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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant to Section 13 or 15(d) of
the Securities Act of 1934
Date of Report (date of earliest event reported): December 1, 1997
SANTA FE 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)
4949 North Rancho Drive, Las Vegas, Nevada 89130
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 658-4300
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ITEM 5. OTHER EVENTS
On December 1, 1997 Santa Fe Gaming Corporation (the "Registrant"),
announced that its indirect-wholly owned subsidiary, Sahara Las Vegas
Corporation ("SLVC"), entered into an amended and restated loan agreement
pursuant to which SLVC increased an existing loan to $57.5 million from $35
million. A copy of the press release is filed as exhibit 99.1 to this Current
Report on Form 8-K. The additional proceeds were used by SLVC primarily to
acquire a 39 acre parcel of real property in Henderson, Nevada from its
affiliate, Santa Fe Valley, Inc., for cash consideration of $20 million. Copies
of various documents entered into in connection with the amended loan agreement
are filed as exhibits to this Current Report on Form 8-K.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL
INFORMATION AND EXHIBITS.
(c) Exhibits.
The following are filed as exhibits to this Current Report on
Form 8-K:
10.94 Second Amended and Restated Note Purchase Agreement dated
as of November 25, 1997 among Registrant, SLVC and the
holders named therein.
10.95 Form of Tranche A Promissory Note.
10.96 Form of Tranche B Promissory Note.
10.97 Second Amendment to Deed of Trust, Fixture Filing and
Financing Statement and Security Agreement with
Assignment of Rents executed and delivered on November
25, 1997 by SLVC in favor of SunAmerica Life Insurance
Company, as Collateral Agent.
10.98 Second Amendment to Security Agreement executed and
delivered on November 25, 1997 between SLVC and
SunAmerica Life Insurance Company, as Collateral Agent.
10.99 Deed of Trust, Fixture Filing and Financing Statement and
Security Agreement with Assignment of Rents executed and
delivered on November 25, 1997 by SLVC in favor of
SunAmerica Life Insurance Company, as Collateral Agent.
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10.100 Second Amendment to Subordination, Non-Disturbance and
Attornment Agreement dated November 25, 1997 among SLVC,
Wet 'N' Wild Nevada, Inc. and SunAmerica Life Insurance
Company, as Collateral Agent.
10.101 Second Amendment to the Environmental Indemnity Agreement
executed and delivered on November 25, 1997 by Registrant
and SLVC in favor of SunAmerica Life Insurance Company,
as Collateral Agent.
10.102 Environmental Indemnity Agreement issued by Registrant
and SLVC on November 25, 1997 in favor of SunAmerica Life
Insurance Company, as Collateral Agent.
10.103 Consent to Amendment and Restatement delivered on
November 25, 1997 by Registrant, Sahara Resorts, Casino
Properties, Inc. and Hacienda Hawaiian Properties, Inc.
10.104 Intercreditor Agreement dated as of November 25, 1997
among SunAmerica Life Insurance Company and Credit Suisse
First Boston Mortgage Capital LLC.
99.1 Press Release dated December 1, 1997.
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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.
SANTA FE GAMING CORPORATION, a
Nevada corporation
By: /s/ Thomas K. Land
____________________________
Name: Thomas K. Land
Title: Chief Financial Officer
December 4, 1997
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EXHIBIT 10.94
SANTA FE GAMING CORPORATION
SAHARA LAS VEGAS CORP.
SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT
THIS SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT is made as of
this 25th day of November, 1997 by and among Santa Fe Gaming Corporation
(formerly named Sahara Gaming Corporation), a Nevada corporation ("SGC"), Sahara
Las Vegas Corp., a Nevada corporation ("Company"), SunAmerica Life Insurance
Company, an Arizona corporation ("SunAmerica"), SunAmerica, Inc. ("SAI"), Credit
Suisse First Boston Mortgage Capital LLC, a Delaware limited liability company
("CSFB"), and any other person or persons party hereto from time to time after
the date hereof as a holder (individually, including SunAmerica, SAI and CSFB, a
"Holder" and collectively, "Holders") and SunAmerica, as Collateral Agent
RECITALS
WHEREAS, Company issued and sold to SunAmerica $20,000,000 in principal
amount of Company's 12% Notes Due December 15, 1999 pursuant to that certain
Note Purchase Agreement dated as of January 16, 1996 among Company, SGC and
SunAmerica (the "Original Note Purchase Agreement");
WHEREAS, Company issued and sold to SAI $15,000,000 in additional
principal amount of Company's 12% Notes Due December 15, 1999 pursuant to that
certain Amended and Restated Note Purchase Agreement dated as of July 29, 1997
by and among Company, SGC, SunAmerica and SAI (as amended, the "Existing Note
Purchase Agreement");
WHEREAS, Company desires to restructure the Existing Notes issued to
SunAmerica and SAI pursuant to the Original Note Purchase Agreement and the
Existing Note Purchase Agreement and to issue additional Notes as provided
herein to, among other things, enable Company to acquire the Henderson Facility
from Santa Fe Valley;
WHEREAS, Company intends to grant a security interest in the Henderson
Facility as additional security to secure the Notes and its other Obligations;
WHEREAS, SGC, Sahara Resorts, Casino Properties and Hacienda Hawaiian
have agreed to continue to provide guaranties and Collateral to support and
secure the payment of the Obligations as provided herein and in the other Basic
Documents; and
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WHEREAS, the parties hereto desire to amend and restate the Existing
Note Purchase Agreement as provided herein.
NOW THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the Existing Note Purchase Agreement
is hereby amended and restated as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS. The following terms used in this Agreement
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shall have the following meanings:
"ADDITIONAL COLLATERAL ACCOUNT" means the "Collateral Account" as
defined in the Additional Collateral Account Agreement.
"ADDITIONAL COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account
Agreement dated as of July 29, 1997 between Company and Collateral Agent, as
amended, supplemented or otherwise modified from time to time.
"ADDITIONAL COLLATERAL ACCOUNT LETTER" means the Collateral Account
Letter dated July 29, 1997 from Company to Bankers Trust Company and
acknowledged by Collateral Agent relating to the Additional Collateral Account,
as amended, supplemented or otherwise modified from time to time, and any other
similar letter entered into with any successor institution.
"AFFILIATE" means, with respect to any Person, any other Person that,
directly or indirectly, is in control of, is controlled by, or is under common
control with, such Person. For the purposes of this definition, "control"
(including, with correlative meanings, the terms "controlling", "controlled by"
and "under common control with"), as applied to any Person, means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of that Person, whether through the
ownership of voting securities or by contract or otherwise. Without limiting
the foregoing, a Person shall be deemed to be "controlled by" another Person if
such other (i) possesses, directly or indirectly, power to vote 10% or more of
the securities having ordinary voting power for the election of directors of
such Person or (ii) with respect to any other Person that is not a corporation,
owns 10% or more of the equity interests of such Person.
"AGREEMENT," "HEREOF" and "HEREUNDER" and words of similar import refer
to this Second Amended and Restated Note Purchase Agreement, as it may be
amended, supplemented or otherwise modified from time to time.
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"AGGREGATE APPRAISED VALUE" means the sum of the appraised value of the
Wet 'N' Wild Property in the Wet 'N' Wild Appraisal (or any substitute or
updated appraisal acceptable to Requisite Holders) and the appraised value of
the Henderson Property in the Henderson Appraisal (or any substitute or updated
appraisal acceptable to Requisite Holders).
"ATLA" has the meaning assigned to such term in Section 4.1E.
"APPRAISALS" means the Wet 'N' Wild Appraisal and the Henderson
Appraisal.
"APPRAISAL DEFICIT AMOUNT" has the meaning assigned to such term in
Section 2.5C(vi).
"APPRAISAL DEFICIT REDEMPTION DATE" has the meaning assigned to such
term in Section 2.5C(vi).
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
"BASIC DOCUMENTS" means this Agreement, the Notes, the Guaranties, the
Security Agreements, the Deeds of Trust, the Environmental Indemnities, the Wet
'N' Wild Subordination, Non-Disturbance and Attornment Agreement and all other
instruments or documents now, heretofore or hereafter granting Liens on the
property of any Credit Party or any of their Affiliates to Collateral Agent for
the benefit of Holders and any other instruments or agreements now, heretofore
or hereafter entered into with or for the benefit of Collateral Agent or any
Holder in connection herewith or therewith in connection with the Notes.
"BOARD OF DIRECTORS" means the Board of Directors of any Credit Party
or one of their respective Subsidiaries, as the context requires, or any
committee thereof duly authorized to act on behalf of such Board.
"BUSINESS DAY" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the State of California or Nevada or
is a day on which banking institutions located in either such state are
authorized or required by law or other governmental action to close.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CAPITAL STOCK" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including, without
limitation, any preferred stock or any interests in a Joint Venture.
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"CASH" means money, currency or a credit balance in a Deposit Account.
"CASH COLLATERAL ACCOUNT" means the "Collateral Account" as defined in
the Cash Collateral Agreement.
"CASH COLLATERAL ACCOUNT LETTER" means the letter by Company to the
Account Bank (as defined in the Cash Collateral Agreement) dated July 29, 1997
delivered pursuant to the Cash Collateral Agreement, as amended, supplemented or
otherwise modified from time to time.
"CASH COLLATERAL AGREEMENT" means the Cash Collateral Agreement dated
as of July 29, 1997, by Company and Collateral Agent, as such Cash Collateral
Agreement may be supplemented, amended, supplemented or otherwise modified from
time to time.
"CASINO PROPERTIES" means Casino Properties, Inc., a Nevada
corporation.
"CASINO PROPERTIES GUARANTY" means the Guaranty dated as of July 29,
1997 issued by Casino Properties, as such Guaranty may be amended, supplemented
or otherwise modified from time to time.
"CASINO PROPERTIES PLEDGE AGREEMENT" means the Pledge Agreement dated
as of July 29, 1997 by Casino Properties, as such Pledge Agreement may be
amended, supplemented or otherwise modified from time to time.
"CHANGE OF CONTROL" means an event or series of events by which (i) SGC
or SFHI sells, conveys, transfers or leases, directly or indirectly, all or
substantially all of its properties and assets to any Person or group (as such
term is used in Section 13(d) and 14(d) of the Exchange Act); (ii) any Person or
group (other than the Lowden Family) is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person or
group shall be deemed to have "beneficial ownership" of all shares that any such
Person or group has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly of
securities representing (a) 25% or more of the combined voting power of SGC's or
SFHI's, as the case may be, Voting Stock and at such time the Lowden Family
together shall fail to beneficially own, directly or indirectly, securities
representing at least 30% of the combined voting power of SGC's or SFHI's, as
the case may be, Voting Stock or (b) more than 50% of the combined voting power
of SGC's or SFHI's Voting Stock, as the case may be; (iii) SGC or SFHI
consolidates with or merges into another Person or conveys, transfers or leases
all or substantially all its properties and assets to any Person or any Person
consolidates with or merges into SGC or SFHI, in either event pursuant to a
transaction in which the outstanding Voting Stock of SGC or SFHI is changed into
or exchanged for cash, securities or other property with the effect that any
Person or group (other than the Lowden Family) becomes the "beneficial owner,"
directly or indirectly, of securities representing (a) 25% or more of the
combined voting power of the Voting Stock of the Person
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that continues after such consolidation or merger or who acquires such assets
and at such time the Lowden Family together shall fail to beneficially own,
directly or indirectly, securities representing at least 30% of the combined
voting power of such Voting Stock or (b) more than 50% of the combined voting
power of the Voting Stock of the Person that continues after such consolidation
or merger or who acquires such assets, (iv) during any period of 24 consecutive
months, individuals who at the beginning of such period constituted SGC's or
SFHI's Board of Directors, as the case may be, (together with any new or
replacement directors whose election by the Board of Directors or whose
nomination for election by the stockholders of SGC or SFHI, as the case may be,
was approved by a vote of at least a majority 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 directors then in office; (v) SFHI ceases
to own any of the outstanding Capital Stock, or all or substantially all of the
assets, of any Restricted Subsidiary (as defined in the SFHI Indenture) except
where such Capital Stock or such assets are disposed of pursuant to subsection
4.13 of the SFHI Indenture or where such assets are disposed of pursuant to
subsection 3.9 of the SFHI Indenture; or (vi) SGC ceases to own any of the
outstanding Capital Stock, or all or substantially all of the assets, of SFHI or
any of its Consolidated Subsidiaries (as defined in the SFHI Indenture), except
where such Capital Stock or such assets are disposed of pursuant to subsection
4.13 of the SFHI Indenture.
"CLOSING DATE" means January 16, 1996, the date on which the Original
Notes were purchased.
"COLLATERAL" means all the real, personal and mixed property made
subject to a Lien pursuant to the Security Agreements, the Deeds of Trust or any
other Basic Document.
"COLLATERAL ACCOUNT" means account number 241275072 designated as the
"Sahara Las Vegas Collateral Account" and established with Donaldson, Lufkin &
Jenrette Securities Corporation and any successor account established with any
institution pursuant to the Collateral Account Letter.
"COLLATERAL ACCOUNT AGREEMENT" means the Collateral Account Agreement
dated as of January 16, 1996 by Company and Collateral Agent, as it may be
amended, supplemented or otherwise modified from time to time.
"COLLATERAL ACCOUNT LETTER" means the Collateral Account Letter dated
January 16, 1996 from Company to Donaldson, Lufkin & Jenrette Securities
Corporation and acknowledged by Donaldson, Lufkin & Jenrette Securities
Corporation relating to the Collateral Account and any other similar letter
entered into with any successor institution.
"COLLATERAL AGENT" means SunAmerica Life Insurance Company in its
capacity as collateral agent for the Holders, and any successor Collateral Agent
appointed pursuant to this Agreement.
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"COMMISSION" means the Securities and Exchange Commission.
"COMPANY" has the meaning set forth in the Introduction to this
Agreement.
"COMPANY DEED OF TRUST" means the Deed of Trust, Fixture Filing and
Financing Statement and Security Agreement with Assignment of Rents dated as of
January 16, 1996, as amended by the First Amendment to Company Deed of Trust and
Second Amendment to Company Deed of Trust, by Company in favor of Collateral
Agent, as beneficiary thereunder, pursuant to which Company granted to Stewart
Title of Nevada, as trustee, for the benefit of Collateral Agent on behalf of
the Holders a first priority Lien on, among other things, the Wet 'N' Wild
Premises and Company's right, title and interest in and to the Wet 'N' Wild
Improvements to secure the obligations of Company, as it may be further amended,
supplemented or otherwise modified from time to time.
"COMPANY ENVIRONMENTAL INDEMNITY" means the Environmental Indemnity
Agreement dated as of January 16, 1996, as amended by the First Amendment to
Company Environmental Indemnity and Second Amendment to Company Environmental
Indemnity by Company and SGC in favor of Collateral Agent for the benefit of
Holders and certain other indemnified parties therein pursuant to which Company
and SGC indemnify Collateral Agent for the benefit of Holders and certain other
indemnified parties therein against environmental risks, as it may hereafter be
amended, supplemented or otherwise modified from time to time.
"COMPANY PLEDGE AGREEMENT" means the Pledge Agreement dated as of July
29, 1997 by Company, as such Pledge Agreement may be amended, supplemented, or
otherwise modified from time to time.
"COMPANY SECURITY AGREEMENT" means the Security Agreement dated as of
January 16, 1996, as amended by the First Amendment to Company Security
Agreement and Second Amendment to Company Security Agreement, by Company and
Collateral Agent pursuant to which Company granted to Collateral Agent on behalf
of Holders a security interest in all of Company's assets including personal
property and fixtures, as it may be amended, supplemented or otherwise modified
from time to time.
"CONSENT TO AMENDMENT AND RESTATEMENT" means the Consent to Amendment
and Restatement delivered by the Credit Parties on the Effective Date,
substantially in the form of Exhibit XI annexed hereto.
"CONTINGENT OBLIGATION," as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person (i) with respect to
any Indebted ness, lease, dividend or other obligation of another Person if the
primary purpose or intent thereof by the Person incurring the Contingent
Obligation is to provide assurance to the obligee of such obligation of another
Person that such obligation of another will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
obligation
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will be protected (in whole or in part) against loss in respect thereof, (ii)
with respect to any letter of credit issued for the account of that Person or as
to which that Person is otherwise liable for reimbursement of drawings, or (iii)
under interest rate agreements and currency agreements. Contingent Obligations
shall include, without limitation, (a) the direct or indirect guaranty,
endorsement (otherwise than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the obligation of another Person, (b) the obligation to make take-or-
pay or similar payments if required regardless of non-performance by any other
party or parties to an agreement, and (c) any liability of such Person for the
obligation of another Person through any agreement (contingent or otherwise) (X)
to purchase, repurchase or otherwise acquire such obligation or any security
therefor, or to provide funds for the payment or discharge of such obligation
(whether in the form of loans, advances, stock purchases, capital contributions
or otherwise) or (Y) to maintain the solvency or any balance sheet item, level
of income or financial condition of another if, in the case of any agreement
described under subclauses (X) or (Y) of this sentence, the primary purpose or
intent thereof is as described in the preceding sentence. For purposes of this
definition, the amount of any Contingent Obligation at any time of determination
shall be computed as the amount that, in light of all the facts and
circumstances existing at such time represents the amount that reasonably can be
expected at such time of determination to become an actual or matured liability.
"CONTRACTUAL OBLIGATION," as applied to any Person, means any security
issued by that Person or any indenture, mortgage, deed of trust, contract,
undertaking, agreement or other instrument to which that Person is a party or by
which it or any of its properties is bound or to which it or any of its
properties is subject.
"CREDIT PARTY" means Company, SGC, Sahara Resorts, Casino Properties,
Hacienda Hawaiian and any other Subsidiary of SGC or Company which is or becomes
a party to a Basic Document.
"CSFB" has the meaning set forth in the Introduction to this Agreement.
"DEEDS OF TRUST" means the Company Deed of Trust and the Henderson Deed
of Trust, as each such Deed of Trust may be amended, supplemented or otherwise
modified from time to time.
"DEPOSIT ACCOUNT" means a demand, time, savings, passbook or like
account with a bank, savings and loan association, credit union or like
organization, other than an account evidenced by a negotiable certificate of
deposit.
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
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"EFFECTIVE DATE" means the date on which all conditions to the
effectiveness of this Agreement set forth in subsection 4.1 are satisfied;
provided that if the Effective Date does not occur on or prior to December 2,
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1997, this Agreement shall not become effective and the Existing Note Purchase
Agreement shall continue in full force and effect.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined in
Section 3(3) of ERISA which is, or was maintained or contributed to by SGC,
Company or any ERISA Affiliate.
"ENVIRONMENTAL CLAIM" means any accusation, allegation, notice of
violation, claim, demand, abatement order, cleanup order, removal order, or
other order or direction (conditional or otherwise) by any Governmental
Authority or other Person for any injury, loss or damage, including, without
limitation, personal injury (including sickness, disease or death), tangible or
intangible property damage, contribution, indemnity, indirect or consequential
damages, damage to the environment, nuisance, pollution, contamination or other
adverse effects on the environment, or for fines, penalties or restrictions or
to compel cleanup or remediation, in each case relating to, resulting from or in
connection with any Hazardous Material and relating to the Premises or
Improvements.
"ENVIRONMENTAL INDEMNITIES" means the Company Environmental Indemnity
and the Henderson Environmental Indemnity.
"ENVIRONMENTAL LAWS" has the meaning set forth in the Deeds of Trust,
as applicable.
"ENVIRONMENTAL REPORTS" means the Wet 'N' Wild Environmental Report and
the Henderson Environmental Report.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA AFFILIATE" means (i) any corporation which is a member of a
controlled group of corporations within the meaning of Section 414(b) of the
Internal Revenue Code of which SGC or Company is, or was at any time, a member;
(ii) any trade or business (whether or not incorporated) which is, or was at any
time, a member of a group of trades or businesses under common control within
the meaning of Section 414(c) of the Internal Revenue Code of which SGC or
Company is, or was at any time, a member; and (iii) any member of an Affiliated
service group within the meaning of Section 414(m) or (o) of the Internal
Revenue Code of which SGC or Company is a member.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043(c) of ERISA and the regulations issued thereunder with respect to
any Pension Plan (excluding those for which the provision for 30-day notice to
the PBGC has been waived by
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regulation); (ii) the failure to meet the minimum funding standard of Section
412 of the Internal Revenue Code with respect to any Pension Plan (whether or
not waived in accordance with Section 412(d) of the Internal Revenue Code) or
the failure to make by its due date a required installment under Section 412(m)
of the Internal Revenue Code with respect to any Pension Plan or the institution
of a proceeding on behalf of a Multiemployer Plan against Company, SGC or any
Affiliate to enforce Section 515 of ERISA, which proceeding is not dismissed
within 30 days; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by SGC, Company or any ERISA Affiliates from any Pension Plan with
two or more contributing sponsors or the termination of any such Pension Plan
resulting in liability pursuant to Sections 4063 or 4064 of ERISA; (v) the
institution by the PBGC of proceedings to terminate any Pension Plan, or the
occurrence of any event or condition which might constitute grounds under ERISA
for the termination of, or the appointment of a trustee to administer, any
Pension Plan; (vi) the imposition of liability on SGC, Company or any ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal by SGC, Company or
any of their respective ERISA Affiliates in a complete or partial withdrawal
(within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer
Plan if there is any potential liability therefor, or the receipt by SGC,
Company or any of their respective ERISA Affiliates of notice from any
Multiemployer Plan that it is in reorganization or insolvency pursuant to
Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated
under Section 4041A or 4042 of ERISA; (viii) the occurrence of an act or
omission which could give rise to the imposition on SGC, Company or any of their
respective ERISA Affiliates of fines, penalties, taxes or related charges under
Chapter 43 of the Internal Revenue Code or under Section 409 or 502(c), (i) or
(l) of ERISA in respect of any Employee Benefit Plan; (ix) the assertion of a
material claim (other than routine claims for benefits) against any Employee
Benefit Plan other than a Multiemployer Plan or the assets thereof, or against
SGC, Company or any of their respective ERISA Affiliates in connection with any
such Employee Benefit Plan; (x) receipt from the Internal Revenue Service of
notice of the failure of any Pension Plan (or any other Employee Benefit Plan
intended to be qualified under Section 401(a) of the Internal Revenue Code) to
qualify under Section 401(a) of the Internal Revenue Code, or the failure of any
trust forming part of any Pension Plan to qualify for exemption from
taxationunder Section 501(a) of the Internal Revenue Code; or (xi) the adoption
of an amendment to any Pension Plan that, pursuant to Section 401(a)(29) of the
Internal Revenue Code or pursuant to Section 307 of ERISA, would require
Company, SGC or any ERISA Affiliate timely to provide security to the plan or
would result in loss of tax exempt status of the trust of which such plan is a
part if not timely provided, or the impositionof a lien pursuant to Section
412(n) of the Internal Revenue Code.
"EVENT OF DEFAULT" has the meaning set forth in Section 7 hereof.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as it may
from time to time be amended, and the related regulations and published
interpretations.
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"EXISTING HENDERSON MORTGAGE DOCUMENTS" means the Note secured by Deed
of Trust in the principal amount of $5,000,000 dated May 6, 1997, executed by
Santa Fe Valley, in favor of certain "promisees" more particularly described in
Exhibit A attached thereto, together with the Deed of Trust with Assignment of
Leases and Rents dated May 6, 1997, the Unsecured Environmental Indemnity
Agreement dated May 6, 1997, the Guaranty of Payment and Performance dated May
6, 1997, executed by Paul W. Lowden, the Guaranty of Payment and Performance
dated May 6, 1997, executed by Suzanne Lowden and all other instruments and
documents executed in connection with the transactions described in the
foregoing documents.
"EXISTING NOTE PURCHASE AGREEMENT" has the meaning set forth in the
Introduction to this Agreement.
"EXISTING NOTES" means the Notes as defined in the Existing Note
Purchase Agreement.
"EXISTING WET 'N' WILD LEASE" means that certain ground lease dated as
of January 1, 1987, as amended by (i) the assignment of the Ground Lease dated
March 1, 1987 from Wet 'N' Wild Florida to Wet 'N' Wild Tenant, (ii) the First
Amendment to Ground Lease dated as of March 1, 1993 between Company (as
successor to HHP), as landlord, and Wet 'N' Wild Tenant (as successor to Wet 'N'
Wild Florida), (iii) the Assignment Agreement dated as of October 2, 1995
between HHP and Company, (iv) the Letter Agreement dated August 24, 1995 and
effective October 2, 1995 between Company and Wet 'N' Wild Tenant; and (v) the
Letter Agreement dated June 2, 1997 between Company and Wet 'N' Wild Tenant.
"EXISTING WET 'N' WILD LEASE DOCUMENTS" means the Existing Wet 'N' Wild
Lease, the Existing Wet 'N' Wild Lease Guaranty, the Existing Wet 'N' Wild Lease
Note, the Existing Wet 'N' Wild Lease Security Agreement, the Wet 'N' Wild
Tenant Sale Agreement and any other agreements or instruments relating to any of
the foregoing agreements.
"EXISTING WET 'N' WILD LEASE GUARANTY" means that certain Guaranty
Agreement dated as of October 2, 1995 between Company and HHP.
"EXISTING WET 'N' WILD LEASE NOTE" means that certain promissory note
dated January 1, 1987 in the original principal amount of $9,000,000 issued by
Wet 'N' Wild Tenant (as successor to Wet 'N' Wild Florida) to HHP (as successor
to Hughes Entertainment, Ltd., a Nevada limited partnership).
"EXISTING WET 'N' WILD LEASE SECURITY AGREEMENT" means that certain
Security Agreement dated as of January 1, 1987 between Wet 'N' Wild Tenant (as
successor to Wet 'N' Wild Florida) and HHP (as successor to Hughes
Entertainment, Ltd., a Nevada limited partnership).
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"FACILITIES" means the Wet 'N' Wild Facility and the Henderson
Facility.
"FIRST AMENDMENT TO COMPANY DEED OF TRUST" means that certain First
Amendment to Deed of Trust, Fixture Filing and Financing Statement and Security
Agreement with Assignment of Rents dated as of July 31, 1997 by and between
Company and Collateral Agent, as beneficiary thereunder.
"FIRST AMENDMENT TO COMPANY ENVIRONMENTAL INDEMNITY" means that certain
First Amendment to Environmental Indemnity Agreement dated as of July 31, 1997
between Company and Collateral Agent.
"FIRST AMENDMENT TO COMPANY SECURITY AGREEMENT" means that certain
First Amendment to Company Security Agreement dated as of July 29, 1997 between
Company and Collateral Agent.
"FIRST AMENDMENT TO WET 'N' WILD SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT" means that certain First Amendment to Subordination, Non-
Disturbance and Attornment Agreement dated as of July 31, 1997 among Company,
Wet 'N' Wild Tenant and Collateral Agent.
"FISCAL YEAR" means the Fiscal Year of SGC and Company, the last day of
which occurs on September 30th of each year.
"FLOOD ACT" means the National Flood Insurance Act of 1968 as amended
by the Flood Disaster Protection Act of 1973 (42 U.S.C. (S)(S)4013 et. seq.).
-- ---
"GAAP" means, subject to the limitations on the application thereof set
forth in subsection 1.2, generally accepted accounting principles set forth in
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession (including, without limitation, to the extent applicable in the AICPA
Audit and Accounting Guide; Audits of Casinos), in each case as the same are
applicable to the circumstances as of the date of determination.
"GAMING AUTHORITIES" means, collectively, (a) the Nevada Gaming
Commission, (b) the Nevada State Gaming Control Board, and (c) any other
Governmental Authority that holds regulatory, licensing or permit authority over
gambling, gaming or casino activities conducted by SGC, Company or any of their
respective Subsidiaries within its jurisdiction.
"GAMING LAWS" means all statutes, rules, regulations, ordinances, codes
and administrative or judicial precedents (including, without limitation, the
Nevada Gaming Control Act (N.R.S. Ch. 463)) pursuant to which any Gaming
Authority possesses regulatory, licensing
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or permit authority over gambling, gaming or casino activities conducted by SGC,
Company or any of their respective Subsidiaries within its jurisdiction.
"GAMING LICENSE" means every license, franchise or other authorization
required on the date hereof or hereafter to own, lease, operate or otherwise
conduct gaming operations at the Santa Fe Hotel & Casino and the Pioneer Hotel &
Gambling Hall or other gaming activities of SGC or any of its Subsidiaries,
including, without limitation, all such licenses granted by any Gaming Authority
and any Gaming Laws.
"GOVERNMENTAL AUTHORITY" means any agency, authority, board, bureau,
commission, department, office or instrumentality of any nature whatsoever of
any governmental or quasi-governmental unit, whether federal, state, county,
district, city or other political subdivision or otherwise and whether now or
hereafter in existence, or any officer or official thereof.
"GUARANTIES" means the SGC Guaranty, the Sahara Resorts Guaranty, the
Casino Properties Guaranty and the Hacienda Hawaiian Guaranty, as each such
Guaranty may be amended, supplemented or otherwise modified from time to time.
"HACIENDA HAWAIIAN" means Hacienda Hawaiian Properties, Inc., a Hawaii
corporation.
"HACIENDA HAWAIIAN GUARANTY" means the Guaranty dated as of July 29,
1997 issued by Hacienda Hawaiian as such Guaranty may be amended, supplemented
or otherwise modified from time to time.
"HACIENDA HAWAIIAN PLEDGE AGREEMENT" means the Pledge Agreement dated
as of July 29, 1997 by Hacienda Hawaiian as such Pledge Agreement may be
amended, supplemented or otherwise modified from time to time.
"HACIENDA INDENTURE" means the Indenture dated June 15, 1983 between
Sahara Resorts (formerly Hacienda Resorts, Inc.) and Nevada State Bank, as
amended by the First Supplemental Indenture dated as of June 23, 1983 between
Sahara Resorts and Valley Bank of Nevada and the Second Supplemental Indenture
dated as of September 30, 1993 between Sahara Resorts, SGC and Nevada State
Bank.
"HAZARDOUS MATERIALS" has the meaning set forth in the Deeds of Trust,
as applicable.
"HENDERSON APPRAISAL" means a self contained MAI appraisal of the
Henderson Premises and the Henderson Improvements prepared to USPAP standards
for loan purposes by a MAI appraiser acceptable to Holders and licensed as an
appraiser in the State of Nevada which shall be satisfactory in form, scope and
substance to Holders.
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"HENDERSON CONSTRUCTION FINANCING" means a debt financing entered into
by an Affiliate of Company that is not a Subsidiary of Company (other than the
Henderson Development Subsidiary) after the Henderson Release Date and the
transfer of the Henderson Facility to such Affiliate for the development and
construction of the Henderson Facility.
"HENDERSON DEED OF TRUST" means the Deed of Trust, Fixture Filing and
Financing Statement and Security Agreement with Assignment of Rents to be
executed and delivered on the Effective Date by Company in favor of Collateral
Agent, as beneficiary thereunder, pursuant to which Company grants to United
Title of Nevada, as trustee, for the benefit of Collateral Agent on behalf of
the Holders a Lien on the Henderson Facility including Company's right, title
and interest in and to the Henderson Improvements, to secure the obligations of
Company under the Basic Documents, substantially in the form of Exhibit VI-C
annexed hereto, as it may be amended, supplemented or otherwise modified from
time to time.
"HENDERSON DEVELOPMENT DOCUMENTS" means the Development Agreement dated
as of February 21, 1997, by and between Ranch Center Associates Limited
Partnership, a Nevada limited partnership ("Ranch I"), Ranch Center Associates
II, a Nevada general partnership (collectively with Ranch I hereinafter referred
to herein as "Ranch"), and Santa Fe Valley, together with the Construction,
Operation and Reciprocal Easement Agreement between Ranch and Santa Fe Valley
and the Access Fee Agreement between Ranch and Santa Fe Valley both referenced
in the Development Agreement, and all other instruments and documents executed
in connection with such Development Agreement, Construction, Operation and
Reciprocal Easement Agreement or Access Fee Agreement or any of the transactions
described therein.
"HENDERSON DEVELOPMENT SUBSIDIARY" has the meaning assigned to such
term in Section 6.10.
"HENDERSON ENVIRONMENTAL INDEMNITY" means the Environmental Indemnity
Agreement to be issued by Company and SGC on the Effective Date in favor of
Collateral Agent for the benefit of Holders and certain other indemnified
parties therein pursuant to which Company and SGC indemnify Collateral Agent for
the benefit of Holders and certain other indemnified parties therein against
environmental risks, substantially in the form of Exhibit VII-C annexed hereto,
as it may hereafter be amended, supplemented or otherwise modified from time to
time.
"HENDERSON ENVIRONMENTAL REPORT" means the Phase I Environmental Site
Assessment dated November 5, 1997 prepared by Western Technologies, Inc. as
project number 4187JL296 relating to the Henderson Premises delivered to Holders
prior to the Effective Date.
"HENDERSON FACILITY" means the Henderson Premises and the Henderson
Improvements.
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"HENDERSON IMPROVEMENTS" means all buildings, structures, facilities
and other improvements of every kind and description (if any) now or hereafter
located on the Henderson Premises, including all parking areas, roads,
driveways, walks, fences, walls, beams, recreation facilities, drainage
facilities, lighting facilities and other site improvements, all water, sanitary
and storm sewer, drainage, electricity, steam, gas, telephone and other utility
equipment and facilities, all plumbing, lighting, heating, ventilating, air-
conditioning, refrigerating, incinerating, compacting, fire protection and
sprinkler, surveillance and security, vacuum cleaning, public address and
communications equipment and systems, all screens, awnings, floor coverings,
partitions, elevators, escalators, motors, machinery, pipes, fittings and other
items of equipment and personal property of every kind and description now or
hereafter located on the Henderson Premises or attached to the improvements that
by the nature of their location thereon or attachment thereto are real property
under applicable law; and including all materials intended for the construction,
reconstruction, repair, replacement, alteration, addition or improvement of or
to such buildings, equipment, fixtures, structures and improvements.
"HENDERSON PREMISES" means the real property to be acquired by Company
on the Effective Date situated in Henderson, Nevada, and more particularly
described in Schedule 1.1B annexed hereto.
"HENDERSON PROPERTY DOCUMENTS" all agreements and documents other than
the Basic Documents relating to the Henderson Facility, including the Henderson
Development Documents specified on Schedule 1.1C annexed hereto.
"HENDERSON RELEASE DATE" means the first date on which (i) Company has
prepaid the Notes (together with applicable interest and premium) with available
funds (other than Collateral or the proceeds of Collateral other than proceeds
from the transfer of the Henderson Facility) in a principal amount of not less
than $20,000,000.00 and has transferred the Henderson Facility to a Person
(which may be the Henderson Development Subsidiary but not any other Subsidiary
of Company), (ii) no Event of Default or Potential Event of Default has occurred
and is continuing and (iii) the Collateral Agent has received an Officer's
Certificate from SGC and Company certifying that clauses (i) and (ii) hereof
have been satisfied and that the Henderson Release Date has occurred.
"HENDERSON SUBORDINATION AGREEMENT" means a Subordination Agreement in
the form annexed as Exhibit XV hereto.
"HENDERSON SUBSIDIARY" means SFV, Inc., a Nevada corporation and wholly
owned Subsidiary of Company.
"HENDERSON TITLE COMPANY" has the meaning assigned to such term in
Section 4.1E.
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"HENDERSON TITLE POLICY" has the meaning assigned to such term in
Section 4.1E.
"HENDERSON TRANSFER" means the transfer of the Henderson Facility from
Santa Fe Valley to Company, which shall occur on the Effective Date.
"HENDERSON TRANSFER DOCUMENTS" means all agreements, instruments and
documents to be entered into by Santa Fe Valley, Company and other Persons in
connection with the sale of Henderson Facility to Company.
"HHP" means Howard Hughes Properties, Limited Partnership, a Delaware
limited partnership.
"HOLDER" and "HOLDERS" has the meaning set forth in the Introduction to
this Agreement and shall include the successors and assigns of any Holder.
"IMPROVEMENTS" means the Wet 'N' Wild Improvements and the Henderson
Improvements.
"INDEBTEDNESS," as applied to any Person, means, without duplication,
(i) all indebtedness for borrowed money, (ii) that portion of obligations with
respect to Capital Leases that is properly classified as a liability on a
balance sheet in conformity with GAAP, (iii) notes payable and drafts accepted
representing extensions of credit whether or not representing obligations for
borrowed money, (iv) any obligation owed for all or any part of the deferred
purchase price of property or services (excluding any such obligations incurred
under ERISA), which purchase price is (a) due more than six months from the date
of incurrence of the obligation in respect thereof or (b) evidenced by a note or
similar written instrument, (excluding any trade payables payable in the
ordinary course of business), (v) all indebtedness secured by any Lien on any
property or asset owned or held by that Person regardless of whether the
indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person and (vi) any Contingent Obligation.
"INITIAL HOLDERS" mean CSFB and SunAmerica.
"INTERCREDITOR AGREEMENT means the Intercreditor Agreement among
SunAmerica and CSFB, substantially in the form of Exhibit XIII annexed hereto,
as amended, supplemented or otherwise modified from time to time.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended, or any successor statute.
"JOINT VENTURE" means a joint venture, partnership or other similar
arrange ment, whether in corporate, partnership, limited liability company or
other legal form; provided that
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<PAGE>
in no event shall any corporate Subsidiary of any Person be considered to be a
Joint Venture to which such Person is a party.
"JUNIOR SUBORDINATED NOTES" means the Junior Subordinated Notes under
and as defined in the Certificate of Designation of the SGC Preferred Stock or
any other securities that are issued in exchange for or to redeem, acquire or
otherwise pay SGC Preferred Stock.
"LIEN" means any lien, mortgage, pledge, assignment, security interest,
charge or encumbrance of any kind (including any conditional sale or other title
retention agreement, any lease in the nature thereof, any agreement to give any
security interest and any mechanic's liens) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOWDEN FAMILY" means Mr. Paul Lowden and Mrs. Suzanne Lowden and the
executors, administrators or legal representatives of their estates, heirs,
distributees and beneficiaries, any trust as to which any of the foregoing is a
settlor or co-settlor, any trustee of the estate of any of the foregoing that is
bankrupt or insolvent, any guardian or conservator of any of the foregoing that
is adjudged disabled or incompetent, and any corporation, partnership or other
entity which is an Affiliate of any of the foregoing. Lowden Family shall also
mean any lineal descendants of the grandparents of such Persons, but only to the
extent that the beneficial ownership of the Voting Stock held by such lineal
descendants was directly received (by gift, trust or sale) from any such Person.
"LOWDEN FAMILY DISCLOSURE" has the meaning assigned to such term in
Section 6.1.
"LOWDEN FAMILY PAYMENT" means any direct or indirect compensation,
salary, bonus or other payment or distribution or transfer of any nature made to
Mr. Paul Lowden or any other Person described in the definition of Lowden Family
other than (i) any payment, distribution or transfer consisting solely of shares
of common stock of SGC or warrants, options and/or other rights to acquire
common stock of SGC or (ii) distributions made generally to the shareholders of
SGC in respect of their capital stock that are not prohibited under this
Agreement.
"MATERIAL ADVERSE EFFECT" means (i) a material adverse effect upon the
business, operations, properties, assets, liabilities, condition (financial or
otherwise) of SGC and its Subsidiaries, taken as a whole, Company, the Wet `N'
Wild Premises, or, until the Henderson Release Date, the Henderson Facility, or
(ii) the impairment of the ability of any Credit Party to perform, or of
Collateral Agent or any Holder to enforce, any of the Obligations.
"MULTIEMPLOYER PLAN" means a "multiemployer plan", as defined in
Section 3(37) of ERISA, to which SGC, Company or any of their respective ERISA
Affiliates is contributing or has an obligation to contribute to, or to which
such an obligation existed, or
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<PAGE>
contribution was made within the last six years, or to which Company or any of
its ERISA Affiliates has, or ever has had, an obligation to contribute.
"NOTES" means the Tranche A Notes and the Tranche B Notes.
"OBLIGATIONS" means all obligations of every nature of Company and each
other Credit Party from time to time owed to Collateral Agent, Holders or any of
them under this Agreement, the Notes or any other Basic Document, whether for
principal, interest, fees, expenses, indemnification or otherwise and whether or
not the obligation is allowed as a claim in any proceeding referred to in
subsection 7.6 or 7.7.
