<PAGE>
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): July 14, 1995
SAHARA GAMING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Nevada 1-9481 88-0304348
(STATE OR OTHER (COMMISSION FILE (I.R.S. EMPLOYER
JURISDICTION OF NUMBER) IDENTIFICATION NO.)
INCORPORATION)
2535 Las Vegas Blvd. South, Las Vegas, Nevada 89109
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (702) 737-2111
None
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>
ITEM 5. OTHER EVENTS.
Sahara Gaming Corporation has previously announced that its
subsidiary, Hacienda Hotel Inc., entered into an agreement with Circus Circus
Enterprises Inc. to sell substantially all of the assets of the Hacienda Resort
Hotel & Casino, and that its subsidiaries, Sahara Nevada Corp. and Sahara Las
Vegas Corp., entered into agreements with William G. Bennett to sell
substantially all of the assets of the Sahara Hotel & Casino. On July 17, 1995,
Sahara Gaming Corporation announced that its Board of Directors and the Boards
of Sahara Nevada Corp. and Sahara Las Vegas Corp. approved the proposed sale of
the Sahara Hotel assets to Mr. Bennett. Sahara Gaming Corporation also announced
that it had obtained the consent of the holders of 13 1/2% First Mortgage Bonds
due 1998 (the "Pioneer Bonds") issued by Sahara Gaming Corporation's subsidiary,
Pioneer Finance Corp., to the proposed sales of the Hacienda and Sahara Hotels.
A copy of the consent executed by the holders of at least a majority of the
outstanding principal amount of the Pioneer Bonds is attached as an Exhibit to
the Current Report on Form 8-K.
The consummation of the sales of the Sahara and Hacienda Hotels remain
subject, among other things, to the purchasers obtaining all necessary licensing
and regulatory approvals and to certain other regulatory approvals.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
<TABLE>
<CAPTION>
Exhibits
--------
<S> <C>
10.113 Form of Consent and Waiver with respect to Pioneer
Finance Corp. 13 1/2% First Mortgage Bonds due
1998.
</TABLE>
2
<PAGE>
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 hereunto duly authorized.
SAHARA GAMING CORPORATION, a
Nevada corporation
By: /s/ Thomas K. Land
-------------------------------------
Name: Thomas K. Land
Title: Senior Vice President
July 18, 1995
3
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ---------- -----------
<S> <C>
10.113 Form of Consent and Waiver with respect to Pioneer
Finance Corp. 13 1/2% First Mortgage Bonds due
1998.
</TABLE>
4
<PAGE>
EXHIBIT 10.113
[Letterhead of Sahara Gaming Corporation]
July 10, 1995
To Certain Holders of Pioneer Bonds
Re: Pioneer Finance Corp. Indenture dated as
of December 1, 1988, as amended
$120,000,000 13-1/2% First Mortgage Bonds due 1998
--------------------------------------------------
Ladies and Gentlemen:
Enclosed for your consideration is a Revised Consent and Waiver (the
"Revised Consent") relating to the above-referenced securities (the "Bonds")
regarding the sale of substantially all of the assets of the Hacienda Hotel and
the Sahara Hotel. This Revised Consent contains the following changes from the
Revised Consent and Waiver dated July 7, 1995:
. The cash contributions to Pioneer Hotel Inc. ("PHI") would be
made within 60 days, rather than 90 days, after the sales of the Hacienda and
Sahara Hotels (page 3).
. The Revised Consent reflects management's belief that the market
value of the Henderson, Nevada real property held by Sahara Mission Valley Inc.
is approximately $20 million (page 3).
. Any contribution of up to an additional $10 million to PHI and/or
Sahara Green Valley, required under certain circumstances, would be limited in
use for capital contributions to Sahara Green Valley, repurchase of Bonds, debt
service on the Note or capital expenditures, rather than only such a
contribution triggered by a sale of the Wet "N Wild Parcel (page 4).
