For purposes of this Agreement a "Change in Control"
shall mean an event as a result of which: (i) any "person" (as
such term is used in Sections 13(d) and 14(d) of the Securities
and Exchange Act of 1934 (the "Exchange Act")), is or becomes
the "beneficial owner" (as defined in Rule 13d-3 under the
Exchange Act, except that a person shall be deemed to have
"beneficial ownership" of all securities that such person has the
right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more
than 50% of the total voting power of the voting stock of the
Company; (ii) the Company consolidates with, or merges with
or into another corporation or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its
assets to any person, or any corporation consolidates with, or
merges with or into, the Company, in any such event pursuant
to a transaction in which the outstanding voting stock of the
Company is changed into or exchanged for cash, securities or
other property, other than any such transaction where (A) the
outstanding voting stock of the Company is changed into or
exchanged for (x) voting stock of the surviving or transferee
corporation or (y) cash, securities (whether or not including
voting stock) or other property, and (B) the holders of the
voting stock of the Company immediately prior to such
transaction own, directly or indirectly, not less than 50% of the
voting power of the voting stock of the surviving corporation
immediately after such transaction; or (iii) during any period of
two consecutive years, individuals who at the beginning of such
period constituted the Board of the Company (together with any
new directors whose election by such Board or whose nomi-
nation for election by the stockholders of the Company was
approved by a vote of 66-2/3% of the directors then still in
office who were either directors at the beginning of such period
or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
Board of the Company then in office; or (iv) the Company is
liquidated or dissolved or adopts a plan of liquidation, provided
however that a Change in Control shall not include any going
private or leveraged buy-out transaction which is sponsored by
Executive or in which Executive acquires an equity interest
materially in excess of his equity interest in the Company
immediately prior to such transaction (each of the events de-
scribed in (i), (ii), (iii) or (iv) above, as provided otherwise by
the preceding clause being referred to herein as a "Change in
Control").
(b) Termination for Cause. The
Company shall have the right to terminate Executive's
employment at any time for Cause by giving Executive written
notice of the effective date of termination (which effective date
may, except as otherwise provided below, be the date of such
notice). If the Company terminates Executive's employment for
Cause, Executive shall be paid his unpaid Base Salary through
the date of termination and the amount of any unpaid Bonus to
which Executive had become entitled under the Bonus Plan prior
to the effective date of such termination and the Company shall
have no further obligation hereunder from and after the effective
date of termination and the Company shall have all other rights
and remedies available under this or any other agreement and at
law or in equity.
For purposes of this Agreement only, Cause shall mean:
i) fraud, misappropriation, embezzle-
ment, or other act of material mis-
conduct against the Company or
any of its affiliates;
ii) substantial and willful failure to
perform specific and lawful direc-
tives of the Board or any Supervis-
ing Officer, as reasonably deter-
mined by the Board;
iii) willful and knowing violation of
any rules or regulations of any
governmental or regulatory body,
which is materially injurious to the
financial condition of the Company;
iv) conviction of or plea of guilty or
nolo contendere to a felony; or
v) Executive's loss of any personal
gaming or related regulatory
approval or license required to
perform his duties under this
Agreement;
provided, however, that with regard to subparagraph ii) above,
Executive may not be terminated for Cause unless and until the
Board has given him reasonable written notice of its intended
actions and specifically describing the alleged events, activities
or omissions giving rise thereto and with respect to those events,
activities or omissions for which a cure is possible, a reasonable
opportunity to cure such breach; and provided, further, that for
purposes of determining whether any such Cause is present, no
act or failure to act by Executive shall be considered "willful" if
done or omitted to be done by Executive in good faith and in the
reasonable belief that such act or omission was in the best
interest of the Company and/or required by applicable law.
(c) Termination on Account of Death. In
the event of Executive's death while in the employ of the
Company, his employment hereunder shall terminate on the date
of his death and Executive shall be paid his unpaid Base Salary
through the date of termination and the amount of any unpaid
Bonus to which Executive had become entitled under the Bonus
Plan prior to the effective date of such termination. In addition,
any other benefits payable on behalf of Executive shall be deter-
mined under the Company's insurance and other compensation
and benefit plans and programs then in effect in accordance with
the terms of such programs.
(d) Voluntary Termination by Executive.
In the event that Executive's employment with the Company is
voluntarily terminated by Executive other than for Good Reason,
Executive shall be paid his unpaid Base Salary through the date
of termination and the amount of any unpaid Bonus to which
Executive had become entitled under the Bonus Plan prior to the
effective date of such termination, and the Company shall have
no further obligation hereunder from and after the effective date
of termination and the Company shall have all other rights and
remedies available under this Agreement or any other agreement
and at law or in equity. Executive shall give the Company at
least 30 days' advance written notice of his intention to
terminate his employment hereunder.
(e) Termination on Account of Disability.
To the extent not prohibited by The Americans With Disabilities
Act of 1990 or Chapter 613 of the Nevada Revised Statutes, if,
as a result of Executive's incapacity due to physical or mental
illness (as determined in good faith by a physician acceptable to
the Company and Executive), Executive shall have been absent
from the full-time performance of his duties with the Company
for 120 consecutive days during any twelve (12) month period
or if a physician acceptable to the Company advises the
Company that it is likely that Executive will be unable to return
to the full-time performance of his duties for 120 consecutive
days during the succeeding twelve (12) month period, his em-
ployment may be terminated for "Disability." During any
period that Executive fails to perform his full-time duties with
the Company as a result of incapacity due to physical or mental
illness, he shall continue to receive his Base Salary, Bonus and
other benefits provided hereunder, together with all compen-
sation payable to him under the Company's disability plan or
program or other similar plan during such period, until
Executive's employment hereunder is terminated pursuant to this
Section 5(e). Thereafter, Executive's benefits shall be deter-
mined under the Company's retirement, insurance, and other
compensation and benefit plans and programs then in effect, in
accordance with the terms of such programs.