"OFFICERS' CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by (i) its chairman of the
board (if an officer) or its president or one of its vice presidents and (ii)
its chief financial officer or its treasurer.
"ORIGINAL NOTE PURCHASE AGREEMENT" has the meaning set forth in the
Introduction to this Agreement.
"ORIGINAL NOTES" has the meaning set forth in the Introduction to this
Agreement.
"PBGC" means the Pension Benefit Guaranty Corporation (or any successor
thereto).
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens (other than
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA):
(i) Liens for taxes, assessments or governmental charges or claims the
payment of which is not, at the time, required by subsection 5.4;
(ii) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics and materialmen and other Liens imposed by law incurred in the
ordinary course of business for sums not yet delinquent or being contested
in good faith, if such reserve or other appropriate provision, if any, as
shall be required by GAAP shall have been made therefor; and
(iii) easements, rights of tenants, reservations, covenants, rights-
of-way, restrictions, minor defects, minor encroachments or minor
irregularities in title and other similar immaterial charges or encumbrances
that (a) arise prior to the Effective Date and
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are approved in writing by Requisite Holders or (b) arise after the
Effective Date and would not, individually or in the aggregate, result in a
Material Adverse Effect.
"PERMITTED EQUITY FINANCING" means the issuance by Company of its
common stock, preferred stock or related equity securities to third party
investors in exchange for cash paid to Company, provided that in no event shall
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the equity securities issued in connection with any Permitted Equity Financing
be entitled, in the aggregate (before or after giving effect to the occurrence
of any contingency set forth therein), to elect a majority of the Board of
Directors of Company or represent 50% or more of the Voting Stock of any class
of equity security of Company and, after giving effect thereto, no Change of
Control shall have occurred or will occur; provided further, that the terms and
conditions (including all documents and agreements) of the Permitted Equity
Financing shall be in form and substance satisfactory to the Holders of more
than 50% in aggregate principal amount of the Tranche B Notes and, after giving
effect to the Permitted Equity Financing, Company shall be an indirect
Subsidiary of SGC. The terms and conditions of the Permitted Equity Financing
shall be deemed satisfactory to the Holders of more than 50% in aggregate
principal amount of the Tranche B Notes have not objected to such terms and
conditions within ten Business Days of receipt of a written notification from
Company specifying all of the terms and conditions proposed in sufficient detail
reasonably requested by such Holders.
"PERSON" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, limited
liability partnerships, joint stock companies, joint ventures, associations,
companies, trusts, banks and other organizations, whether or not legal entities,
and governments and agencies and political subdivisions thereof.
"PIONEER BONDS" means the 13 1/2% First Mortgage Bonds due 1998 of
Pioneer Finance issued pursuant to the Pioneer Indenture.
"PIONEER FINANCE" means Pioneer Finance Corp., a Nevada corporation.
"PIONEER INDENTURE" means that certain Indenture dated as of December
1, 1988 among Pioneer Finance, Sahara Casino Partners, L.P., a Delaware limited
partnership ("Sahara Casino"), as Guarantor and Security Pacific National Bank,
as Trustee, as amended by the First Supplemental Indenture dated as of December
21, 1988 among Pioneer Finance, Sahara Casino and Security Pacific National
Bank, as Trustee, the Second Supplemental Indenture dated as of September 30,
1993 among Pioneer Finance, Sahara Casino, Pioneer Operating Limited
Partnership, a Nevada limited partnership, Pioneer Hotel, Inc., a Nevada
corporation, SGC, as successor Guarantor, and Bank of America National Trust and
Savings Association, as Trustee, and the Third Supplemental Indenture dated as
of August 31, 1995 among Pioneer Finance, SGC and IBJ Schroeder Bank & Trust
Company, as Trustee.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
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<PAGE>
"PREMISES" means the Wet 'N' Wild Premises and the Henderson Premises.
"RELEASE" has the meaning set forth in the Deeds of Trust, as
applicable.
"REQUISITE HOLDERS" means Holders having or holding more than 66 2/3%
of the principal balance of the outstanding Notes.
"REQUISITE TRANCHE A HOLDERS" means Holders having or holding more than
66 2/3% of the principal balance of the outstanding Tranche A Notes.
"REQUISITE TRANCHE B HOLDERS" means Holders having or holding more than
66 2/3% of the principal balance of the outstanding Tranche B Notes.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of
capital stock of SGC or Company now or hereafter outstanding, except a dividend
payable solely in shares of that class of capital stock to the holders of that
class or in options, warrants or other rights to purchase such capital stock,
(ii) any redemption, retirement, sinking fund or similar payment, purchase or
other acquisition for value, direct or indirect, of any shares of any class of
capital stock of SGC or Company now or hereafter outstanding (other than in
exchange for capital stock of SGC or Company or options, warrants or other
rights to purchase such capital stock), (iii) any payment made to retire, or to
obtain the surrender of, any outstanding warrants, options or other rights to
acquire shares of any class of capital stock of SGC or Company now or hereafter
outstanding, and (iv) any payment or prepayment of principal of, premium, if
any, or redemption, purchase, retirement, defeasance (including in-substance or
legal defeasance), sinking fund or similar payment with respect to, any
indebtedness of Company to SGC or any of SGC's Subsidiaries or Affiliates or
with respect to any Junior Subordinated Notes.
"SAHARA RESORTS" means Sahara Resorts, a Nevada corporation.
"SAHARA RESORTS GUARANTY" means the Guaranty dated as of July 29, 1997,
issued by Sahara Resorts as such Guaranty may be amended, supplemented or
otherwise modified from time to time.
"SAHARA RESORTS PLEDGE AGREEMENT" means the Pledge Agreement dated as
of July 29, 1997 by Sahara Resorts, as such Pledge Agreement may be amended,
supplemented or otherwise modified from time to time.
"SAI" has the meaning set forth in the Introduction to this Agreement.
"SANTA FE VALLEY" means Santa Fe Valley, Inc., a Nevada corporation.
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"SECOND AMENDMENT TO COMPANY DEED OF TRUST" means that certain Second
Amendment to the Company Deed of Trust, substantially in the form of Exhibit
VI-B annexed hereto, executed and delivered on the Effective Date.
"SECOND AMENDMENT TO COMPANY ENVIRONMENTAL INDEMNITY" means that
certain Second Amendment to the Company Environmental Indemnity, substantially
in the form of Exhibit VII-B annexed hereto, executed and delivered on the
Effective Date.
"SECOND AMENDMENT TO COMPANY SECURITY AGREEMENT" means the Second
Amendment to Company Security Agreement, substantially in the form Exhibit IV-B
annexed hereto, executed and delivered on the Effective Date.
"SECOND AMENDMENT TO WET 'N' WILD SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT" means that certain Second Amendment to the Wet 'N' Wild
Subordination, Non-Disturbance and Attornment Agreement substantially in the
form of Exhibit XIV annexed hereto, executed and delivered on the Effective
Date.
"SECURITY AGREEMENTS" means the Company Security Agreement, the Sahara
Resorts Pledge Agreement, the Company Pledge Agreement, the Casino Properties
Pledge Agreement, the Hacienda Hawaiian Pledge Agreement, the Collateral Account
Agreement, the Cash Collateral Agreement, and the Additional Collateral Account
Agreement, as each such Security Agreement may hereafter be amended,
supplemented or otherwise modified from time to time.
"SFHI" means Santa Fe Hotel Inc., a Nevada corporation.
"SFHI CASH FLOW" means, for any period, the sum of the following
amounts without duplication for such period with respect to SFHI and its
consolidated Subsidiaries: (i) net income, (ii) provisions for taxes based on
income, (iii) interest expense, (iv) lease payments made with respect to
equipment leased pursuant to the sale/leaseback transactions of gaming equipment
permitted pursuant to the SFHI Indenture (as such lease agreements may be
amended, modified or supplemented from time to time) to the extent not included
in item (iii) above; provided that such lease payments (including any such lease
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payments included in item (iii) above) shall not exceed $200,000 per month, (v)
depreciation expense, (vi) amortization expenses and (vii) other non-cash items
reducing net income but excluding any component of items (ii) through (vi) not
deducted in calculating net income minus non-cash items increasing net income,
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other than items excluded from the calculation thereof, all as determined for
SFHI in conformity with GAAP.
"SFHI INDENTURE" means that certain Indenture dated as of December 29,
1993 among SFHI, SGC, as guarantor, and IBJ Schroeder Bank & Trust Company as
trustee, as amended.
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"SFHI NOTES" means the 11% First Mortgage Notes issued by SFHI pursuant
to the terms of the SFHI Indenture.
"SGC" has the meaning set forth in the Introduction to this Agreement.
"SGC GUARANTY" means the Guaranty dated as of January 16, 1996 issued
by SGC, as such Guaranty may be amended, supplemented or otherwise modified from
time to time.
"SGC PREFERRED STOCK" means SGC's Exchangeable Redeemable Preferred
Stock, $2.14 liquidation preference per share, issued prior to the Closing Date
pursuant to the Certificate of Designation for Exchangeable Redeemable Preferred
Stock and any such Exchangeable Redeemable Preferred Stock issued after the
Closing Date to pay dividends in kind with respect thereto.
"SIERRA NOTE" means the Note issued by SGC in favor of Sierra
Construction Corp.
"SUBSIDIARY" means, with respect to any Person, any corporation,
partnership, association, limited liability company, joint venture or other
business entity of which more than 50% of the total voting power of shares of
stock or other ownership interests entitled (without regard to the occurrence of
any contingency) to vote in the election of the Person or Persons (whether
directors, managers, trustees or other Persons performing similar functions)
having the power to direct or cause the direction of the management and policies
thereof is at the time owned or controlled, directly or indirectly, by that
Person or one or more of the other Subsidiaries of that Person or a combination
thereof.
"SUNAMERICA" has the meaning set forth in the Introduction to this
Agreement.
"TRANCHE A NOTES" means $37,000,000 in principal amount of Company's
9.75% Notes Due December 15, 1999 issued to CSFB on the Effective Date, as
amended, modified or otherwise supplemented or replaced from time to time. The
Tranche A Notes issued on the Effective Date shall consist of a Tranche A-1 Note
in the principal amount of $17,000,000, a Tranche A-2 Note in the principal
amount of $10,000,000, and a Tranche A-2 Note in the principal amount of
$10,000,000.
"TRANCHE B NOTES" means $20,500,000 in principal amount of Company's
13.25% Notes Due December 15, 1999 issued to SunAmerica on the Effective Date,
as amended, modified or otherwise supplemented or replaced from time to time.
The Tranche B Notes issued on the Effective Date shall consist of a Tranche B-1
Note in the principal amount of $5,000,000 and a Tranche B-2 Note in the
principal amount of $15,500,000.
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"VOTING STOCK" means any class of Capital Stock of any Person then
outstanding entitled to vote in elections of directors (without regard to the
occurrence of any contingency).
"WET 'N' WILD APPRAISAL" means an updated, self contained MAI appraisal
of the Wet 'N' Wild Premises and the Wet 'N' Wild Improvements, and prepared to
USPAP standards for loan purposes by a MAI appraiser acceptable to Holders and
licensed as an appraiser in the State of Nevada which shall be satisfactory in
form, scope and substance to Holders.
"WET 'N' WILD DOCUMENTS" means the Existing Wet 'N' Wild Lease
Documents and all other agreements and documents other than the Basic Documents
relating to the Wet 'N' Wild Facility to which Company is a party, including the
agreements and documents specified on Schedule 1.1C annexed hereto.
"WET 'N' WILD ENVIRONMENTAL REPORT" means the Phase I Environmental
Site Assessment dated November 5, 1997 prepared by Western Technologies, Inc. as
project number 4187JL297 relating to the Wet 'N' Wild Premises delivered to
Holders prior to the Effective Date.
"WET 'N' WILD IMPROVEMENTS" means all buildings, structures, facilities
and other improvements of every kind and description now or hereafter located on
the Wet 'N' Wild Premises, including all parking areas, roads, driveways, walks,
fences, walls, beams, recreation facilities, drainage facilities, lighting
facilities and other site improvements, all water, sanitary and storm sewer,
drainage, electricity, steam, gas, telephone and other utility equipment and
facilities, all plumbing, lighting, heating, ventilating, air-conditioning,
refrigerating, incinerating, compacting, fire protection and sprinkler,
surveillance and security, vacuum cleaning, public address and communications
equipment and systems, all screens, awnings, floor coverings, partitions,
elevators, escalators, motors, machinery, pipes, fittings and other items of
equipment and personal property of every kind and description now or hereafter
located on the Wet 'N' Wild Premises or attached to the improvements that by the
nature of their location thereon or attachment thereto are real property under
applicable law; and including all materials intended for the construction,
reconstruction, repair, replacement, alteration, addition or improvement of or
to such buildings, equipment, fixtures, structures and improvements.
"WET 'N' WILD FACILITY" means the Wet 'N' Wild Premises and the Wet 'N'
Wild Improvements.
"WET 'N' WILD FLORIDA" means Wet 'N' Wild Florida, Inc., a Florida
corporation.
"WET 'N' WILD PREMISES" means the real property owned by Company
situated in Las Vegas, Nevada, and more particularly described in Schedule 1.1A
annexed hereto.
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"WET 'N' WILD SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT"
means the Wet 'N' Wild Subordination, Non-Disturbance and Attornment Agreement
executed and delivered by Company, Wet 'N' Wild Tenant, and Collateral Agent
dated as of January 16, 1996, as amended by the First Amendment to the Wet 'N'
Wild Subordination, Non-Disturbance and Attornment Agreement and the Second
Amendment to the Wet 'N' Wild Subordination, Non-Disturbance and Attornment
Agreement, and as it may be amended, supplemented or otherwise modified from
time to time.
"WET 'N' WILD TENANT" means Wet 'N' Wild Nevada, Inc., a Nevada
corporation and assignee of Wet 'N' Wild Florida's interest under the Existing
Wet 'N' Wild Lease.
"WET 'N' WILD TENANT SALE AGREEMENT" means the Agreement for Sale of
Partnership Interest and Dissolution of Partnership dated as of January 1, 1987
among Hughes Entertainment, Ltd., a Nevada limited partnership, Wet 'N' Wild,
Ltd., a Florida limited partnership and Wet 'N' Wild Florida.
"WET 'N' WILD TITLE COMPANY" has the meaning assigned to such term in
Section 4.1E.
"WET 'N' WILD TITLE POLICY" has the meaning assigned to such term in
Section 4.1E.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS
------------------------------------------------------------------
UNDER AGREEMENT. Except as otherwise expressly provided in this Agreement, all
- ---------------
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by SGC or Company to Holders pursuant to subsections
5.1A and 5.1B shall be prepared in accordance with GAAP as in effect at the time
of such preparation (and delivered together with the reconciliation statements
provided for in subsection 5.1D). Calculations in connection with the
definitions, covenants and other provisions of this Agreement shall utilize
accounting principles and policies in conformity with those used to prepare the
financial statements referred to in subsection 3.3.
1.3 OTHER DEFINITIONAL PROVISIONS. References to "Sections" and
-----------------------------
"subsections" shall be to Sections and subsections, respectively, of this
Agreement unless otherwise specifically provided. Any of the terms defined in
subsection 1.1 may, unless the context otherwise requires, be used in the
singular or the plural, depending on the reference.
23
<PAGE>
SECTION 2. THE NOTES; CLOSING; DELIVERY
2.1A AUTHORIZATION OF EXISTING NOTES. Company has authorized the issuance
-------------------------------
and sale and has issued the Existing Notes to SunAmerica and SAI, as Holders,
pursuant to the terms and conditions of the Existing Note Purchase Agreement.
2.1B AUTHORIZATION OF RESTRUCTURE OF EXISTING NOTES AND ISSUANCE OF
--------------------------------------------------------------
ADDITIONAL NOTES. Company has authorized the restructure of the Existing Notes,
- ----------------
and, in connection therewith, the issuance and sale of the Tranche A Notes in an
aggregate principal amount of $37,000,000 to CSFB, as a Holder, and the issuance
and sale of the Tranche B Notes in an aggregate principal amount of $20,500,000
to SunAmerica, as a Holder, pursuant to the terms and conditions hereof and as
provided herein. The Tranche A Notes and the Tranche B Notes shall replace the
Existing Notes.
2.2 PURCHASE AND SALE OF NOTES. Subject to the terms and conditions
--------------------------
hereof, Company will issue and sell to CSFB and CSFB will purchase from Company
on the Effective Date $37,000,000 in principal amount of Tranche A Notes
consisting of four separate Tranche A Notes as further specified in the
definition of the Tranche A Notes herein. On the Effective Date, subject to the
terms and conditions hereof, CSFB shall pay the $37,000,000 subscription price
of the Tranche A Notes to be purchased by CSFB, $15,000,000 of which shall be
paid directly to SAI in cash by wire transfer of immediately available funds to
pay in full (together with the cash interest payment referred to in Section 2.3
hereof) the Existing Note issued to SAI and SAI shall thereupon deliver such
Existing Note to Company for cancellation, and $22,000,000 of which shall be
paid to Company or at its direction in cash by wire transfer of immediately
available funds against delivery to CSFB of Tranche A Notes as provided above in
the aggregate principal amount of $37,000,000.
Subject to the terms and conditions hereof, Company will restructure on
the Effective Date the Existing Note issued to SunAmerica in the principal
amount of $20,000,000 by issuing to SunAmerica two Tranche B Notes as further
specified in the definition of the Tranche B Notes herein in an aggregate
principal amount of $20,500,000, which Tranche B Notes shall amend and restate
in its entirety such Existing Note; it being understood that SunAmerica shall
-----------------------------------------
wire transfer $500,000 in immediately available funds to the Company or at its
- -------------
direction against delivery to SunAmerica of the Tranche B Notes as provided
above. On the Effective Date, subject to the terms and conditions hereof,
Company shall deliver to SunAmerica the Tranche B Notes (together with the cash
interest payment referred to in Section 2.3 hereof), and SunAmerica shall
deliver its Existing Note to Company for cancellation.
2.3 CLOSING AND DELIVERY OF NOTES. A pre-closing of the purchase and sale
-----------------------------
of the Notes shall be held at O'Melveny & Myers LLP, 400 South Hope Street, Los
Angeles, CA on November 25, 1997 or at such other time and place as the parties
may agree upon. The "Closing", as used herein, shall mean the date that the
Second Amendment to the Company Deed of Trust and the Henderson Deed of Trust
are recorded and all conditions to the Effective
24
<PAGE>
Date hereunder have been satisfied or waived by the Holders. Subject to the
terms of this Agreement, at the Closing, Company will deliver to CSFB four
Tranche A Notes in the aggregate principal amount of $37,000,000 and to
SunAmerica two Tranche B Notes in the aggregate principal amount of $20,500,000,
Company will pay to SunAmerica and SAI from the Cash Collateral Account all
accrued interest due to SunAmerica and SAI under the Existing Notes and Company
will satisfy the terms and conditions of the Closing set forth in subsection
4.1. If at the Closing Company shall fail to tender the Notes to the Holders as
provided above in this subsection 2.3 and subsection 2.2, or any of the terms or
conditions specified in subsection 4.1 shall not have been fulfilled to each
Holder's satisfaction, the Holders shall, at their election, be relieved of all
further obligations under this Agreement to purchase the Notes. In no event
shall the Closing occur after December 2, 1997.
2.4 CERTAIN TERMS OF THE NOTES; PAYMENT OF INTEREST.
-----------------------------------------------
A. INTEREST. The Tranche A Notes shall bear interest at a rate of 9.75%
per annum, computed on the basis of a 360-day year of twelve 30 day months. The
Tranche B Notes shall bear interest at a rate of 13.25% per annum, computed on
the basis of a 360-day year of twelve 30-day months. Interest on the Notes shall
be payable semi-annually on June 20 and December 20 of each year, commencing
December 20, 1997 and at the scheduled maturity of the Notes on December 15,
1999. In addition to the foregoing, interest on the Notes shall be payable on
and to any date of any prepayment, redemption or other payment of the Notes (to
the extent accrued on the amount of the prepayment, redemption or other payment)
and at maturity (including at any accelerated maturity).
B. STATED MATURITY. The principal evidenced by the Notes matures on
December 15, 1999, and on such date, or on any accelerated maturity, the full
amount of principal then outstanding, and all accrued and unpaid interest
thereon, shall be due and payable.
C. POST-MATURITY INTEREST. From the occurrence and during the
continuance of an Event of Default, the principal of the Notes and, to the
extent permitted by applicable law, all accrued interest on the Notes and any
fees or other amounts owed hereunder shall bear interest (including post-
petition interest in any proceeding under the Bankruptcy Code or other
applicable bankruptcy laws) compounded monthly payable on demand at a rate which
is 2% per annum in excess of the interest rate otherwise payable under this
Agreement with respect to the Notes (or, in the case of any such fees and other
amounts, at a rate which is 2% per annum in excess of the interest rate
otherwise payable under the Notes). Payment or acceptance of the increased
rates of interest provided for in this subsection 2.4C is not a permitted
alternative to timely payment and shall not constitute a waiver of any Event of
Default or otherwise prejudice or limit any rights or remedies of Collateral
Agent or any Holder. For the purpose of complying with NRS 99.050, Company
hereby declares that it understands that to the extent interest accrued under
the Notes, late charges or other fees and accruals under this Agreement and the
other Basic Documents are added to the outstanding principal owing hereunder and
the
25
<PAGE>
other Basic Documents, a compounding of interest results which compounding
is agreed to by Company as a part of the terms of this Agreement and the other
Basic Documents.
D. LATE CHARGES. If any payment of principal and/or interest or any
other amount payable hereunder or under the other Basic Documents is not paid
when due, Company shall pay to each Holder, on demand, a late charge (the "Late
Charge") of five cents ($0.05) for each dollar so overdue in order to compensate
such Holder for its loss of the timely use of the money and frustration of such
Holder in the meeting of its financial commitments. Nothing contained herein
shall constitute an extension of any due date for, or a waiver of any obligation
to pay, any amounts payable hereunder or under the other Basic Documents.
E. RIGHT OF REQUISITE TRANCHE B HOLDERS TO REQUIRE SALE OF SFHI NOTES
TO PAY INTEREST ON DECEMBER 20, 1998 AND JUNE 20, 1999. On or before each of
November 20, 1998 and May 20, 1999, Company shall provide to the Tranche B
Holders evidence satisfactory to the Holders of more than 50% in aggregate
principal amount of the Tranche B Notes that Company has or will have on or
prior to December 15, 1998 or June 15, 1999, as applicable, sufficient funds to
pay in full the interest payments on the Notes due on December 20, 1998 and June
20, 1999, respectively. If Company does not provide such satisfactory evidence
with respect to its ability to pay either the December 1998 or June 1999
interest payment, at the written instruction of the Holders of more than 50% in
aggregate principal amount of the Tranche B Notes, the Company shall sell SFHI
Notes held as Collateral, and deposit the proceeds thereof in the Cash
Collateral Account and apply such proceeds to make the interest payment due on
the Notes on December 20, 1998 and June 20, 1999.
F. BACK-END FEES. On the date on which the principal amount of the
Tranche A Notes is paid in full, Company shall pay to CSFB $675,000 in cash as
an additional structuring advisory fee in respect of the Tranche A Notes;
provided that if on such date an Event of Default has occurred and is
continuing, such fee shall be deferred and shall be paid on the date on which
the fee described in the next succeeding sentence is due. On the date on which
the principal amount of the Tranche B Notes is paid in full, Company shall pay
to SunAmerica $1,425,000 in cash as an additional structuring advisory fee in
respect of the Tranche B Notes.
2.5 GENERAL PROVISIONS REGARDING PAYMENTS; OPTIONAL REDEMPTION; MANDATORY
---------------------------------------------------------------------
REDEMPTION AND CHANGE IN CONTROL REPURCHASE; RELEASE OF SFHI NOTES AS
- ---------------------------------------------------------------------
COLLATERAL.
- ----------
A. GENERAL PROVISIONS REGARDING PAYMENTS.
(i) Manner and Time of Payment. All payments by Company of principal,
--------------------------
interest, fees and other Obligations hereunder and under the Notes shall be
made in Dollars in same day funds, without reductions of any payment on
account of any defense, set-off or counterclaim, free of any restriction or
condition and without
26
<PAGE>
surrender or presentation of such Note, and delivered to the applicable
Holder not later than 11:00 A.M. (Los Angeles time) on the date due at its
address and in the manner set forth in Schedule 2 annexed hereto (or at such
other place and in such other manner as such Holder may designate from time
to time by written notice to Company); funds received by the applicable
Holder after that time on such due date shall be deemed to have been paid by
Company on the next succeeding Business Day. Whenever any payment to be made
hereunder shall be stated to be due on a day that is not a Business Day,
such payment shall be made on the next succeeding Business Day.
(ii) Application and Apportionment of Payments. Subject to the
-----------------------------------------
Intercreditor Agreement, all payments made hereunder shall be applied first
to late charges, costs and expenses owing to Collateral Agent and then to
Holders hereunder and under the other Basic Documents, second to accrued
interest due under the Tranche A Notes, third to accrued interest due under
the Tranche B Notes, fourth to the principal balance of the Tranche A Notes
and fifth to the principal balance of the Tranche B Notes. Subject to
Section 2.5E, aggregate principal, interest and applicable late charge
payments shall be ratably apportioned among all outstanding Tranche A Notes
or Tranche B Notes, as the case may be, to which such payments relate.
(iii) Notation of Payment. Each Holder agrees that before disposing
-------------------
of any Note held by it, or any part thereof (other than by granting
participations therein), that Holder will make a notation thereon of all
principal payments previously made thereon and of the date to which interest
thereon has been paid; provided that the failure to make (or any error in
--------
the making of) a notation of the Note shall not limit or otherwise affect
the obligations of Company hereunder or under such Note or any payments of
principal or interest on such Note.
B. OPTIONAL REDEMPTION.
(i) Optional Redemption. The Notes shall not be redeemable prior to
-------------------
June 15, 1998. From and after June 15, 1998 to and including December 15,
1998, the Tranche A Notes shall be redeemable at any time in whole or in
part the option of Company at a price paid in immediately available funds of
101 1/2% of the principal amount thereof, and the Tranche B Notes shall be
redeemable at any time in whole or in part at the option of Company at a
price paid in immediately available funds of 104 1/2% of the principal
amount thereof, together in each case with accrued interest to the
redemption date and the applicable fee set forth in subsection 2.4E. During
the period from and including December 16, 1998 to and including June 15,
1999, the Tranche A Notes shall be redeemable at any time in whole or in
part at the option of Company at a price paid in immediately available funds
of 101% of the principal amount thereof and the Tranche B Notes shall be
redeemable at any time in whole or in part at the option of Company at a
price paid in immediately available funds at 103% of the principal amount
thereof, together with accrued interest to the redemption date and the
applicable fee set
27
<PAGE>
forth in subsection 2.4E. During the period from and including June 16, 1999
to and including November 15, 1999, the Tranche A Notes shall be redeemable
at any time in whole or in part at the option of Company at price paid in
immediately available funds of 100 1/2% of the principal amount thereof and
the Tranche B Notes shall be redeemable at any time in whole or in part at
the option of Company at a price paid in immediately available funds of 101
1/2% of the principal amount thereof, together with accrued interest to the
redemption date and applicable fee set forth in subsection 2.4E. The Tranche
A Notes and the Tranche B Notes shall be redeemable after November 15, 1999
at any time in whole or in part at the option of Company at a price paid in
immediately available funds of 100% of the principal amount thereof,
together with accrued interest thereon and the applicable fee set forth in
subsection 2.4E. Company shall give Holders not less than thirty days prior
written notice of a redemption pursuant to this subsection 2.5B (i) and
shall not redeem Notes pursuant to this subsection 2.5B except in a minimum
aggregate principal amount of $5,000,000 and integral multiples of
$1,000,000 thereof.
(ii) Redemption Upon Sale of Wet 'N' Wild Premises. Notwithstanding
---------------------------------------------
clause (i) above, if Company transfers the Wet 'N' Wild Premises to an
unaffiliated third party or to another Person with the prior written consent
of the Holders of more than 50% of the aggregate principal amount of the
Tranche B Notes, the Tranche A Notes shall be immediately redeemed by
Company in whole at a price paid in cash equal to the redemption price
payable in connection with the optional redemption of Tranche A Notes
pursuant to subsection 2.5B(i) (or, if prior to June 15, 1998, at 101 1/2%
of the principal amount thereof) and the Tranche B Notes shall be
immediately redeemed by Company in whole at a price paid in cash equal to
the redemption price payable in connection with the optional redemption of
Tranche B Notes pursuant to subsection 2.5B(i) (or, if prior to June 15,
1998, at 104 1/2% of the principal amount thereof), in each case, plus
accrued but unpaid interest thereon to the redemption date and the
applicable fee set forth in subsection 2.4E; provided that if the net
--------
proceeds of any such transfer are sufficient to redeem the Tranche A Notes
on the terms set forth in this subsection 2.5B(ii), Company may, with the
consent of the Holders of more than 50% in aggregate principal amount of the
Tranche B Notes, transfer the Wet 'N Wild Premises to such Person if the net
proceeds of such transfer are used to redeem, as contemplated by this
subsection, in full the Tranche A Notes and such portion of the Tranche B
Notes as may be redeemed after giving effect to the redemption of the
Tranche A Notes. If the Company requests the consent of the Holders of more
than 50% of the Tranche B Notes under this subsection 2.5B(ii), if such
Holders have not responded to such request in writing within ten (10)
Business days of the receipt by the Holders of the Tranche B Notes of such
request, such request shall be deemed to have been rejected.
28
<PAGE>
C. MANDATORY REDEMPTION AND CHANGE IN CONTROL REPURCHASE.
(i) Payment Required Under Deeds of Trust. Company shall redeem or
-------------------------------------
otherwise pay the principal amount of the Notes (beginning with the Tranche
A Notes until the Tranche A Notes have been paid in full) and accrued
interest thereon as required pursuant to the Deeds of Trust, at a redemption
price equal to the redemption price payable in connection with the optional
redemption of Tranche A Notes or Tranche B Notes as applicable, pursuant to
subsection 2.5B (i) (or if prior to June 15, 1998, at 101 1/2% of the
principal amount so redeemed in the case of the Tranche A Notes and 104 1/2%
of the principal amount so redeemed in the case of the Tranche B Notes) plus
accrued and unpaid interest thereon to the redemption date and any
applicable fee set forth in subsection 2.4E.
(ii) Redemption Based on Redemption or Transfer of SFHI Notes. If any
--------------------------------------------------------
SFHI Notes that constitute Collateral are mandatorily redeemed under the
SFHI Indenture with the proceeds of any recovery as a result of casualty or
condemnation or pursuant to Section 3.8 of the SFHI Indenture, the same
principal amount of Notes (beginning with the Tranche A Notes until the
Tranche A Notes have been paid in full) shall be immediately redeemed with
accrued interest thereon to the redemption date, at a redemption price equal
to 100% of the principal amount so redeemed (or, if the redemption is a
voluntary redemption or any other type of redemption, purchase or other
payment of any nature under the SFHI Indenture, at a redemption price equal
to the redemption price payable in connection with the optional redemption
of Tranche A Notes or Tranche B Notes as applicable, pursuant to subsection
2.5B (i) or, if prior to June 15, 1998, at 101-1/2% of the principal amount
so redeemed in the case of the Tranche A Notes and 104 1/2% of the principal
amount so redeemed in the case of the Tranche B Notes) plus accrued and
unpaid interest thereon to the redemption date and if the Tranche A Notes or
Tranche B Notes have been paid in full, the applicable fee set forth in
subsection 2.4E.
(iii) Redemption Based on SFHI Cash Flow. If as of the end of any
----------------------------------
fiscal quarter commencing as of the four-quarter period ending on December
31, 1997, SFHI Cash Flow for the preceding four quarter period is less than
$13,500,000, Company will be required to redeem a principal amount of Notes
(beginning with the Tranche A Notes until the Tranche A Notes have been paid
in full) equal to $7,000,000 in the aggregate at a redemption price equal to
the redemption price payable in connection with the optional redemption of
Tranche A Notes pursuant to Section 2.5B(i) (or, if prior to June 15, 1998,
at 101 1/2% of the principal amount so redeemed) plus accrued and unpaid
interest thereon to the redemption date which shall be within 30 days after
the date of delivery by SGC of financial statements for such fiscal quarter
pursuant to subsection 5.1A; it being understood that Company or Collateral
Agent shall be entitled to sell SFHI Notes held as Collateral to persons
other than SGC or any of its Affiliates in order to make such redemption and
that the Holders of more than 50% in aggregate principal
29
<PAGE>
amount of the Tranche B Notes shall be entitled to amend or waive this
subsection 2.5C(iii) without the consent of any Holders of the Tranche A
Notes. Company shall only redeem Notes as provided in this subsection
2.5C(iii) on one occasion.
(iv) Redemption Upon Sale of Henderson Premises. If Company transfers
------------------------------------------
any portion of the Henderson Premises, $20,000,000 in principal amount of
the Notes beginning with the Tranche A Notes shall be immediately redeemed
by Company at a redemption price equal to the redemption price payable in
connection with the optional redemption of Tranche A Notes or Tranche B
Notes as applicable pursuant to subsection 2.5B(i) (or if prior to June 15,
1998, at 101 1/2% of the principal amount so redeemed in the case of the
Tranche A Notes and 104 1/2% of the principal amount so redeemed in the case
of the Tranche B Notes) plus accrued and unpaid interest thereon to the
redemption date and, if the Tranche A Notes or the Tranche B Notes have been
paid in full, the applicable fee set forth in subsection 2.4E.
(v) Change-of-Control Repurchase. If there is a Change of Control (the
----------------------------
date of such Change of Control being the "Change of Control Date"), then
----------------------
Company shall promptly thereafter notify each Holder in writing of such
occurrence and not later than ten Business Days after such Change of Control
Date shall commence an offer to repurchase (the "Change of Control
-----------------
Repurchase Offer") all of the outstanding Notes on the Change of Control
----------------
Payment Date (as defined below) at a purchase price in cash equal to 101% of
the aggregate principal amount of the Notes plus accrued and unpaid interest
to the date of repurchase (and at no other premium). The Change of Control
Repurchase Offer shall remain open for 20 Business Days following the date
Company mails notice of the Change of Control Repurchase Offer to the
Holders or such longer period required by applicable law. Notice of a
Change of Control Repurchase Offer shall be mailed by Company to the Holders
of the Notes at their last registered addresses with copies to Collateral
Agent. The notice shall contain all instructions and materials necessary to
enable such Holders to tender Notes pursuant to the Change of Control
Repurchase Offer. The notice shall state:
(1) that the Change of Control Repurchase Offer is being made
pursuant to this subsection 2.5C(v), that Notes may be surrendered in
whole or in part (in denominations of $1,000 and integral multiples
thereof), and that all Notes tendered will be accepted for payment;
(2) that any Notes not tendered will continue to accrue interest;
(3) that any Notes accepted for payment pursuant to the Change of
Control Repurchase Offer shall cease to accrue interest after the date
on which such Notes are paid;
30
<PAGE>
(4) that Holders electing to have Notes purchased pursuant to a
Change of Control Repurchase Offer will be required to surrender their
Notes, with the form entitled "Option of Holder to Elect Repurchase" on
the reverse of the Note completed, to Company prior to the close of
business on the expiration date of the Change of Control Repurchase
Offer;
(5) that Holders will be entitled to withdraw their election if
Company receives, not later than the close of business on the Business
Day immediately preceding the expiration date of the Change of Control
Repurchase Offer, a telegram telex, facsimile transmission or letter
setting forth the name of the Holder, the principal amount of Notes the
Holder delivered for purchase and a statement that such Holder is
withdrawing such Holder's election to have such Notes purchased;
(6) that the Holders whose Notes are tendered only in part will be
issued Notes representing the unpurchased portion of the Notes
surrendered;
(7) the instructions Holders must follow in order to tender their
Notes; and
(8) the circumstances and relevant facts regarding such Change of
Control (including but not limited to information with respect to pro
forma historical financial information after giving effect to such
Change of Control, information regarding the persons acquiring control
and such person's business plans going forward).
On the expiration of the Change of Control Repurchase Offer, Company
shall (A) accept for payment Notes or portions thereof tendered pursuant to the
Change of Control Repurchase Offer, (B) promptly transfer to the Holders
immediately available funds sufficient to pay the purchase price of all Notes or
portions thereof so tendered and (C) promptly deliver to such Holders a new Note
equal in principal amount to any unpurchased portion of the Note surrendered.
If the events which give rise to a Change of Control Repurchase Offer cease to
exist prior to completion of such repurchase offer, then Company shall not be
obligated to repurchase any of the Notes and may revoke any offer set forth
above (whether before or after acceptance thereof by any Holder) and will not be
liable to make the payments set forth above with respect to any revoked offer.
(vi) Appraisal Deficit Redemption. If and to the extent that, as of
----------------------------
the Effective Date, 80% of the Aggregate Appraised Value is less than the
aggregate principal amount of the Notes as of the Effective Date (such
amount, the "Appraisal Deficit Amount"), then on December 31, 1997 (such
date, the "Appraisal Deficit Redemption Date"), Company shall redeem a
principal amount of Tranche A Notes equal to the Appraisal Deficit Amount at
a redemption price equal to 100% of the
31
<PAGE>
principal amount so redeemed plus accrued and unpaid interest thereon to the
redemption date unless, prior to the Appraisal Deficit Redemption Date,
Company has delivered updated, restated or new MAI Appraisals with respect
to either or both of the Wet 'N' Wild Property and the Henderson Property to
the Holders, in form and substance satisfactory to Requisite Holders and 80%
of the Aggregate Appraised Value reflected in such MAI Appraisals is equal
to or greater than the principal amount of the Notes.
D. REPURCHASE PURSUANT TO ANY GAMING LAW.
(i) If required to be found suitable by any Gaming Authority, all
Holders and beneficial owners of Notes, whether initial Holders, beneficial
owners or subsequent transferees, shall be subject to the suitability provisions
of the applicable Gaming Law and shall apply for a finding of suitability within
the earlier of (i) 30 days after the applicable Gaming Authority requests that
such Holder or beneficial owner apply for a finding of suitability, or (ii) the
time period prescribed by such Gaming Authority for such application. The Holder
or beneficial owner required to be found suitable shall pay all costs of the
investigation for such finding. In the event that any Gaming Authority
determines that a Holder or beneficial owner is not suitable under such Gaming
Authority's Gaming Laws or such Holder or beneficial owner fails to submit for a
finding of suitability as required by such Gaming Authority in its sole
discretion, then, promptly after the date that such Holder or beneficial owner
(the "Unsuitable Holder") is found unsuitable or fails to submit for a finding
of suitability (the "Unsuitability Date"), SGC and Company shall provide written
notice to that effect to such Unsuitable Holder and the Unsuitable Holder must
thereafter dispose of, pursuant to subsection 2.5D(ii), all Notes the Unsuitable
Holder then possesses, either directly, indirectly or beneficially. Immediately
upon the Unsuitability Date, the Unsuitable Holder shall have no further right
(a) to exercise, directly or indirectly, through any trustee or nominee or any
other person or entity, any right conferred by any Note(s) and (b) to receive
any interest or any other distribution or payment with respect to any such
Note(s) or any remuneration in any form from Company or SGC; provided, however,
-------- -------
that after the Unsuitability Date, interest on any such Note(s) shall continue
to accrue for the benefit of any subsequent Holder thereof.
(ii) Within 30 days after receipt of the notice referred to in clause
(i) above or such shorter period as the Gaming Authorities may prescribe, (1)
the Unsuitable Holder shall sell its Note(s) either directly or through a bona
fide brokerage transaction, in either case on arms-length terms, to a Person who
has not previously been found unsuitable by the Gaming Authorities and who is
not an Affiliate of the Unsuitable Holder or (2) at the election of Company,
Company may redeem such Holder's Notes at the lower of (i) the principal amount
thereof, or (ii) the amount which the Unsuitable Holder paid for the Note(s),
together in either case with accrued interest up to the Unsuitability Date.
(iii) The provisions of this subsection 2.5D shall be construed in
accordance with the provisions of the applicable Gaming Laws.