You, as beneficial holders rather than record holders of the Bonds,
are not entitled to execute the Revised Consent unless you do so pursuant to the
written authorization of your nominee holder, which authorization must be
returned with the executed Revised Consent to Sahara Gaming Corporation, 2535
Las Vegas Boulevard South, Las Vegas, Nevada 89109, Attention: Chief Financial
Officer.
<PAGE>
Therefore, in order to submit a properly executed Revised Consent,
please either (i) have it executed by your nominee holder, or (ii) obtain the
written authorization WITH SIGNATURE GUARANTEED of your nominee holder for you
to execute the Revised Consent, and submit both the authorization and the
executed Revised Consent.
It is requested that all executed Revised Consents be returned to
Sahara Gaming no later than Wednesday, July 12, 1995.
Should you have any questions, please direct them to Thomas K. Land,
Chief Financial Officer, Sahara Gaming Corporation, 2535 Las Vegas Boulevard
South, Las Vegas, Nevada 89109; telephone: (702) 737-2750; fax: (702) 737-2787.
Very truly yours,
SAHARA GAMING CORPORATION
By: __________________
<PAGE>
July 10, 1995
Re: Pioneer Finance Corp. Indenture dated as
of December 1, 1988, as amended
$120,000,000 13-1/2% First Mortgage Bonds due 1998
--------------------------------------------------
Ladies and Gentlemen:
Reference is made to the Indenture dated as of December 1, 1988, among
Pioneer Finance Corp., as Issuer ("Pioneer"), Sahara Gaming Corporation
("Sahara Gaming"), as successor Guarantor to Sahara Casino Partners, L.P., and
IBJ Schroder Bank & Trust Company, as successor Trustee, as amended (the
"Indenture"). Capitalized terms used herein and not otherwise defined shall
have the meanings ascribed to them in the Indenture.
Section 801(d) of the Indenture requires that Sahara Gaming not cause
or permit any of its consolidated Subsidiaries to dispose of all or
substantially all of their respective properties or assets, except when such
assets or properties are transferred to other subsidiaries of Sahara Gaming.
Hacienda Hotel Inc. ("HHI"), a Nevada corporation and consolidated Subsidiary
of Sahara Gaming, has entered into an agreement to dispose of the Hacienda
Resort Hotel and Casino (the "Hacienda Hotel"), constituting all or
substantially all of its assets. Sahara Nevada Corp. ("SNC") and Sahara Las
Vegas Corp. ("Sahara Las Vegas"), each Nevada corporations and consolidated
Subsidiaries of Sahara Gaming, have entered into agreements to dispose of the
Sahara Hotel and Casino and related property (the "Sahara Hotel"), constituting
all or substantially all of their respective properties. Absent an effective
waiver of Section 801(d) as it applies to any such dispositions, such
dispositions would be in violation of Section 801(d) of the Indenture and, if
consummated, would create an Event of Default under Section 501(e) of the
Indenture.
We are seeking a waiver of Section 801(d) as it applies to the
contemplated sales of the Hacienda Hotel and the Sahara Hotel, which are
described in more detail below.
HACIENDA HOTEL SALE. Pursuant to the agreement for the sale of the
Hacienda Hotel, HHI will receive cash proceeds of $80 million. Of such
proceeds, $56 million will be used by HHI to repay approximately (i) $22
million of indebtedness secured by the Hacienda Hotel that accelerates upon a
sale of the property (the "PERS Note"), (ii) $2 million of equipment financing,
and (iii) $32 million outstanding on an affiliate note payable to SNC that
accelerates upon a sale of the property (a portion of which will be loaned to a
Sahara Gaming subsidiary to repay certain indebtedness, as described in the
following paragraph). In addition, $15.5 million of such proceeds will be used
to purchase $20 million principal amount of 13-1/2% First Mortgage Bonds due
1998 (the "Bonds"), which Sahara Gaming has committed to buy, contingent upon
the closing of the sale of a Hacienda Hotel. The balance of the proceeds of
approximately $9.5 million will be used to relocate the recreational vehicle
facility currently located on the Hacienda property, as required by the
purchase agreement, and to pay the costs associated with the transaction.