6. Confidential Information, Non-Solicitation and
Non-Competition.
(a) During the Term of Employment
and for three (3) years thereafter, Executive shall not, except as
may be required to perform his duties hereunder or as required
by applicable law, disclose to others or use, whether directly or
indirectly, any Confidential Information regarding the Company.
"Confidential Information" shall mean information about the
Company, its subsidiaries and affiliates, and their respective
clients and customers that is not available to the general public
and that was learned by Executive in the course of his em-
ployment by the Company, including (without limitation) any
proprietary knowledge, tcomplete
statement of all the arrangements between the parties with
respect to Executive's employment by the Company, this Agree-
ment supersedes all prior and existing negotiations and
agreements between the parties concerning Executive's employ-
ment, and this Agreement can only be changed or modified
pursuant to a written instrument duly executed by each of the
parties hereto.
(c) If any provision of this Agreement or
any portion thereof is declared invalid, illegal, or incapable of
being enforced by any court of competent jurisdiction, the
remainder of such provisions and all of the remaining provisions
of this Agreement shall continue in full force and effect.
(d) This Agreement shall be governed by
and construed in accordance with the internal laws of the State
of Nevada, except to the extent governed by federal law.
(e) The Company may assign this Agree-
ment to any direct or indirect subsidiary or parent of the
Company or joint venture in which the Company has an interest,
or any successor (whether by merger, consolidation, purchase or
otherwise) to all or substantially all of the stock, assets or
business of the Company and this Agreement shall be binding
upon and inure to the benefit of such successors and assigns.
Except as expressly provided herein, Executive may not sell,
transfer, assign, or pledge any of his rights or interests pursuant
to this Agreement.
(f) Any rights of Executive hereunder
shall be in addition to any rights Executive may otherwise have
under benefit plans, agreements, or arrangements of the Compa-
ny to which he is a party or in which he is a participant,
including, but not limited to, any Company-sponsored employee
benefit plans. Provisions of this Agreement shall not in any
way abrogate Executive's rights under such other plans,
agreements, or arrangements.
(g) For the purpose of this Agreement,
notices and all other communications provided for in this Agree-
ment shall be in writing and shall be deemed to have been duly
given when delivered or mailed by United States certified or
registered mail, return receipt requested, postage prepaid,
addressed to the named Executive at the address set forth below
under his signature; provided that all notices to the Company
shall be directed to the attention of the Board with a copy to the
Secretary of the Company, or to such other address as either
party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effec-
tive only upon receipt.
(h) Section 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.
(i) Failure to insist upon strict compliance
with any of the terms, covenants, or conditions hereof shall not
be deemed a waiver of such term, covenant, or condition, nor
shall any waiver or relinquishment of, or failure to insist upon
strict compliance with, any right or power hereunder at any one
or more times be deemed a waiver or relinquishment of such
right or power at any other time or times.
(j) This Agreement may be executed in
several counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same instrument.
11. Resolution of Disputes. Any dispute or
controversy arising under or in connection with this Agreement
shall be settled exclusively by arbitration, conducted before a
panel of three arbitrators in Las Vegas, Nevada in accordance
with the rules of the American Arbitration Association then in
effect. The Company and Executive hereby agree that the
arbitrator will not have the authority to award punitive damages,
damages for emotional distress or any other damages that are
not contractual in nature. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided,
however, that the Company shall be entitled to seek a
restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation of the
provisions of Section 6, and Executive consents that such re-
straining order or injunction may be granted without the neces-
sity of the Company's posting any bond except to the extent
otherwise required by applicable law. The expense of such
arbitration shall be borne by the Company.
12. Attorneys' Fees. Should either party hereto
or their successors retain counsel for the purpose of enforcing,
or preventing the breach of, any provision hereof, including, but
not limited to, by instituting any action or proceeding in
arbitration or a court to enforce any provision hereof or to
enjoin a breach of any provision of this Agreement, or for a
declaration of such party's rights or obligations under the
Agreement, or for any other remedy, whether in arbitration or
in a court of law, then the successful party shall be entitled to
be reimbursed by the other party for all costs and expenses
incurred thereby, including, but not limited to, reasonable fees
and expenses of attorneys and expert witnesses, including costs
of appeal. If such successful party shall recover judgment in
any such action or proceeding, such costs, expenses and fees
may be included in and as part of such judgment. The
successful party shall be the party who is entitled to recover his
costs of suit, whether or not the suit proceeds to final judgment.
If no costs are awarded, the successful party shall be determined
by the arbitrator or court, as the case may be.
<PAGE>
IN WITNESS WHEREOF, the parties hereto
have executed this Agreement as of the day and year first above
written.
EXECUTIVE COMPANY
KURT D. SULLIVAN CIRCUS CIRCUS
ENTERPRISES, INC.
By: KURT D. SULLIVAN By: CLYDE T.TURNER
Title: Senior Vice President-Operations Title: Chief Executive Officer
Address:
2880 Las Vegas Blvd. South
Las Vegas, Nevada 89109