32
<PAGE>
E. PRO RATA REDEMPTION. Subject to the terms and conditions of the
Intercreditor Agreement and except as otherwise provided in this Agreement, in
the event of any redemption in which the aggregate principal amount of Notes to
be redeemed is less than the entire principal amount of Notes outstanding,
Company shall apply all payments made hereunder first to fees, late charges,
costs and expenses owing to Collateral Agent hereunder and under the other Basic
Documents, second to accrued interest due under the Tranche A Notes pro rata,
third to the principal balance of the Tranche A Notes pro rata, fourth to
accrued interest due under the Tranche B Notes pro rata, and fifth to the
principal balance of the Tranche B Notes pro rata (with such adjustments as may
be deemed appropriate by Company so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased) Holders whose Notes are
purchased only in part will be issued new Notes equal in principal amount to the
unpurchased portion of the Notes surrendered in connection with a redemption.
F. RELEASE OF SFHI NOTES AS COLLATERAL. If and to the extent that
(i) the Wet `N' Wild Facility constitutes Collateral hereunder and (ii) the
principal amount of SFHI Notes held as Collateral under the Company Security
Agreement exceeds the principal amount of outstanding Notes (the amount of such
excess, the "Excess Principal Amount"), then, so long as no Event of Default or
Potential Event of Default has occurred and is continuing, Collateral Agent
shall release its security interest held on behalf of Holders in SFHI Notes in a
principal amount not to exceed the Excess Principal Amount within five (5)
Business Days after receiving the written request of Company directing that such
release occur which request shall certify that no Event of Default or Potential
Event of Default has occurred and is continuing; provided that Collateral Agent
--------
shall not release its security interest in any such SFHI Notes unless and until
Company has demonstrated in a manner satisfactory to Collateral Agent that
immediately upon such release, the SFHI Notes released will be contributed or
otherwise transferred to SFHI and retired or otherwise cancelled unless the
Holders of more than 50% in aggregate principal amount of the Tranche B Notes
have agreed that such contribution and retirement need not occur; it being
--------
understood that Collateral Agent shall have no obligation to deliver to Company
- ----------
any instrument or instruments evidencing the SFHI Notes that is in excess of the
Excess Principal Amount prior to receiving in exchange therefor a substitute
instrument or instruments evidencing SFHI Notes in a principal amount not less
than the principal amount required to be pledged hereunder and under the Company
Security Agreement. Company agrees that the principal amount of SFHI Notes held
as collateral shall equal or exceed the lesser of (i) principal amount of
outstanding Notes and (ii) an amount equal to $33,120,000 minus any SFHI Notes
sold in connection with any payment of interest pursuant to subsection 2.4E or
with any prepayment pursuant to subsection 2.5C(iii) or subsection 2.5C(ii).
G. RIGHT OF FIRST REFUSAL WITH RESPECT TO SFHI NOTES. In the event
that Company desires to sell any SFHI Notes (whether pursuant to the Basic
Documents or otherwise) to any Person, Company shall give the Initial Holders
written notice thereof (the "Sale Notice") which notice shall include the price
at which Company intends, to sell such SFHI Notes (the "Sale Price").
33
<PAGE>
The Initial Holders or their respective designees shall then have the
right to acquire any SFHI Notes subject to a Sale Notice upon the same terms and
conditions stated in the Sale Notice by giving written notice of their
willingness to acquire such SFHI Notes to Company within one (1) Business Day of
receipt by the Initial Holders of such Sale Notice. If such Person elect or are
deemed to elect not to acquire such SFHI Notes, then Company may sell the SFHI
Notes pursuant to such Sale Notice on the same terms and conditions set forth in
the Sale Notice delivered to the Initial Holders. If the terms of such Sale
Notice are changed from the terms set forth in the Sale Notice delivered to the
Initial Holders in any manner that is favorable to such third party (including
any reduction of the Sale Price), then Company shall be obligated to deliver to
the Initial Holders written notice of such changes and the Initial Holders or
their respective designees will again have a right to acquire such SFHI Notes on
the basis of such changed terms in accordance with the terms and provisions (and
within the time periods set forth) above. If Company fails to sell the SFHI
Notes pursuant to such Sale Notice within thirty days after delivery of the Sale
Notice to the Initial Holders then Company shall be obligated to redeliver the
Sale Notice to the Initial Holders prior to selling the SFHI Notes pursuant to
such Sale Notice, and the Initial Holders or their respective designees will
again have a right to acquire such SFHI Notes in accordance with the terms and
provisions (and within the time periods set forth) above.
In the event that both Initial Holders elect to acquire particular SFHI
Notes pursuant to this subsection 2.5G, then each Initial Holder shall acquire
50% of the aggregate principal amount of SFHI Notes subject to the Sale Notice.
In the event that an Initial Holder elects to acquire particular SFHI Notes
pursuant to this subsection 2.5G and the other Initial Holder does not elect to
acquire such SFHI Notes, the Initial Holder electing to acquire such SFHI Notes
shall acquire all of the SFHI Notes subject to the Sale Notice.
In no event shall this subsection 2.5G or any election by any Person
constitute a deferral or waiver of any required payment under any Basic Document
or other term or provision of any Basic Document.
2.6 REPLACEMENT OF NOTES. Upon receipt of evidence reasonably satisfactory
--------------------
to Company of the loss, theft, destruction or mutilation of a Note and upon
delivery of an unsecured indemnity agreement reasonably satisfactory to Company
from any Holder of such Note or, in the case of any such mutilation, upon the
surrender of such Note for cancellation to Company at its principal office,
Company, at its expense, will execute and deliver, in lieu thereof, a new Note
of like tenor, dated in the case of a Note, so that there will be no loss of
interest. Any Note in lieu of which any such new Note has been so executed and
delivered by Company, thereupon shall not be deemed an outstanding Note for any
purpose under this Agreement. Notwithstanding the foregoing provisions of this
subsection 2.6, if any Note of which SunAmerica, SAI, CSFB or any other
institutional Holder is the owner is lost, stolen or destroyed, then the
affidavit of such Holder's Treasurer or Assistant Treasurer (or other
responsible officials), setting forth the name of the owner of such Note and the
circumstances with respect to such loss, theft or destruction, shall be accepted
as satisfactory evidence thereof,
34
<PAGE>
and no indemnity shall be required as a condition to the execution and delivery
by Company of a new Note in lieu of such Note (or as a condition to the payment
thereof, if due and payable) other than SunAmerica's, SAI, CSFB or such Holder's
written agreement to indemnify Company.
2.7 TAXES. In the event of the passage of any state, Federal, municipal or
-----
other governmental law, order, rule or regulation subsequent to the date hereof
(i) deducting from the value of real property for the purpose of taxation any
lien or encumbrance thereon or in any manner changing or modifying the laws now
in force governing the taxation of any of the Deeds of Trust or debts secured by
mortgages (other than laws governing income, franchise and similar taxes
generally) or the manner of collecting taxes thereon and (ii) imposing a tax to
be paid by Collateral Agent or any Holder, either directly or indirectly, on any
of the Deeds of Trust, this Agreement, the Guaranties or any of the other Basic
Documents or to require an amount of taxes to be withheld or deducted therefrom,
SGC and Company will promptly notify Collateral Agent or such Holder, as
applicable, of such event. In such event, SGC and Company shall (i) jointly and
severally agree to enter into such further instruments as may be reasonably
necessary or desirable to obligate Company to make additional payments to fully
and timely discharge such items and (ii) jointly and severally guarantee such
additional payments. If SGC and Company are not permitted by law to do that
which is required by the preceding sentence, Collateral Agent or such Holder, as
applicable, shall be entitled to exercise any or all of its rights and remedies
under the Basic Documents, including the right to accelerate the Obligations.
The obligations of SGC and Company under this subsection shall survive the
payment of the Notes.
2.8 REGISTRATION; TRANSFER; REGISTRATION OF TRANSFER AND EXCHANGE.
-------------------------------------------------------------
A. Company shall maintain a register for its Notes, which shall
provide for the registration of the Notes and of transfers of the Notes. Upon
surrender for registration or transfer of any Note or any portion thereof
together with an Assignment Agreement in the form of Exhibit XVI annexed hereto
entered into by the transfering Holder and the applicable transferee or
transferees, Company, at its expense, shall execute and deliver, in the name of
the designated transferee or transferees and the transferor, as applicable, one
or more new Notes, as applicable; provided, however, that in connection with any
-------- -------
such transfer, the Holder requesting the transfer shall provide to Company
evidence reasonably satisfactory to it that the transfer is to a "qualified
institutional buyer" or an "accredited investor," as such terms are defined in
Rule 144A and 501, respectively, of the Securities Act, and is exempt from the
registration requirements of the Securities Act and, if the transfer is to an
entity or person other than a "qualified institutional buyer", a Company shall
be provided with an opinion of counsel reasonably satisfactory to it that the
transfer is so exempt from the registration requirements of the Securities Act;
provided further, that, in connection with any transfer, the Holder requesting
- -------- -------
such transfer shall provide to Company, the Collateral Agent and the other
Holders an amendment to Schedule 2 annexed hereto that sets forth payment and
other information with respect to such transferee or transferees and shall also
deliver to the Collateral Agent and each
35
<PAGE>
other Holder an Intercreditor Assumption Agreement and the Assignment Agreement
referred to above executed by each such transferee provided, further, that
Company shall not be required to register the transfer of Notes to a transferee
with a principal amount of less than $2,000,000; provided, further, that, if no
Event of Default has occurred and is continuing, Company shall have the right to
consent (which consent shall not unreasonably be withheld or delayed) to any
transfer of Notes that causes SunAmerica, SAI and their Affiliates to hold, in
the aggregate, less than 51% of the legal or beneficial interests in all
outstanding Tranche B Notes. Notes may be exchanged at the option of any Holder
thereof for Notes of a like aggregate principal amount in the same name but in
different denominations. Whenever any Notes are so surrendered for exchange,
Company, at its expense, shall execute and deliver the Notes which the Holder
making the exchange is entitled to receive. All Notes issued upon any
registration of transfer or exchange thereof shall be the valid obligations of
Company, evidencing the same debt, and entitled to the same benefits, as Notes
surrendered upon such registration of transfer or exchange. Each Note presented
or surrendered for registration or transfer or exchange shall (if so required by
Company) be duly endorsed, or be accompanied by a written instrument of transfer
in form satisfactory to Company, duly executed by the Holder thereof or its
attorney duly authorized in writing.
B. In connection with any transfer of the Notes pursuant to the
exemption from the provisions of Section 5 of the Securities Act afforded by
Rule 144A promulgated thereunder, Company hereby agrees to provide (i) at the
request of any transferring Holder, including any transferee thereof or Person
who has been granted a participation in any Note pursuant to this Agreement, to
such Holder and to any prospective transferee designated to Company in writing
by such Holder, and (ii) at such prospective transferee's request to such Holder
to Company, the information required by paragraph (d)(4)(i) (or any successor
provision) of Rule 144A under the Securities Act.
2.9 REPRESENTATION OF HOLDERS. Each Holder represents to SGC and Company
-------------------------
that on the Effective Date such Holder is an "accredited investor" within the
meaning of Section 501 of the Securities Act, is acquiring the Notes for
investment and is not acquiring the Notes with a view to the distribution or
sale of the securities within the meaning of the Securities Act, subject,
however, to any requirement of law that the disposition of its property be at
all times within its control.
SECTION 3. REPRESENTATIONS AND WARRANTIES
To induce the Holders to enter into this Agreement, and to hold the
Notes hereunder, SGC and Company each represent, warrant and covenant to each
Holder, as of the Effective Date as follows:
36
<PAGE>
3.1 ORGANIZATION, POWERS, QUALIFICATION, GOOD STANDING AND OTHER MATTERS.
--------------------------------------------------------------------
A. ORGANIZATION AND POWERS; QUALIFICATION AND GOOD STANDING. Each
Credit Party is a corporation duly organized, validly existing and in good
standing under the laws of the State of Nevada. Each Credit Party has all
requisite corporate power and authority to own and operate its properties, to
carry on its business as now conducted and as proposed to be conducted, to enter
into the Basic Documents to which it is or may be party and to carry out the
transactions contemplated thereby. Each Credit Party is qualified to do business
and in good standing in Nevada and in every other jurisdiction where its assets
are located and wherever necessary to carry out its business and operations,
except in such other jurisdictions where the failure to be so qualified or in
good standing has not had and will not have a Material Adverse Effect.
B. SUBSIDIARIES AND JOINT VENTURES. All of the Subsidiaries and
Joint Ventures of SGC as of the Effective Date are identified in Schedule 3.1B
annexed hereto. The capital stock of each of the Subsidiaries of SGC identified
in Schedule 3.1B annexed hereto is duly authorized, validly issued, fully paid
and nonassessable. Each of the Subsidiaries and Joint Ventures of SGC
identified in Schedule 3.1B annexed hereto is a corporation or other entity duly
organized or formed, validly existing and in good standing under the laws of its
respective jurisdiction of incorporation set forth therein, has all requisite
power and authority to own and operate its properties and to carry on its
business as now conducted and as proposed to be conducted, and is qualified to
do business and in good standing in every jurisdiction where its assets are
located and wherever necessary to carry out its business and operations, in each
case except where failure to be so qualified or in good standing or a lack of
such corporate power and authority has not had and will not have a Material
Adverse Effect. Schedule 3.1B annexed hereto correctly sets forth, as of the
Effective Date, the ownership interest of SGC and each of its Subsidiaries in
each of their respective Subsidiaries and Joint Ventures.
C. CAPITALIZATION. The authorized capital stock of SGC consists of
100,000,000 shares of common stock, par value .01 per share, of which 6,195,356
shares are outstanding and 10,000,000 shares of preferred stock, par value .01
per share, of which 8,556,651 shares of SGC Preferred Stock are outstanding.
The authorized capital stock of Company consists of 20,000 shares of common
stock, par value $10 per share, of which 57 shares are issued and outstanding,
50 of which are owned by Sahara Resorts, five of which are owned by Casino
Properties and two of which are owned by Hacienda Hawaiian. The authorized
capital stock of Sahara Resorts consists of 10,000 shares of common stock, par
value $0.20 per share, of which 10,000 are issued and outstanding, all of which
are owned by SGC.
D. EXISTING WET 'N' WILD LEASE INDEBTEDNESS AND OTHER INDEBTEDNESS.
Company is not liable with respect to any Indebtedness except for the Notes and
the Existing Wet 'N' Wild Lease Guaranty and the outstanding principal amount of
the Existing Wet 'N' Wild Lease Note was $5,434,862 as of October 31, 1997. As
of the Effective Date, SGC and its Subsidiaries are not liable with respect to
Indebtedness individually in excess of $100,000
37
<PAGE>
except for Indebtedness listed on Schedule 3.1D. Schedule 3.1D correctly
identifies the maturity date and the amount and date of all amortization or
other payments required to be made in respect of such Indebtedness and the
Persons who are obligated (whether pursuant to a guaranty or otherwise) to pay
such Indebtedness. Schedule 1.1C correctly identifies all of the Henderson
Property Documents and the Wet 'N' Wild Documents.
E. OTHER BASIC DOCUMENTS. All representations and warranties in each
other Basic Document are true and correct in all material respects.
3.2 AUTHORIZATION OF NOTES AND OTHER BASIC DOCUMENTS AND RELATED MATTERS.
--------------------------------------------------------------------
A. AUTHORIZATION OF NOTES AND OTHER BASIC DOCUMENTS. The execution
and delivery by each Credit Party of each Basic Document to which each is a
party and the performance by each Credit Party of their respective obligations
thereunder have been duly authorized by all necessary corporate action on the
part of each such Credit Party, as applicable.
B. NO CONFLICT. The execution, delivery and performance by each
Credit Party of each Basic Document to which it is party and the consummation of
the transactions contemplated by the Basic Documents, do not and will not (i)
violate any provision of any law or any governmental rule or regulation
(including any Gaming Laws or, based on the representation and warranty of
Holders contained in subsection 2.9 hereof, federal securities laws) applicable
to any Credit Party or any of their respective Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of any Credit Party or any of their
respective Subsidiaries or any order, judgment or decree of any court or other
agency of government binding on any Credit Party or any of their respective
Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due
notice or lapse of time or both) a default under the SFHI Indenture, the Pioneer
Indenture, the Wet 'N' Wild Documents, the Hacienda Indenture, the Sierra Note,
the Henderson Property Documents or any other Contractual Obligation of any
Credit Party or any of their respective Subsidiaries, (iii) result in or require
the creation or imposition of any Lien upon any of the properties or assets of
any Credit Party or any of their respective Subsidiaries (other than any Liens
created under any of the Basic Documents in favor of Collateral Agent or
Holders), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of any Credit Party or
any of their respective Subsidiaries, except for such approvals or consents
which will be obtained on or before the Effective Date and disclosed in writing
to Holders.
C. GOVERNMENTAL CONSENTS. Assuming the accuracy of Holders'
representation contained in subsection 2.9, the execution, delivery and
performance by each Credit Party and their respective Subsidiaries of each Basic
Document and the consummation of the transactions contemplated by each Basic
Document do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any
38
<PAGE>
federal, state or other Governmental Authority or regulatory body, including but
not limited to any Gaming Board.
D. BINDING OBLIGATION. Each of the Basic Documents to which each Credit
Party is party has been duly executed and delivered by each such Credit Party,
as applicable, and is the legally valid and binding obligation of each such
Credit Party, as applicable, enforceable against each such Credit Party in
accordance with its respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or limiting
creditors' rights generally or by equitable principles relating to
enforceability.
E. OFFERINGS. No Credit Party or any of their respective
Subsidiaries has, directly or indirectly, offered the Notes, or any part
thereof, or (within the last six months) any similar securities for sale to, or
solicited any offer to buy any of the same from, or otherwise approached or
negotiated in respect thereof with, anyone other than the Holders as of the
Effective Date and their Affiliates and not more than 10 other institutional
investors. Assuming the accuracy of the representations and warranties of the
Holders contained in subsection 2.9, the offer, issuance and sale of the Notes
to the Holders in conformity with the terms of this Agreement constitute
transactions exempt from the registration requirements of Section 5 of the
Securities Act and comply or will comply with federal securities and state blue
sky laws applicable to such offer, sale and issuance.
F. USE OF PROCEEDS. SGC and Company have used all of the proceeds
received from the sale of the Existing Notes as provided in subsection 3.2F and
5.10 of the Existing Note Purchase Agreement. SGC and Company will use the
proceeds of the Notes as provided in subsection 5.10 hereof.
3.3 FINANCIAL CONDITION. SGC and Company have heretofore delivered to
-------------------
Holders at Holders' request, the following financial statements and information:
the audited consolidated financial statements of SGC and its Subsidiaries for
the fiscal years ended September 30, 1996, 1995 and 1994 and for the fiscal
quarter ended June 30, 1997. All such statements were prepared in conformity
with GAAP and fairly present the consolidated financial position of the entities
described in such financial statements as at the respective dates thereof and
the results of operations and cash flows (on a consolidated basis) of the
entities described therein for each of the periods then ended. SGC and its
Subsidiaries do not (and will not following the issuance of the Notes) have any
material Contingent Obligation or liability for taxes, long-term lease or
unusual forward or long-term commitment that is not reflected in the
aforementioned financial statements or the notes thereto and which in any such
case is material in relation to the business, operations, properties, assets,
condition (financial or otherwise) or prospects of SGC, Company, or any of their
respective Subsidiaries.
3.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS. Since
---------------------------------------------------------
September 30, 1997, no event or change has occurred that has caused or
evidences, either in any case or in the aggregate, a Material Adverse Effect.
Since September 30, 1997, neither
39
<PAGE>
SGC nor Company has directly or indirectly declared, ordered, paid or made, or
set apart any sum or property for, any Restricted Junior Payment or agreed to do
so.
3.5 TITLE TO PROPERTIES; LIENS. SGC and Company have (or in the case of
--------------------------
the Henderson Facility, will have as of the Effective Date) (i) good, sufficient
and legal title to (in the case of fee interests in real property), (ii) valid
leasehold interests in (in the case of leasehold interests in real or personal
property), or (iii) good title to (in the case of all other property, including
personal property), the Premises and Improvements, as applicable, and all of
their other respective properties and assets reflected in the financial
statements referred to in subsection 3.3, in each case except as disclosed in
the notes to such financial statements and for assets disposed of since the date
of such financial statements in the ordinary course of business or as otherwise
permitted under Section 6. Except as permitted by this Agreement, the properties
and assets of Company are free and clear of Liens.
3.6 LITIGATION; ADVERSE FACTS. Except as disclosed in SGC's Annual Report
-------------------------
on Form 10-K for the fiscal year ending September 30, 1996 and Quarterly Reports
on Form 10-Q for the quarters ended December 31, 1996, March 31, 1997 and June
30, 1997, there are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of any Credit Party or any
of their respective Subsidiaries) at law or in equity or before or by any
federal, state, municipal or other governmental department, commission, board,
bureau, agency or instrumentality, domestic or foreign, pending or, to the
knowledge of any Credit Party, threatened against any Credit Party or any of
their respective Subsidiaries or any property of any Credit Party or any of
their respective Subsidiaries that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. No Credit Party
or any of their respective Subsidiaries is (i) in violation of any applicable
laws that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect or (ii) subject to or in default with
respect to any final judgments, writs, injunctions, decrees, rules or
regulations of any court or any federal, state, municipal or other governmental
department, commission, board, bureau, agency or instrumentality, domestic or
foreign, that, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect.
3.7 PAYMENT OF TAXES. Except to the extent permitted by subsection 5.4,
----------------
all tax returns and reports of each Credit Party and their respective
Subsidiaries required to be filed by any of them have been timely filed, and all
taxes, assessments, fees and other governmental charges upon any Credit Party
and their respective Subsidiaries and upon their respective properties, assets,
income, businesses and franchises which are due and payable have been paid or
are being contested in good faith by appropriate proceedings. No Credit Party
knows of any proposed tax assessment against any Credit Party or any of their
respective Subsidiaries except as disclosed on Schedule 3.7 annexed hereto and
any such proposed tax assessment is being actively contested by such Credit
Party or Subsidiary, as applicable, in good faith and by appropriate
proceedings; provided that such reserves or other appropriate provisions, if
--------
any, as shall be required in conformity with GAAP shall have been made or
provided therefor. No
40
<PAGE>
governmental entity has, during the past three years, examined, or is in the
process of examining, any tax return of any Credit Party or any of their
respective Subsidiaries. No governmental entity has proposed (tentatively or
definitively), asserted or assessed, or, to the knowledge of any Credit Party
threatened to propose or assert, any deficiency, assessment or claim for taxes,
which delinquency, assessment or claim is not described on Schedule 3.7 annexed
hereto, no such delinquency, assessment or claim could reasonably be expected to
have a Material Adverse Effect and, to the best knowledge of each Credit Party,
there would be no basis for any such delinquency, assessment or claim. There are
no agreements, waivers or other arrangements providing for an extension of time
with respect to the assessment of any tax or deficiency against any Credit Party
or any of their respective Subsidiaries or with respect to any tax return filed
or to be filed by any Credit Party or any of their respective Subsidiaries.
Following the Effective Date, the assessment of any additional taxes for periods
for which returns have been filed is not expected to exceed the liability
recorded therefor on the financial statements delivered to Holders pursuant to
subsection 3.3. There are no material unresolved questions or claims concerning
the tax liability of any Credit Party or any of their respective Subsidiaries.
3.8 PERFORMANCE OF AGREEMENTS; MATERIALLY ADVERSE AGREEMENTS. No Credit
--------------------------------------------------------
Party or any of their respective Subsidiaries is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in any of its Contractual Obligations except as described on Schedule
3.8 annexed hereto and no such default could reasonably be expected to result in
a Material Adverse Effect and, to the knowledge of SGC and Company, no condition
exists that, with the giving of notice or the lapse of time or both, would
constitute such a default.
3.9 GOVERNMENTAL REGULATION. No Credit Party or any of their respective
-----------------------
Subsidiaries is subject to regulation under the Public Utility Holding Company
Act of 1935, the Federal Power Act, the Interstate Commerce Act or the
Investment Company Act of 1940 or under any other federal or state statute or
regulation which may limit its ability to incur Indebtedness or which may
otherwise render all or any portion of the Obligations unenforceable.
3.10 EMPLOYEE BENEFIT PLANS AND EMPLOYEE MATTERS.
-------------------------------------------
A. Each Credit Party and each of their respective ERISA Affiliates
are in compliance in all material respects with all applicable provisions and
requirements of ERISA and the regulations and published interpretations
thereunder with respect to each Employee Benefit Plan, and have performed all
their obligations under each Employee Benefit Plan. No ERISA Event has occurred
or is reasonably expected to occur.
B. Schedule 3.10 annexed hereto lists all Employee Benefit Plans.
Except to the extent required under Section 4980B of the Internal Revenue Code,
no Employee Benefit Plan provides health or welfare benefits (through the
purchase of insurance or otherwise) for
41
<PAGE>
any retired or former employees of any Credit Party or any of their respective
ERISA Affiliates. As of the most recent valuation date for any Pension Plan, no
Pension Plan has any unfunded benefit liabilities (as defined in Section
4001(a)(18) of ERISA).
3.11 ENVIRONMENTAL PROTECTION. Except as set forth in Schedule 3.11
------------------------
annexed hereto, in each particular instance, with respect to the particular
clause of this subsection 3.11 to which such exception is taken:
(i) the operations of Company and Santa Fe Valley (including, without
limitation, all operations and conditions at or in any Facility) related to
the Facilities comply in all material respects with all Environmental Laws;
(ii) each of Company and Santa Fe Valley has obtained all Governmental
Authorizations under Environmental Laws necessary to its operations related
to the Facilities, and all such Governmental Authorizations are in good
standing, and Company and Santa Fe Valley are in compliance with all
material terms and conditions of such Governmental Authorizations;
(iii) neither Company nor Santa Fe Valley has received (a) any notice
or claim to the effect that it is or may be liable to any Person as a result
of or in connection with any Hazardous Material related to the Facilities or
(b) any letter or request for information under Section 104 of the
Comprehensive Environmental Response, Compensation, and Liability Act (42
U.S.C. (S) 9604) or comparable state laws, with respect to the Facilities
and, none of the operations of Company or Santa Fe Valley is the subject of
any federal or state investigation relating to or in connection with any
Hazardous Material at the Facilities or any Hazardous Material in any other
manner related to the Facilities;
(iv) neither Company nor Santa Fe Valley is a party to any judicial or
administrative proceeding alleging the violation of or liability under any
Environmental Laws which if adversely determined could reasonably be
expected to have a Material Adverse Effect;
(v) none of Company, Santa Fe Valley, nor the Facilities is subject to
any outstanding written order or agreement with any governmental authority
or private party relating to (a) any Environmental Laws or (b) any
Environmental Claims;
(vi) neither Company nor Santa Fe Valley has any contingent liability
in connection with any Release of any Hazardous Material related to the
Facilities which could reasonably be expected to have a Material Adverse
Effect;
(vii) Company, Santa Fe Valley and, to the best knowledge of each
officer of SGC and Company, none of their predecessors have filed any notice
under any
42
<PAGE>
Environmental Law indicating past or present treatment or Release of
Hazardous Material at the Facilities and none of Company's or Santa Fe
Valley's operations involves the generation, transportation, treatment,
storage or disposal of hazardous waste, as defined under 40 C.F.R. Parts
260-270 or any state equivalent;
(viii) except as disclosed in the Environmental Reports, no Hazardous
Material exists on, under or about the Facilities in a manner that has a
reasonable possibility of giving rise to an Environmental Claim having a
Material Adverse Effect, Company and Santa Fe Valley and, to Company's
knowledge, their predecessors have not filed any notice or report of a
Release of any Hazardous Material that has a reasonable possibility of
giving rise to an Environmental Claim having a Material Adverse Effect;
(ix) none of Company, Santa Fe Valley and, to the best knowledge of
each officer of SGC and Company, any of their predecessors have disposed of
any Hazardous Material in a manner that has a reasonable possibility of
giving rise to an Environmental Claim having a Material Adverse Effect;
(x) to the knowledge of SGC and Company, no underground storage tanks
or surface impoundments are on or at the Facilities; and
(xi) no Lien in favor of any Person relating to or in connection with
any Environmental Claim has been filed or has been attached to the
Facilities.
3.12 SOLVENCY. Upon the consummation of all the transactions contemplated
--------
by this Agreement and the Basic Documents: (i) the present fair salable value
of the assets of each Credit Party as an entirety will exceed the amount that
will be required to pay their probable liability on existing debts (whether
matured or unmatured, liquidated or unliquidated, absolute, fixed or
contingent), as they become absolute and matured; (ii) the sum of the debts
(whether matured or unmatured, liquidated or unliquidated, absolute, fixed or
contingent) of each Credit Party will not exceed the aggregate value of all of
their property, fairly valued, assuming sale in an orderly manner and not
subject to any type of distressed or forced liquidation; (iii) the capital of
each Credit Party will not be unreasonably small for such Credit Party to carry
on their businesses; and (iv) no Credit Party intends to, nor does it or believe
it will, by virtue of consummating the transactions contemplated hereby, incur
debts that will be beyond its ability to pay as they mature.
3.13 CERTAIN FEES. No broker's or finder's fee or commission will be
------------
payable with respect to this Agreement or any of the transactions contemplated
hereby and SGC and Company hereby jointly and severally indemnify each Holder
against, and agree that they will hold each Holder harmless from, any claim,
demand or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
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3.14 DISCLOSURE. No representation or warranty of any Credit Party or any
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of their respective Subsidiaries contained in any Basic Document or in any other
document, certificate or written statement furnished to any Holder by or on
behalf of any Credit Party or any of their respective Subsidiaries for use in
connection with the transactions contemplated by this Agreement, taken as a
whole, contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which the same were
made.
SECTION 4. CONDITIONS TO EFFECTIVENESS
4.1 CONDITIONS TO OBLIGATIONS OF HOLDERS TO PURCHASE NOTES ON THE EFFECTIVE
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DATE. The obligations of each Holder to purchase the Notes to be purchased by
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such Holder pursuant to this Agreement are subject to the fulfillment, at or
prior to the Effective Date, of the following conditions, any one or more of
which may be waived by the Holders:
A. CREDIT PARTY AND SANTA FE VALLEY DOCUMENTS. On or before the
Effective Date, each of SGC and Company shall deliver or cause to be delivered
to the Holders the following:
(i) Certified copies of the Articles or Certificate of Incorporation of
each Credit Party and Santa Fe Valley (including, in the case of SGC, the
Certificate of Designations for the Preferred Stock), together with a good
standing certificate from the Secretary of State of the State of Nevada (or,
in the case of Hacienda Hawaiian, the Department of Commerce and Consumer
Affairs of the State of Hawaii) and, to the extent generally available, a
certificate or other evidence of good standing as to payment of any
applicable franchise or similar taxes from the appropriate taxing authority
of such state, each dated a recent date prior to the Effective Date;
(ii) Copies of the Bylaws of each Credit Party and Santa Fe Valley,
certified as of the Effective Date by its corporate secretary or an
assistant secretary;
(iii) Resolutions of Board of Directors of each Credit Party approving
and authorizing the execution, delivery and performance of this Agreement
and the other Basic Documents to which it is a party, certified as of the
Effective Date by its corporate secretary or an assistant secretary as being
in full force and effect without modification or amendment, and in the case
of Santa Fe Valley, authorizing the sale of the Henderson Facility;
(iv) Signature and incumbency certificates of the officers of each
Credit Party executing this Agreement and the other Basic Documents to which
it is a party and of the officers of Santa Fe Valley executing the deed and
other documents relating to the sale of the Henderson Facility;
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(v) in the case of Company, executed originals of this Agreement, the
Notes to be issued to the Holders on the Effective Date (duly executed in
accordance with subsection 2.3, payable to such Holders and with appropriate
insertions), the Second Amendment to the Company Deed of Trust, Henderson
Deed of Trust, Second Amendment to Company Environmental Indemnity,
Henderson Environmental Indemnity, Second Amendment to Wet 'N' Wild
Subordination, Non-Disturbance and Attornment Agreement, Second Amendment to
Company Security Agreement, the Consent to Amendment and Restatement and the
other Basic Documents to which it is party;
(vi) in the case of SGC, executed originals of this Agreement, the
Second Amendment to Company Environmental Indemnity, the Henderson
Environmental Indemnity and the Consent to Amendment and Restatement, and
the other Basic Documents to which it is party;
(vii) in the case of Sahara Resorts, executed originals of the Consent
to Amendment and Restatement; and
(viii) in the case of Casino Properties, executed originals of the
Consent to Amendment and Restatement;
(ix) in the case of Hacienda Hawaiian, executed originals of the
Consent to Amendment and Restatement;
(x) in the case of Santa Fe Valley, the deed transferring title to the
Henderson Facility to Company and all other Henderson Transfer Documents
executed in connection with such transfer; and
(xi) such other documents as any Holders may reasonably request.
B. LEGAL OPINIONS. The Holders shall have received (i) originally
executed copies of one or more favorable written opinions of Gibson, Dunn &
Crutcher LLP and Vargas & Bartlett, counsel for the Credit Parties and Case,
Bigelow & Lombardi, special counsel for Hacienda Hawaiian, dated as of the
Effective Date and setting forth substantially the matters in the opinions
designated in Exhibit IX-A, Exhibit IX-B and Exhibit IX-C annexed hereto and as
to such other matters as the Holders may reasonably request and (ii) evidence
satisfactory to the Holders that the Credit Parties have requested such counsel
to deliver such opinions to the Holders.
C. OFFICERS CERTIFICATE REGARDING CERTAIN CONDITIONS. The following
conditions shall be satisfied and each Credit Party shall have delivered to the
Holders an Officers' Certificate, in form and substance satisfactory to the
Holders, to that effect:
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(i) The representations and warranties of each Credit Party, as the
case may be, contained herein and in the other Basic Documents shall be
true, correct and complete in all material respects on and as of the
Effective Date to the same extent as though made on and as of that date;
(ii) No event shall have occurred and be continuing as of the Effective
Date, or would result from the consummation of the issuance of the Notes,
the transfer of the Henderson Facility to Company or the other transactions
contemplated by the Basic Documents, that would constitute an Event of
Default or a Potential Event of Default;
(iii) Each Credit Party shall have performed all agreements and
satisfied all conditions which this Agreement and the other Basic Documents
provide shall be performed or satisfied by each such Credit Party on or
before the Effective Date; and
(iv) No Credit Party has given notice to Collateral Agent or any Holder
under Nevada Revised Statute Section 106 or otherwise that any indebtedness
evidenced by any Note issued on or after the Effective Date will not be
secured by the Lien so created by the Deeds of Trust or any other Basic
Document.
D. PERFECTION OF SECURITY INTERESTS AND RELATED MATTERS. Company
shall have taken or caused to be taken such actions in such a manner so that
Collateral Agent, for the benefit of Holders, has a valid and perfected first
priority security interest in all Collateral, in which a Lien is purported to be
granted by the Basic Documents or any of them, executed as of the Effective
Date. Such actions shall include, without limitation: (i) evidence that
original counterparts of the Second Amendment to Company Deed of Trust and the
Second Amendment to Wet 'N' Wild Subordination, Non-Disturbance and Attornment
Agreement were recorded in all locations to the extent necessary or desirable,
in the judgment of Collateral Agent, to maintain the effectiveness of a valid
and enforceable first priority Lien (subject only to Permitted Encumbrances) on
the Wet 'N' Wild Premises in favor of Collateral Agent for the benefit of
Holders; (ii) the delivery to Collateral Agent of Uniform Commercial Code
financing statements, executed by Company as to the Collateral granted by
Company for all jurisdictions as may be necessary or desirable to perfect
Collateral Agent's security interest in such Collateral; (iii) evidence that
counterparts of the Henderson Deed of Trust were recorded in all locations to
the extent necessary or desirable, in the judgment of Collateral Agent,
effectively to create a valid and enforceable Lien (subject only to Permitted
Encumbrances) on the Henderson Facility in favor of Collateral Agent for the
benefit of Holders, and (iv) evidence reasonably satisfactory to Collateral
Agent that all other filings, recordings and other actions Collateral Agent
deems necessary or advisable to establish, preserve and perfect the first
priority Liens (subject to the Liens permitted under subsection 6.2) granted to
Collateral Agent, for the benefit of Holders, in the Collateral shall have been
made. In addition to the foregoing, on or prior to the Effective Date
arrangements satisfactory to the Collateral Agent shall have been made to
transfer all SFHI Notes and all proceeds thereto held in the Collateral Account
to the Additional
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Collateral Account and to terminate the Collateral Account Agreement and
Collateral Account Letter.
E. TITLE POLICY FOR FACILITIES. Holders shall have received a CLTA
110.5 Endorsement and CLTA 116 Endorsement in the forms required by Holders
providing for the modification to the Company Deed of Trust, increasing the
coverage under the title policy issued in connection with the funding of the
Existing Notes (the "WET `N' WILD TITLE POLICY") to $52,900,000 which
Endorsements are to be issued by Stewart Title Guaranty Company (the "WET `N'
WILD TITLE COMPANY"). Holders shall have received a 1970 Form B American Land
Title Association ("ALTA") extended coverage mortgagee form of title insurance
policy, together with all endorsements required by Holders, in the amount of not
less than $20,000,000 (the "HENDERSON TITLE POLICY") (with proof of the payment
of the premiums thereon) or commitment therefor in form and substance acceptable
to Holders issued by United Title Guaranty Company (the "HENDERSON TITLE
COMPANY"), insuring the lien of the Henderson Deed of Trust to be a first
priority lien against the Henderson Facility, free and clear of all defects,
encumbrances and exceptions, except those provided for herein or approved by
Holders and their counsel in writing, together with such affirmative insurance
as Holders may require. The Henderson Title Policy shall contain, among other
things:
(i) full coverage against mechanic's liens (filed and inchoate),
parties in possession and survey matters;
(ii) a foundation endorsement;
(iii) a contiguity endorsement;
(iv) a zoning endorsement;
(v) a reference to the survey but no survey exceptions except those
theretofore approved in writing by Holders and their counsel;
(vi) Form 100 and 116.1 endorsements;
(vii) an access to public streets endorsement; and
(viii) such other items and endorsements requested by Holders.
F. UCC AND JUDGMENT SEARCHES. Holders shall have received current
searches of the UCC filing offices and judgment searches with the Offices of the
Secretary of State of Nevada and the local recorder's office in Clark County and
elsewhere showing no security interests or judgments affecting the Premises, the
Improvements, Company, Santa Fe Valley, SGC or Sahara Resorts, Casino Properties
or Hacienda Hawaiian other than those provided for herein.
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G. HENDERSON SURVEY. Holders shall have received a current survey
prepared by a surveyor acceptable to Holders and licensed as a land surveyor in
the State of Nevada, that shall (a) be satisfactory, in form, scope and
substance, to Holders, and (b) contain the legal description of the Henderson
Facility in form, scope and substance satisfactory to Holders, with a surveyor's
certification in a form acceptable to the Holders from the surveyor to Holders
and the Henderson Title Company and other persons reasonably requested by
Holders.
H. FLOOD INSURANCE. Holders shall have been provided with
satisfactory evidence, which may be in the form of a letter from an insurance
broker, municipal engineer, land surveyor or other knowledgeable source
unaffiliated with Company, as to whether (a) the Premises are located in an area
designated by the Department of Housing and Urban Development as having special
flood or mudslide hazards, and (b) the community in which the Premises are
located is participating in the National Flood Insurance Program. If both of
the aforesaid conditions exist, Holders shall receive satisfactory policies of
flood insurance covering the Improvements as required by the Flood Act.
I. INSURANCE. Holders shall have received evidence, satisfactory to
Holders, of insurance required to be procured and maintained pursuant to
subsection 5.5 hereof and Section 8 of the Company Security Agreement, Section 6
of the Company Deed of Trust and Section 6 of the Henderson Deed of Trust
indicating that, with respect to casualty insurance, such policies of insurance
have been endorsed to name Collateral Agent, on behalf of Holders, as loss payee
pursuant to a standard mortgagee clause and, with respect to liability
insurance, such policies of insurance name Collateral Agent, on behalf of
Holders, as an additional insured.
J. APPRAISALS. Holders shall have received and approved the
Appraisals, the appraised value of the Wet 'N' Wild Property shall be not less
than $52,400,000 and the appraised value of the Henderson Property shall not be
less than $18,400,000.
K. NECESSARY CONSENTS AND APPROVALS. On or before the Effective
Date, SGC and Company shall have obtained all consents and approvals to the
transactions contemplated under this Agreement and the other Basic Documents and
to the continuing operations of the business of SGC, Company and their
Subsidiaries, of any Person required under any Contractual Obligation or other
obligation (including obligations imposed by law) of SGC or Company or any of
their respective Affiliates and of any governmental entity. Such consents and
approvals shall be in full force and effect, and any applicable waiting periods
shall have expired by the Effective Date without any action taken or threatened
to be taken by any competent governmental authority which might restrain,
prevent or otherwise impose adverse conditions on the transactions contemplated
under this Agreement.