<PAGE>
Approximately $16.8 million of third party indebtedness (the "Green
Valley Notes") of Sahara Mission Valley Inc. ("Sahara Green Valley"), a Nevada
corporation and a consolidated Subsidiary of Sahara Gaming, is secured by an
approximately 40 acre parcel of real property in Henderson, Nevada, and matures
on the earlier of September 30, 1995 and five days after consummation of a sale
of the Hacienda Hotel. Under the terms of an indenture to which SNC is a
party, the proceeds received by SNC upon repayment of the $32 million affiliate
note may be used only (i) by SNC for capital expenditures at the Sahara Hotel,
or (ii) for loans by SNC to wholly-owned subsidiaries of Sahara Gaming,
provided any loan is evidenced by an affiliate note comparable to the one that
will be repaid, including having a maturity date of the earlier of August 17,
1996 or a sale of the Sahara Hotel. The repayment of the Green Valley Notes
will be funded by a loan from SNC to Sahara Green Valley using a portion of the
funds received by SNC upon repayment of the affiliate note, and will be
evidenced by a new affiliate note with a maturity of the earlier of August 1996
or a sale of the Sahara Hotel.
Consummation of the Hacienda sale is contingent upon receipt by the
buyer of all necessary gaming approvals and is subject to obtaining the waiver
requested in this letter.
SAHARA HOTEL SALE. Pursuant to the agreements for the sale of the
Sahara Hotel, SNC will receive approximately $128 million in cash, and Sahara
Las Vegas will receive a parcel of real property on the Las Vegas Strip (the
"Wet 'N Wild Parcel") valued at approximately $22 million in exchange for a
parcel of real property, a portion of which is currently leased to SNC for
parking at the Sahara Hotel. In connection with the sale of the Sahara Hotel,
$115 million of indebtedness secured by the property must be defeased. The
cash proceeds of the sale will be used to fund the cost of defeasance,
estimated at approximately $122 million, and to pay for the costs associated
with the transaction.
Consummation of the Sahara sale is contingent upon receipt by the
buyer of all necessary gaming approvals, approval of the Boards of Directors of
SNC and Sahara Las Vegas Corp. and termination or expiration of the waiting
period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as
amended, and is subject to obtaining the waiver requested in this letter.
WAIVER REQUEST. We hereby request that Holders consent to waive
compliance by Sahara Gaming with Section 801(d) with respect to the proposed
dispositions of the Hacienda Hotel and the Sahara Hotel described herein,
provided Sahara Gaming agrees as set forth below.
Concurrently with the effectiveness of Consents and Waivers executed
by Holders of not less than a majority of the Outstanding Amount of Bonds
Outstanding, and contingent upon the consummation of the sale of the Hacienda
Hotel, Sahara Gaming would agree:
. to cause the $20 million principal amount of Bonds to be
acquired for $15.5 million, contingent upon the consummation of a sale of the
<PAGE>
Hacienda Hotel, to be contributed as equity to PHI and submitted to the Trustee
for cancellation.
Concurrently with the effectiveness of Consents and Waivers executed
by Holders of not less than a majority of the Outstanding Amount of Bonds
Outstanding, and contingent upon the consummation of the sales of both the
Hacienda Hotel AND the Sahara Hotel, Sahara Gaming would agree:
. to cause $10 million in cash to be contributed to PHI within 60
days after the later of the consummation of the sale of the Hacienda Hotel and
the Sahara Hotel. Such funds would be restricted in use for (i) contribution
to the capital of Sahara Green Valley, (ii) repurchase of Bonds, (iii) debt
service on the Note, and (iv) capital expenditures at the Pioneer Hotel.