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L. ENVIRONMENTAL INFORMATION. Holders shall have received and
approved the Environmental Reports and a reliance letter in favor of Collateral
Agent from the consultants who prepared the Environmental Reports, in a form
satisfactory to Holders.
M. CHANGES IN STRUCTURE. Any changes in the management, capital or
ownership structure of SGC or its Subsidiaries not previously disclosed to the
Holders shall be satisfactory to the Holders in all respects.
N. NO MATERIAL ADVERSE EFFECT. Since June 30, 1997, no Material
Adverse Effect (in the sole opinion of Holders) shall have occurred.
O. COMPLETION OF PROCEEDINGS. All corporate and other proceedings
taken or to be taken in connection with the transactions contemplated hereby and
all documents incidental thereto not previously found acceptable by the Holders
and its counsel shall be satisfactory in form and substance to the Holders and
such counsel, and the Holders and its counsel shall have received all such
counterpart originals or certified copies of such documents as the Holders may
reasonably request.
P. NO INJUNCTIONS, RESTRAINING ORDER OR ADVERSE LITIGATION. No
order, judgment or decree of any court, arbitrator or governmental authority
shall purport to enjoin or restrain any Holder from acquiring any Notes on the
Effective Date. As of the Effective Date, there shall not be pending or, to the
knowledge of SGC or Company, threatened, any action, suit, proceeding,
governmental investigation or arbitration against SGC, Company or any of their
respective Subsidiaries or any property of SGC, Company or any of their
respective Subsidiaries that has not been disclosed by SGC or Company in writing
pursuant to subsection 3.6 prior to the execution of this Agreement, and there
shall have occurred no development not so disclosed in any such action, suit,
proceeding, governmental investigation or arbitration so disclosed, that, in
either event, in the opinion of the Holders, could be expected to have a
Material Adverse Effect; and no injunction or other restraining order shall have
been issued and no hearing to cause an injunction or other restraining order to
be issued shall be pending or noticed with respect to any action, suit or
proceeding seeking to enjoin or otherwise prevent the consummation of, or to
recover any damages or obtain relief as a result of, the transactions
contemplated by this Agreement, the Basic Documents or the acquisition of the
Notes hereunder.
Q. NO VIOLATION OF LAW. The acquisition of the Notes shall not
violate any law including, without limitation, Regulation G, Regulation T or
Regulation X of the Board of Governors of the Federal Reserve System.
R. DOCUMENTS RELATING TO FACILITIES. On the Effective Date (i) the
Holders shall have received any agreements or other documents relating to the
Facilities all in form and substance satisfactory to the Holders; (ii) Holders
shall have received an Officers' Certificate from SGC and Company stating that
the applicable Wet 'N' Wild Documents and the
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Henderson Property Documents to which such Person is a party are in full force
and effect and no material term or condition thereof has been amended, modified
or waived, that all agreements and conditions contained in the Wet 'N' Wild
Documents, the Henderson Property Documents and any agreements or documents
referred to therein required to be performed or complied with by SGC, Company
and their respective Affiliates and, to the knowledge of SGC and Company, the
other parties thereto on or before the Effective Date shall have been so
performed or satisfied and that none of SGC, Company or any of their respective
Affiliates, to the knowledge of SGC or Company, any other party to any Wet 'N'
Wild Documents or any of the Henderson Property Documents is in default in the
performance of or compliance with any of the terms or provisions thereof; (iii)
Holders shall have received from the Wet 'N' Wild Tenant any estoppel
certificates or other documents or certifications from the Wet 'N' Wild Tenant
or the holder(s) of the Existing Wet 'N' Wild Lease Notes requested by Holders;
and (iv) Holders shall have received from Ranch (as defined in the definition of
Henderson Development Documents) an estoppel certificate and other
certifications and agreements requested by the Initial Holders regarding the
Henderson Development Documents.
S. OTHER INDEBTEDNESS DOCUMENTS. On the Effective Date (i) the
Holders shall have received any agreements or other documents relating to all
Indebtedness described on Schedule 3.1D annexed hereto; and (ii) Holders shall
have received an Officers' Certificate from SGC and Company stating that such
documents are in full force and effect and no term or condition thereof has been
amended, modified or waived, and that neither SGC nor any of its Subsidiaries is
in default in the performance of or compliance with any of the terms or
provisions thereof.
T. PAYMENT OF FEES AND EXPENSES. Without limiting the provisions of
subsection 9.2, SGC or its Affiliates other than Company shall have paid from
their own funds, or shall have contributed to Company for payment on or before
the Effective Date by wire transfer of immediately available funds, the
reasonable fees, charges and disbursements arising in connection with the
preparation, execution and delivery of the Basic Documents, including but not
limited to the reasonable fees and expenses of counsel to SunAmerica and CSFB,
O'Melveny & Myers LLP, Henderson & Nelson and Cadwalder, Wickersham & Taft, as
applicable, and the reasonable fees and expenses of Company's counsel, Gibson,
Dunn & Crutcher LLP, Jones Vargas and Case, Bigelow & Lombardi, to the extent an
invoice therefor is received by SGC not less than one Business Day prior to the
Effective Date; the appraisers retained to deliver the Appraisals, environmental
and other consultants; closing costs; escrow fees; title issuance premiums;
title search and survey costs; and the reasonable out-of-pocket expenses of
Holders; provided that the selection of the appraiser and any environmental or
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other consultant or experts shall not be made without Company's prior consent,
which shall not be unreasonably withheld.
U. USE OF PROCEEDS. SGC and Company shall be prepared to use and
shall use the Note proceeds in accordance with subsection 5.10.
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V. HENDERSON TRANSFER. Company shall have acquired the Henderson
Facility from Santa Fe Valley on the Effective Date concurrently with the
issuance of the Notes and the following conditions shall have been satisfied:
(i) all documents affecting the Henderson Transfer shall be in form
and substance satisfactory to Holders;
(ii) the purchase price shall be not greater than $20,000,000; and
(iii) Company shall have delivered to the Holders an opinion of an
investment banking valuation firm acceptable to the Initial Holders
concluding that the purchase price for the Henderson Facility is fair from a
financial point of view addressed to each Holder and in form and substance
satisfactory to Holders.
W. INTERCREDITOR AGREEMENT. CSFB and SunAmerica shall have entered
into the Intercreditor Agreement.
SECTION 5. AFFIRMATIVE COVENANTS OF SGC AND COMPANY
SGC and Company each hereby covenants and agrees that, until payment in
full of the Obligations, unless the Requisite Holders shall otherwise give
written consent, SGC and Company shall perform, and shall cause each of its
respective Subsidiaries to perform, all covenants in this Section 5.
5.1 FINANCIAL STATEMENTS AND RELATED INFORMATION. SGC and Company will
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maintain and cause the other Credit Parties to maintain a system of accounting
established in accordance with sound business practices to permit preparation of
financial statements in conformity with GAAP. SGC and Company will deliver to
each Holder:
A. QUARTERLY, ANNUAL AND OTHER REPORTS: as soon as available all
annual and quarterly reports and such other information, documents and reports
that SGC and its Subsidiaries are required to file with the Securities and
Exchange Commission pursuant to Sections 13 and 15(d) of the Exchange Act.
B. OFFICERS' CERTIFICATES: together with each delivery of quarterly
and annual financial statements of SGC and its Subsidiaries pursuant to
subsection 5.1A above, an Officers' Certificate of SGC stating that the signers
have reviewed the terms of this Agreement and have made, or caused to be made
under their supervision, a review in reasonable detail of the transactions and
condition of SGC, Company and their respective Subsidiaries during the
accounting period covered by such financial statements and that such review has
not disclosed the existence during or at the end of such accounting period, and
that the signers do not have knowledge of the existence as at the date of such
Officers' Certificate, of any condition or event
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that constitutes an Event of Default or Potential Event of Default, or, if any
such condition or event existed or exists, specifying the nature and period of
existence thereof and what action SGC, Company and their respective Subsidiaries
have taken, are taking and propose to take with respect thereto;
C. RECONCILIATION STATEMENTS: if, as a result of any change in
accounting principles and policies from those used in the preparation of the
audited financial statements referred to in subsection 3.3, the consolidated
financial statements of SGC and its Subsidiaries delivered pursuant to
subsection 5.1A will differ in any material respect from the consolidated
financial statements that would have been delivered pursuant to such subsections
had no such change in accounting principles and policies been made, then
together with the first delivery of financial statements pursuant to subsection
5.1A following such change, a written statement of the chief accounting officer
or chief financial officer of SGC setting forth the differences which would have
resulted if such financial statements had been prepared without giving effect to
such change;
D. SEC FILINGS AND PRESS RELEASES: promptly upon their becoming
available, copies of (a) all financial statements, reports, notices and proxy
statements sent or made available generally by SGC to its security holders, (b)
all regular and periodic reports and all registration statements (other than on
Form S-8 or a similar form) and prospectuses, if any, filed by SGC or any of
their respective Subsidiaries with any securities exchange or with the
Securities and Exchange Commission or any governmental or private regulatory
authority, and (c) all press releases and other statements made available
generally by SGC or any of their respective Subsidiaries to the public
concerning material developments in the business of SGC or any of their
respective Subsidiaries;
E. EVENTS OF DEFAULT, ETC.: promptly upon any officer of any Credit
Party obtaining knowledge (i) of any condition or event that constitutes an
Event of Default or Potential Event of Default, or becoming aware that any
Holder has given any notice or taken any other action with respect to a claimed
Event of Default or Potential Event of Default, (ii) that any Person has given
any notice to SGC, Company or any of their respective Subsidiaries or taken any
other action with respect to a claimed default or event or condition of the type
referred to in subsection 7.2, or (iii) of the occurrence of any event or change
that has caused or evidences, either in any case or in the aggregate, a Material
Adverse Effect, an Officers' Certificate specifying the nature and period of
existence of such condition, event or change, or specifying the notice given or
action taken by any such Person and the nature of such claimed Event of Default,
Potential Event of Default, default, event or condition, and what action SGC,
Company and their respective Subsidiaries have taken, are taking and propose to
take with respect thereto;
F. LITIGATION OR OTHER PROCEEDINGS: promptly upon any officer of any
Credit Party obtaining knowledge of (X) the institution of, or non-frivolous
threat of, any action, suit, proceeding (whether administrative, judicial or
otherwise), governmental
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investigation or arbitration against SGC, Company or any of their Subsidiaries
or any property of SGC, Company or any of their Subsidiaries (collectively,
"PROCEEDINGS") not previously disclosed in writing by SGC or Company to Holders
or (Y) any material development in any Proceeding that, in any case:
(1) if adversely determined, has a reasonable possibility of
giving rise to a Material Adverse Effect; or
(2) seeks to enjoin or otherwise prevent the consummation of, or
to recover any damages or obtain relief as a result of, the
transactions contemplated hereby;
written notice thereof together with such other information as may be reasonably
available to SGC, Company or any of their respective Subsidiaries to enable
Holders and their counsel to evaluate such matters;
G. AMENDMENTS TO CERTAIN DOCUMENTS. With reasonable promptness but
in any event within three Business Days of the execution thereof, copies of any
amendment, supplement or modification to any Wet 'N' Wild Document, any
Henderson Property Document, the SFHI Indenture, the Pioneer Indenture, the
Hacienda Indenture, the Henderson Transfer Documents or the Sierra Note and
copies of any agreement (or any amendment, supplement or modification to any
agreement) evidencing indebtedness in excess of $100,000 of SGC or any of its
Subsidiaries or any security agreement, deed of trust or other document relating
thereto or any agreement or document relating to any of the Facilities;
H. ERISA EVENTS: promptly upon becoming aware of the occurrence of
or forthcoming occurrence of any ERISA Event, a written notice specifying the
nature thereof, what action SGC, Company or any of their respective ERISA
Affiliates has taken, is taking or proposes to take with respect thereto and,
when known, any action taken or threatened by the Internal Revenue Service, the
Department of Labor or the PBGC with respect thereto; and upon the request of a
Holder copies of each Schedule B (Actuarial Information) to the annual report
(Form 5500 Series) filed by SGC, Company or any of their respective ERISA
Affiliates with the Internal Revenue Service with respect to each Pension Plan
and such other documents or governmental reports or filings relating to any
Employee Benefit Plan as any Holder shall reasonably request;
I. ENVIRONMENTAL AUDITS AND REPORTS: promptly upon receipt thereof
copies of all environmental audits and reports, whether or not prepared by or on
behalf of any Credit Party or by independent consultants, with respect to any
environmental matters relating to the Facilities; and
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J. OTHER INFORMATION: with reasonable promptness, such other
information and data with respect to any Credit Party or any of their respective
Subsidiaries as from time to time may be reasonably requested by Collateral
Agent or any Holder.
5.2 INSPECTION. No more than once a fiscal quarter unless an Event of
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Default or Potential Event of Default has occurred and is continuing, SGC and
Company will permit any authorized representative designated by any Holder or
Holders of at least a majority in principal amount of the Tranche A Notes or the
Tranche B Notes at such Person's own expense (unless a Potential Event of
Default or an Event of Default has occurred and is continuing in which case at
SGC's and Company's expense), to visit and inspect any Credit Party's properties
or the properties of any of their respective Subsidiaries, including their
financial and accounting records, and to make copies and take extracts
therefrom, and to discuss their affairs, finances and accounts with the chief
financial officer and any other persons approved by the chief financial officer,
under the chief financial officer's direction, and, unless an Event of Default
shall have occurred and be continuing, all upon at least three Business Days'
notice and at reasonable times during normal business hours.
5.3 CORPORATE EXISTENCE, ETC. Except as permitted under subsection 6.3 or
-------------------------
6.5, SGC and Company will preserve and keep in full force and effect their
respective corporate existence and the corporate existence of each other Credit
Party and all rights and franchises material to their respective businesses;
provided, however, that SGC and Company shall not be required to preserve any
- -------- -------
such right, license or franchise, or corporate or other existence of any other
Credit Party (other than Sahara Resorts, Casino Properties, Hacienda Hawaiian
and Company), if the Board of Directors of SGC and such Credit Party, as the
case may be, shall determine in good faith in accordance with their respective
charters that the preservation thereof is no longer desirable in the conduct of
the business of SGC, and its Subsidiaries, taken as a whole, and Company and
that the loss thereof is not adverse in any material respect to the Holders and
will not have a Material Adverse Effect.
5.4 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION. SGC and Company will,
----------------------------------------------
and will cause each of their respective Subsidiaries to, pay all taxes,
assessments and other governmental charges imposed upon it or any of its
properties or assets or in respect of any of its income, businesses or
franchises before any penalty accrues thereon, and all claims (including,
without limitation, claims for labor, services, materials and supplies) for sums
that have become due and payable and that by law have or may become a Lien upon
any of its properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto; provided that no such charge or claim
--------
need be paid if being contested in good faith by appropriate proceedings timely
instituted and diligently conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor. SGC and Company will not, nor will they permit any of their
respective Subsidiaries to, file or consent to the filing of any consolidated
income tax return with any Person (other than SGC, Company or any of their
respective Subsidiaries). To the extent that the terms and provisions of the
Deeds of Trust regarding payment of taxes and assessments on
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the Premises and Improvements conflicts with the terms and provisions of this
Agreement, the terms and provisions of the Deeds of Trust shall govern.
5.5 MAINTENANCE OF PROPERTIES; INSURANCE. SGC and Company will, and will
------------------------------------
cause each of their respective Subsidiaries to, maintain or cause to be
maintained in good repair, working order and condition, ordinary wear and tear
excepted, all material properties used or useful in the business of SGC, Company
and their respective Subsidiaries (including, without limitation, intellectual
property) and from time to time will make or cause to be made all appropriate
repairs, renewals and replacements thereof. SGC and Company will maintain or
cause to be maintained, with financially sound and reputable insurers, insurance
with respect to their respective properties and businesses and the properties
and businesses of their respective Subsidiaries against loss or damage of the
kinds customarily carried or maintained under similar circumstances by
corporations of established reputation engaged in similar businesses. To the
extent that the terms and provisions regarding the payment of insurance
contained in the Deeds of Trust or Security Agreements conflict with the terms
and provisions of this subsection 5.5, the terms and provisions of the Deeds of
Trust and Security Agreements shall govern.
5.6 COMPLIANCE WITH LAWS, ETC. SGC and Company shall, and shall cause each
--------------------------
of their respective Subsidiaries to, comply in all material respects with the
requirements of all applicable laws, rules, regulations and orders of any
governmental authority, including but not limited to all applicable
Environmental Laws and Gaming Laws, noncompliance with which could reasonably be
expected to cause a Material Adverse Effect.
5.7 ENVIRONMENTAL DISCLOSURE AND INSPECTION.
---------------------------------------
A. Company shall exercise due diligence in order to comply and use
its best efforts to cause (i) all tenants under any leases or occupancy
agreements affecting any portion of the Facilities and (ii) all other Persons on
or occupying such property, to comply with all Environmental Laws.
B. After the occurrence and during the continuance of an Event of
Default or otherwise at any time upon the reasonable request of any Holder or
Holders holding not less than 50% of the principal amount of either the Tranche
A Notes or the Tranche B Notes, Company agrees that such Holder may, from time
to time and in its sole and absolute discretion, retain, at Company's expense,
an independent professional consultant to review any report relating to
Hazardous Material prepared by or for Company and, whether or not any such
report exists, upon reasonable notice to Company, to conduct its own
investigation of the Facilities, and SGC and Company each agree to use their
respective best efforts to obtain permission for the professional consultant of
such Holder or Holders to conduct its own investigation of the Facilities,
Company hereby grants to Collateral Agent and its agents, employees, consultants
and contractors the right to enter into or on to the Facilities to perform such
tests on such property as are reasonably necessary to conduct such a review
and/or investigation. Any such investigation of the Facilities shall be
conducted, unless otherwise
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agreed to by Company and the requesting Holder, during normal business hours
and, to the extent reasonably practicable, shall be conducted with prior notice.
Company and Holders each hereby acknowledge and agree that any report of any
investigation conducted at the request of Holders pursuant to this subsection
5.7 will be obtained and shall be used by such Holder(s) for the purposes of
Holders' internal credit analysis, to monitor the Notes and to protect Holders'
security interests created by the Basic Documents.
C. Company shall promptly advise Holders in writing and in reasonable
detail of (i) any Release of any Hazardous Material on or relating to the
Facilities required to be reported to any federal, state or local governmental
or regulatory agency under any applicable Environmental Laws, (ii) any and all
written communications with respect to any Environmental Claims or with respect
to any Release of Hazardous Material required to be reported to any federal,
state or local governmental or regulatory agency, (iii) any remedial action
taken by Company or, to Company's or SGC's knowledge, any other Person in
response to (x) any Hazardous Material on, under or about the Facilities, or (y)
any Environmental Claim that reasonably could have a Material Adverse Effect,
(iv) Company's discovery of any occurrence or condition on any real property
adjoining or in the vicinity of the Facilities that reasonably could cause the
Facilities or any part thereof to be subject to (x) any restrictions on the
ownership or transferability thereof or (y) any material restriction on the
occupancy or use thereof under any Environmental Laws, and (v) any request for
information from any governmental agency that indicates such agency is
investigating whether Company may be potentially responsible for a Release of
Hazardous Material.
D. Company shall promptly notify Holders of any action that Company
has taken or proposes to take that reasonably could be expected to subject
Company to Environmental Claims, laws, rules or regulations (including, without
limitation, laws, rules and regulations requiring additional environmental
permits or licenses) not theretofore applicable to the Facilities or operations
of Company.
E. Company shall, at its own expense, provide copies of such
documents or information as any Holder may reasonably request in relation to any
matters disclosed pursuant to this subsection 5.7.
5.8 REMEDIAL ACTION REGARDING HAZARDOUS MATERIAL. Company shall promptly
--------------------------------------------
take any and all necessary remedial action in connection with the presence,
storage, use, disposal, transportation or Release of any Hazardous Material on,
under or about the Facilities in order to comply with all applicable
Environmental Laws and Governmental Authorizations. In the event Company
undertakes any remedial action with respect to any Hazardous Material on, under
or about the Facilities, Company shall conduct and complete such remedial action
in compliance with all applicable Environmental Laws and other applicable legal
requirements (including lawful policies, orders and directives of federal, state
and local governmental authorities).
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5.9 DISPOSAL OF COMPANY STOCK; RESTRICTIONS ON SUBSIDIARIES. SGC and
-------------------------------------------------------
Company shall cause Sahara Resorts to own not less than 87% of the capital stock
and other equity securities of Company and Casino Properties and Hacienda
Hawaiian to own all of the other capital stock and equity securities of Company;
provided that Company may engage in one Permitted Equity Financing if all
- --------
transaction documentation is in form and substance satisfactory to more than 50%
in aggregate principal amount of the Holders of the Tranche B Notes and the
proceeds thereof are applied to repay in whole or in part the Notes pursuant to
subsection 2.5, acquire and pledge to the Collateral Agent SFHI Notes or acquire
and pledge to the Collateral Agent 10 1/4% notes outstanding under the Hacienda
Indenture.
5.10 USE OF PROCEEDS. Company shall use the cash proceeds of the Notes on
---------------
the Effective Date to acquire the Henderson Facility pursuant to the Henderson
Transfer Documents and shall cause Santa Fe Valley on the Effective Date to
repay all amounts outstanding under the Existing Henderson Mortgage Documents.
5.11 RIGHT OF FIRST REFUSAL. In the event that SGC, Company or any of their
----------------------
respective Affiliates desire to refinance the Notes or any other Indebtedness of
Company pursuant to any debt financing with a Person other than SunAmerica or
one or more of its Affiliates (such financing, a "Third Party Financing"), SGC
and Company shall first obtain from such Person a bona fide written proposal (a
"Third Party Proposal") to provide such Third Party Financing which shall state
all of the material terms and conditions of the Third Party Financing, including
the applicable principal amount, interest rate, maturity and amortization and
fees thereof, and SGC and Company shall deliver copies of such Third Party
Proposal to SunAmerica together with other information reasonably required by
SunAmerica with respect to such Third Party Financing. Notwithstanding anything
herein to the contrary, a Third Party Financing shall not include a Permitted
Equity Financing.
SunAmerica or one or more of its designees shall then have the right to
provide any Third Party Financing upon the same terms and conditions stated in
the Third Party Proposal by giving written notice of their willingness to
provide such financing to Company within 5 Business Days of receipt by
SunAmerica of such Third Party Proposal and other information referred to in the
preceding paragraph, it being understood that if SunAmerica or one or more of
its designees elects to provide Third Party Financing, such Persons shall have a
reasonable period of time, and in any event not less than 30 days to close such
Third Party Financing. If SunAmerica or one or more of its designees elect or
are deemed to elect not to provide such Third Party Financing, then Company may
enter into the Third Party Financing on the same terms and conditions as set
forth in the Third Party Proposal delivered to SunAmerica. If the terms of the
Third Party Financing are changed from those set forth in the Third Party
Proposal delivered to the SunAmerica in any manner that is favorable to the
lender, then Company shall be obligated to deliver to SunAmerica written notice
of such changes and SunAmerica or one of more of its designees will again have a
right to provide the Third Party Financing on the basis of such changed terms in
accordance with the terms and provisions (and within the time periods set forth)
above. If Company fails to consummate the Third Party Financing within six (6)
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months after delivery of the Third Party Proposal to SunAmerica, then Company
shall be obligated to redeliver the Third Party Proposal to SunAmerica prior to
consummating such Third Party Financing with a third party, and SunAmerica or
one or more of its designees will again have a right to provide the Third Party
Financing in accordance with the terms and provisions (and within the time
periods set forth) above.
In no event shall this subsection 5.11 or any election by any Holders
to provide a Third Party Financing constitute a deferral or waiver of any
required payment under any Basic Document or other term or provision of any
Basic Document.
5.12 SINGLE PURPOSE ENTITY/SEPARATENESS. Company represents, warrants and
----------------------------------
covenants as follows:
(i) the purpose for which the Company is organized shall be limited
solely to (a) owning, holding, selling, leasing, transferring, and exchanging
the Facilities and the SFHI Notes owned by Company as further provided herein
and any 10 1/4% notes outstanding under the Hacienda Indenture acquired with the
proceeds of a Permitted Equity Financing as further provided herein, (b)
entering into the Note Purchase Agreement, other Basic Documents, the Henderson
Property Documents and the Wet 'N Wild Documents, (c) refinancing the Facilities
in connection with a permitted repayment of the Notes and (d) transacting any
and all lawful business for which Corporation may be organized under Nevada law
that is incident, necessary and appropriate to accomplish the foregoing.
(ii) Company does not own and will not own any asset or property other
than (a) the Facilities and the SFHI Notes and any 10 1/4% notes outstanding
under the Hacienda Indenture acquired with the proceeds of a Permitted Equity
Financing as further provided herein, (b) the capital stock of the Henderson
Subsidiary and (c) incidental personal property necessary for and used or to be
used in connection with the ownership of the Facilities. The Henderson
Subsidiary does not own and will not own any asset or property other than,
concurrently or after the Henderson Release Date if the Henderson Facility is
transferred to the Henderson Development Subsidiary, the capital stock of the
Henderson Development Subsidiary.
(iii) Company has not made and will not make any loans or advances to
any entity or person (including any Affiliate of Company), and shall not acquire
obligations or securities of any such Affiliates other than the SFHI and any 10
1/4% notes outstanding under the Hacienda Indenture acquired with the proceeds
of a Permitted Equity Financing as further provided herein Notes or as expressly
permitted hereby.
(iv) Company is and will remain solvent and Company will pay it debts
and liabilities from its assets as the same shall become due.
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(v) Company has done or caused to be done and will do all things
necessary to observe organizational formalities and preserve its existence, and
Company will not, nor will Company permit any of its shareholders to, amend,
modify or otherwise change Articles III or V of the articles of incorporation
and bylaws, or other organizational documents of Company without the prior
written consent of Requisite Holders.
(vi) Company will maintain all of its books, records, financial
statements and bank accounts separate from those of its Affiliates. Company
assets will not be listed as assets on the financial statement of any other
entity other than on the consolidated financial statements of SGC and Saraha
Resorts. Company shall maintain its books, records, resolutions and agreements
as official records.
(vii) Company will be, and at all times will hold itself out to the
public as, a legal entity separate and distinct from any other entity (including
any Affiliate of Company), shall correct any known misunderstanding regarding
its status as a separate entity, shall conduct business in its own name, shall
not identify itself or any of its Affiliates as a division or part of any other
Affiliate and shall maintain and utilize a separate telephone number and
separate stationery invoices and checks.
(viii) Company will maintain adequate capital for the normal
obligations reasonably foreseeable in a business of its size and character and
in light of its contemplated business operations.
(ix) Company will not commingle the funds and other assets of Company
with those of any of its Affiliates or any other Person, and will not
participate in any cash management system with any such party.
(x) Company will not commingle its assets with those of any other
person or entity and will hold all of its assets in its own name.
(xi) Company will not hold itself out as being responsible for the
debts or obligations of any other person.
(xii) Company shall at all times cause there to be at least one duly
appointed member of its board of directors (an "Independent Director") to be an
individual who is not at the time of initial appointment and has not been at any
time during the preceding five (5) years: (a) a stockholder of more than 5% of
the capital stock of Company or any of its Affiliates, or an officer, employee,
partner, attorney or counsel of the Company or any of its Affiliates; (b) a
customer, supplier or other person who derives more than 10% of its purchases or
revenues from its activities with the Company or any of its Affiliates; (c) a
person or other entity controlling or under common control with any such
stockholder, partner, customer, supplier or other person (other than solely as a
result of being a director of any of the foregoing); or (d) a member of the
immediate family of any such stockholder, officer, employee, partner,
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customer, supplier or other person. (As used herein, the term "control" means
the possession, directly or indirectly, of the power to direct or cause the
direction of management, policies or activities of a person or entity, whether
through ownership of voting securities, by contract or otherwise.)
(xiii) Company shall not cause or permit the board of directors of
Company to take any action which, under the terms of any articles of
incorporation or by-laws requires the vote of an Independent Director unless at
the time of such action there shall be at least one member who is an Independent
Director and the directors of Company, including the Independent Director, shall
have participated in such vote and all of such directors shall have voted
affirmatively to authorize such action.
(xiv) The stationery, invoices, and checks utilized by Company or
utilized to collect its funds or pay its expenses shall bear its own name and
shall not bear the name of any other entity unless such entity is clearly
designated as being Company's agent.
(xv) Company shall correct any known misunderstanding regarding its
separate identity.
(xvi) Company shall not identify itself as a division of any other
person or entity.
SECTION 6. NEGATIVE COVENANTS OF SGC AND COMPANY
SGC and Company each hereby covenants and agrees that, until payment in
full of all of the Obligations, unless Requisite Holders shall otherwise give
prior written consent, SGC and Company shall perform and shall cause each of
their respective Subsidiaries to perform, all covenants in this Section 6.
6.1 RESTRICTED JUNIOR PAYMENTS AND LOWDEN FAMILY PAYMENTS. SGC and Company
-----------------------------------------------------
will not, and will not permit any of their Subsidiaries to, directly or
indirectly, declare, make or pay any Restricted Junior Payment; provided that so
--------
long as no Event of Default or Potential Event of Default has occurred and is
continuing, Company may dividend or otherwise distribute SFHI Notes to SGC to
the extent expressly permitted under subsection 2.5F.
SGC and Company will not, and will not permit any of their Subsidiaries
to, directly or indirectly, make or pay Lowden Family Payments except that (i)
Paul Lowden may be paid a salary during each fiscal year not to exceed the
salary and bonus paid to Paul Lowden during the fiscal year ending September 30,
1997, as disclosed in writing by SGC to the Initial Holders prior to the
Effective Date (the "Lowden Family Disclosure"), (ii) the other members of the
Lowden Family that are currently employed by Company as disclosed in the Lowden
Family Disclosure may be paid a salary not to exceed the amount set forth in the
Lowden
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Family Disclosure, (iii) Paul Lowden and the other members of the Lowden Family
described in clause (ii) above may receive health benefits extended generally to
employees or executive officers of SGC or its Subsidiaries and may also receive
other non-cash benefits described in the Lowden Family Disclosure and payable
generally to other employees or executive officers of SGC and its Subsidiaries
and (iv) the debt owed by LICO, a company owned by Paul Lowden, to Hacienda
Hotel, as further described in the Lowden Family Disclosure, may be reduced as a
result of the offset of such debt against the one-time bonus payable to Paul
Lowden in 1988 as described in the Lowden Family Disclosure.
6.2 LIENS AND RELATED MATTERS.
-------------------------
A. PROHIBITION ON LIENS. Company shall not, and SGC and Company
shall cause Sahara Resorts and each other Credit Party (other than SGC) to not,
directly or indirectly, create, incur, assume or permit to exist any Lien on or
with respect to any property or asset of any kind (including any document or
instrument in respect of goods or accounts receivable) of Company, Sahara
Resorts or any other Credit Party (other than SGC), whether now owned or
hereafter acquired, or any income or profits therefrom, or file or permit the
filing of, or permit to remain in effect, any financing statement or other
similar notice of any Lien with respect to any such property, asset, income or
profits under the Uniform Commercial Code of any State or under any similar
recording or notice statute, except:
(i) Permitted Encumbrances; and
(ii) Company may grant Liens to Collateral Agent pursuant to the Basic
Documents; and
(iii) Sahara Resorts, Casino Properties and Hacienda Hawaiian may
grant non-recourse second priority Liens in the capital stock of Company
that secures the Henderson Construction Financing provided that Collateral
Agent and the lenders providing the Henderson Construction Financing shall
have entered into intercreditor arrangements in form and substance
satisfactory to Requisite Holders which provides, among other things, that
such second priority liens do not have any voting or other rights or
remedies of any nature with respect to such capital stock or Sahara Resorts,
Casino Properties or Hacienda Hawaiian, including, without limitation, a
covenant not to file a petition commencing any proceeding seeking to
liquidate or adjudicate the Company as bankrupt or insolvent, prior to the
indefeasible payment in full of the Obligations.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company, Sahara Resorts,
or any other Credit Party (other than SGC) shall create or assume any Lien upon
any of its properties or assets, whether now owned or hereafter acquired, other
than Liens excepted by the provisions of subsection 6.2A, it shall make or cause
to be made effective provision whereby the Obligations will be secured by such
Lien equally and ratably with any and all other Indebtedness secured thereby as
long as any such Indebtedness shall be so secured; provided
--------
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that, notwithstanding the foregoing, this covenant shall not be construed as a
consent by Requisite Holders to the creation or assumption of any such Lien not
permitted by the provisions of subsection 6.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific
property encumbered to secure payment of particular Indebtedness permitted
hereunder, Company, Sahara Resorts, and each other Credit Party (other than SGC)
shall not enter into any agreement prohibiting the creation or assumption of any
Lien upon any of its properties or assets, whether now owned or hereafter
acquired.
6.3 WHEN SGC MAY MERGE, ETC. SGC shall not consolidate with or merge with
------------------------
or into or sell, assign, transfer or lease all or substantially all of its
properties and assets as an entirety to any Person, or permit any Person to
merge with or into SGC unless:
(i) SGC shall be the continuing Person, or the Person (if other than
SGC) formed by such consolidation or into which SGC is merged or to which
the properties and assets of SGC, substantially as an entirety are
transferred (the "surviving entity") shall be a corporation organized and
existing under the laws of the United States or any State thereof or the
District of Columbia and shall expressly assume, by an agreement
supplemental hereto, executed and delivered to Collateral Agent, in form
satisfactory to Collateral Agent, all the obligations of SGC, under this
Agreement, the SGC Guaranty and the other Basic Documents and this
Agreement, the SGC Guaranty and the other Basic Documents shall remain in
full force and effect; and
(ii) immediately before and immediately after giving effect to such
transaction, no Event of Default and no Potential Event of Default shall
have occurred and be continuing.
In connection with any consolidation, merger, transfer or lease
contemplated by this subsection 6.3, SGC shall deliver, or cause to be
delivered, to Collateral Agent, in form and substance reasonably satisfactory to
Collateral Agent, an Officers' Certificate and an Opinion of Counsel, each
stating that such consolidation, merger, transfer or lease and the supplemental
agreement in respect thereto comply with this subsection 6.3 and that all
conditions precedent herein provided for relating to such transaction have been
complied with. Upon any consolidation or merger or any transfer of all or
substantially all of the assets of SGC in accordance with this subsection 6.3,
the successor corporation formed by such consolidation or into which SGC is
merged or to which such transfer is made, shall succeed to, and be substituted
for, and may exercise every right and power of, SGC under this Agreement with
the same effect as if such successor corporation had been named as SGC herein.
6.4 INDEBTEDNESS OF COMPANY AND SAHARA RESORTS. Company will not, and SGC
------------------------------------------
and Company will cause Sahara Resorts and each other Credit Party (other than
SGC) to not,
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directly or indirectly, create, incur, assume, guarantee or otherwise become or
remain directly or indirectly liable with respect to any Indebtedness except:
(i) Indebtedness in respect of the Notes;
(ii) Indebtedness arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently
drawn against insufficient funds in the ordinary course of business,
provided that such Indebtedness is extinguished within five business days of
its incurrence;
(iii) the obligations of Company under the Existing Wet 'N' Wild
Guaranty Agreement; and
(iv) Sahara Resorts may become and remain liable with respect to
Indebtedness under the Hacienda Indenture.
6.5 FUNDAMENTAL CHANGES. Company will not, and SGC and Company will cause
-------------------
Sahara Resorts and each other Credit Party (other than SGC) to not, (i) form,
acquire or otherwise permit to exist any Subsidiary or Joint Venture or any
investment in the Capital Stock or other ownership interest in any Person except
that Sahara Resorts, Casino Properties and the Hacienda Hawaiian may own the
capital stock set forth on Schedule 3.1B annexed hereto, (ii) liquidate or
dissolve, (iii) merge into or consolidate with any Person or (iv) sell or
otherwise transfer any Collateral except sales of obsolete equipment in the
ordinary course of business and except SFHI Notes or the Henderson Facility and
the Wet 'N Wild Facility as expressly contemplated by and subject to subsections
2.4E, 2.5B(ii), 2.5C(iii), 2.5C(iv) or 2.5F; provided, however, that nothing in
-------- -------
this subsection 6.4 shall prohibit the grant or creation of any Lien permitted
under subsection 6.2; provided further that a Permitted Equity Financing entered
-------- -------
into in accordance with this Agreement shall not be deemed to violate this
subsection 6.5.
6.6 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES. SGC and Company shall
---------------------------------------------
not, and shall not permit Sahara Resorts or any of their respective Subsidiaries
to, directly or indirectly, enter into or permit to exist any transaction
(including, without limitation, the purchase, sale, lease or exchange of any
property or the rendering of any service) with any holder of 5% or more of any
class of equity securities of SGC or with any Affiliate of SGC or of any such
holder, on terms that are less favorable to SGC, Company, Sahara Resorts or that
Subsidiary, as the case may be, than those that might be obtained at the time
from Persons who are not such a holder or Affiliate; provided that the foregoing
--------
restriction shall not apply to (i) any transaction between SGC and any of its
wholly-owned Subsidiaries (other than Company, Sahara Resorts or any other
Credit Party) or between any of its wholly-owned Subsidiaries (other than
Company, Sahara Resorts or any other Credit Party) or (ii) reasonable and
customary fees paid to members of the Boards of Directors of SGC and its
Subsidiaries.
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6.7 AMENDMENTS TO DOCUMENTS. Company shall not amend, modify, supplement,
-----------------------
extend, renew, alter or otherwise change the terms of any Wet 'N' Wild Document
except with the consent of the Holders of more than 50% of the Tranche B Notes,
which consent shall not be unreasonably withheld. Company shall not amend,
modify, supplement, alter or otherwise change in any respect or renew or extend
beyond February 1998 the Henderson Development Documents, unless (i) the
Henderson Release Date has occurred, (ii) the Holders of more than 50% of the
Tranche B Notes otherwise consent or (iii) Company causes Ranch and any of its
successors and assigns to enter into the Henderson Subordination Agreement, as
such Henderson Subordination Agreement may be amended, modified, supplemented,
altered or otherwise changed with the consent of the Holders of more than a
majority of the Tranche B Holders. Company shall not amend, modify, supplement,
alter or otherwise change the Permitted Equity Financing except with the consent
of Requisite Holders which consent shall not unreasonably withheld.
6.8 STAY, EXTENSION AND USURY LAWS. No Credit Party shall, nor shall they
------------------------------
permit any of their respective Subsidiaries to (to the extent each may lawfully
do so), at any time insist upon, plead or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law or any usury law or other
law that would prohibit or forgive any Credit Party from paying all or a portion
of the principal of or premium, if any, or interest on the Notes as contemplated
herein, wherever enacted, now or at any time hereinafter in force, or that may
materially affect the covenants or the performance by any Credit Party of their
respective obligations hereunder in a manner inconsistent with the provisions
hereof. Each of SGC and Company expressly waives all benefit or advantage of
any such law. If a court of competent jurisdiction prescribes that any Credit
Party may not waive its rights to take the benefit or advantage of any stay or
extension law or any usury law or other law in accordance with the prior
sentence, then the obligation to pay interest on the Notes shall be reduced to
the maximum legal limit under applicable law governing the interest payable in
connection with the Notes and any amount of interest or premium, if any, paid by
any Credit Party that is deemed illegal shall be deemed to have been a
prepayment of principal (without penalty) on the Notes.
6.9 GOVERNMENT REGULATION. SGC and Company shall not, and shall not permit
any of their respective Subsidiaries to, be or become subject to, regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
6.10 CONDUCT OF BUSINESS; DEVELOPMENT EXPENDITURES. SGC and Company will
not permit Company to engage in any business other than any business relating to
the Facilities. SGC and Company will not permit Casino Properties or Hacienda
Hawaiian to engage in any business other than holding the capital stock of
Company and, in the case of Hacienda Hawaiian, activities relating to its former
time share operations. Company shall not use any Collateral or the proceeds of
any Collateral, including but not limited to any payments received
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in respect of any SFHI Notes owned by Company or in respect of any Existing Wet
'N' Wild Lease Documents, for the payment of any costs, expenses or other
obligations (including fees and expenses of attorneys, accountants or other
professionals) relating to the improvement or development of the Henderson
Facility or the Wet 'N' Wild Facility. SGC and Company will not permit the
Henderson Subsidiary to engage in any business, except that, on or after the
Henderson Release Date, if the Henderson Facility is transferred to a Subsidiary
of the Henderson Subsidiary (the "Henderson Development Subsidiary"), the
Henderson Subsidiary may own the capital stock of the Henderson Development
Subsidiary and may guaranty indebtedness and other obligations of and pledge
such capital stock to secure the indebtedness and other obligations of the
Henderson Development Subsidiary. SGC and Company will not permit the Henderson
Development Subsidiary to engage in any busines other than any business relating
to the Henderson Facility.
SECTION 7. EVENTS OF DEFAULT
If any one or more of the following conditions or events ("Events of
Default") shall occur:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE. Failure by Company to pay any
---------------------------------
installment of principal of any Note when due, whether at stated maturity, by
acceleration, by notice of voluntary prepayment, by mandatory prepayment,
redemption or otherwise; or failure by Company to pay any interest on any Note
or any other amount due under this Agreement within 15 days after the date due;
or
7.2 DEFAULT IN OTHER AGREEMENTS. (i) Failure of any Credit Party or any of
---------------------------
their respective Subsidiaries to pay when due any principal of or interest on
any Indebtedness (other than Indebtedness referred to in subsection 7.1) in an
aggregate principal amount of $5,000,000 or more, in each case beyond the end of
any grace period provided therefor; or (ii) breach or default by any Credit
Party or any of their respective Subsidiaries with respect to any other material
term of any items of Indebtedness with an aggregate principal amount of
$5,000,000 or more or any loan agreement, mortgage, indenture or other agreement
relating to such Indebtedness, including but not limited to the SFHI Indenture
or the Pioneer Indenture, if the effect of such breach or default is to cause
that Indebtedness to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may
be; or (iii) breach or default by Company under any Wet 'N' Wild Document or by
Company under any Henderson Property Document if such breach or default is not
cured within any applicable grace period;
7.3 BREACH OF CERTAIN COVENANTS. Failure of SGC or Company to perform or
---------------------------
comply with any term or condition contained in subsection 2.5, 5.3, 5.9, 5.10 or
5.11 or Section 6 of this Agreement; or
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7.4 BREACH OF WARRANTY. Any representation, warranty, certification or
------------------
other statement made by any Credit Party or any of their respective Subsidiaries
in any Basic Document shall be false in any material respect on the date as of
which made; or
7.5 OTHER DEFAULTS UNDER BASIC DOCUMENTS. Any Credit Party shall default
------------------------------------
in the performance of or compliance with any term contained in this Agreement or
any of the other Basic Documents, other than any such term referred to in any
other subsection of this Section 7, and such default shall not have been
remedied or waived within 30 days after the earlier of (i) an officer of any
Credit Party becoming aware of such default or (ii) receipt by SGC or Company of
notice from any Holder of such default; or
7.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) A court
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having jurisdiction in the premises shall enter a decree or order for relief in
respect of any Credit Party or any of their respective material Subsidiaries in
an involuntary case under the Bankruptcy Code or under any other applicable
bankruptcy, insolvency or similar law now or hereafter in effect, which decree
or order is not stayed; or any other similar relief shall be granted under any
applicable federal or state law; or (ii) an involuntary case shall be commenced
against any Credit Party or any of their respective material Subsidiaries under
the Bankruptcy Code or under any other applicable bankruptcy, insolvency or
similar law now or hereafter in effect; or a decree or order of a court having
jurisdiction in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers over any
Credit Party or any of their respective material Subsidiaries, or over all or a
substantial part of its property, shall have been entered; or there shall have
occurred the involuntary appointment of an interim receiver, trustee or other
custodian of any Credit Party or any of their respective material Subsidiaries
for all or a substantial part of its property; or a warrant of attachment,
execution or similar process shall have been issued against any substantial part
of the property of any Credit Party or any of their respective material
Subsidiaries, and any such event described in this clause (ii) shall continue
for 60 days unless dismissed, bonded or discharged, it being understood that
"material Subsidiary" under subsections 7.6, 7.7 and 7.9 shall include SFHI,
Pioneer Finance, Pioneer Hotel Inc. and their respective successors; or
7.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC. (i) Any Credit
---------------------------------------------------
Party or any of their respective material Subsidiaries shall have an order for
relief entered with respect to it or commence a voluntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, or shall consent to the entry of an order for
relief in an involuntary case, or to the conversion of an involuntary case to a
voluntary case, under any such law, or shall consent to the appointment of or
taking possession by a receiver, trustee or other custodian for all or a
substantial part of its property; or any Credit Party or any of their respective
material Subsidiaries shall make any assignment for the benefit of creditors; or
(ii) any Credit Party or any of their respective material Subsidiaries shall be
unable, or shall fail generally, or shall admit in writing its inability, to pay
its debts as such debts become due; or the Board of Directors of any Credit
Party or any of their respective material Subsidiaries (or any committee
thereof) shall adopt any resolution or otherwise
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authorize any action to approve any of the actions referred to in clause (i)
above or this clause (ii); or
7.8 JUDGMENTS AND ATTACHMENTS. Any money judgment, writ or warrant of
-------------------------
attachment or similar process involving in the aggregate at any time an amount
in excess of $5,000,000 (in either case not adequately covered by insurance as
to which a solvent and unaffiliated insurance company has acknowledged coverage)
shall be entered or filed against any Credit Party or any of their respective
Subsidiaries or any of their respective assets and shall remain undischarged,
unvacated, unbonded or unstayed for a period of 60 days (or in any event later
than five days prior to the date of any proposed sale thereunder); or
7.9 DISSOLUTION. Any order, judgment or decree shall be entered against
-----------
any Credit Party or any of their respective material Subsidiaries decreeing the
dissolution or split up of any Credit Party or that Subsidiary and such order
shall remain undischarged or unstayed for a period in excess of 30 days; or
7.10 EMPLOYEE BENEFIT PLANS. There shall occur one or more ERISA Events
----------------------
which individually or in the aggregate results in or might reasonably be
expected to result in liability of the Credit Parties and their or any of their
ERISA Affiliates in excess of $500,000 during the term of this Agreement; or
there shall exist an amount of unfunded benefit liabilities (as defined in
Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension
Plans of the Credit Parties and their ERISA Affiliates (excluding for purposes
of such computation any Pension Plans with respect to which assets exceed
benefit liabilities), which exceeds $500,000; or
7.11 MATERIAL ADVERSE EFFECT. Any event or change shall occur that has
-----------------------
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect; or
7.12 INVALIDITY OF ENVIRONMENTAL INDEMNITIES OR GUARANTIES. Any
-----------------------------------------------------
Environmental Indemnity or any guaranty of the Obligations, including, without
limitation, the Guaranties, for any reason, other than the satisfaction in full
of all Obligations, ceases to be in full force and effect or is declared to be
null and void, or any guarantor or indemnitor, including but not limited to SGC,
Company or Sahara Resorts denies that it has any further liability under any
indemnity or guaranty or under any make-well agreement or under the
Environmental Indemnities or gives notice to such effect, in each case, to the
extent it relates to the Obligations; or
7.13 IMPAIRMENT OF COLLATERAL. (A) A judgment creditor of any Credit Party
------------------------
or any of their respective Subsidiaries shall obtain possession of any portion
of the Collateral under the Basic Documents by any means, including, without
limitation, levy, distraint, replevin or self-help, (B) any substantial portion
of the Collateral shall be taken by eminent domain or condemnation, (C) any of
the Basic Documents shall cease for any reason to be in full force and effect,
or any party thereto shall purport to disavow its obligations thereunder or
shall declare
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that it does not have any further obligations thereunder or shall contest the
validity or enforceability thereof or Holders shall cease to have a valid and
perfected first priority security interest in any Collateral therein except as
permitted under the terms of such Basic Document, or (D) Collateral Agent's
security interests or Liens, in each case on behalf of Holders, in Collateral
under the Basic Documents shall become otherwise impaired or unenforceable; or
7.14 OWNERSHIP OF COMPANY. (i) SGC shall cease to own all of the Capital
--------------------
Stock of Sahara Resorts or (ii) Sahara Resorts shall cease to own at least 87%
of the Capital Stock of Company (or, if the Permitted Equity Financing has
occurred and Company has issued equity securities in connection therewith,
Sahara Resorts shall cease to own not less than 51% of the common stock of
Company).
THEN in addition to all other remedies of the Collateral Agent or the Holders
hereunder, under the other Basic Documents or at law or equity, (i) upon the
occurrence of any Event of Default described in subsection 7.6 or 7.7, each of
the unpaid principal amount of and accrued interest on the Notes (to the full
extent permitted by applicable law) and all other Obligations shall
automatically become immediately due and payable; without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by SGC and Company, and (ii) upon the occurrence and during the
continuation of any other Event of Default, Requisite Holders or such other
Holders specified in the Intercreditor Agreement may, by written notice to
Company, declare all or a portion of the amounts described in clause (i) above
relating to the Notes and all other Obligations owed to Holders of the Notes to
be, and the same shall forthwith become immediately due and payable. Company
acknowledges, and the parties hereto agree, that each Holder has the right to
maintain its investment in the Notes free from repayment by Company (except as
herein specifically provided for). Notwithstanding anything to the contrary in
this paragraph or in the immediately succeeding paragraph, Holders of more than
50% of the Tranche B Notes may waive any Event of Default or Potential Event of
Default that has occurred (or rescind and annul any acceleration in accordance
with the succeeding paragraph) solely as a result of a breach or default under
the Pioneer Indenture other than an Event of Default arising under subsections
7.6 or 7.7 with respect to SGC.
Notwithstanding anything to the contrary contained in the preceding
paragraph except for the last sentence thereof, if at any time after an
acceleration of Obligations pursuant to such paragraph SGC and Company shall pay
all arrears of interest and all payments on account of principal which shall
have become due otherwise than as a result of such acceleration (with interest
on principal, premium (if any) and, to the extent permitted by law, on overdue
interest, at the rates specified in this Agreement and late charges) and all
Events of Default and Potential Events of Default (other than non-payment of the
principal of and accrued interest as aforesaid on the Obligations, in each case
which is due and payable solely by virtue of acceleration) shall be remedied or
waived pursuant to subsection 7.1, then Requisite Holders or such other Holders
specified in the Intercreditor Agreement, by written notice to SGC and Company,
may at their option rescind and annul such acceleration and its consequences;
but
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such action shall not affect any subsequent Event of Default or Potential Event
of Default or impair any right consequent thereon. The provisions of this
paragraph are intended merely to bind Holders to a decision which may be made at
the election of the percentage of Holders referenced above and are not intended
to benefit any Credit Party and do not grant any Credit Party the right to
require Holders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
SGC and Company hereby waive to the extent not prohibited by applicable
law which cannot itself be waived (i) all presentments, demands for performance,
notices of nonperformance (except to the extent required by the provisions
hereof), (ii) any requirement of diligence or promptness on the part of any
holder of Notes in the enforcement of its rights under the provisions of this
Agreement, (iii) any and all notices of every kind and description which may be
required to be given by any statute or rule of law (except to the extent
required by the provisions of this Agreement), and (iv) to the extent permitted
by applicable law, any defense of any kind (other than payment) which it may now
or hereafter have with respect to its liability under the Notes.
No course of dealing between any Credit Party or any of their
respective Subsidiaries and any Holder shall operate as a waiver of any of the
rights of any Holder under any Basic Document. No delay or omission in
exercising any right under any Basic Document shall operate as a waiver of such
right or any other right. A waiver on any one occasion shall not be construed
as a bar to or waiver of any right or remedy on any other occasion. The
remedies provided in this Section 7 are in addition to all rights and remedies
available to each Holder under the Basic Documents or any other document or by
law or equity.
In consideration of, among other things, Holders' agreement to acquire
the Notes, to the extent permitted by applicable law, Company agrees that if a
petition is filed by or against it commencing a case under the Bankruptcy Code
or if Company is the subject of any insolvency, bankruptcy, receivership,
readjustment of debt, dissolution, reorganization, liquidation or similar
proceeding, under state or federal law, voluntary or involuntary, Collateral
Agent on behalf of the Holders will be immediately and absolutely entitled to,
and Company hereby consents to, the following relief, singly, alternatively or
cumulatively, and Company will not object to, contest or oppose any motion,
application, complaint or other proceeding by Collateral Agent to obtain such
relief, and Company will take all actions necessary to enable Collateral Agent
to obtain such relief, including: (a) Collateral Agent shall be entitled to the
immediate termination of the automatic stay imposed by (S) 362 of the Bankruptcy
Code so as to enable it to exercise all of its rights and remedies under this
Agreement and the other Basic Documents or applicable law; (b) Collateral Agent
shall be entitled to the immediate dismissal of such case pursuant to (S)
305(a)(1) of the Bankruptcy Code (with attorney's fees and other costs), and
Company agrees that such dismissal will be in the interests of creditors and
itself; and (c) Collateral Agent shall be entitled to the immediate dismissal of
such case under (S) 1112(b) of the Bankruptcy Code for cause, and Company agrees
that the filing of such case by it shall per se be deemed to have been commenced
in bad faith
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and solely for the improper purpose of impeding once again the exercise of
Collateral Agent's rights and remedies with attendant unnecessary delay and
needless cost.
SECTION 8. COLLATERAL AGENT AND RELATIONS AMONG HOLDERS, ETC.
8.1 APPOINTMENT OF THE COLLATERAL AGENT, POWERS AND IMMUNITIES. Each
----------------------------------------------------------
Holder of Notes hereby irrevocably appoints and authorizes Collateral Agent to
act as its agent under the Basic Documents with such powers as are expressly
delegated to Collateral Agent by the terms of this Agreement and the other Basic
Documents, together with such other powers as are reasonably incidental thereto.
Collateral Agent (which term as used in this sentence and in subsections 8.5 and
8.6 hereof shall include reference to its Affiliates and the officers,
directors, employees and agents of Collateral Agent and of its Affiliates): (a)
shall not have any duties or responsibilities except those expressly set forth
in this Agreement or in any other Basic Document, or be a trustee for any
Holder; (b) shall not be required to take any action which is contrary to this
Agreement or any other Basic Document or the Intercreditor Agreement or
applicable law; (c) shall not be required to initiate or conduct any litigation
or collection proceedings hereunder or under any other Basic Document or the
Intercreditor Agreement; and (d) shall not be responsible for any action taken
or omitted to be taken by it hereunder or under any other Basic Document or the
Intercreditor Agreement or under any other document or instrument referred to or
provided for herein or therein or in connection herewith or therewith, except
for its own gross negligence or willful misconduct. Neither Collateral Agent nor
any Holder nor any of their respective Affiliates shall be responsible to any
other Holder for any recitals, statements, representations or warranties made by
any Credit Party or any other Person contained in this Agreement or in any
certificate or other document referred to or provided for in, or received by any
Holder under, this Agreement or any other Basic Document or the Intercreditor
Agreement, for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement, any other Basic Document or any other document
referred to or provided for herein or therein, for the creation, perfection or
priority of any Lien on or in any of the Collateral or for any failure by any
Credit Party or any other Person to perform its obligations hereunder or
thereunder. Collateral Agent may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents of
attorneys-in-fact selected by it with reasonable care. Except as otherwise
provided under this Agreement and the Intercreditor Agreement, Collateral Agent
shall take such action under the Basic Documents to which it is a party as shall
be directed by the Requisite Holders. As to any matters not expressly provided
for by any Basic Document or the Intercreditor Agreement, the Collateral Agent
shall not be required to take any action or exercise any discretion, but shall
be required to act or to refrain from acting upon instructions of the Requisite
Holders and shall in all cases be fully protected in acting, or in refraining
from acting, hereunder or under any other Basic Document in accordance with the
instructions of the Requisite Holders, and such instructions of the Requisite
Holders and any action taken or failure to act pursuant thereto shall be binding
on all of the Holders. These provisions of this Section 8 are solely for the
benefit of the Collateral Agent and the Holders and none of
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Company or the other Credit Parties shall have any rights as a third party
beneficiary of any of the provisions thereof.
8.2 RELIANCE BY COLLATERAL AGENT. Collateral Agent shall be entitled to
----------------------------
rely upon any certificate, notice or other document (including any cable,
telegram, telecopy or telex) believed by it to be genuine and correct and to
have been signed or sent by or on behalf of the proper Person or Persons, and
upon advice and statements of legal counsel, independent accountants and other
experts selected by Collateral Agent. Except as otherwise provided in the
Intercreditor Agreement, Collateral Agent agrees to make such demands and give
such notices under the Basic Documents as the Requisite Holders may request, to
take such action to enforce the Basic Documents or any guaranty or undertaking
under the Basic Documents and to foreclose upon, collect and dispose of the
Collateral or any portion thereof, or enforce any such guaranty or undertaking,
and to release any part of the Collateral as may be directed by the Requisite
Holders; provided, however, that neither the consent nor the direction of the
-------- -------
Requisite Holders shall be required for the release of any part of the
Collateral which is otherwise permitted under this Agreement or the other Basic
Documents. Collateral Agent may at any time request directions from the
Requisite Holders with respect to this Agreement or the other Basic Documents or
the Intercreditor Agreement as to any course of action or other matter relating
hereto or to such Collateral Documents or other Basic Documents or the
Intercreditor Agreement. Except as otherwise provided herein or in the
Collateral Documents or other Basic Documents or the Intercreditor Agreement,
directions given by the Requisite Holders to Collateral Agent hereunder shall be
binding on all the Holders for all purposes. Each Holder agrees not to take any
action whatsoever to enforce any term or provision of this Agreement, or any of
the other Basic Documents or to enforce any of its rights in respect of the
Collateral or in connection with any guaranties or undertakings given in any of
the Basic Documents, except through Collateral Agent in accordance with this
Agreement.
8.3 DEFAULTS. Collateral Agent shall not be deemed to have knowledge or
--------
notice of the occurrence of a Potential Event of Default or Event of Default
unless Collateral Agent has received written notice from a Holder or Company
referring to this Agreement, describing such Potential Event of Default or Event
of Default and stating that such notice is a "Notice of Default". In the event
that Collateral Agent receives such a notice of the occurrence of a Potential
Event of Default or Event of Default, Collateral Agent shall give notice thereof
to the Holders. Collateral Agent shall (subject to the last sentence of
subsection 8.5 hereof) take such action with respect to such Potential Event of
Default or Event of Default as shall be reasonably directed by the Requisite
Holders except as otherwise provided in the Intercreditor Agreement; provided
--------
that, unless and until Collateral Agent shall have received such directions,
Collateral Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Potential Event of Default
or Event of Default as it shall deem advisable in the best interest of the
Holders except to the extent that this Agreement expressly requires that such
action be taken, or not taken, only with the consent or upon the authorization
of the Requisite Holders or all of the Holders.
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8.4 RIGHTS AS A HOLDER. With respect to the Notes held by Collateral
------------------
Agent, it shall have the same rights and powers hereunder as any Holder and may
exercise the same as though it was not acting as Collateral Agent and the terms
"Holder" or "Holders" shall, unless the context otherwise indicates, include the
Collateral Agent in its individual capacity. Collateral Agent may (without
having to account therefor to any Holder) accept deposits from, extend credit
(on a secured or unsecured basis) to and generally engage in any kind of
financing, insurance, trust or other business with any Credit Party or any of
its Affiliates, as if it was not acting as Collateral Agent. Each Holder and
its Affiliates may (without having to account therefor to Collateral Agent, or
any other Holder) accept deposits from, extend credit (on a secured or unsecured
basis) to and generally engage in any kind of financing, insurance, trust or
other business with any Credit Party or any of its Affiliates, as if it was not
acting as a Holder.
8.5 INDEMNIFICATION. Each Holder agrees to indemnify Collateral Agent (to
---------------
the extent not reimbursed by SGC or Company), ratably in accordance with the
principal amount of Notes purchased by it, for any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may at any time
(including, without limitation, at any time following the payment of principal
of and/or interest on the Notes) be imposed on, incurred by or asserted against
Collateral Agent in any way relating to or arising out of this Agreement, any
other Basic Document or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby (including the costs
and expenses which SGC or Company is obligated to pay hereunder) or the
enforcement of any of the terms hereof or thereof or of any such other
documents; provided that no Holder shall be liable for any of the foregoing to
--------
the extent they arise from the Collateral Agent's gross negligence or wilful
misconduct. Collateral Agent shall be fully justified in refusing to take or to
continue to take any action hereunder or under the other Basic Documents unless
it shall first be indemnified to its satisfaction by the Holders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action.
8.6 NON-RELIANCE ON COLLATERAL AGENT AND OTHER HOLDERS. Each Holder
--------------------------------------------------
represents that it has, independently and without reliance on Collateral Agent
or any other Holder, and based on such documents and information as it has
deemed appropriate, made its own appraisal of the financial condition and
affairs of each Credit Party and their Affiliates and made its own decision to
purchase the Notes and agrees that it will, independently and without reliance
upon Collateral Agent or any other Holder, continue to make its own appraisals
and decisions in taking or not taking action under this Agreement as it shall
deem appropriate at the time. Neither Collateral Agent nor any Holder shall be
required to keep informed as to the performance or observance by any Credit
Party or any of their Affiliates under this Agreement or any other document
referred to or provided for herein or to make inquiry of, or to inspect the
properties or books of, any Credit Party or any of their Affiliates. Neither
the Collateral Agent nor any Holder shall have any duty or responsibility to
provide any Holder with any credit or other information concerning any Credit
Party or any of their Affiliates, which may come into the possession of
Collateral Agent or such Holder or any of its or their Affiliates.
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8.7 RESIGNATION OR REMOVAL OF COLLATERAL AGENT. Subject to the appointment
------------------------------------------
and acceptance of a successor Collateral Agent as provided below, Collateral
Agent may resign at any time by giving notice thereof to the Holders, SGC and
Company, and Collateral Agent may be removed at any time with or without cause
by the Requisite Holders. Upon any such resignation or removal, the Requisite
Holders shall have the right to appoint a successor Collateral Agent. If no
successor Collateral Agent shall have been so appointed by the Requisite Holders
and shall have accepted such appointment within 30 days after the retiring
Collateral Agent's giving of notice of resignation or the Requisite Holders'
removal of the retiring Collateral Agent, then the retiring Collateral Agent
may, on behalf of the Holders, appoint a successor Collateral Agent, which shall
be a financial institution with a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Collateral Agent
hereunder by a successor Collateral Agent, such successor Collateral Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Collateral Agent, and the retiring Collateral Agent
shall be discharged from its duties and obligations hereunder. Upon the
acceptance of any appointment as Collateral Agent, the retiring or removed
Collateral Agent under this Agreement shall promptly (i) transfer to such
successor Collateral Agent all sums, securities and other items of Collateral
held under any Basic Document, together with all records and other documents
necessary or appropriate in connection with the performance of the duties of the
successor Collateral Agent under each Basic Document and this Agreement, and
(ii) execute and deliver to such successor Collateral Agent such amendments to
financing statements, and take such other actions, as may be necessary or
appropriate in connection with the assignment to such successor of the security
interests created under each of the Basic Documents. After any retiring
Collateral Agent's resignation or removal hereunder as Collateral Agent, the
provisions of this paragraph shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as the
Collateral Agent.
8.8 AUTHORIZATION. Collateral Agent is hereby authorized by the Holders to
-------------
execute, deliver and perform in accordance with its terms each of the Basic
Documents to which the Collateral Agent is or is intended to be a party and each
Holder agrees to be bound by all of the agreements of Collateral Agent contained
in such Basic Documents.
8.9 VOTING RIGHTS IN RESPECT OF PLEDGED SFHI NOTES. Company and Holders
----------------------------------------------
agree that the Holders of more than 50% in aggregate principal amount of the
Tranche B Notes may exercise all of the voting and other consensual rights with
respect to the SFHI Notes as contemplated by Section 13 of the Company Security
Agreement and that the Collateral Agent may rely and act upon any instruction
with respect thereto received from such Holders.
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SECTION 9. MISCELLANEOUS
9.1 AMENDMENTS AND WAIVERS.
----------------------
A. No amendment, modification, termination or waiver of any provision
of this Agreement, the Notes or the other Basic Documents, or consent to any
departure by any Credit Party therefrom, shall in any event be effective without
the written concurrence of Requisite Holders or, to the extent expressly
provided herein, the Holders of the percentage of and type of Notes expressly
provided herein; provided that any such amendment, modification, termination,
--------
waiver or consent which: (i) reduces the requisite percentage of Holders or the
principal balance of the Notes that must consent to an amendment or waiver of an
Event of Default; (ii) reduces the rate of or changes the time for payment of
interest on any Notes; (iii) reduces the principal amount of or extends the
final maturity of any Note, or reduces the redemption price of the Notes; (iv)
changes the currency of payment for any payment on the Notes; (v) changes the
definition of or the requirements of SGC or Company or any of their respective
Subsidiaries upon the occurrence of a Change in Control; (vi) changes in any
manner the provisions contained in this subsection 9.1A or (vii) reduces the
requisite percentage of Holders or the principal balance of the Notes necessary
to amend or modify the provisions as set forth in clauses (i) through (vii)
shall be effective only with respect to the applicable Holders consenting
thereto if evidenced by a writing signed by or on behalf of such Holders.
Holders of the requisite percentage of Notes considering any such proposed
amendment, modification, termination or waiver may elect to approve or
disapprove any such proposal in their sole discretion except as otherwise
expressly provided herein. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 9.1 shall be binding upon each
Holder at the time outstanding, and each future Holder, if signed by SGC, on SGC
and, if signed by Company, on Company.
B. Solely for the purpose of determining whether Holders of the
requisite percentage of the Notes then outstanding approved or consented to any
amendment, modification, termination or waiver to be given under this Agreement
or the Notes, or have directed the taking of any action provided herein or in
the Notes to be taken upon the direction of the Holders of a specified
percentage of the aggregate amount of Notes then outstanding, Notes directly or
indirectly owned by any Credit Party or any of their respective Subsidiaries
shall be deemed not to be outstanding.
9.2 EXPENSES. Whether or not the transactions contemplated hereby shall be
--------
consummated, SGC and Company jointly and severally agree to pay promptly (i) all
the actual reasonable costs and expenses of preparation of the Basic Documents
and of creating and perfecting Liens in favor of Collateral Agent, SunAmerica
and the other Holders or otherwise relating to the Collateral pursuant to any
Basic Document, including filing and recording fees
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and expenses, title insurance, environmental studies and surveys; (ii) all the
reasonable costs of furnishing all opinions by counsel for each Credit Party
(including without limitation any opinions requested by Collateral Agent or any
other Holder as to any legal matters arising hereunder) and of each Credit
Party's performance of and compliance with all agreements and conditions on its
part to be performed or complied with under this Agreement and the other Basic
Documents including, without limitation, with respect to confirming compliance
with environmental and insurance requirements; (iii) the reasonable fees,
expenses and disbursements of counsel to Collateral Agent and any Holder holding
a majority in principal amount of either the Tranche A Notes or the Tranche B
Notes (including allocated costs of internal counsel) in connection with the
negotiation, preparation, execution and administration of the Basic Documents
and any consents, amendments, waivers or other modifications hereto or thereto
and any other documents or matters requested by any Credit Party; (iv) all other
actual reasonable costs and expenses incurred by Collateral Agent or any Holder
holding a majority of the principal amount of either the Tranche A or the
Tranche B Notes in connection with the negotiation, preparation and execution of
the Basic Documents and the transactions contemplated hereby and thereby; and
(v) after the occurrence of an Event of Default, all costs and expenses,
including reasonable attorneys' fees (including allocated costs of internal
counsel) and costs of settlement, incurred by Collateral Agent and any Holder in
enforcing any Obligations of or in collecting any payments due from any Credit
Party hereunder or under the other Basic Documents by reason of such Event of
Default or in connection with any refinancing or restructuring of the credit
arrange ments provided under this Agreement in the nature of a "work-out" or
pursuant to any insolvency or bankruptcy proceedings.
9.3 INDEMNITY. In addition to the payment of expenses pursuant to
---------
subsection 9.2, whether or not the transactions contemplated hereby shall be
consummated, SGC and Company jointly and severally agree to defend, indemnify,
pay and hold harmless Collateral Agent, each Holder, and the officers,
directors, employees, agents and Affiliates of Collateral Agent and each Holder
(collectively called the "INDEMNITEES") from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including without limitation the reasonable fees and disbursements of counsel
for such Indemnitees) in connection with any investigative, administrative or
judicial proceeding commenced or threatened by any Person, whether or not any
such Indemnitee shall be designated as a party or a potential party thereto),
whether direct, indirect or consequential and whether based on any federal,
state or foreign laws, statutes, rules or regulations (including without
limitation securities and commercial laws, statutes, rules or regulations and
Environmental Laws), on common law or equitable cause or on contract or
otherwise, that may be imposed on, incurred by, or asserted against any such
Indemnitee, in any manner relating to or arising out of this Agreement or the
other Basic Documents or the transactions contemplated hereby or thereby
(including without limitation Holders' agreement to purchase any Notes or the
use or intended use of the proceeds of such purchase) or the statements
contained in any commitment letter delivered by any Holder to any Credit Party
with respect thereto (collectively called the "INDEMNIFIED LIABILITIES");
provided that SGC and Company shall not have any obligation to any Indemnitee
- --------
hereunder with respect
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to any Indemnified Liabilities to the extent such Indemnified Liabilities arise
solely from the gross negligence or willful misconduct of that Indemnitee as
determined by a final judgment of a court of competent jurisdiction. To the
extent that the undertaking to defend, indemnify, pay and hold harmless set
forth in the preceding sentence may be unenforceable because it is violative of
any law or public policy, SGC and Company shall contribute the maximum portion
that it is permitted to pay and satisfy under applicable law to the payment and
satisfaction of all Indemnified Liabilities incurred by the Indemnitees or any
of them.
9.4 RATABLE SHARING.
---------------
A. Subject to the Intercreditor Agreement, the Holders of Tranche A
Notes hereby agree among themselves that if any of them shall, whether by
voluntary payment, by realization upon security, through the exercise of any
right of set-off, by counterclaim or cross action or by the enforcement of any
right under any Basic Document or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code, receive payment or
reduction of a proportion of the aggregate amount of principal, interest, fees
and other amounts then due and owing to that Holder with respect to the Tranche
A Notes hereunder or under the other Basic Document (collectively, the
"AGGREGATE TRANCHE A AMOUNTS DUE" to such Holder) which is greater than the
proportion received by any other Holder of Tranche A Notes in respect of the
Aggregate Tranche A Amounts Due to such other Holder, then the Holder receiving
such proportionately greater payment shall (i) notify each other Holder of
Tranche A Notes of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Tranche A Amounts Due to
the other Holders of Tranche A Notes so that all such recoveries of Aggregate
Tranche A Amounts Due shall be shared by all Holders of Tranche A Notes in
proportion to the Aggregate Tranche A Amounts Due to them; provided that if all
--------
or part of such proportionately greater payment received by such purchasing
Holder is thereafter recovered from such Holder upon the bankruptcy or
reorganization of any Credit Party or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such purchasing Holder ratably to the extent of such recovery, but without
interest. SGC and Company expressly consent to the foregoing arrangement and
agree that any Holder of a participation so purchased may exercise any and all
rights of set-off or counterclaim with respect to any and all monies owing by
SGC and Company to that Holder with respect thereto as fully as if that Holder
were owed the amount of the participation held by that Holder.
B. Subject to the Intercreditor Agreement, the Holders of Tranche B
Notes hereby agree among themselves that if any of them shall, whether by
voluntary payment, by realization upon security, through the exercise of any
right of set-off, by counterclaim or cross action or by the enforcement of any
right under any Basic Document or otherwise, or as adequate protection of a
deposit treated as cash collateral under the Bankruptcy Code, receive payment or
reduction of a proportion of the aggregate amount of principal, interest, fees
and
76
<PAGE>
other amounts then due and owing to that Holder with respect to the Tranche
B Notes hereunder or under the other Basic Document (collectively, the
"AGGREGATE TRANCHE B AMOUNTS DUE" to such Holder) which is greater than the
proportion received by any other Holder of Tranche B Notes in respect of the
Aggregate Tranche B Amounts Due to such other Holder, then the Holder receiving
such proportionately greater payment shall (i) notify each other Holder of
Tranche B Notes of the receipt of such payment and (ii) apply a portion of such
payment to purchase participations (which it shall be deemed to have purchased
from each seller of a participation simultaneously upon the receipt by such
seller of its portion of such payment) in the Aggregate Tranche B Amounts Due to
the other Holders of Tranche B Notes so that all such recoveries of Aggregate
Tranche B Amounts Due shall be shared by all Holders of Tranche B Notes in
proportion to the Aggregate Tranche B Amounts Due to them; provided that if all
--------
or part of such proportionately greater payment received by such purchasing
Holder is thereafter recovered from such Holder upon the bankruptcy or
reorganization of any Credit Party or otherwise, those purchases shall be
rescinded and the purchase prices paid for such participations shall be returned
to such purchasing Holder ratably to the extent of such recovery, but without
interest. SGC and Company expressly consent to the foregoing arrangement and
agree that any Holder of a participation so purchased may exercise any and all
rights of set-off or counterclaim with respect to any and all monies owing by
SGC and Company to that Holder with respect thereto as fully as if that Holder
were owed the amount of the participation held by that Holder.
C. Subject to subsection 9.4A and 9.4B above and the Intercreditor
Agreement, and in addition to any other rights Collateral Agent or any Holder
may have under law or in equity, if any amount shall at any time be due and
owing by SGC or Company under this Agreement or the other Basic Documents,
Collateral Agent or such Holder, as the case may be, is authorized at any time
or from time to time, without notice (any such notice being hereby expressly
waived), to set off and to appropriate and to apply any and all deposits
(general or special, including but not limited to indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness of Collateral Agent or Holder, as the case may be, owing to SGC or
Company or any other Credit Party and any other property of SGC or Company or
any other Credit Party held by Collateral Agent or Holder, as applicable to or
for the credit or the account of SGC or Company or any other Credit Party
against and on account of the Obligations and liabilities of SGC or Company or
such other Credit Party to Collateral Agent or any Holder, as applicable.
9.5 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be given
-------------------------
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or would otherwise be within the limitations of, another covenant shall not
avoid the occurrence of an Event of Default or Potential Event of Default if
such action is taken or condition exists.
9.6 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
77
<PAGE>
personally served, telexed or sent by telefacsimile or United States mail or
courier service and shall be deemed to have been given when delivered in person
or by courier service, upon receipt of telefacsimile or telex if sent prior to
5:00 p.m. on a Business Day (and otherwise such facsimile or telex shall be
deemed received on the next Business Day), or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed. For the purposes hereof, the address of each party hereto shall be as
set forth under such party's name on the signature pages hereof or such other
address as shall be designated by such Person in a written notice delivered to
the other parties hereto.
9.7 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
------------------------------------------------------
A. All representations, warranties and agreements made in or pursuant
to the Basic Documents shall survive the execution and delivery of this
Agreement and the purchase of the Notes hereunder.
B. Notwithstanding anything in this Agreement or implied by law to
the contrary, the agreements of SGC and Company set forth in subsections 3.13,
9.2, 9.3 and 9.4 and the agreements of Holders set forth in subsection 9.4 shall
survive the payment of the Notes and the termination of this Agreement.
9.8 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No failure or
-----------------------------------------------------
delay on the part of any Holder in the exercise of any power, right or privilege
hereunder or under any other Basic Document shall impair such power, right or
privilege or be construed to be a waiver of any default or acquiescence therein,
nor shall any single or partial exercise of any such power, right or privilege
preclude other or further exercise thereof or of any other power, right or
privilege. All rights and remedies existing under this Agreement and the other
Basic Documents are cumulative to, and not exclusive of, any rights or remedies
otherwise available.
9.9 MARSHALLING; PAYMENTS SET ASIDE. No Holder shall be under any
-------------------------------
obligation to marshal any assets in favor of any Credit Party or any other party
or against or in payment of any or all of the Obligations. To the extent that
SGC or Company or any other Credit Party makes a payment or payments to any
Holder, any Holder enforces any security interests or exercises its rights of
set-off, and such payment or payments or the proceeds of such enforcement or
set-off or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, any other state or federal
law, common law or any equitable cause, then, to the extent of such recovery,
the obligation or part thereof originally intended to be satisfied, and all
Liens, rights and remedies therefor or related thereto, shall be revived and
continued in full force and effect as if such payment or payments had not been
made or such enforcement or set-off had not occurred.
78
<PAGE>
9.10 SEVERABILITY. In case any provision in or obligation under this
------------
Agreement or the other Basic Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
9.11 OBLIGATIONS SEVERAL; INDEPENDENT NATURE OF HOLDERS' RIGHTS. The
----------------------------------------------------------
obligations of Holders hereunder are several and no Holder shall be responsible
for the obligations of any other Holder hereunder. Nothing contained herein or
in any other Basic Document, and no action taken by Holders pursuant hereto or
thereto, shall be deemed to constitute Holders as a partnership, an association,
a joint venture or any other kind of entity. The amounts payable at any time
hereunder to each Holder shall be a separate and independent debt, and each
Holder shall be entitled to protect and enforce its rights arising out of this
Agreement and it shall not be necessary for any other Holder to be joined as an
additional party in any proceeding for such purpose.
9.12 HEADINGS. Section and subsection headings in this Agreement are
--------
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
9.13 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
--------------
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEVADA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
9.14 SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon the
----------------------
parties hereto and their respective successors and assigns and shall inure to
the benefit of the parties hereto and the successors and assigns of Holders;
Subject to subsection 2.8, SunAmerica and any other Holder may assign the Notes
to its Affiliates or one or more entities, and upon such assignment, any such
Affiliate or entity shall become a Holder for all purposes of the Basic
Documents. The Holders shall have the right to sell participations in their
Notes; provided that, if no Event of Default has occurred and is continuing,
--------
Company shall have the right to consent (which consent shall not be unreasonably
withheld or delayed) to the sale of any participation in the Notes by SunAmerica
that causes SunAmerica and its Affiliates to hold less than 51% of the legal or
beneficial interests in all outstanding Tranche B Notes. Neither SGC's,
Company's or any other Credit Party's rights or obligations hereunder or under
the other Basic Documents nor any interest herein or therein may be assigned or
delegated by SGC, Company or such other Credit Party without the prior written
consent of all Holders.
9.15 CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
----------------------------------------------
PROCEEDINGS BROUGHT AGAINST ANY CREDIT PARTY ARISING OUT OF OR RELATING TO THIS
AGREEMENT OR ANY OTHER BASIC DOCUMENT OR ANY
79
<PAGE>
OBLIGATION MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEVADA, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT COMPANY ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS AGREEMENT,
SUCH OTHER BASIC DOCUMENT OR SUCH OBLIGATION. SGC and Company hereby agree that
service of all process in any such proceeding in any such court may be made by
registered or certified mail, return receipt requested, to SGC or Company, as
applicable, at its address provided in subsection 9.6, such service being hereby
acknowledged by SGC and Company to be sufficient for personal jurisdiction in
any action against SGC or Company, as applicable, in any such court and to be
otherwise effective and binding service in every respect. Nothing herein shall
affect the right to serve process in any other manner permitted by law or shall
limit the right of any Holder to bring proceedings against SGC or Company in the
courts of any other jurisdiction.
9.16 WAIVER OF JURY TRIAL. EACH OF THE PARTIES TO THIS AGREEMENT HEREBY
--------------------
AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF
ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY OF THE OTHER BASIC
DOCUMENTS OR ANY DEALINGS BETWEEN THEM RELATING TO THE SUBJECT MATTER OF THIS
TRANSACTION OR THE RELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this
waiver is intended to be all-encompassing of any and all disputes that may be
filed in any court and that relate to the subject matter of this transaction,
including without limitation contract claims, tort claims, breach of duty claims
and all other common law and statutory claims. Each party hereto acknowledges
that this waiver is a material inducement to enter into a business relationship,
that each has already relied on this waiver in entering into this Agreement, and
that each will continue to rely on this waiver in their related future dealings.
Each party hereto further warrants and represents that it has reviewed this
waiver with its legal counsel and that it knowingly and voluntarily waives its
jury trial rights following consultation with legal counsel. THIS WAIVER IS
IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING,
AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS
OR MODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER BASIC DOCUMENTS OR TO ANY
OTHER DOCUMENTS OR AGREEMENTS RELATING TO THE SECURITIES MADE HEREUNDER. In the
event of litigation, this Agreement may be filed as a written consent to a trial
by the court.