. to cause $5 million in cash to be contributed to PHI within 60
days after the later of the consummation of the sale of the Hacienda Hotel and
the Sahara Hotel. Such funds would be restricted in use for (i) debt service
on the Note, and (ii) capital expenditures at the Pioneer Hotel.
. to cause the capital stock of Sahara Green Valley, representing
all of the outstanding capital stock, to be contributed to PHI, subject to the
conditions set forth in the following paragraph. Immediately prior to the
contribution, Sahara Gaming would cause SNC to forgive the new affiliate note
evidencing the loan made for the purpose of repaying the Green Valley Notes.
Management believes that the market value of the real property in Henderson,
Nevada held by Sahara Green Valley is approximately $20 million.
As a result of the contribution of the Sahara Green Valley stock, the
real property in Henderson, Nevada held by Sahara Green Valley would be held by
a subsidiary of PHI. It is contemplated that Sahara Green Valley will enter
into financing arrangements secured by the real property in Henderson, Nevada
and personal property of Sahara Green Valley in connection with the development
of a hotel-casino on the Henderson, Nevada property.
Sahara Green Valley would not be subject to restrictions on the
incurrence by it of indebtedness, except that any indebtedness that is secured
by the real property may not exceed $70 million principal amount in the
aggregate. Accordingly, the restrictions in the Indenture, the Mortgage
Documents or any documents related to the Indenture or the Mortgage Documents
that would otherwise limit in any way Sahara Green Valley's ability to incur
debt, whether secured or unsecured, including without limitation the
restrictions in Section 1008 (Restrictions on Debt), would not be applicable to
it. Furthermore, Sahara Green Valley would not be subject to the restrictions
in Section 801(d) of the Indenture (Consolidation, Merger, Conveyance or
Transfer Only on Certain Terms), which would otherwise prohibit a merger or
disposition of substantially all of the assets of Sahara Green Valley, or
Section 1011 of the Indenture (Restrictions on Activities), which would
otherwise require Sahara Green Valley to limit its activities to the Pioneer
Hotel operations. Finally, Section 1010(b) of the Indenture (Limitations on
Distributions and Investments) would be amended to provide that Sahara Green
Valley would be permitted to make a Restricted Payment to PHI in an amount
<PAGE>
up to the amount of the net proceeds received upon a disposition of
substantially all of the Sahara Green Valley assets, regardless of the Cash
Flow and Coverage Ratio tests specified in Section 1010(b)(2). All other
covenants in the Indenture applicable to Subsidiaries of PHI would be
applicable to Sahara Green Valley.
. to cause up to $10 million to be contributed as debt or equity
to PHI and/or Sahara Green Valley, (i) in the event of a sale by Sahara Las
Vegas of the Wet 'N Wild Parcel at any time prior to Maturity of the Bonds, or
(ii) to the extent necessary to satisfy any remaining principal obligation of
Pioneer on the Bonds in December 1997 and December 1998. Such $10 million
contribution obligation shall be reduced on a dollar-for-dollar basis to the
extent that Sahara Gaming and/or any of its Affiliates shall have otherwise
contributed funds to PHI and/or Sahara Green Valley (other than as contemplated
herein). Such contingent obligation would be secured by the Wet 'N Wild
Parcel. The lien would be released upon the earlier of (i) contribution by
Sahara Gaming and/or and of its Affiliates of funds aggregating $10 million,
(ii) consummation of a sale of the Wet 'N Wild Parcel and the concurrent
contribution of $10 million, and (iii) satisfaction in full of the Bonds. Any
contribution would be restricted in use for (i) contribution to the capital of
Sahara Green Valley, (ii) repurchase of Bonds, (iii) debt service on the Note,
and (iv) capital expenditures at the Pioneer Hotel.