9.17 COUNTERPARTS; EFFECTIVENESS. This Agreement and any amendments,
---------------------------
waivers, consents or supplements hereto or in connection herewith may be
executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall
80
<PAGE>
constitute but one and the same instrument; signature pages may be detached from
multiple separate counterparts and attached to a single counterpart so that all
signature pages are physically attached to the same document. This Agreement
shall become effective upon the execution of a counterpart hereof by each of the
parties hereto.
9.18 CONFLICTS WITH OTHER BASIC DOCUMENTS. To the fullest extent possible,
------------------------------------
the terms and provisions of the other Basic Documents shall be read in
conjunction with the terms and provisions of this Agreement and shall supplement
the terms and provisions hereof. To the extent that any terms and provisions
hereunder conflict with the terms provisions of any of the other Basic
Documents, the stricter provisions shall govern.
9.19 RELEASE OF CERTAIN COLLATERAL. If the Henderson Release Date has
-----------------------------
occurred the Collateral Agent shall enter into documentation reasonably
requested by the Company at the Company's expense to release the Henderson
Facility from the lien of the Henderson Deed of Trust and the other Basic
Documents. If the Wet 'N Wild Facility is transferred in accordance with
subsection 2.5B(ii), the Notes have been redeemed to the extent required by
subsection 2.5B(ii) and the consent of the Holders of more than 50% in aggregate
principal amount of the Tranche B Notes has been obtained as contemplated by
subsection 2.5B(ii), the Collateral Agent shall enter into documentation
reasonably requested by the Company at the Company's expense to release the Wet
'N Wild Facility from the lien of the Wet 'N Wild Deed of Trust and the other
Basic Documents.
81
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
SANTA FE GAMING CORPORATION
(formerly named Sahara Gaming Corporation),
a Nevada corporation
By: Thomas K. Land
----------------------------------
Its: SVP & CEO
---------------------------------
Notice Address:
SANTA FE GAMING CORPORATION,
2535 Las Vegas Blvd. South
Las Vegas, Nevada 89109
Attention: Thomas Land
SAHARA LAS VEGAS CORP.,
a Nevada corporation
By: Thomas K. Land
----------------------------------
Its: Treasurer & Asst. Secretary
---------------------------------
Notice Address:
Sahara Las Vegas Corp.
2535 Las Vegas Blvd. South
Las Vegas, Nevada 89109
Attention: Thomas Land
S-1
<PAGE>
SUNAMERICA LIFE INSURANCE COMPANY,
By: Stephen P. Hanover
-----------------------------------
Its: Authorized Agent
----------------------------------
Notice Address:
SunAmerica Life Insurance Company
1 SunAmerica Center
Century City
Los Angeles, CA 90067-6022
Attention: Peter McMillan
and Steven Hanover
SUNAMERICA, INC.
By: Stephen P. Hanover
-----------------------------------
Its: Authorized Agent
----------------------------------
Notice Address:
SunAmerica, Inc.
1 SunAmerica Center
Century City
Los Angeles, CA 90067-6022
Attention: Peter McMillan
and Steven Hanover
S-2
<PAGE>
CREDIT SUISSE FIRST BOSTON MORTGAGE
CAPITAL LLC
By: William Adamski
----------------------------
Its: Vice President
---------------------------
Notice Address:
Credit Suisse First Boston Mortgage
Capital LLC
11 Madison Avenue
New York, New York 10010
Attention: Richard Luftig
S-3
<PAGE>
SCHEDULE 2
INFORMATION RELATING TO HOLDERS
-------------------------------
Principal Amount Principal Amount
Name and Address of Purchaser of Tranche A Notes of Tranche B Notes
- ----------------------------- ------------------ ------------------
SunAmerica Life Insurance Company 0 $20,500,000
One SunAmerica Center
Century City
Los Angeles, California 90067
(1) All payments by wire transfer of
immediately available funds to:
Wire Instructions
-----------------
CITIBANK
ABA # 021-001-089
A/C # 40573831
RE: SunAmerica Life Insurance Company/
Sahara Las Vegas
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and written
confirmations of such wire transfers:
SunAmerica Investments, Inc.
c/o SunAmerica Center
Investment Accounting 36-05
Los Angeles, California 90067-6022
Sched. 2-1
<PAGE>
Credit Suisse First Boston Mortgage $37,000,000 0
Capital LLC
11 Madison Avenue
New York, New York 10010
(1) All payments by transfer of
immediately available funds to:
New Wire Instructions
---------------------
CITIBANK NYC
ABA # 021-0000-89
A/C # 09253506
Attn: STEWART HOCHBERG
with sufficient information
to identify the source and
application of such funds.
(2) All notices of payments and written
confirmations of such wire transfers:
Credit Suisse First Boston Mortgage
Capital LLC
11 Madison Avenue
New York, New York 10010
Attention: Richard Luftig
Sched. 2-2
<PAGE>
EXHIBIT 10.95
SAHARA LAS VEGAS CORP.
TRANCHE A-1 NOTE DUE DECEMBER 15, 1999
November 26, 1997
$17,000,000 Los Angeles, California
THIS NOTE MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT AS PERMITTED BY THIS LEGEND. TRANSFERS OF THIS NOTE ARE SUBJECT TO
RESTRICTIONS AS PROVIDED IN THE NOTE PURCHASE AGREEMENT REFERENCED BELOW,
AND THIS NOTE IS ALSO SUBJECT TO THE INTERCREDITOR AGREEMENT DATED AS OF
NOVEMBER 25, 1997 BY AND AMONG SUNAMERICA LIFE INSURANCE COMPANY,
SUNAMERICA, INC., AND CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, AS
SUCH NOTE PURCHASE AGREEMENT AND INTERCREDITOR AGREEMENT, AS THE CASE MAY
BE, MAY BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME.
THE HOLDER HEREOF, BY ITS ACCEPTANCE OF THIS NOTE, REPRESENTS, ACKNOWLEDGES
AND AGREES THAT IT WILL NOT REOFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER
THIS NOTE EXCEPT IN COMPLIANCE WITH SUCH NOTE PURCHASE AGREEMENT AND
INTERCREDITOR AGREEMENT.
FOR VALUE RECEIVED, the undersigned, SAHARA LAS VEGAS CORP. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Nevada, hereby promises to pay to CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC or registered assigns ("Holder"), the principal sum of
SEVENTEEN MILLION DOLLARS ($17,000,000) on December 15, 1999 with interest
(computed on the basis of a 360-day year of twelve 30-day months) on the unpaid
balance thereof at 9.75% per annum from the date hereof, payable semi-annually
on June 20 and December 20, commencing on December 20, 1997 and the stated
maturity of this Note, and, to the extent permitted by law, upon the occurrence
of and continuation of an Event of Default (as defined in the Note Purchase
Agreement), interest, payable, on demand, at a rate per annum from time to time
equal to 2% per annum above the interest rate specified above. In addition to
interest as set forth herein, if any payment of principal and/or interest or any
other amount payable hereunder or under the other Basic Documents (as defined in
the Note Purchase Agreement) is not paid when due, Company shall pay to each
Holder, on demand, a late charge of five cents ($0.05) for each dollar so
overdue in order to compensate such Holder for its loss of the timely use of the
money and frustration of such Holder in the meeting of its financial
commitments. Nothing contained herein shall constitute an extension of any due
date for, or a waiver of any obligation to pay, any amounts payable hereunder or
under the other Basic Documents.
1
<PAGE>
Payments of principal of, interest on and late charges with respect to
this Note are to be made in lawful money of the United States of America as
provided in the Note Purchase Agreement referred to below.
This Note is one of the Tranche A Notes (herein called the "Notes")
issued pursuant to the Second Amended and Restated Note Purchase Agreement,
dated as of November 25, 1997 (as from time to time amended, modified or
otherwise supplemented, the "Note Purchase Agreement"), among the Company, Santa
Fe Gaming Corporation, SunAmerica Life Insurance Company, as Collateral Agent,
and the Holders party thereto and is entitled to the benefits thereof. Each
holder of this Note will be deemed, by its acceptance hereof, to have made the
representation set forth in Section 2.9 of the Note Purchase Agreement.
This Note, together with the other notes issued pursuant to the Note
Purchase Agreement, are secured by the Deeds of Trust, the Company Security
Agreement and certain other Basic Documents (as such terms are defined in the
Note Purchase Agreement) and is guaranteed by the Guaranties (as such term is
defined in the Note Purchase Agreement).
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreement. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price and with the effect
provided in the Note Purchase Agreement.
2
<PAGE>
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Nevada
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
SAHARA LAS VEGAS CORP.
By: Thomas K. Land
--------------------------------
Title: Treasurer & Asst. Secretary
-----------------------------
S-1
<PAGE>
OPTION OF HOLDER TO ELECT REPURCHASE
If you want to elect to have this Note purchased by Company pursuant
to Section 2.5C(v) of the Note Purchase Agreement, check the box: [ ]
---------------
If you want to elect to have only part of this Note purchased by
Company pursuant to Section 2.5C(v) of the Note Purchase Agreement, state the
---------------
amount (which must be $1,000 or an integral multiple of $1,000):
$____________________
Date: ___________________ Signature: _____________________________
(Sign exactly as your name
appears on the other side
of this Note)
Signature Guarantee:
<PAGE>
SAHARA LAS VEGAS CORP.
TRANCHE A-2 NOTE DUE DECEMBER 15, 1999
November 26, 1997
$10,000,000 Los Angeles, California
THIS NOTE MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT AS PERMITTED BY THIS LEGEND. TRANSFERS OF THIS NOTE ARE SUBJECT TO
RESTRICTIONS AS PROVIDED IN THE NOTE PURCHASE AGREEMENT REFERENCED BELOW,
AND THIS NOTE IS ALSO SUBJECT TO THE INTERCREDITOR AGREEMENT DATED AS OF
NOVEMBER 25, 1997 BY AND AMONG SUNAMERICA LIFE INSURANCE COMPANY,
SUNAMERICA, INC., AND CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, AS
SUCH NOTE PURCHASE AGREEMENT AND INTERCREDITOR AGREEMENT, AS THE CASE MAY
BE, MAY BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME.
THE HOLDER HEREOF, BY ITS ACCEPTANCE OF THIS NOTE, REPRESENTS, ACKNOWLEDGES
AND AGREES THAT IT WILL NOT REOFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER
THIS NOTE EXCEPT IN COMPLIANCE WITH SUCH NOTE PURCHASE AGREEMENT AND
INTERCREDITOR AGREEMENT.
FOR VALUE RECEIVED, the undersigned, SAHARA LAS VEGAS CORP. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Nevada, hereby promises to pay to CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC or registered assigns ("Holder"), the principal sum of TEN
MILLION DOLLARS ($10,000,000) on December 15, 1999 with interest (computed on
the basis of a 360-day year of twelve 30-day months) on the unpaid balance
thereof at 9.75% per annum from the date hereof, payable semi-annually on June
20 and December 20, commencing on December 20, 1997 and the stated maturity of
this Note, and, to the extent permitted by law, upon the occurrence of and
continuation of an Event of Default (as defined in the Note Purchase Agreement),
interest, payable, on demand, at a rate per annum from time to time equal to 2%
per annum above the interest rate specified above. In addition to interest as
set forth herein, if any payment of principal and/or interest or any other
amount payable hereunder or under the other Basic Documents (as defined in the
Note Purchase Agreement) is not paid when due, Company shall pay to each Holder,
on demand, a late charge of five cents ($0.05) for each dollar so overdue in
order to compensate such Holder for its loss of the timely use of the money and
frustration of such Holder in the meeting of its financial commitments. Nothing
contained herein shall constitute an extension of any due date for, or a waiver
of any obligation to pay, any amounts payable hereunder or under the other Basic
Documents.
1
<PAGE>
Payments of principal of, interest on and late charges with respect to
this Note are to be made in lawful money of the United States of America as
provided in the Note Purchase Agreement referred to below.
This Note is one of the Tranche A Notes (herein called the "Notes")
issued pursuant to the Second Amended and Restated Note Purchase Agreement,
dated as of November 25, 1997 (as from time to time amended, modified or
otherwise supplemented, the "Note Purchase Agreement"), among the Company, Santa
Fe Gaming Corporation, SunAmerica Life Insurance Company, as Collateral Agent,
and the Holders party thereto and is entitled to the benefits thereof. Each
holder of this Note will be deemed, by its acceptance hereof, to have made the
representation set forth in Section 2.9 of the Note Purchase Agreement.
This Note, together with the other notes issued pursuant to the Note
Purchase Agreement, are secured by the Deeds of Trust, the Company Security
Agreement and certain other Basic Documents (as such terms are defined in the
Note Purchase Agreement) and is guaranteed by the Guaranties (as such term is
defined in the Note Purchase Agreement).
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreement. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price and with the effect
provided in the Note Purchase Agreement.
2
<PAGE>
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Nevada
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
SAHARA LAS VEGAS CORP.
By: Thomas K. Land
----------------------------------
Title: Treasurer & Asst. Secretary
-------------------------------
S-1
<PAGE>
OPTION OF HOLDER TO ELECT REPURCHASE
If you want to elect to have this Note purchased by Company pursuant
to Section 2.5C(v) of the Note Purchase Agreement, check the box: [ ]
---------------
If you want to elect to have only part of this Note purchased by
Company pursuant to Section 2.5C(v) of the Note Purchase Agreement, state the
---------------
amount (which must be $1,000 or an integral multiple of $1,000):
$____________________
Date: ___________________ Signature: _____________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
<PAGE>
SAHARA LAS VEGAS CORP.
TRANCHE A-2 NOTE DUE DECEMBER 15, 1999
November 26, 1997
$10,000,000 Los Angeles, California
THIS NOTE MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT AS PERMITTED BY THIS LEGEND. TRANSFERS OF THIS NOTE ARE SUBJECT TO
RESTRICTIONS AS PROVIDED IN THE NOTE PURCHASE AGREEMENT REFERENCED BELOW,
AND THIS NOTE IS ALSO SUBJECT TO THE INTERCREDITOR AGREEMENT DATED AS OF
NOVEMBER 25, 1997 BY AND AMONG SUNAMERICA LIFE INSURANCE COMPANY,
SUNAMERICA, INC., AND CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, AS
SUCH NOTE PURCHASE AGREEMENT AND INTERCREDITOR AGREEMENT, AS THE CASE MAY
BE, MAY BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME.
THE HOLDER HEREOF, BY ITS ACCEPTANCE OF THIS NOTE, REPRESENTS, ACKNOWLEDGES
AND AGREES THAT IT WILL NOT REOFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER
THIS NOTE EXCEPT IN COMPLIANCE WITH SUCH NOTE PURCHASE AGREEMENT AND
INTERCREDITOR AGREEMENT.
FOR VALUE RECEIVED, the undersigned, SAHARA LAS VEGAS CORP. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Nevada, hereby promises to pay to CREDIT SUISSE FIRST BOSTON
MORTGAGE CAPITAL LLC or registered assigns ("Holder"), the principal sum of TEN
MILLION DOLLARS ($10,000,000) on December 15, 1999 with interest (computed on
the basis of a 360-day year of twelve 30-day months) on the unpaid balance
thereof at 9.75% per annum from the date hereof, payable semi-annually on June
20 and December 20, commencing on December 20, 1997 and the stated maturity of
this Note, and, to the extent permitted by law, upon the occurrence of and
continuation of an Event of Default (as defined in the Note Purchase Agreement),
interest, payable, on demand, at a rate per annum from time to time equal to 2%
per annum above the interest rate specified above. In addition to interest as
set forth herein, if any payment of principal and/or interest or any other
amount payable hereunder or under the other Basic Documents (as defined in the
Note Purchase Agreement) is not paid when due, Company shall pay to each Holder,
on demand, a late charge of five cents ($0.05) for each dollar so overdue in
order to compensate such Holder for its loss of the timely use of the money and
frustration of such Holder in the meeting of its financial commitments. Nothing
contained herein shall constitute an extension of any due date for, or a waiver
of any obligation to pay, any amounts payable hereunder or under the other Basic
Documents.
1
<PAGE>
Payments of principal of, interest on and late charges with respect to
this Note are to be made in lawful money of the United States of America as
provided in the Note Purchase Agreement referred to below.
This Note is one of the Tranche A Notes (herein called the "Notes")
issued pursuant to the Second Amended and Restated Note Purchase Agreement,
dated as of November 25, 1997 (as from time to time amended, modified or
otherwise supplemented, the "Note Purchase Agreement"), among the Company, Santa
Fe Gaming Corporation, SunAmerica Life Insurance Company, as Collateral Agent,
and the Holders party thereto and is entitled to the benefits thereof. Each
holder of this Note will be deemed, by its acceptance hereof, to have made the
representation set forth in Section 2.9 of the Note Purchase Agreement.
This Note, together with the other notes issued pursuant to the Note
Purchase Agreement, are secured by the Deeds of Trust, the Company Security
Agreement and certain other Basic Documents (as such terms are defined in the
Note Purchase Agreement) and is guaranteed by the Guaranties (as such term is
defined in the Note Purchase Agreement).
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreement. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price and with the effect
provided in the Note Purchase Agreement.
2
<PAGE>
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Nevada
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
SAHARA LAS VEGAS CORP.
By: Thomas K. Land
---------------------------------
Title: Treasurer & Asst. Secretary
-------------------------------
S-1
<PAGE>
OPTION OF HOLDER TO ELECT REPURCHASE
If you want to elect to have this Note purchased by Company pursuant
to Section 2.5C(v) of the Note Purchase Agreement, check the box: [ ]
---------------
If you want to elect to have only part of this Note purchased by
Company pursuant to Section 2.5C(v) of the Note Purchase Agreement, state the
---------------
amount (which must be $1,000 or an integral multiple of $1,000):
$____________________
Date: ___________________ Signature: _____________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
<PAGE>
EXHIBIT 10.96
SAHARA LAS VEGAS CORP.
TRANCHE B-1 NOTE DUE DECEMBER 15, 1999
November 26, 1997
$5,000,000 Los Angeles, California
THIS NOTE MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT AS PERMITTED BY THIS LEGEND. TRANSFERS OF THIS NOTE ARE SUBJECT TO
RESTRICTIONS AS PROVIDED IN THE NOTE PURCHASE AGREEMENT REFERENCED BELOW,
AND THIS NOTE IS ALSO SUBJECT TO THE INTERCREDITOR AGREEMENT DATED AS OF
NOVEMBER 25, 1997 BY AND AMONG SUNAMERICA LIFE INSURANCE COMPANY,
SUNAMERICA, INC., AND CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, AS
SUCH NOTE PURCHASE AGREEMENT AND INTERCREDITOR AGREEMENT, AS THE CASE MAY
BE, MAY BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME.
THE HOLDER HEREOF, BY ITS ACCEPTANCE OF THIS NOTE, REPRESENTS, ACKNOWLEDGES
AND AGREES THAT IT WILL NOT REOFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER
THIS NOTE EXCEPT IN COMPLIANCE WITH SUCH NOTE PURCHASE AGREEMENT AND
INTERCREDITOR AGREEMENT.
FOR VALUE RECEIVED, the undersigned, SAHARA LAS VEGAS CORP. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Nevada, hereby promises to pay to OKGBD & Co., as nominee for
SUNAMERICA LIFE INSURANCE COMPANY or registered assigns ("Holder"), the
principal sum of FIVE MILLION DOLLARS ($5,000,000) on December 15, 1999 with
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the unpaid balance thereof at 13.25% per annum from the date hereof, payable
semi-annually on June 20 and December 20, commencing on December 20, 1997 and
the stated maturity of this Note, and, to the extent permitted by law, upon the
occurrence of and continuation of an Event of Default (as defined in the Note
Purchase Agreement), interest, payable, on demand, at a rate per annum from time
to time equal to 2% per annum above the interest rate specified above. In
addition to interest as set forth herein, if any payment of principal and/or
interest or any other amount payable hereunder or under the other Basic
Documents (as defined in the Note Purchase Agreement) is not paid when due,
Company shall pay to each Holder, on demand, a late charge of five cents ($0.05)
for each dollar so overdue in order to compensate such Holder for its loss of
the timely use of the money and frustration of such Holder in the meeting of its
financial commitments. Nothing contained herein shall constitute an extension
of any due date for, or a waiver of any obligation to pay, any amounts payable
hereunder or under the other Basic Documents.
1
<PAGE>
Payments of principal of, interest on and late charges with respect to
this Note are to be made in lawful money of the United States of America as
provided in the Note Purchase Agreement referred to below.
This Note is one of the Tranche B Notes (herein called the "Notes")
issued pursuant to the Second Amended and Restated Note Purchase Agreement,
dated as of November 25, 1997 (as from time to time amended, modified or
otherwise supplemented, the "Note Purchase Agreement"), among the Company, Santa
Fe Gaming Corporation, SunAmerica Life Insurance Company, as Collateral Agent,
and the Holders party thereto and is entitled to the benefits thereof. Each
holder of this Note will be deemed, by its acceptance hereof, to have made the
representation set forth in Section 2.9 of the Note Purchase Agreement.
This Note, together with the other notes issued pursuant to the Note
Purchase Agreement, are secured by the Deeds of Trust, the Company Security
Agreement and certain other Basic Documents (as such terms are defined in the
Note Purchase Agreement) and is guaranteed by the Guaranties (as such term is
defined in the Note Purchase Agreement).
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreement. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price and with the effect
provided in the Note Purchase Agreement.
2
<PAGE>
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Nevada
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
SAHARA LAS VEGAS CORP.
By: Thomas K. Land
_______________________________
Title: Treasurer & Asst. Secretary
____________________________
S-1
<PAGE>
OPTION OF HOLDER TO ELECT REPURCHASE
If you want to elect to have this Note purchased by Company pursuant
to Section 2.5C(v) of the Note Purchase Agreement, check the box: [_]
---------------
If you want to elect to have only part of this Note purchased by
Company pursuant to Section 2.5C(v) of the Note Purchase Agreement, state the
---------------
amount (which must be $1,000 or an integral multiple of $1,000):
$
____________________
Date: Signature:
___________________ _____________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
<PAGE>
SAHARA LAS VEGAS CORP.
TRANCHE B-2 NOTE DUE DECEMBER 15, 1999
November 26, 1997
$15,500,000 Los Angeles, California
THIS NOTE MAY NOT BE REOFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT AS PERMITTED BY THIS LEGEND. TRANSFERS OF THIS NOTE ARE SUBJECT TO
RESTRICTIONS AS PROVIDED IN THE NOTE PURCHASE AGREEMENT REFERENCED BELOW,
AND THIS NOTE IS ALSO SUBJECT TO THE INTERCREDITOR AGREEMENT DATED AS OF
NOVEMBER 25, 1997 BY AND AMONG SUNAMERICA LIFE INSURANCE COMPANY,
SUNAMERICA, INC., AND CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC, AS
SUCH NOTE PURCHASE AGREEMENT AND INTERCREDITOR AGREEMENT, AS THE CASE MAY
BE, MAY BE AMENDED, SUPPLEMENTED OR OTHERWISE MODIFIED FROM TIME TO TIME.
THE HOLDER HEREOF, BY ITS ACCEPTANCE OF THIS NOTE, REPRESENTS, ACKNOWLEDGES
AND AGREES THAT IT WILL NOT REOFFER, RESELL, PLEDGE OR OTHERWISE TRANSFER
THIS NOTE EXCEPT IN COMPLIANCE WITH SUCH NOTE PURCHASE AGREEMENT AND
INTERCREDITOR AGREEMENT.
FOR VALUE RECEIVED, the undersigned, SAHARA LAS VEGAS CORP. (herein
called the "Company"), a corporation organized and existing under the laws of
the State of Nevada, hereby promises to pay to OKGBD & Co., as nominee for
SUNAMERICA LIFE INSURANCE COMPANY or registered assigns ("Holder"), the
principal sum of FIFTEEN MILLION FIVE HUNDRED THOUSAND DOLLARS ($15,500,000) on
December 15, 1999 with interest (computed on the basis of a 360-day year of
twelve 30-day months) on the unpaid balance thereof at 13.25% per annum from the
date hereof, payable semi-annually on June 20 and December 20, commencing on
December 20, 1997 and the stated maturity of this Note, and, to the extent
permitted by law, upon the occurrence of and continuation of an Event of Default
(as defined in the Note Purchase Agreement), interest, payable, on demand, at a
rate per annum from time to time equal to 2% per annum above the interest rate
specified above. In addition to interest as set forth herein, if any payment of
principal and/or interest or any other amount payable hereunder or under the
other Basic Documents (as defined in the Note Purchase Agreement) is not paid
when due, Company shall pay to each Holder, on demand, a late charge of five
cents ($0.05) for each dollar so overdue in order to compensate such Holder for
its loss of the timely use of the money and frustration of such Holder in the
meeting of its financial commitments. Nothing contained herein shall constitute
an extension of any due date for, or a waiver of any obligation to pay, any
amounts payable hereunder or under the other Basic Documents.
1
<PAGE>
Payments of principal of, interest on and late charges with respect to
this Note are to be made in lawful money of the United States of America as
provided in the Note Purchase Agreement referred to below.
This Note is one of the Tranche B Notes (herein called the "Notes")
issued pursuant to the Second Amended and Restated Note Purchase Agreement,
dated as of November 25, 1997 (as from time to time amended, modified or
otherwise supplemented, the "Note Purchase Agreement"), among the Company, Santa
Fe Gaming Corporation, SunAmerica Life Insurance Company, as Collateral Agent,
and the Holders party thereto and is entitled to the benefits thereof. Each
holder of this Note will be deemed, by its acceptance hereof, to have made the
representation set forth in Section 2.9 of the Note Purchase Agreement.
This Note, together with the other notes issued pursuant to the Note
Purchase Agreement, are secured by the Deeds of Trust, the Company Security
Agreement and certain other Basic Documents (as such terms are defined in the
Note Purchase Agreement) and is guaranteed by the Guaranties (as such term is
defined in the Note Purchase Agreement).
This Note is a registered Note and, as provided in the Note Purchase
Agreement, upon surrender of this Note for registration of transfer, duly
endorsed, or accompanied by a written instrument of transfer duly executed, by
the registered holder hereof or such holder's attorney duly authorized in
writing, a new Note for a like principal amount will be issued to, and
registered in the name of, the transferee. Prior to due presentment for
registration of transfer, the Company may treat the person in whose name this
Note is registered as the owner hereof for the purpose of receiving payment and
for all other purposes, and the Company will not be affected by any notice to
the contrary.
The Company will make required prepayments of principal on the dates
and in the amounts specified in the Note Purchase Agreement. This Note is also
subject to optional prepayment, in whole or from time to time in part, at the
times and on the terms specified in the Note Purchase Agreement.
If an Event of Default, as defined in the Note Purchase Agreement,
occurs and is continuing, the principal of this Note may be declared or
otherwise become due and payable in the manner, at the price and with the effect
provided in the Note Purchase Agreement.
2
<PAGE>
This Note shall be construed and enforced in accordance with, and the
rights of the parties shall be governed by, the law of the State of Nevada
excluding choice-of-law principles of the law of such State that would require
the application of the laws of a jurisdiction other than such State.
SAHARA LAS VEGAS CORP.
By: Thomas K. Land
________________________________
Title: Treasurer & Asst. Secretary
_____________________________
S-1
<PAGE>
OPTION OF HOLDER TO ELECT REPURCHASE
If you want to elect to have this Note purchased by Company pursuant
to Section 2.5C(v) of the Note Purchase Agreement, check the box: [_]
---------------
If you want to elect to have only part of this Note purchased by
Company pursuant to Section 2.5C(v) of the Note Purchase Agreement, state the
---------------
amount (which must be $1,000 or an integral multiple of $1,000):
$
____________________
Date: Signature:
___________________ _____________________________
(Sign exactly as your name
appears on the other side of
this Note)
Signature Guarantee:
<PAGE>
EXHIBIT 10.97
WHEN RECORDED MAIL TO:
O'MELVENY & MYERS LLP
1999 Avenue of the Stars
Suite 700
Los Angeles, California 90067
Attention: Dean Pappas, Esq.
File No.: 843,112-044
- --------------------------------------------------------------------------------
SECOND AMENDMENT TO
DEED OF TRUST, FIXTURE FILING AND FINANCING STATEMENT
AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS
NOTICE: THIS INSTRUMENT SECURES FUTURE ADVANCES
THIS SECOND AMENDMENT TO DEED OF TRUST, FIXTURE FILING AND FINANCING
STATEMENT AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS (this "AMENDMENT") is
made and entered into as of this 25th day of November, 1997, by and between
SAHARA LAS VEGAS CORP., a Nevada corporation, as debtor and trustor ("TRUSTOR"),
and SUNAMERICA LIFE INSURANCE COMPANY, an Arizona corporation, as Collateral
Agent on behalf of itself and each of the Holders, as secured party and
beneficiary ("BENEFICIARY").
R E C I T A L S
- - - - - - - -
A. Pursuant to that certain Note Purchase Agreement dated as of January
16, 1996 (the "NOTE PURCHASE AGREEMENT"), by and among Sahara Gaming
Corporation, Trustor, and Beneficiary, Trustor issued and sold to the Holders
certain 12% Notes Due December 15, 1999 in a principal amount up to $20,000,000
(the "ORIGINAL NOTES"). The Original Notes were secured by, among other things,
the "Property" described in and pursuant to the Deed of Trust, Fixture Filing
and Financing Statement and Security Agreement with Assignment of Rents dated as
of January 16, 1996 and recorded in the Official Records of the County Recorder
of Clark County, Nevada on January 18, 1996, in Book 960118, as Instrument No.
00974 (the "DEED OF TRUST"), including, without limitation, the real property
described on Exhibit A attached hereto. All initially capitalized terms used
---------
herein without definition shall have the meanings given such terms in the Deed
of Trust.
B. Pursuant to that certain Amended and Restated Note Purchase Agreement
dated as of July 29, 1997 (the "AMENDED AND RESTATED NOTE PURCHASE AGREEMENT"),
by and among Santa Fe Gaming Corporation (formerly named Sahara Gaming
Corporation), a Nevada
1
<PAGE>
corporation ("SGC"), Trustor, Beneficiary, and SunAmerica, Inc., a Delaware
corporation ("SUNAMERICA"), (i) Trustor agreed to issue and sell to the Holders,
in addition to the Original Notes, certain Tranche A Notes in a principal amount
up to $15,000,000 (the "ORIGINAL TRANCHE A NOTES"), which Original Tranche A
Notes were issued on July 31, 1997, and certain Tranche B Notes in a principal
amount up to $5,000,000 (the "ORIGINAL TRANCHE B NOTES"), which Original Tranche
B Notes have not as of this date been issued, and (ii) the parties amended the
Deed of Trust pursuant to that certain First Amendment to Deed of Trust, Fixture
Filing and Financing Statement and Security Agreement with Assignment of Rents
dated as of July 31, 1997 and recorded in the Official Records of Clark County,
Nevada on July 31, 1997, in Book 970731, as Instrument No. 01719 to provide that
the Original Tranche A Notes and Original Tranche B Notes would be secured by
the Property pursuant to the Deed of Trust. The Original Notes, Original Tranche
A Notes and Original Tranche B Notes shall sometimes hereinafter be collectively
referred to as the "EXISTING NOTES".
C. Pursuant to and subject to the conditions set forth in that certain
Second Amended and Restated Note Purchase Agreement of even date herewith (the
"SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT"), by and between SGC,
Trustor, Beneficiary, SunAmerica and Credit Suisse First Boston Mortgage Capital
LLC, a Delaware limited liability company ("FIRST BOSTON"), SGC, Trustor,
Beneficiary, SunAmerica and First Boston agreed to: (i) amend and restate all
Existing Notes and the note facility described in the Amended and Restated Note
Purchase Agreement to provide for the issuance by Trustor of (x) certain Tranche
A Notes in a principal amount up to $37,000,000 (the "TRANCHE A NOTES"), and (y)
certain Tranche B Notes in a principal amount up to $20,500,000 (the "TRANCHE B
NOTES"), and (ii) amend the Deed of Trust to provide that such Tranche A Notes
and Tranche B Notes will be secured by, among other things, the Property
pursuant to the Deed of Trust.
D. The parties hereby desire to amend the Deed of Trust as necessary to
provide that the Deed of Trust secures Trustor's obligations under the Second
Amended and Restated Note Purchase Agreement, the Tranche A Notes and the
Tranche B Notes and to conform the same to the Second Amended and Restated Note
Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereby amend the Deed of Trust as follows:
1. All references in the Deed of Trust to the term "Note Purchase
Agreement" shall be deemed to refer to the Second Amended and Restated Note
Purchase Agreement.
2. All references in the Deed of Trust to the term "Notes" shall be deemed
to refer only to the Tranche A Notes and the Tranche B Notes, collectively, and
all references to the term "Basic Documents" shall be deemed to refer to the
Basic Documents described in the Second Amended and Restated Note Purchase
Agreement, as amended.
2
<PAGE>
3. All references in the Deed of Trust to the term "Security Agreement"
shall be deemed to refer to the Company Security Agreement, as amended.
4. All references in the Deed of Trust to the term "Environmental
Indemnity" shall be deemed to refer to the Company Environmental Indemnity, as
amended, and the Henderson Environmental Indemnity, collectively.
5. The second full paragraph on Page 7 of the Deed of Trust is hereby
deleted in its entirety and the following paragraph is substituted in its place
and stead:
"FIRST: Payment when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including
payment of amounts that would become due but for the operation of the
automatic stay under Section 362(a) of the Bankruptcy Code, 11 U.S.C.
(S)362(a)), of all obligations and liabilities of every nature of Trustor
now or hereafter existing under or arising out of or in connection with
that certain Second Amended and Restated Note Purchase Agreement dated as
of November 25, 1997, by and among Santa Fe Gaming Corporation (formerly
named Sahara Gaming Corporation), Trustor, Beneficiary, SunAmerica, Inc., a
Delaware corporation, and Credit Suisse First Boston Mortgage Capital LLC,
a Delaware limited liability company (the "SECOND AMENDED AND RESTATED NOTE
PURCHASE AGREEMENT") (it being acknowledged that all initially capitalized
terms used herein without definition shall have the meanings given such
terms in the Second Amended and Restated Note Purchase Agreement), and the
Tranche A Notes, whether for principal in the maximum principal amount of
Thirty-Seven Million Dollars ($37,000,000) in the aggregate or such
principal amount as may be advanced and remain unpaid, issued to the
Beneficiary and the other Holders to evidence such obligations and
liabilities, and the Tranche B Notes, whether for principal in the maximum
principal amount of Twenty Million Five Hundred Thousand Dollars
($20,500,000) in the aggregate or such principal amount as may be advanced
and remain unpaid, issued to the Beneficiary and the other Holders to
evidence such obligations and liabilities, together with any and all
renewals, extensions, amendments, modifications, rearrangements,
replacements, restatements, substitutions and addenda of or to such Tranche
A Notes and Tranche B Notes (herein referred to collectively as the
"NOTES"), or for interest (including, without limitation, interest that,
but for the filing of a petition in bankruptcy with respect to Trustor,
would accrue on such obligations), fees, expenses, indemnities or
otherwise, whether voluntary or involuntary, direct or indirect, absolute
or contingent, liquidated or unliquidated, whether or not jointly owed with
others, and whether or not from time to time decreased or extinguished and
later increased, created or incurred, and all or any portion of such
obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from
Beneficiary as a preference, fraudulent transfer or otherwise."
3
<PAGE>
6. The fourth full paragraph on Page 8 of the Deed of Trust is hereby
deleted in its entirety and the following paragraph is substituted in its place
and stead:
"It is the intention of Trustor, Beneficiary and the Holders that
all obligations secured hereby are obligatory and to the extent that the
obligations (or any portion thereof) are deemed not to be obligatory, then
this Deed of Trust shall be deemed an "instrument" (as defined in NRS
106.330, as amended or recodified from time to time) which secures "future
advances" (as defined in NRS 106.320, as amended or recodified from time to
time) and which is governed pursuant to NRS 106.300 through 106.400, as
amended and recodified from time to time ("NRS" means Nevada Revised
Statutes). In the event that the obligations (or any portion thereof) are
deemed not to be obligatory, it is the intention of the parties that the
Secured Obligations include the obligation of the Trustor to repay "future
advances" of "principal" (as defined in NRS 106.345, as amended or
recodified from time to time) in an amount up to $57,500,000, and that the
lien of this Deed of Trust secures the obligation of Trustor to repay all
such "future advances" with the priority set forth in NRS 106.370(1), as
amended or recodified from time to time."
7. Except as expressly amended and modified hereby, the Deed of
Trust shall remain in full force and effect. The obligations secured by the
Deed of Trust are hereby reconfirmed in their entirety and the Deed of Trust, as
amended, is hereby ratified by Trustor.
8. The parties hereto expressly disclaim any intent to effect a
novation or an extinguishment or discharge of any of the obligations secured by
the Deed of Trust or by any other document executed in connection with the
Second Amended and Restated Note Purchase Agreement by reason of this Amendment.
9. The obligations created by the Second Amended and Restated Note
Purchase Agreement and/or secured by the Deed of Trust are continuing
obligations and nothing contained in this Amendment shall be deemed to release,
terminate, subordinate or impair any lien, security interest or assignment
created or evidenced by the Deed of Trust.
10. This Amendment and the recordation hereof shall not prejudice,
limit or affect in any way any present or future rights, remedies, powers or
benefits available to Beneficiary under the Deed of Trust or any other documents
executed for the benefit of Beneficiary in connection with the Second Amended
and Restated Note Purchase Agreement.
11. The provisions of this Amendment shall be binding upon, and shall
inure to the benefit of, the successors and assigns of the parties hereto.
12. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which when taken together
shall constitute one and the same instrument. The signature and acknowledgment
pages of any counterpart may be detached therefrom without impairing the legal
effect of the signatures and acknowledgments
4
<PAGE>
thereto, provided such signature and acknowledgment pages are attached to any
other counterpart identical thereto except having additional signature and
acknowledgment pages executed by other parties to this Amendment attached
thereto.
13. This Amendment shall be governed by, and shall be construed and
enforced in accordance with, the internal laws of the State of Nevada, without
regard to conflicts of laws principles.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.
"TRUSTOR"
SAHARA LAS VEGAS CORP.,
a Nevada corporation
By: Paul Lowden
-----------------------------------
Its: President
----------------------------------
By: Thomas K. Land
-----------------------------------
Its: Treasurer & Asst. Secretary
----------------------------------
"BENEFICIARY"
SUNAMERICA LIFE INSURANCE COMPANY,
an Arizona corporation
By: Keith C. Honia
-----------------------------------
Its: Authorized Agent
----------------------------------
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ACKNOWLEDGMENTS
STATE OF ________________ )
)
COUNTY OF _______________ )
On _______________, 1997 before me, the undersigned, a Notary Public
in and for said State, personally appeared ____________________________________
and ______________________________________ personally known to me or proved to
me on the basis of satisfactory evidence to be the person(s) whose name(s)
is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature ________________________________
STATE OF CALIFORNIA )
)
COUNTY OF LOS ANGELES )
On _______________, 1997 before me, the undersigned, a Notary Public
in and for said State, personally appeared ___________________, personally known
to me or proved to me on the basis of satisfactory evidence to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me
that he/she/they executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature ________________________________
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
----------------------------------
The real property located in the County of Clark, State of Nevada and described
as follows:
Being a portion of the Northeast Quarter (NE 1/4) of Section 9 and a portion of
the Northwest Quarter (NW 1/4) of the Northwest Quarter (NW 1/4) of Section 10,
Township 21 South, Range 61 East, M.D.B.&M., Clark County, Nevada, described as
follows:
COMMENCING at the Northeast Corner (NE Cor) of the Northeast Quarter (NE 1/4) of
said Section 9; thence South 04 Degrees 43 Minutes 06 Seconds East along the
East Line of said Section 9, a distance of 896.80 feet to a point, said point
being the Northeast Corner (NE Cor) of that certain parcel of land conveyed by
HOTEL SECURITIES C. to EL RANCHO VEGAS by Corporation Deed recorded March 20,
1945 shown as Document No. 194417, Clark County, Nevada Official Records, said
point also being the POINT OF BEGINNING; thence South 87 Degrees 12 Minutes 23
Seconds East parallel to the North Line of said Section 9 a distance of 342.86
feet to the West Line of Paradise Road, thence South 00 Degrees 14 Minutes 47
Seconds West along said West Line of Paradise Road, a distance of 868.44 feet;
thence North 87 Degrees 12 Minutes 23 Seconds West parallel to the North Line of
said Section 9, a distance of 1572.55 feet to the East Line of Las Vegas
Boulevard South; thence North 28 Degrees 00 Minutes 00 Seconds East along said
East Line of Las Vegas Boulevard South, a distance of 958.89 feet; thence South
87 Degrees 12 Minutes 23 Seconds East parallel to the North Line of said Section
9, a distance of 782.72 feet to the POINT OF BEGINNING.
ASSESSOR'S PARCEL NUMBERS: 162-09-602-001
162-09-602-005
B-1
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EXHIBIT 10.98
EXHIBIT IV-B
[FORM OF SECOND AMENDMENT TO
COMPANY SECURITY AGREEMENT]
THIS SECOND AMENDMENT TO COMPANY SECURITY AGREEMENT (this "AMENDMENT")
is made and entered into as of this ____ day of November, 1997, by and between
SAHARA LAS VEGAS CORP., a Nevada corporation ("GRANTOR"), and SUNAMERICA LIFE
INSURANCE COMPANY, an Arizona corporation ("SUNAMERICA"), as Collateral Agent on
behalf of itself and each of the Holders ("SECURED PARTY").
R E C I T A L S
- - - - - - - -
A. Pursuant to that certain Note Purchase Agreement dated as of
January 16, 1996, by and among Santa Fe Gaming Corporation (formally Sahara
Gaming Corporation) ("SGC"), Grantor and SunAmerica (the "ORIGINAL NOTE PURCHASE
AGREEMENT"), Company issued and sold to SunAmerica certain 12% Notes Due
December 15, 1999 in a principal amount up to $20,000,000 (the "ORIGINAL
NOTES"), which Original Notes were secured by, among other things, that certain
Security Agreement dated as of January 16, 1996 between Grantor and Collateral
Agent (the "ORIGINAL COMPANY SECURITY AGREEMENT").
B. Pursuant to that certain Amended and Restated Note Purchase
Agreement dated as of July 29, 1997, by and among SGC, Grantor, Collateral
Agent, and SunAmerica, Inc. (the "AMENDED AND RESTATED NOTE PURCHASE
AGREEMENT"), (i) Company issued and sold to the Holders, in addition to the
Original Notes, certain additional Notes in a principal amount up to $15,000,000
(the "EXISTING NOTES"), and (ii) SGC and Company agreed that the Existing Notes
would be secured by, among other things, the Collateral pursuant to the Original
Company Security Agreement, as amended by that certain First Amendment to
Company Security Agreement dated as of July 29, 1997 (as so amended, the
"COMPANY SECURITY AGREEMENT").
C. Pursuant to that certain Second Amended and Restated Note
Purchase Agreement of even date herewith, by and among SGC, Grantor, Collateral
Agent, SunAmerica, Inc. ("SAI") and Credit Suisse First Boston Mortgage Capital
LLC ("CSFB") (the "NOTE PURCHASE AGREEMENT"), (i) Company restructured the Notes
issued to SunAmerica pursuant to the Original Note Purchase Agreement and the
Amended and Restated Note Purchase Agreement and agreed to issue and sell (x) to
CSFB certain Tranche A Notes in a principal amount up to $37,000,000, and (y) to
issue to SunAmerica certain Tranche B Notes in a principal amount up to
$20,500,000, and (ii) SGC and Company agreed that the Tranche A Notes and
Tranche B Notes would be secured by, among other things, the Collateral
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pursuant to the Company Security Agreement. All terms not otherwise defined
herein shall have the meanings set forth in the Note Purchase Agreement.
D. The parties hereby desire to amend the Company Security Agreement
as necessary to account for the Tranche A Notes and Tranche B Notes and to
conform the Company Security Agreement to the Note Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereby amend the Company Security Agreement as follows:
1. All references in the Company Security Agreement to the term
"Note Purchase Agreement" shall be deemed to refer to the Note Purchase
Agreement.
2. All references in the Company Security Agreement to the term
"Notes" shall be deemed to refer to the Tranche A Notes and the Tranche B Notes,
collectively.
3. Section 13(d) of the Company Security Agreement is hereby amended
by deleting all references to "Section 7(b)" and substituting "Section 13(b)"
therefor. Section 13(d) of the Company Security Agreement is hereby further
amended by deleting all references to "Section 7(c)" and substituting "Section
13(c)" therefor.
4. Except as expressly amended and modified hereby, the Company
Security Agreement shall remain in full force and effect.
5. The provisions of this Amendment shall be binding upon, and shall
inure to the benefit of, the successors and assigns of the parties hereto.
6. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which when taken together
shall constitute one and the same instrument. The signature and acknowledgment
pages of any counterpart may be detached therefrom without impairing the legal
effect of the signatures and acknowledgments thereto, provided such signature
and acknowledgment pages are attached to any other counterpart identical thereto
except having additional signature and acknowledgment pages executed by other
parties to this Amendment attached thereto.
7. This Amendment shall be governed by, and shall be construed and
enforced in accordance with, the internal laws of the State of Nevada, without
regard to conflicts of laws principles.
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.
"GRANTOR"
SAHARA LAS VEGAS CORP.,
a Nevada corporation
By: Thomas K. Land
_____________________________
Its: Treasurer & Asst. Secretary
_____________________________
"SECURED PARTY"
SUNAMERICA LIFE INSURANCE COMPANY,
an Arizona corporation
By: Stephen P. Hanover
_____________________________
Its: Authorized Agent
____________________________
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EXHIBIT 10.99
WHEN RECORDED MAIL TO:
O'MELVENY & MYERS
1999 Avenue of the Stars, Suite 700
Los Angeles, California 90067
Attention: Dean Pappas, Esq.
File No.: 843,112-044
==============================================================================
(Space above line is for Recorder's use)
DEED OF TRUST, FIXTURE FILING AND FINANCING STATEMENT
AND SECURITY AGREEMENT WITH ASSIGNMENT OF RENTS
NOTICE: THIS INSTRUMENT SECURES FUTURE ADVANCES.
THIS DEED OF TRUST, FIXTURE FILING AND FINANCING STATEMENT AND SECURITY
AGREEMENT WITH ASSIGNMENT OF RENTS (this "DEED OF TRUST"), made as of the 25th
day of November, 1997, by and among SAHARA LAS VEGAS CORP., a Nevada
corporation, as debtor and trustor ("TRUSTOR"), UNITED TITLE OF NEVADA, as
trustee ("TRUSTEE"), and SUNAMERICA LIFE INSURANCE COMPANY, an Arizona
corporation, as Collateral Agent on behalf of itself and each of the Holders, as
secured party and beneficiary ("BENEFICIARY").
W I T N E S S E T H:
THAT TRUSTOR HEREBY:
GRANTS, bargains, sells, transfers, conveys and assigns the following
described real property and related collateral to Trustee, IN TRUST, WITH POWER
OF SALE, to have and to hold the same unto Trustee and its successors in
interest, for the benefit of and on behalf of Beneficiary, upon the trusts,
covenants and agreements herein expressed:
DESCRIPTION OF REAL PROPERTY COLLATERAL
All that certain real property, and the interests of Trustor therein,
situate in the County of Clark, State of Nevada, that is more particularly
described on that certain exhibit marked "Exhibit A", affixed hereto and by this
---------
reference incorporated herein and made a part hereof (the "LAND");
Together with all right, title and interest of Trustor, now owned or
hereafter acquired, in and to any land lying within the right-of-way of any
street, open or proposed,
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adjoining any of the Land and any and all sidewalks, alleys and strips and gores
of land adjacent to or used in connection with any of the Land, with
appurtenances ("ADJACENT INTERESTS");
Together with all right, title and interest of Trustor in and to all
buildings, structures and all other improvements and fixtures that are or may
hereafter be erected or placed on or in the Land and all rights and interests of
Trustor in and to all buildings, structures and other improvements and fixtures
that are or may hereafter be erected or placed on or in Adjacent Interests
(collectively, the "IMPROVEMENTS");
Together with all right, title and interest of Trustor in and to all and
singular the tenements, hereditaments and appurtenances belonging or in any wise
appertaining to any of the Land, Adjacent Interests or Improvements
(collectively, the "APPURTENANCES");
Together with all rents, issues, products, earnings, revenues, payments,
profits, royalties and other proceeds and income of or from any of the foregoing
or of or from any of the Leases, as hereinafter defined (collectively, the
"RENTS"), subject, however, in the case of Rents, to the absolute assignment
given to Beneficiary in Section 12 hereof, to which Section 12 this grant to the
---------- ----------
Trustee is subject and subordinate;
Together with all leasehold estate, right, title and interest of Trustor in
and to all leases, subleases, licenses, concessions, franchises and other use or
occupancy agreements, as the same may be from time to time amended, modified,
extended or renewed (collectively, "LEASES"), covering any of the Land, Adjacent
Interests, Improvements or Appurtenances, now or hereafter existing or entered
into, and all right, title and interest of Trustor thereunder, including,
without limitation, the right to all security deposits, advance rentals, other
deposits, and all payments of similar nature, relating thereto;
Together with all right, title and interest of Trustor in and to all water
rights and rights to the use of water now or hereafter appurtenant to or used in
connection with any of the Land, Adjacent Interests, Improvements or
Appurtenances ("WATER RIGHTS");
Together with all right, title and interest of Trustor in and to the
Development Agreement dated as of February 20, 1997, by and among Ranch Center
Associates Limited Partnership, Ranch Center Associates II, and Santa Fe Valley,
Inc., together with all other contracts and agreements executed in connection
with the transactions described therein;
Together with any and all other estate, right, title, interest, property,
possession, claim or demand, in law or in equity, which Trustor now has or may
hereafter acquire in or to any of the Land, Adjacent Interests, Improvements,
Appurtenances, Rents, Leases and Water Rights, or pertaining or appurtenant
thereto, and all reversions and remainders thereof, and all tenements,
hereditaments and appurtenances thereunto belonging or in any wise appertaining
thereto ("OTHER INTERESTS") (said Land, Adjacent Interests, Improvements,
Appurtenances, Rents, Leases, Water Rights and Other Interests may be referred
to herein as the "REAL PROPERTY"); AND
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THAT TRUSTOR HEREBY:
GRANTS a security interest, pursuant to the Nevada Uniform Commercial Code
- -- Secured Transactions, to Beneficiary on the terms and provisions (by this
reference incorporated herein with respect to the security interest herein
granted and the rights and obligations of the parties with respect to the
Personal Property, as hereinafter defined, but for no other purpose) set forth
in that certain Security Agreement dated as of even date herewith by and between
Trustor, as Grantor, and Beneficiary, as Secured Party (the "SECURITY
AGREEMENT"), subject to all applicable Gaming Laws, in all of Trustor's right,
title and interest in and to the following described personal property, whether
now owned or hereafter acquired (collectively, the "PERSONAL PROPERTY"):
DESCRIPTION OF PERSONAL PROPERTY COLLATERAL
All Trustor's right, title and interest in and to that certain personal
property, described hereinbelow as follows, and the interests of Trustor
therein, whether now owned or hereafter acquired (collectively the "PERSONAL
PROPERTY"):
(a) All present and future chattels, furniture, furnishings, goods,
equipment, fixtures and all other tangible personal property, of whatever kind
and nature, now or hereafter used in connection with or placed or located in or
on any part of the Real Property (including, without limitation, any building or
structure that is now or that may hereafter be erected on the Real Property),
including, but not limited to, machinery, materials, goods and equipment now or
hereafter used in any construction or operation relating thereto (including,
without limitation, air conditioning, heating, electrical, lighting, fire
fighting and fire prevention, food and beverage service, laundry, plumbing,
refrigeration, security, sound, signaling, telephone, television, window washing
and other equipment and fixtures, of whatever kind or nature, including
generators, transformers, switching gear, boilers, burners, furnaces, piping,
sprinklers, sinks, tubs, valves, compressors, motors, carts, dumb waiters,
elevators and other lifts, floor coverings, hardware, keys, locks, organs,
pianos, planters, railings, scales, shelving, signs, tools, machinery, molds,
dies, drills, presses, planers, saws, furniture, business fixtures, trade
fixtures, electric, gas and other motor vehicles, uniforms, vacuum cleaners,
hotel furniture, furnishings and equipment, bathroom furniture and furnishings
(including towels, bathmats, hamperettes, shower curtains and other bath linen),
beds and bedding (including mattresses, springs, pillows, bed pads, sheets,
blankets, comforters, spreads and other bed linens and furnishings), bric-a-
brac, chairs, chests, vanities, secretaries, bureaus, chiffonniers, love seats,
benches, costumers, smoking stands, sand jars, desks, dressers, hangings,
paintings, pictures, frames, sculptures, lamps, light bulbs, mirrors, night
stands, ornaments, radios, stereo equipment, sofas, statuary, tables,
telephones, televisions, vases, window coverings, foodstuffs, beverages
(including beer, wine, liquor and other alcoholic beverages), and other
consumables (including soap, shampoo, cleaning supplies and paper goods),
cutlery, cooking, baking and other kitchen utensils and apparatus (including
crockery, fryers, grills, kettles, mixers, pots, pans, pails, racks, steamers
and toasters), china and other dishes, flatware, glassware, hollowware, serving
pieces, trays, table linens, washers, dryers, irons, ironing boards and other
ironing equipment, cables, outlets, plugs, wiring and related
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apparatus and fixtures, card readers, cash registers, adding machines,
calculators, computers, keyboards, monitors, printers, printing equipment,
envelopes, stationary, posting machines, blank forms, typewriters, typewriter
stands, other office and accounting equipment and supplies, time stamps, time
recorders, bookkeeping machines, checking machines, payroll machines, computer
reservations systems, and all other goods, equipment, furnishings, apparatus and
fixtures which are now or may hereafter be located at or used at or in
connection with the Real Property) and all other tangible personal property used
or to be used at or in connection with, or placed or to be placed in, rooms,
halls, lounges, offices, lobbies, lavatories, basements, cellars, vaults or
other portions of the Real Property or any facilities on the Real Property or of
any other building or buildings hereafter constructed or erected thereon,
whether herein enumerated or not, and whether or not contained in any such
building, and which are used or to be used or useful in the operation and
maintenance thereof, or in any business conducted thereon, together with all
replacements and substitutions for any and all personal property in which
Trustor has an interest, including without limitation such goods and equipment
as shall from time to time be located, placed, installed or used in or upon, or
procured for use, or to be used or useful in connection with the operation of
the whole, or any part of, the Real Property or any facilities on the Real
Property and all parts thereof and all accessions thereto;
(b) All present and future inventory and merchandise in all of its forms
(including, but not limited to, (i) all goods held by Trustor for sale or lease
or to be furnished under contracts of service or so leased or furnished, (ii)
all raw materials, work in process, (iii) all goods in which Trustor has an
interest in mass or a joint or other interest or right of any kind, (iv) all
goods that are returned to or repossessed by Trustor, and (v) all accessions
thereto and products thereof);
(c) All present and future accounts, accounts receivable, rentals,
revenues, receipts, payments, and income of any nature whatsoever derived from
or received with respect to any facilities on the Real Property, agreements and
contracts (including, without limitation, the Development Agreement dated as of
February 20, 1997, among Ranch Center Associates Limited Partnership, Ranch
Center Associates II, and Santa Fe Valley, Inc., together with all contracts and
agreements executed in connection with the transactions described therein),
leases, contract rights, rights to payment, instruments, documents, chattel
paper, security agreements, guaranties, undertakings, surety bonds, insurance
policies, condemnation deposits and awards, notes and drafts, securities,
certificates of deposit and the right to receive all payments thereon or in
respect thereof (whether principal, interest, fees or otherwise), contract
rights (other than rights under contracts or governmental permits that may not
be transferred by law), including, without limitation, rights to all deposits
from tenants and other users of the Real Property or any facilities on the Real
Property, rights under all contracts relating to the construction, renovation or
restoration of any of the improvements now or hereafter located on the Real
Property or the financing thereof and all rights under payment or performance
bonds, warranties, and guaranties, and all rights to payment from any
credit/charge card organization or entity such as or similar to, and including,
without limitation, the organizations or entities that sponsor and administer,
respectively, the American Express Card, the Carte Blanche Card, the Diners Club
Card, the Discover Card, the MasterCard and the Visa Card, books of account, and
principal, interest and
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payments due on account of goods sold, services rendered, loans made or credit
extended, on or in connection with the Real Property or any facilities on the
Real Property and all forms of obligations owing to and rights of Trustor or in
which Trustor may have any interest, however created or arising;
(d) All present and future right, title and interest of Trustor in and
to all leases, subleases, licenses, concessions, franchises and other use or
occupancy agreements, and any amendments, modifications, extensions or renewals
thereof, whether or not specifically herein described, which now or may
hereafter pertain to or affect the Real Property or any portion thereof, and all
amendments to the same, including, but not limited to, the following: (i) all
payments due and to become due under such Leases, whether as rent, damages,
insurance payments, condemnation awards, or otherwise; (ii) all claims, rights,
powers, privileges and remedies under such Leases; and (iii) all rights of the
Trustor under such Leases to exercise any election or option, or to give or
receive any notice, consent, waiver or approval, or to accept any surrender of
the premises or any part thereof, together with full power and authority in the
name of the Trustor, or otherwise, to demand and receive, enforce, collect, and
receipt for any or all of the foregoing, to endorse or execute any checks or any
instruments or orders, to file any claims, and to take any other action that
Beneficiary may deem necessary or advisable in connection therewith;
(e) All fees, income, rents, issues, profits, oil, gas and mineral
rights, royalties and leaseholds, all earnings, receipts, royalties and revenues
(including, without limitation, revenue from hotel guests) which accrue from any
of the Property (as hereinafter defined) or which may be received or receivable
by Trustor from any hiring, using, leasing, subhiring or subleasing therefor;
(f) All present and future deposit accounts of Trustor, any demand,
time, savings, passbook or like account maintained by Trustor with any bank,
savings and loan association, credit union or like organization, and all money,
cash and cash equivalents of Trustor, whether or not deposited in any such
deposit account;
(g) All present and future general intangibles (including but not
limited to all governmental permits relating to construction or other activities
on the Real Property), all tax refunds of every kind and nature to which Trustor
now or hereafter may become entitled, however arising, all other refunds, and
all deposits, goodwill, choses in action, rights to payment or performance,
judgments taken on any rights or claims included in the Property (as hereinafter
defined), trade secrets, computer programs, software, customer lists, business
names, trademarks, trade names and service marks, patents, patent applications,
licenses, copyrights, technology, processes, proprietary information and
insurance proceeds;
(h) All present and future books and records, including, without
limitation, books of account and ledgers of every kind and nature, ledger cards,
computer programs, tapes, disks and other information storage devices, all
related data processing software, and all
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electronically recorded data relating to Trustor or its business or the Real
Property, all receptacles and containers for such records, and all files and
correspondence;
(i) All present and future maps, plans, specifications, surveys,
studies, reports, data and drawings (including, without limitation,
architectural, structural, mechanical and engineering plans and specifications,
studies, data and drawings) prepared for or relating to the Real Property or the
construction, renovation or restoration of any improvements on the Real Property
or the extraction of minerals, sand, gravel or other valuable substances from
the Real Property, together with all amendments and modifications thereto;
(j) All present and future licenses, permits, variances, special
permits, franchises, certificates, rulings, certifications, validations,
exemptions, filings, registrations, authorizations, consents, approvals,
waivers, orders, rights and agreements (including options, option rights and
contract rights), other than those (including non-transferable gaming permits)
that may not be transferred by law, now or hereafter obtained by Trustor from
any governmental authority having or claiming jurisdiction over the Real
Property or any other element of the Property or providing access thereto, or
the operation of any business on, at, or from the Real Property;
(k) All present and future stocks, bonds, debentures, securities,
subscription rights, options, warrants, puts, calls, certificates, partnership
interests, joint venture interests, investments, brokerage accounts and all
rights, preferences, privileges, dividends, distributions, redemption payments
and liquidation payments received or receivable with respect thereto;
(l) All present and future accessions, appurtenances, components,
repairs, repair parts, spare parts, replacements, substitutions, additions,
issue and improvements to or of or with respect to any of the foregoing;
(m) All other fixtures and storage and office facilities, and all
accessions thereto and products thereof and all water stock relating to the Real
Property;
(n) All other tangible and intangible personal property of Trustor;
(o) All rights, remedies, powers and privileges of Trustor with
respect to any of the foregoing; and
(p) Any and all fees, proceeds, products, rents, income, and profits
of any of the foregoing, including, without limitation, all money, accounts,
general intangibles, deposit accounts, documents, instruments, chattel paper,
goods, insurance proceeds (whether or not the Trustee or Beneficiary is the loss
payee), and any other tangible or intangible property received upon the sale or
disposition of any of the foregoing (it being agreed, for purposes hereof, that
the term "PROCEEDS" includes whatever is receivable or received when any of the
Personal Property is sold, collected, exchanged or otherwise disposed of,
whether such disposition is voluntary or involuntary). Notwithstanding anything
to the contrary contained herein, Beneficiary
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acknowledges that it has no security interest in (x) any cash of Trustor
described in clauses (d), (e), (f), (g) and (k) above, to the extent such
----------- --- --- --- ---
a security interest is prohibited by any Gaming Laws, or (y) any deposit account
described in clause (f) above, to the extent such a security interest is not
----------
permitted by applicable law;
(The Real Property, the Personal Property and all of the other
collateral described above may hereinafter be collectively referred to as the
"PROPERTY");
FOR THE PURPOSE OF SECURING:
FIRST: Payment when due, whether at stated maturity, by required
prepayment, declaration, acceleration, demand or otherwise (including payment of
amounts that would become due but for the operation of the automatic stay under
Section 362(a) of the Bankruptcy Code, 11 U.S.C. (S)362(a)), of all obligations
and liabilities of every nature of Trustor, now, heretofore or hereafter
existing under or arising out of or in connection with that certain Second
Amended and Restated Note Purchase Agreement of even date herewith, among Santa
Fe Gaming Corporation (formerly named Sahara Gaming Corporation), a Nevada
corporation ("SGC"), Trustor, Beneficiary, SunAmerica, Inc., a Delaware
corporation, and Credit Suisse First Boston Mortgage Capital LLC, a Delaware
limited liability company (the "SECOND AMENDED AND RESTATED NOTE PURCHASE
AGREEMENT") (it being acknowledged and agreed that all initially capitalized
terms used herein without definition shall have the meanings given such terms in
the Second Amended and Restated Note Purchase Agreement), or the promissory
notes issued to the Beneficiary and the other Holders to evidence such
obligations and liabilities, together with any and all renewals, extensions,
amendments, modifications, rearrangements, replacements, restatements,
substitutions and addenda thereof or thereto (herein referred to as the
"NOTES"), whether for principal in the maximum principal amount of Fifty-Seven
Million Five Hundred Thousand Dollars ($57,500,000) in the aggregate or such
principal amount as may be advanced and remain unpaid or for interest
(including, without limitation, interest that, but for the filing of a petition
in bankruptcy with respect to Trustor, would accrue on such obligations), fees,
expenses, indemnities or otherwise, whether voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from Beneficiary as
a preference, fraudulent transfer or otherwise.
SECOND: Payment and performance of every obligation, covenant,
promise and agreement of Trustor herein contained, or incorporated herein by
reference, including any sums paid or advanced by Beneficiary or Trustee
pursuant to the terms hereof.
THIRD: Payment of the expenses and costs incurred or paid by
Beneficiary in the preservation and enforcement of the rights and remedies of
Beneficiary and the duties and liabilities of Trustor hereunder, including, but
not by way of limitation, attorneys' fees, court costs, witness fees, expert
witness fees, collection costs, Trustee's fees and costs of a Trustee's
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Sale Guarantee, and costs and expenses paid by Beneficiary in performing for
Trustor's account any obligation of Trustor.
FOURTH: Payment of additional sums and interest thereon which may
hereafter be loaned to Trustor by Beneficiary when evidenced by a promissory
note or notes or other writing that recites that this Deed of Trust is security
therefor.
FIFTH: Performance of every obligation, warranty, representation,
covenant, agreement and promise of Trustor contained in the Second Amended and
Restated Note Purchase Agreement, Security Agreement and all other Basic
Documents, except the Environmental Indemnity.
The foregoing are described herein as the "OBLIGATIONS". All persons
who may have or acquire an interest in all or any part of the Property will be
considered to have notice of, and will be bound by, the terms of the Obligations
and each other agreement or instrument made or entered into in connection with
each of the Obligations. Such terms include any provisions in the Notes or the
Second Amended and Restated Note Purchase Agreement which permit borrowing,
repayment and reborrowing, or which provide that the interest rate on one or
more of the Obligations may vary from time to time.
It is the intention of Trustor, Beneficiary and the Holders that all
obligations secured hereby are obligatory and to the extent that such
obligations (or any portion thereof) are deemed not to be obligatory, then this
Deed of Trust shall be deemed an "instrument" (as defined in NRS 106.330, as
amended or recodified from time to time) which secures "future advances" (as
defined in NRS 106.320, as amended or recodified from time to time) and which is
governed pursuant to NRS 106.300 through 106.400, as amended and recodified from
time to time ("NRS" means Nevada Revised Statutes). In the event that the
obligations (or any portion thereof) are deemed not to be obligatory, it is the
intention of the parties that the Obligations include the obligation of the
Trustor to repay "future advances" of "principal" (as defined in NRS 106.345, as
amended or recodified from time to time) in an amount up to $57,500,000, and
that the lien of this Deed of Trust secures the obligation of Trustor to repay
all such "future advances" with the priority set forth in NRS 106.370(1), as
amended or recodified from time to time.
THIS DEED OF TRUST FURTHER WITNESSETH THAT, IN CONNECTION WITH AND IN
FURTHERANCE OF THE FOREGOING GRANTS, AND THE ENCUMBRANCES, LIENS AND SECURITY
INTERESTS CREATED THEREBY, TRUSTOR COVENANTS AND AGREES AS FOLLOWS:
1. CERTAIN REPRESENTATIONS AND WARRANTIES. Trustor represents,
warrants and covenants that, except as set forth in the Second Amended and
Restated Note Purchase Agreement or as disclosed to Beneficiary, prior to the
date hereof, in a writing making reference to this Section 1 of this Deed of
---------
Trust:
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(a) Trustor lawfully possesses and holds fee simple title to all
of the Land and Improvements subject to the permitted exceptions set forth
on "Exhibit B" attached hereto and incorporated herein by this reference
---------
(the "PERMITTED EXCEPTIONS");
(b) Trustor has or will have good title to all Property other
than the Land and Improvements;
(c) Trustor has the full and unlimited power, right and authority
to encumber the Property and assign the Rents as provided herein;
(d) This Deed of Trust creates a first priority lien on the
Property, subject to only the Permitted Exceptions;
(e) Subject to the Permitted Exceptions (to the extent
applicable), Trustor owns (or, with respect to any Personal Property
acquired by Trustor after the date hereof, will own) the Personal Property
free and clear of any security agreements, reservations of title or
conditional sales contracts, and there is no financing statement affecting
the Personal Property on file in any public office other than the security
interest herein granted;
(f) Trustor's place of business, or its chief executive office if
it has more than one place of business, is located at the address specified
in Section 48(a) hereof;
-------------
(g) No part of the Property is in the hands of a receiver, no
application for a receiver is pending with respect to any portion of the
Property, and no part of the Property is subject to any foreclosure or
similar proceeding;
(h) There is no pending or, to the best of Trustor's knowledge,
threatened, litigation, action, proceeding or investigation, including,
without limitation, any condemnation proceeding, against Trustor or the
Property before any court, governmental or quasi-governmental, arbitrator
or other authority;
(i) Access to and egress from the Property are available and
provided by public streets, and Trustor has no knowledge of any federal,
state, county, municipal or other governmental plans to change the highway
or road system in the vicinity of the Property or to restrict or change
access from any such highway or road to the Property;
(j) Adequate utilities services exist for the current ownership,
use, occupancy, operation and maintenance of the Property, and Trustor is
not in default of any obligation to any utility service provider;
(k) The Property is located in a zoning district designated CC
(Community Commercial District) of the City of Henderson, County of Clark,
State of Nevada. Such designation permits the development, use and
operation of the Property as
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a hotel and casino and as it is currently operated as a matter of right and
not as a non-conforming use (except that a conditional use permit may be
required to permit non-restricted casino operations that are included in a
hotel). The Property complies in all respects with all requirements,
conditions and restrictions, including but not limited to deed restrictions
and restrictive covenants, applicable to the Property;
(l) Except for those that are Permitted Exceptions, there are no
special or other assessments for public improvements or otherwise now
affecting the Property, nor does Trustor know of any pending or threatened
special assessments affecting the Property or any contemplated improvements
affecting the Property that may result in special assessments. Except for
those that are Permitted Exceptions, there are no tax abatements or
exceptions affecting the Property;
(m) Trustor has not received any notice from any governmental
body having jurisdiction over the Property as to any violation of any
applicable law, or any notice from any insurance company or inspection or
rating bureau setting forth any requirements as a condition to the
continuation of any insurance coverage on or with respect to the Property
or the continuation thereof at premium rates existing at present which have
not been remedied or satisfied;
(n) Except for those that are Permitted Exceptions, there are no
occupancy rights (written or oral), reciprocal easement agreements, Leases
or tenancies presently affecting any part of the Property.
(o) Except for those that are Permitted Exceptions, there are no
options, purchase contracts or other similar agreements of any type
(written or oral) presently affecting any part of the Property;
(p) Except for those that are Permitted Exceptions, and except as
otherwise disclosed to Beneficiary in writing prior to the date hereof, (i)
there are no contracts presently affecting the Property ("CONTRACTS")
having a term in excess of one hundred eighty (180) days or not terminable
by Trustor (without penalty) on thirty (30) days' notice; (ii) Trustor has
heretofore delivered to Beneficiary true and correct copies of each of the
Contracts together with all amendments thereto; (iii) Trustor is not in
default of any obligations under any of the Contracts; and (iv) the
Contracts represent the complete agreement between Trustor and such other
parties as to the services to be performed or materials to be provided
thereunder and the compensation to be paid for such services or materials,
as applicable, and except as otherwise disclosed herein, such other parties
possess no unsatisfied claims against Trustor. Trustor is not in default
under any of the Contracts and no event has occurred which, with the
passing of time or the giving of notice, or both, would constitute a
default under any of the Contracts;
(q) Trustor currently has all permits ("PERMITS") necessary or
desirable for the use, ownership, development, occupancy and maintenance of
the Property as used
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<PAGE>
as of the date hereof. None of the Permits has been suspended or revoked,
and all of the Permits are in full force and effect, are fully paid for,
and Trustor has made or will make application for renewals of any of the
Permits prior to the expiration thereof; and
(r) All insurance policies held by Trustor relating to or
affecting the Property are in full force and effect and shall remain in
full force and effect (unless replaced with new policies that meet the
requirements set forth in Section 6 hereof) through the date of payment and
---------
satisfaction in full of the Obligations. Trustor has not received any
notice of default or notice terminating or threatening to terminate any
such insurance policy and Trustor has made or will make application for
renewals of any of such insurance policies prior to the expiration thereof.
2. PAYMENT OF OBLIGATIONS. Trustor shall pay when due all
Obligations secured hereby, including, without limitation, the principal of and
interest on the indebtedness evidenced by the Notes, all charges, fees and other
sums as provided in the Basic Documents, and the principal of and interest on
any other indebtedness secured by this Deed of Trust.
3. COMPLIANCE WITH LAWS. Trustor shall not commit, suffer or permit
any act to be done, or condition to exist, on, or with respect to, the Property
which violates or is prohibited by any law, statute, code, act, ordinance,
order, judgment, decree, injunction, rule, regulation, permit, license,
authorization or direction of any government or subdivision thereof, whether it
be federal, state, county or municipal (collectively, "LEGAL REQUIREMENTS"),
which is applicable to the Property, or any part thereof, now or at any time
hereafter.
4. MAINTENANCE OF PROPERTY. Trustor agrees: (a) properly to care
for and keep said Property in good condition and repair; (b) not to remove,
demolish or substantially alter any building on the Real Property except (i) in
compliance with the terms of this Deed of Trust relating to the occurrence of a
casualty or condemnation, or (ii) upon the prior written consent of Beneficiary;
(c) to complete promptly and in a good and workmanlike manner any building or
other improvement which may be constructed thereon, to restore promptly in like
manner any portion of the Improvements (and any other improvements located on
the Real Property, whether or not such improvements are owned by Trustor) which
may be damaged or destroyed from any cause whatsoever, and to pay when due all
claims for labor performed and materials furnished therefor; (d) to comply with
all laws, ordinances, regulations, covenants, conditions and restrictions now or
hereafter affecting the Property or any part thereof, including any which
require alteration or improvement thereof, and with all requirements of
insurance companies insuring the Property or any portion thereof and of any
bureau or agency which establishes standards of insurability; (e) not to commit
or permit any waste or deterioration of the Property; (f) to keep and maintain
abutting grounds, sidewalks, roads, parking and landscaped areas in good and
neat order and repair; (g) not to apply for, willingly suffer or permit any
change in zoning, subdivision, or land use regulations affecting the Property
without the prior written consent of Beneficiary; (h) not to drill or extract or
enter into any lease for the drilling for or extraction of oil, gas or other
hydrocarbon substances or any mineral of any kind or character on or from the
Property or any part thereof without the prior written consent of Beneficiary;
and (i) to do all
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other acts, in a timely and proper manner, which, from the character or use of
the Property, may be reasonably necessary to maintain and preserve its value,
the specific enumerations herein not excluding the general.
5. ENVIRONMENTAL OBLIGATIONS.
(a) Trustor shall comply with, and shall use its best efforts to cause
each occupant of the Property to comply with, any and all Environmental Laws (as
hereinafter defined) regarding the presence or removal of Hazardous Material (as
hereinafter defined) on or in the Property, shall pay immediately, when due, the
costs of removal from the Property and disposal of any Hazardous Material which
is required to be removed pursuant to any Environmental Laws and shall keep the
Property free of any lien which may arise pursuant to any such Environmental
Laws. Trustor shall not, and shall not permit any person or entity (including
any tenant or other occupant of the Property), to release, discharge, or dispose
of any Hazardous Material on the Real Property except in compliance with all
Environmental Laws and, if the same shall exist, Trustor shall immediately
remove or cause to be removed from the Real Property such Hazardous Material to
the extent required to be removed pursuant to any Environmental Laws.
(b) As used herein, the term "HAZARDOUS MATERIAL" means: (i) any
chemical, material or substance at any time defined as or included in the
definition of "hazardous substances", "hazardous materials", hazardous wastes",
"extremely hazardous waste", "restricted hazardous waste", "infectious waste",
"toxic substances" or any other formulations intended to define, list or
classify substances by reason of deleterious properties such as ignitability,
corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, "TCLP
toxicity" or "EP toxicity" or words of similar import under any applicable
Environmental Law or publication promulgated pursuant thereto; (ii) any oil,
petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling
fluid, produced water or other waste associated with the exploration,
development or production of crude oil, natural gas or geothermal resources;
(iv) any flammable substance or explosive; (v) any radioactive material; (vi)
asbestos in any form; (vii) urea formaldehyde foam insulation; (viii) electrical
equipment which contains any oil or dielectric fluid containing poly-chlorinated
biphenyls; (ix) any pesticide; (x) all hazardous substances defined in NRS
40.504, and (xi) any other chemical, material or substance exposure to which is
prohibited, limited or regulated by any Federal, state, local or other
governmental authority or which may or could pose a hazard to human health or
safety or the environment if released into the workplace or the environment; the
term "ENVIRONMENTAL LAW" means any statute, ordinance, order, rule, regulation,
plan, policy, decree, permit, guidance document, or other requirement of any
Federal, state, local or other governmental authority relating to: (aa)
environmental matters, including, without limitation, those relating to fines,
injunctions, penalties, damages, contribution, cost recovery compensation,
losses or injuries resulting from the Release (as hereinafter defined) or
threatened Release of Hazardous Material, (bb) the presence, generation, use,
storage, transportation or disposal of Hazardous Material, or (cc) occupational
safety and health, industrial hygiene, land use or the protection of human,
plant or animal health or welfare, in any manner applicable to any of the
Property, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act (42 U.S.C. (S) 9601 et seq.), the
Hazardous Materials
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<PAGE>
Transportation Act (49 U.S.C. (S) 1801 et seq.), the Resource Conservation and
Recovery Act (42 U.S.C. (S) 6901 et seq.), the Federal Water Pollution Control
Act (33 U.S.C. (S) 1251 et seq.), the Clean Air Act (42 U.S.C. (S) 7401 et
seq.), the Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. (S) 136
et seq.), the Occupational Safety and Health Act (29 U.S.C. (S)651 et seq.) and
the Emergency Planning and Community Right-to-Know Act (42 U.S.C. (S) 11001 et
seq.), each as amended and supplemented, and any analogous future or present
local, state and federal statutes, ordinances and other laws, and rules and
regulations promulgated pursuant thereto, each as in effect as of the date of
determination; and the term "RELEASE" means any release, spill, emission,
leaking, pumping, pouring, injection, escaping, deposit, disposal, dispersal,
dumping, leaching or migration of Hazardous Material into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Material), or into or out of any of the Property, including the movement of any
Hazardous Material through the air, soil, surface, water, groundwater or
property.
(c) Trustor hereby agrees to indemnify, hold harmless and defend (by
counsel of Beneficiary's or the Holders' choice) Beneficiary, the Holders, their
directors, officers, employees, agents, successors and assigns from and against
any and all claims, losses, damages, demands, liabilities, fines, penalties,
assessments, charges, administrative and judicial proceedings and orders,
judgments, remedial action requirements, enforcement actions of any kind, and
all costs and expenses incurred in connection therewith (including but not
limited to attorneys' and consultants' fees and expenses), arising directly or
indirectly, in whole or in part, out of (i) the presence on or under the
Property (including, but not limited to, the surrounding streets and sidewalks)
of any Hazardous Material, or any Release of any Hazardous Material on, under or
from the Property, or (ii) any activity carried on or undertaken on or off the
Property until the Obligations have been fully and finally satisfied, and
whether by Trustor or any employees, agents, contractors or subcontractors of
Trustor or any third persons occupying or present on the Property, in connection
with the use, holding, handling, treatment, removal, storage, decontamination,
cleanup, transport, Release, generation, processing or abatement of any
Hazardous Material located or present in, on or under the Property (including,
but not limited to, the surrounding streets and sidewalks). The foregoing
indemnity shall further apply to any residual contamination in, on or under the
Property (including, but not limited to, the surrounding streets and sidewalks),
or affecting any natural resources, and to any contamination of any property or
natural resources arising in connection with the generation, use, holding,
handling, treatment, removal, decontamination, cleanup, storage, transport,
disposal, Release, processing or abatement of any such Hazardous Material, and
irrespective of whether any of such activities are undertaken in accordance with
applicable Environmental Laws. Trustor hereby acknowledges and agrees that,
notwithstanding any other provision of this Deed of Trust to the contrary, the
obligations of Trustor under this Section 5(c) shall be unlimited personal
------------
obligations of Trustor, shall not be secured by this Deed of Trust and shall
survive any foreclosure under this Deed of Trust, any transfer in lieu thereof,
and any satisfaction of the Obligations.