* * * * * *
<PAGE>
If you agree to waive compliance with Section 801(d) on the terms set
forth and as described herein, please sign the attached Revised Consent and
Waiver, HAVE YOUR SIGNATURE GUARANTEED and return your executed Revised Consent
and Waiver as soon as possible to Sahara Gaming and Pioneer in care of Sahara
Gaming at 2535 Las Vegas Boulevard South, Las Vegas, Nevada, 89109, Attention:
Chief Financial Officer. Any questions should be directed to Thomas K. Land,
Chief Financial Officer, Sahara Gaming Corporation, 2535 Las Vegas Boulevard
South, Las Vegas, Nevada 89109; telephone: (702) 737-2750; fax: (702) 737-
2787.
Your Revised Consent and Waiver, if executed and delivered as set
forth in the preceding paragraph, will become effective as of the date on which
there shall have been received Revised Consents and Waivers executed by Holders
of not less than a majority of the Outstanding Amount of the Bonds Outstanding.
Except as set forth herein, nothing contained herein shall constitute
a waiver or modification of any conditions or any other terms, provisions or
requirements of the Indenture or any document in effect thereunder.
Very truly yours,
Sahara Gaming Corporation
Pioneer Finance Corp.
By: _______________________________
Thomas K. Land,
Chief Financial Officer
<PAGE>
Pioneer Finance Corp. Indenture
REVISED CONSENT AND WAIVER
The undersigned hereby consents and agrees to the waiver of compliance
with the provisions of Section 801(d) of the Indenture on the terms set forth
and as described in the attached letter dated July 10, 1995 from Sahara Gaming
Corporation and Pioneer Finance Corp. (the "Revised Waiver Request").
Capitalized terms used herein and not otherwise defined are used with the
meanings set forth in the Revised Waiver Request.
Aggregate principal HOLDER
amount of Bonds:
$_____________________ _____________________________________
(Type name of nominee holder or,
Date: ___________, 1995 if written authorization from nominee
holder is attached, the name of the
beneficial holder)
By: _________________________________
Its: ________________________________
Signature Guarantee:
<PAGE>
[LETTERHEAD OF SAHARA GAMING CORPORATION]
July 11, 1995
To: Certain Holders of Pioneer Bonds
Re: Pioneer Finance Corp. Indenture dated as of December 1, 1988, as amended
$120,000,000 13-1/2% First Mortgage Bonds due 1998
------------------------------------------------------------------------
Ladies and Gentlemen:
This letter will confirm the understanding we have reached today with respect to
the solicitation by Pioneer Finance Corp. ("Pioneer") and Sahara Gaming
Corporation ("Sahara Gaming") of the Revised Consent and Waiver (the "Revised
Consent") dated July 10, 1955 relating to $120,000,000 13-1/2% First Mortgage
Bonds Due 1998 (the "Bonds") issued by Pioneer. Capitalized terms not otherwise
defined herein have the meanings set forth in the Indenture under which the
Bonds were issued. Contingent upon (i) receipt by the undersigned of your
validly executed Revised Consent and (ii) effectiveness of the Revised Consent
as specified therein, Sahara Gaming will agree that, in connection with the
contribution of capital stock of Sahara Green Valley Inc. ("Sahara Green
Valley") to Pioneer Hotel Inc. ("PHI") described in the Revised Consent, such
stock will be pledged for the benefit of the bondholders. Such pledge
automatically will be released upon a sale of Sahara Green Valley or
substantially all of its assets, provided that cash proceeds received upon such
sale shall be used for (i) repurchase of Bonds, (ii) debt service on the Note,
and (ii) capital expenditures at the Pioneer Hotel & Gambling Hall, and a
security interest in any noncash proceeds is granted for the benefit of the
bondholders.
Very truly yours,
SAHARA GAMING CORPORATION
PIONEER FINANCE CORP.
By________________________________________
Thomas K. Land, Senior Vice President
and Chief Financial Officer