6. INSURANCE.
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(a) TYPES AND AMOUNTS REQUIRED. During the continuance of this Deed
of Trust, Trustor shall at all times provide, maintain and keep in force, at no
expense to Trustee or Beneficiary, for the benefit of Trustor and Beneficiary,
as their respective interests may appear, the following policies of insurance:
(i) During the course of any construction or repair of
Improvements on the Property, (x) builder's completed value risk insurance
against "all risks of physical loss" (including fire and extended coverage,
and endorsements extending coverage for vandalism and malicious mischief,
collapse and property in transit, offsite storage, delay of opening
(business interruption), demolition and debris removal, flood, and, if
available, earthquake), in non-reporting form, covering 100% of the
anticipated cost of construction or repair, including "soft costs", with a
deductible from the loss payable for any casualty that is acceptable to
Beneficiary in its sole discretion (and Trustor shall obtain Beneficiary's
approval of the deductible prior to commencing any such new construction or
major repair); said policy to contain a "permission to occupy upon
completion of work or occupancy" endorsement and waiver of subrogation
endorsement acceptable to Beneficiary, and with replacement cost coverage
in an agreed amount, and (y) an "owner/contractor protective liability"
policy, providing separate liability coverage for Trustor and Beneficiary,
with a limit of not less than $10,000,000;
(ii) Insurance against loss or damage to the Improvements (if
any) and Personal Property owned by Trustor by fire and any of the other
risks covered by insurance of the type now known as "all risks of physical
loss" (including, if requested by Beneficiary, theft and earthquake
coverage) in an amount not less than 100% of the then full replacement cost
of the Improvements and Personal Property (exclusive of the cost of
excavations, pilings, foundations, footings and other underground
improvements) without deduction for physical depreciation; with a
stipulated value or agreed amount clause for not less than ninety percent
(90%) of the then full replacement cost of the Improvements; with a
replacement cost endorsement, a waiver of subrogation endorsement, coverage
for the cost of removing damaged property, and, if Beneficiary shall so
require, coverage for demolition and increased cost of construction
occasioned by operation of any law or ordinance regulating the
construction, use or repair of the Improvements; and with not more than
$15,000 deductible from the loss payable for any casualty (or, if
Beneficiary requires earthquake coverage, then, with respect to such
coverage, such deductibles as are reasonably approved by Beneficiary); and
Beneficiary shall be named as an additional insured under all casualty/"all
risk" insurance procured and maintained by any ground lessee or tenant of
the Property with respect to any such ground lessee's or tenant's
improvements or personal property located on the Property;
(iii) If reasonably necessary and required by Beneficiary,
mechanical breakdown insurance (also known as "boiler and machinery"
insurance) covering pressure vessels, air tanks, boilers, machinery,
pressure piping, heating, air conditioning and elevator equipment and
escalator equipment, if the Improvements contain equipment of such nature,
and insurance against loss of occupancy or use arising from any such
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<PAGE>
breakdown, written on a comprehensive form with such limits and deductibles
as Beneficiary may reasonably require; the policy shall include an Agreed
Amount endorsement (waiving co-insurance), a Replacement Cost Valuation
endorsement, and coverage for increased cost of construction occasioned by
operation of any law or ordinance regulating the construction, use or
repair of the Improvements; and Beneficiary shall be named as an additional
insured under all mechanical breakdown insurance procured and maintained by
any ground lessee or tenant of the Property;
(iv) Comprehensive general liability insurance (1986 Form),
written on an "occurrence basis," against claims for death, bodily injury,
personal injury and property damage occurring in, on or about the Real
Property or the adjoining streets, sidewalks and passageways, or arising
from or connected with the use, conduct or operation of Trustor's and its
tenants' respective businesses or interests (including, without limitation,
products liability coverage; blanket contractual liability coverage,
including both oral and written contracts; broad form property damage
coverage; coverage against liability for injury or property damage arising
out of the use, by or on behalf of the Trustor or any other person or
organization, of any owned, non-owned, leased or hired automotive equipment
in the conduct of any and all operations of Trustor; coverage for those
hazards commonly known in the insurance industry as explosion, collapse and
underground property damage; owners' and contractors' protective coverage;
coverage for elevators, escalators and garage/parking operations, if any,
on the Real Property; and completed operations coverage for two years after
construction of any Improvement has been completed), such insurance to
afford combined single limit protection of not less than $1,000,000 per
occurrence, and if such policy contains a self-insured retention, (A) such
self-insured retention shall be no greater than $25,000 per occurrence, and
(B) Trustor shall be solely responsible for the payment of all amounts due
within said self-insured retention, and the indemnification provisions
contained in this Deed of Trust shall include all liability associated with
said self-insured retention; and Beneficiary shall be named as an
additional insured under all comprehensive/commercial general liability
insurance policies procured or maintained by any ground lessee or other
tenant of the Property;
(v) In the event Trustor ever operates any vehicles on the
Property, comprehensive business automobile liability insurance, written
under Coverage Symbol "1", covering all owned, non-owned and hired or
borrowed vehicles of Trustor used in connection with any of the
construction, maintenance and operation of the Improvements, naming Trustor
as the named insured and covering Beneficiary as additional insured,
insuring against liability for bodily injury and death and/or for property
damage in an amount not less than $1,000,000 combined single limit per
accident (if the policy contains a self-insured retention, (A) such self-
insured retention shall be no greater than $5,000 per occurrence, and (B)
Trustor shall be solely responsible for the payment of all amounts due
within said self-insured retention, and the indemnification provisions
contained in this Deed of Trust shall include all liability associated with
said self-insured retention); and Beneficiary shall be named as an
additional insured under all comprehensive business
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automobile liability insurance policies procured or maintained by any
ground lessee or tenant of the Property;
(vi) Worker's compensation and employer's liability insurance,
in such amounts and with such deductibles as are established by law or, if
and to the extent not so established, as are satisfactory to Beneficiary;
and Beneficiary shall be named as an additional insured under all worker's
compensation and employer's liability insurance procured and maintained by
any ground lessee or other tenant of the Property;
(vii) An umbrella liability policy with a limit of no less than
$15,000,000 providing excess coverage over all limits and coverages set
forth in paragraphs (iv), (v) and (vi) above, which limits can be obtained
--------------- --- ----
by a combination of primary and excess umbrella policies, provided that all
layers follow form with the underlying policies set forth in paragraphs
----------
(iv), (v) and (vi) and are written on an "occurrence form";
---- --- ----
(viii) If requested by Beneficiary, business interruption/rental
loss insurance/extra expense and loss of "rental value" insurance,
including coverage for off-premises power losses and an extended period of
indemnity endorsement for at least 360 days, in an amount representing not
less than 100% of the annual net profit (or net rental) plus continuing
expenses (including debt service) for the Property, as such net profit and
continuing expenses are reasonably projected by Trustor and consented to by
Beneficiary (or, in the absence of such a projection, as reasonably
projected by Beneficiary) with a deductible of no greater than seventy-two
(72) hours, or $25,000 if a separate deductible applies;
(ix) If the Property is located in an area identified by the
Secretary of Housing and Urban Development as a flood hazard area and in
which flood insurance has been made available under the National Flood
Insurance Act of 1968, flood insurance covering the Improvements, in an
amount, available under the Act, satisfactory to Beneficiary; and
(x) Such other insurance and in such amounts, and such
additional amounts of the foregoing insurance, as may reasonably be
required by Beneficiary, in its sole discretion, from time to time, due
consideration being given to standard practices in the industry and to the
risks involved in Trustor's business, operations or interest.
(b) UNIFORM POLICY REQUIREMENTS. All policies of insurance required
by the terms of this Deed of Trust:
(i) shall be issued by insurance companies licensed and
admitted to do business in the State of Nevada, and rated no lower than A
VII in the most recent edition of A.M. Best's and AA in the most recent
edition of Standard & Poor's, and in such form and amounts as are
satisfactory to Beneficiary from time to time;
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(ii) shall contain an endorsement or agreement by the insurer
that any loss shall be payable in accordance with the terms of such policy
notwithstanding any act, failure to act, negligence or breach of
representation or warranty of Trustor or any ground lessee or tenant of the
Property, or of any other party holding under Trustor, which might
otherwise result in forfeiture of said insurance;
(iii) shall contain a waiver by the insurer of all rights of
setoff, counterclaim and deduction against Trustor or any ground lessee or
tenant of the Property (as applicable);
(iv) shall contain a waiver of subrogation by the insurer in
favor of Beneficiary (and Beneficiary's officers, directors, employees,
agents and representatives) and a clause providing that the policy is
primary and that any other insurance of Beneficiary with respect to the
matters covered by such policy shall be excess and non-contributing;
(v) shall, in the case of policies affording liability
insurance coverage, name Beneficiary (and Beneficiary's officers,
directors, employees, agents and representatives) as additional insureds by
an endorsement satisfactory to Beneficiary and contain cross-liability and
severability of interest clauses satisfactory to Beneficiary, and, in the
case of other policies, shall name Beneficiary as a loss payee and have
attached thereto a lender's loss payable endorsement, for the benefit of
Beneficiary, in form satisfactory to Beneficiary (Form 438 BFU, unless
otherwise specified by Beneficiary); and
(vi) shall contain a provision that, notwithstanding any
contrary agreement between Trustor (or any ground lessee or tenant of the
Property, as applicable) and insurance company, such policies will not be
canceled, failed to be renewed or materially amended (which term shall
include any reduction in the type, scope or limits of coverage) without at
least thirty (30) days prior written notice to Beneficiary.
(c) BLANKET POLICIES. If Beneficiary consents, Trustor may provide
any of the required insurance through blanket policies carried by Trustor and
covering more than one location; provided, however, that the amount of the total
insurance allocated to the Real Property and available with respect to the
occurrences required to be insured against shall be such as to furnish
protection the equivalent of separate policies in the amounts herein required,
and provided further, that, in all other respects, any such policy or policies
shall comply with all of the other provisions of this Deed of Trust.
(d) EVIDENCE OF INSURANCE. At Beneficiary's option, Trustor shall
furnish Beneficiary with a certified copy of all policies of insurance required
under this Section or with a certificate of insurance for each required policy
setting forth the coverage, the limits of liability, the deductibles, if any,
the name of the carrier, the policy number, and the period of coverage, which
certificates shall be executed by authorized officials of the companies issuing
such
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insurance, or by agents or attorneys-in-fact authorized to issue said
certificates (in which event each such certificate shall be accompanied by a
notarized affidavit, agency agreement or power of attorney evidencing the
authority of the signatory to issue such certificate on behalf of the insurer
named therein). Trustor shall furnish to Beneficiary annually, within ten days
after the date hereof, or more often if Beneficiary shall so request, a
certificate of Trustor specifying all insurance policies with respect to the
Property and all other policies required hereby then outstanding and in force,
and stating whether or not such insurance complies with the requirements of this
Section and, if it does not, the manner in which it does not comply. At least
thirty (30) days prior to the expiration of each required policy, Trustor shall
deliver to Beneficiary evidence satisfactory to Beneficiary of the payment of
premium and the renewal or replacement of such policy continuing insurance in
force as required by this Deed of Trust.
(e) PROCUREMENT BY BENEFICIARY. If Trustor fails to provide,
maintain, keep in force or deliver to Beneficiary the policies of insurance
required by this Deed of Trust, Beneficiary may (but shall have no obligation
to) procure such insurance, or single interest insurance for such risks covering
Beneficiary's interests, and Trustor will pay all premiums therefor promptly
upon demand by Beneficiary; and until such payment is made by Trustor, the
amount of all such premiums, together with interest thereon at an annual rate
equal to the rate specified in Section 2.4C of the Second Amended and Restated
Note Purchase Agreement (or if such provision is hereafter replaced or
renumbered, the equivalent section) (the "AGREED RATE"), shall be secured by
this Deed of Trust.
(f) RESERVE FUND. Upon request by Beneficiary following an Event of
Default (as defined in Section 23 hereof), Trustor shall pay to Beneficiary an
----------
initial cash reserve in an amount adequate to pay all insurance premiums due
within the next succeeding twelve calendar months on all policies of insurance
required by this Deed of Trust (or such lesser amount as may then be specified
by Beneficiary), and shall thereafter deposit with Beneficiary each month,
commencing with the first month after such request by Beneficiary and continuing
until all sums secured hereby are paid in full or Beneficiary notifies Trustor
to cease making such deposits, an amount equal to one-twelfth of the aggregate
annual insurance premiums on all policies of insurance required by this Deed of
Trust, as reasonably estimated by Beneficiary. In such event Trustor further
agrees to cause all bills, statements or other documents relating to the
foregoing insurance premiums to be sent or mailed directly to Beneficiary. Upon
receipt of such bills, statements or other documents evidencing that a premium
for a required policy is then payable, and providing Trustor has deposited
sufficient funds with Beneficiary pursuant to this Section, Beneficiary shall
pay such amounts as may be due thereunder out of the funds so deposited with
Beneficiary. If at any time and for any reason the funds deposited with
Beneficiary are or will be insufficient to pay such amounts as may be then or
subsequently due, Beneficiary may notify Trustor and Trustor shall immediately
deposit an amount equal to such deficiency with Beneficiary. Beneficiary may
impound or reserve for future payment of premiums such portion of such payments
as Beneficiary may in its absolute discretion deem proper, applying the balance
upon any indebtedness or obligation secured hereby in such order as Beneficiary
may determine, notwithstanding that said indebtedness or the performance of said
obligation may not yet be due according to the terms thereof. Notwithstanding
the foregoing, nothing contained herein shall
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cause Beneficiary to be deemed a trustee of said funds or to be obligated to pay
any amounts in excess of the amount of funds deposited with Beneficiary pursuant
to this Section, nor shall anything contained herein modify the obligation of
Trustor to maintain and keep in force at all times such insurance as is required
by this Deed of Trust. Beneficiary may commingle said reserve with its own funds
and Trustor shall be entitled to no interest thereon.
(g) REPLACEMENT COST. Whenever Beneficiary requires insurance with
full replacement cost protection, such full replacement cost shall be determined
annually (except in the event of substantial changes, alterations or additions
to the Improvements or in the event of new construction undertaken by the
Trustor, in which event such full replacement cost shall be determined from time
to time as required to assure full replacement cost coverage). Such
determination of full replacement cost shall be made by written agreement of the
insurance carrier and Trustor, subject to the approval of Beneficiary. If they
cannot agree or the value shall not be approved by Beneficiary within thirty
(30) days after such request, such full replacement cost shall be determined by
an appraiser, architect or contractor who shall be acceptable to Beneficiary.
No omission on the part of Beneficiary to request any such determination shall
relieve Trustor of its obligations hereunder, and any such determination to the
contrary notwithstanding, Beneficiary may require Trustor to obtain additional
insurance as provided in this Section.
(h) SEPARATE INSURANCE. Trustor shall not take out separate insurance
concurrent in form or contributing in the event of loss with that required by
this Section to be furnished by Trustor unless Beneficiary is a named insured
therein, with loss payable as provided herein. Trustor shall immediately notify
Beneficiary of the taking out of any such separate insurance and shall cause the
original policies in respect thereof or certificates therefor to be delivered to
Beneficiary.
(i) COMPLIANCE WITH INSURANCE REQUIREMENTS. Trustor shall observe and
comply with the requirements of all policies of insurance required to be
maintained in accordance with this Deed of Trust and shall cause the
requirements of the companies writing such policies to be so performed and
satisfied that at all times companies of good standing satisfactory to
Beneficiary shall be willing to write and to continue such insurance.
Notwithstanding any approval, disapproval, acceptance or acquiescence by
Beneficiary with respect to such insurance, or Beneficiary's obtaining or
failure to obtain any insurance, Beneficiary shall incur no liability as to the
form or legal sufficiency of insurance contracts, the solvency of any insurer or
the payment of any loss, and Trustor hereby expressly assumes full
responsibility therefor.
(j) ASSIGNMENT OF POLICIES UPON FORECLOSURE. In the event of
foreclosure of this Deed of Trust or other transfer of title or assignment of
any of the Property in extinguishment, in whole or in part, of the debt secured
hereby, all right, title and interest of Trustor in and to all policies of
insurance required by this Section with respect to such Property and any
unearned premiums paid thereon shall, without further act, be assigned to and
shall inure to the benefit of and pass to the successor in interest to Trustor
or the purchaser or grantee of the Property, and Trustor hereby appoints
Beneficiary its lawful attorney-in-fact to execute an assignment thereof and any
other document necessary to effect such transfer.
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(k) WAIVER OF SUBROGATION. Trustor waives any and all right to claim
or recover against Beneficiary, its directors, officers, employees, agents and
representatives, for loss of or damage to Trustor, the Property, any other
property of Trustor, or any property of others under Trustor's control, from any
cause insured against or required to be insured against by the provisions of
this Deed of Trust; provided, however, that this waiver of subrogation shall not
be effective with respect to any policy of insurance permitted or required by
this Deed of Trust if (i) such policy prohibits, or if coverage thereunder would
be reduced as a result of, such waiver of subrogation and (ii) Trustor is unable
to obtain from a carrier issuing such insurance a policy that, by special
endorsement or otherwise, permits such a waiver of subrogation.
(l) REQUIREMENTS SUPPLEMENTAL. The requirements of this Deed of Trust
with respect to insurance and maintenance of the Property shall be supplemental
to and not exclusive of the requirements of the Second Amended and Restated Note
Purchase Agreement and the Henderson Security Agreement.
7. CASUALTIES; INSURANCE PROCEEDS.
(a) NOTICE OF CASUALTIES. Trustor shall give prompt written notice
thereof to Beneficiary after the happening of any material casualty to or in
connection with the Property or any part thereof, whether or not such casualty
is covered by insurance.
(b) PAYMENT OF PROCEEDS. All proceeds payable to Trustor in
connection with any casualty affecting all or any portion of the Property shall
be payable to Beneficiary. Trustor hereby authorizes and directs any affected
insurance company to make payment of such proceeds directly to Beneficiary. If
Trustor receives any proceeds of insurance resulting from a casualty which,
pursuant to this Deed of Trust, are to be paid to Beneficiary, Trustor shall
promptly pay over such proceeds to Beneficiary. Trustor shall not settle,
adjust or compromise any claims for loss, damage or destruction of the Property
or any part thereof under any policy or policies of insurance carried by Trustor
in connection with a loss without the prior written consent of Beneficiary to
such settlement, adjustment or compromise; and, after an Event of Default
hereunder, Beneficiary shall have the sole and exclusive right, and Trustor
hereby authorizes and empowers Beneficiary, to settle, adjust or compromise any
such claims.
(c) USE IN RESTORATION. In the event of any damage to or destruction
of the Property or any improvements not owned by Trustor but located on the Real
Property, and provided that (i) at the time of such damage or destruction or
thereafter, an Event of Default does not exist, (ii) the damage or destruction
does not occur within six (6) months prior to the maturity of the Notes or other
Obligations, and (iii) application of insurance proceeds to restoration of the
Property (or such other improvements) will not impair Beneficiary's security for
the obligations secured hereby, insurance proceeds payable to Trustor in
connection with such damage or destruction shall be applied, first, toward
reimbursement of all of Beneficiary's reasonable costs and expenses of
recovering the proceeds, including reasonable attorneys' fees; then, to payment
of all sums advanced by Beneficiary to protect the Property or such other
improvements or the security of the Notes or other Obligations; then, to payment
of installments of principal and
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interest then due and payable under the Notes; then, to restoration of the
Property (or such other improvements, as applicable), upon such conditions as
Beneficiary shall determine (it being expressly understood and agreed that
Beneficiary may condition disbursement of such proceeds for restoration upon
proof that an amount equal to the sum which Beneficiary is requested to disburse
has theretofore been paid by Trustor, or is then due and payable, for materials
theretofore installed or work theretofore performed upon the Property and
properly includable in the cost of repair, reconstruction or restoration
thereof; delivery to Beneficiary by Trustor of detailed plans and specifications
providing for restoration in accordance with all applicable Legal Requirements
of all governmental authorities having jurisdiction over the Property, together
with a detailed estimate of the cost of the work and a schedule therefor and a
construction contract satisfactory to Beneficiary, with a contractor
satisfactory to Beneficiary, for performance of the work within the budgeted
amount, and within the scheduled time for completion; proof that the insurance
required hereby is in force; proof that, after repair or reconstruction, the
Property (or such other improvements) will be at least as valuable as it was (or
they were) immediately before the damage or destruction occurred; and proof that
the insurance proceeds available for repair or restoration are sufficient, in
Beneficiary's determination, to pay for the total cost of repair or
reconstruction, including all associated development costs and interest
projected to be payable on the Obligations until the repair or reconstruction is
complete, or Trustor must provide its own funds in an amount equal to the
difference between the proceeds available for repair or restoration and a
reasonable estimate, made by Trustor and found acceptable by Beneficiary, of the
total cost of repair or reconstruction); and, upon completion of the work of
restoration and payment of the cost thereof, any balance of such proceeds shall
be applied to the Obligations secured hereby, in such order as Beneficiary, in
its sole discretion, shall determine, notwithstanding that said indebtedness or
the performance of said Obligation may not be due according to the terms
thereof; and, if any then remains, it shall be paid over to Trustor.
(d) APPLICATION BY BENEFICIARY. If (i) at the time of such damage or
destruction or thereafter, an Event of Default exists hereunder, or (ii) the
damage or destruction occurs within six (6) months prior to the maturity of the
Notes and other Obligations, or (iii) application of insurance proceeds to
restoration will impair Beneficiary's security for the Obligations secured
hereby, then Beneficiary shall have the option, in its sole and absolute
discretion, (1) to apply all or any portion of such proceeds that are payable to
Trustor to any indebtedness or other Obligation secured hereby and in such order
as Beneficiary may determine, notwithstanding that said indebtedness or the
performance of said Obligation may not be due according to the terms thereof, or
(2) to apply all or any portion of such proceeds to the restoration of the
Property, subject to such conditions as Beneficiary shall determine, or (3) to
deliver all or any portion of such proceeds to Trustor or any ground lessee or
tenant of the Property, subject to such conditions as Beneficiary may determine.
(e) DUTY TO RESTORE. Except as otherwise provided hereinbelow, in the
event of any damage or destruction of the Property or any improvements located
on the Property, Trustor shall restore and repair (or cause to be restored and
repaired) the Property and such other
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improvements located on the Real Property, and nothing in this Deed of Trust
shall be deemed to excuse Trustor from restoring, repairing and maintaining the
Property and any such other improvements located on the Real Property, as herein
provided, regardless of whether or not insurance proceeds are available for
restoration, whether or not any such proceeds are sufficient in amount, or
whether or not the Property (or such other improvements) can be restored to the
same condition and character as existed prior to such damage or destruction.
8. TAXES AND IMPOSITIONS.
(a) PAYMENT BY TRUSTOR. Subject to subsection (d) below, Trustor
--------------
shall pay, or cause to be paid, at least ten (10) days prior to delinquency, all
real property taxes and assessments, general and special, and all other taxes
and assessments of any kind or nature whatsoever, including, without limitation,
non-governmental levies or assessments such as maintenance charges, owner
association dues or charges or fees, levies or charges resulting from covenants,
conditions or restrictions affecting the Property, which are assessed or imposed
upon the Property, or become due and payable, and which create, may create or
appear to create a lien upon the Property, or any part thereof, or upon any of
the Personal Property (all of which taxes, assessments and charges, together
with any and all other taxes, and charges of a similar kind or nature are
collectively referred to hereinafter as "IMPOSITIONS"); provided, however, that
if, by law, any such Imposition is payable, or may at the option of the taxpayer
be paid, in installments, Trustor may pay the same or cause it to be paid,
together with any accrued interest on the unpaid balance of such Imposition, in
installments as the same become due and before any fine, penalty, interest or
cost may be added thereto for the nonpayment of any such installment and
interest.
(b) NEW IMPOSITIONS. If at any time after the date hereof there shall
be assessed or imposed (i) a tax or assessment on the Property in lieu of or in
addition to the Impositions payable by Trustor pursuant to subsection (a) of
--------------
this Section, or (ii) a license fee, tax or assessment imposed on Beneficiary
and measured by or based in whole or in part upon the amount of the Notes or the
other Obligations secured hereby, then all such taxes, assessments or fees shall
be deemed to be included within the term "IMPOSITIONS" as defined in subsection
----------
(a) of this Section, and Trustor shall pay and discharge the same as herein
- ---
provided with respect to the payment of Impositions, if Trustor is permitted by
law to pay the same. If Trustor is prohibited by law from paying such
Impositions, then, at the option of Beneficiary, all obligations secured hereby,
together with all accrued interest thereon, shall immediately become due and
payable. Anything to the contrary herein notwithstanding, Trustor shall have no
obligation to pay any franchise, estate, inheritance, income, excess profits or
similar tax levied on Beneficiary or on the Obligations secured hereby, nor
shall such taxes be deemed to be Impositions.
(c) PROOF OF PAYMENT. Subject to the provisions of subsection (d) of
--------------
this Section, Trustor shall deliver to Beneficiary, within seven (7) days after
the date upon which any Imposition is due and payable by Trustor in accordance
with this Deed of Trust, official receipts of the appropriate taxing authority,
or other proof satisfactory to Beneficiary, evidencing the payment thereof.
(d) CONTEST OF ASSESSMENTS. Trustor shall have the right before any
delinquency occurs to contest or object to the amount or validity of any such
Imposition by
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appropriate legal proceedings, but this shall not be deemed or construed in any
way as relieving, modifying or extending Trustor's covenant to pay any such
Imposition at the time and in the manner provided in this Section unless Trustor
has given prior written notice to Beneficiary of Trustor's intent so to contest
or object to an Imposition, and unless (i) Trustor shall demonstrate to
Beneficiary's satisfaction that the legal proceedings shall conclusively operate
to prevent the sale of the Property, or any part thereof, to satisfy such
Imposition prior to final determination of such proceedings; or (ii) Trustor
shall furnish a good and sufficient bond or surety as requested by and
satisfactory to Beneficiary; or (iii) Trustor shall demonstrate to Beneficiary's
satisfaction that Trustor has provided a good and sufficient undertaking as
required or permitted by law to accomplish a stay of any such sale.
(e) RESERVE FUND. Upon request by Beneficiary following an Event of
Default, Trustor shall pay to Beneficiary an initial cash reserve in an amount
adequate to pay all Impositions for the ensuing tax fiscal year (or such lesser
amount as may then be specified by Beneficiary), and shall thereafter deposit
with Beneficiary each month, commencing with the first month after such request
by Beneficiary and continuing until all sums secured hereby are paid in full or
Beneficiary gives notice to Trustor to cease making such deposits, an amount
equal to one-twelfth of the sum of the annual Impositions, as reasonably
estimated by Beneficiary. In such event, Trustor further agrees to cause all
bills, statements or other documents relating to Impositions to be sent or
mailed directly to Beneficiary. Upon receipt of such bills, statements or other
documents evidencing that Impositions are then payable, and providing Trustor
has deposited sufficient funds with Beneficiary pursuant to this Section,
Beneficiary shall pay such amounts as may be due thereunder out of the funds so
deposited with Beneficiary. If at any time and for any reason the funds
deposited with Beneficiary are or will be insufficient to pay such amounts as
may then or subsequently be due, Beneficiary may notify Trustor and upon such
notice Trustor shall immediately deposit an amount equal to such deficiency with
Beneficiary. Notwithstanding the foregoing, nothing contained herein shall
cause Beneficiary to be deemed a trustee of said funds or to be obligated to pay
any amounts in excess of the amount of funds deposited with Beneficiary pursuant
to this Section, nor shall anything contained herein modify the obligation of
Trustor to pay, or cause to be paid, all Impositions. Beneficiary may commingle
said reserve with its own funds and Trustor shall be entitled to no interest
thereon. Beneficiary may impound or reserve for future payment of Impositions
such portion of such payments as Beneficiary may deem proper, applying the
balance upon any indebtedness or Obligation secured hereby in such order as
Beneficiary may determine, notwithstanding that said indebtedness or the
performance of said Obligation may not yet be due according to the terms
thereof. Should Trustor fail to deposit with Beneficiary (exclusive of that
portion of said payments which has been applied by Beneficiary upon any
indebtedness or Obligation secured hereby) sums sufficient to fully pay such
Impositions at least thirty (30) days before delinquency thereof, Beneficiary
may, at Beneficiary's election, but without any obligation so to do, advance any
amounts required to make up the deficiency, which advances, if any, together
with interest thereon at an annual rate equal to the Agreed Rate, shall be
secured hereby and shall be repayable to Beneficiary upon demand; or, at the
option of Beneficiary, Beneficiary may, without making any advance whatever,
apply any sums held by it upon any indebtedness or Obligation secured hereby, in
such order as
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Beneficiary may determine, notwithstanding that said indebtedness or the
performance of said Obligation may not yet be due according to the terms
thereof.
(f) JOINT ASSESSMENT. Trustor shall not initiate, and, to the maximum
extent permitted by law, shall not suffer or permit the joint assessment of any
real and personal property which may constitute all or a portion of the Property
or any other procedure whereby the lien of real property taxes and the lien of
personal property taxes shall be assessed, levied or charged to the Property as
a single lien.
(g) TAX SERVICE. Trustor shall cause to be furnished to Beneficiary a
tax reporting service, covering the Property, of the type and duration, and with
a company, satisfactory to Beneficiary.
9. LIENS. Trustor shall pay and promptly discharge, at Trustor's
cost and expense, all liens, encumbrances and charges upon the Property, or any
part thereof or in terest therein, other than Permitted Exceptions; provided
that Trustor shall have the right to contest in good faith the validity of any
such lien, encumbrance or charge in accordance with the provisions of the Second
Amended and Restated Note Purchase Agreement. If Trustor shall fail to remove
and discharge any such lien, encumbrance or charge, then, in addition to any
other right or remedy of Beneficiary, Beneficiary may, but shall not be
obligated to, discharge the same, either by paying the amount claimed to be due,
or by procuring the discharge of such lien, encumbrance or charge by depositing
in a court a bond or the amount claimed or otherwise giving security for such
claim, or by procuring such discharge in such manner as is or may be prescribed
by law. Trustor shall, immediately upon demand therefor by Beneficiary, pay to
Beneficiary an amount equal to all costs and expenses incurred by Beneficiary in
connection with the exercise by Beneficiary of the foregoing right to discharge
any such lien, encumbrance or charge, together with interest thereon from the
date of such expenditure at an annual rate equal to the Agreed Rate.
10. EASEMENTS AND LEASEHOLDS. If a leasehold estate or an easement
or other incorporeal right constitutes a portion of the Real Property or if all
or any portion of the Real Property or Improvements is leased or licensed by
Trustor to another person, Trustor agrees not to amend, change, terminate or
modify such lease, license, leasehold estate, easement or other right or
interest, or any right thereto or interest therein, without the prior written
consent of Beneficiary, which consent shall not be unreasonably withheld or
delayed. Consent to one amendment, change, agreement or modification shall not
be deemed to be a waiver of the right to require consent to other, future or
successive amendments, changes, agreements or modifications. Trustor agrees to
perform all obligations and agreements with respect to said lease, license,
leasehold, easement or other right or interest and shall not take any action or
omit to take any action which would effect or permit the termination thereof.
Trustor agrees to promptly notify Beneficiary in writing with respect to any
default or alleged default by any party thereto and to deliver to Beneficiary
copies of all notices, demands, complaints or other communications received or
given by Trustor with respect to any such default or alleged default.
Beneficiary shall have the option to cure any such default and to perform any or
all of Trustor's obligations thereunder or with respect thereto. All sums
expended by Beneficiary in curing any such default
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shall be secured hereby and shall be immediately due and payable without demand
or notice and shall bear interest from the date of expenditure at an annual rate
equal to the Agreed Rate.
11. FURTHER ACTS. Trustor shall do and perform all acts necessary to
keep valid and effective the charges and lien hereof, to carry into effect its
object and purposes, to protect the lawful owner(s) of the Notes and the other
Obligations secured hereby; shall execute and deliver to Beneficiary at any
time, upon request of Beneficiary, all other and further instruments in writing
necessary to vest in and secure to Trustee each and every part of the Real
Property and to Beneficiary the Rents therefrom and rights and interest of
Beneficiary therein or with respect thereto; and, upon request by the
Beneficiary, shall supply evidence of fulfillment of each of the covenants
herein contained concerning which a request for such evidence has been made.
12. ASSIGNMENT OF RENTS.
(a) Notwithstanding any language contained herein, or in any other
document, to the contrary, Trustor hereby irrevocably and absolutely assigns and
transfers to Beneficiary, without having to first take possession of the
Property, all Rents, including all present and future Leases and other rental
agreements, reserving unto Trustor a license to collect such Rents prior to the
occurrence of any Event of Default. Subsequent to the occurrence of an Event of
Default, such license reserved to Trustor shall be immediately revoked without
further demand or notice, and any Rents, including those past due, unpaid or
undetermined, may be collected by Beneficiary or its agent, and any amount so
collected shall be applied, less costs and expenses of operation and collection,
including attorneys' fees, to any indebtedness and/or Obligations secured
hereby, in such order as Beneficiary shall determine. The collection of such
Rents, and the application thereof as aforesaid, shall not cure or constitute a
waiver of any default or notice of default hereunder or invalidate any act done
pursuant to such notice. Trustor and Beneficiary intend that this assignment
shall be a present, absolute and unconditional assignment, not an assignment for
additional security only, and shall, immediately upon the execution hereof,
subject to the license granted above, give Beneficiary, and its agent, the right
to collect the Rents and to apply them as aforesaid. Nothing contained herein,
nor any collection of Rents by Beneficiary, or its agent or a receiver, shall be
construed to make Beneficiary (i) a "Mortgagee-in-Possession" of the Property so
long as Beneficiary has not itself entered into actual possession of the
Property; (ii) responsible for performing any of the obligations of the lessor
under any Lease; (iii) responsible for any waste committed by lessees or any
other parties, any dangerous or defective condition of the Property, or any
negligence in the management, upkeep, repair or control of the Property; or (iv)
liable in any manner for the Property or the use, occupancy, enjoyment or
operation of all or any part of it.
(b) Trustor hereby represents to Beneficiary that, except for
Permitted Exceptions, there is no assignment or pledge of any Leases of, or
Rents from, the Property now in effect, and covenants that, until the Notes are
fully paid and the other Obligations are fully satisfied, Trustor will not make
any such assignment or pledge to anyone other than Beneficiary nor will it
accept any periodic payments which are to be made pursuant to such Leases or
Rents more than thirty (30) days in advance of the date on which such payments
are due.
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13. ACTIONS AFFECTING PROPERTY. Trustor shall give Beneficiary and
Trustee prompt written notice of the assertion of any claim with respect to, or
the filing of any action or proceeding affecting or purporting to affect, the
Property, or title thereto or any right of possession thereof, or this Deed of
Trust or the security hereof or the rights or powers of Beneficiary or Trustee
hereunder. Trustor shall appear in and contest any such action or proceeding at
Trustor's sole expense; and shall pay all costs and expenses, including cost of
evidence of title and attorneys' fees, in any such action or proceeding in which
Beneficiary or Trustee may appear.
14. EMINENT DOMAIN. If any proceeding or action be commenced for the
taking of the Property, or any part thereof or interest therein, for public or
quasi-public use under the power of eminent domain, condemnation or otherwise,
or if the same be taken or damaged by reason of any public improvement or
condemnation proceeding, or in any other manner, or should Trustor receive any
notice or other information regarding such proceeding, action, taking or damage
(including, without limitation, a proposal to purchase the Property or some
portion thereof in lieu of condemnation), Trustor shall give prompt written
notice thereof to Beneficiary. Beneficiary shall be entitled, at its option,
without regard to the adequacy of its security, to investigate and negotiate
with the Trustor and the condemnor concerning the proposed taking, to commence,
appear in and prosecute in its own name, with Trustor, any such action or
proceeding, and, to join Trustor in making any compromise or settlement in
connection with such taking or damage. Trustor shall not compromise or settle
any such action or proceeding or agree to any sale in lieu of condemnation
without the prior written consent of Beneficiary. All compensation, awards,
damages, rights of action and proceeds awarded to Trustor by reason of any such
taking, transfer or damage (the "AWARD") are hereby assigned to Beneficiary and
Trustor agrees to execute such further assignments of the Award as Beneficiary
or Trustee may require. After deducting therefrom all costs and expenses
(regardless of the particular nature thereof and whether incurred with or
without suit), including attorneys' fees, incurred by it in connection with any
such negotiations, action or proceeding (whether or not prosecuted to judgment),
Beneficiary shall, if (i) an Event of Default does not then exist hereunder,
(ii) the taking, transfer or damage does not occur within six (6) months prior
to the maturity of the Notes and other Obligations, and (iii) application of the
Award to restoration of the Property will not impair Beneficiary's security for
the Obligations secured hereby, apply the Award to the restoration of the
Property, subject to such conditions as Beneficiary shall determine (it being
expressly understood and agreed that Beneficiary may condition disbursement of
such proceeds for restoration upon proof that an amount equal to the sum which
Beneficiary is requested to disburse has theretofore been paid by Trustor
without reimbursement therefor, or is then due and payable, for materials
theretofore installed or work theretofore performed upon the Property and
properly includable in the cost of repair, reconstruction or restoration
thereof). If, at the time of receipt by Beneficiary of such proceeds, (i) an
Event of Default then exists hereunder, (ii) the taking, transfer or damage
occurs within six (6) months prior to the maturity of the Notes and other
Obligations, or (iii) application of the Award to restoration will impair
Beneficiary's security for the Obligations secured hereby, Beneficiary shall
have the option, in its sole and absolute discretion, (1) to apply all or any
portion of the Award upon any indebtedness or other Obligation secured hereby
and in such order as Beneficiary may determine, notwithstanding that said
indebtedness or the performance of said
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Obligation may not be due according to the terms thereof, or (2) to apply all or
any portion of the Award to the restoration of the Property, subject to such
conditions as Beneficiary may determine, or (3) to deliver all or any portion of
the Award, after such deductions, to Trustor, subject to such conditions as
Beneficiary may determine (and, if the Award is not sufficient to satisfy the
Obligations in full, Trustor shall immediately pay any remaining balance,
together with all accrued interest thereon). Nothing herein contained shall be
deemed to excuse Trustor from restoring, repairing and maintaining the Property,
as herein provided, regardless of whether or not the Award is available for
restoration, whether or not any such Award is sufficient in amount, or whether
or not the Property can be restored to the same condition and character as
existed prior to such damage or partial taking. Trustor hereby specifically,
unconditionally and irrevocably waives all rights of a property owner under all
laws, including NRS 37.115, as amended or recodified from time to time, which
provide for allocation of condemnation proceeds between a property owner and a
lienholder to the fullest extent permitted by law.
15. DUE ON SALE. Except as otherwise permitted in the Second Amended
and Restated Note Purchase Agreement, or this Deed of Trust, if the Trustor
shall sell or convey, or create or permit to exist any mortgage, pledge,
security interest or other encumbrance on, or in any other manner alienate or
otherwise "transfer" the Real Property hereby encumbered or any part thereof or
any interest therein, or shall enter into any agreement for the same, or shall
be divested of its title in any manner or way, whether voluntary or involuntary
or by merger, without the written consent of Beneficiary being first had and
obtained, any indebtedness or Obligation secured hereby, irrespective of the
maturity dates expressed in the Notes or any other notes evidencing the same, at
the option of Beneficiary, and without demand or notice, shall immediately
become due and payable. Consent to one such transaction shall not be deemed to
be a waiver of the right to require consent to future or successive
transactions. Beneficiary may grant or deny such consent in its sole discretion
and, if consent should be given, any such transfer shall be subject to this Deed
of Trust, and any such transferee shall assume all obligations hereunder and
agree to be bound by all provisions contained herein. Such assumption shall
not, however, release Trustor or any maker or guarantor of any Obligation from
any liability with respect thereto without the prior written consent of
Beneficiary. As used herein, "TRANSFER" includes the direct or indirect sale,
agreement to sell, transfer, conveyance, pledge, collateral assignment or
hypothecation of the Real Property, or any portion thereof or interest therein,
whether voluntary, involuntary, by operation of law or otherwise, the execution
of any installment land sale contract or similar instrument affecting all or a
portion of the Real Property, or the lease of all or substantially all of the
Property. The term "TRANSFER" shall also include the direct or indirect
transfer, assignment, hypothecation or conveyance of legal or beneficial
ownership of Trustor or any corporate shares of Trustor.
16. PARTIAL OR LATE PAYMENTS. By accepting payment of any
indebtedness secured hereby after its due date, Beneficiary does not waive its
right either to require prompt payment, when due, of all other indebtedness so
secured or to declare default, as herein provided, for failure to so pay.
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17. RECONVEYANCE BY TRUSTEE. Upon receipt of written request from
Beneficiary reciting that all sums secured hereby have been paid and upon
surrender of this Deed of Trust and the Notes secured hereby to Trustee for
cancellation and retention, or such other disposition as Trustee, in its sole
discretion, may choose, and upon payment of its fees, the Trustee shall
reconvey, without warranty or recourse, the Property then held hereunder.
Beneficiary will give such written request and will surrender the Deed of Trust
and the Notes within a reasonable time after it and all of the Holders receive
payment in full of all sums secured hereby. The recitals in such reconveyance
of any matters of fact shall be conclusive proof of the truth thereof. The
grantee in such reconveyance may be described in general terms as "the person or
persons legally entitled thereto".
18. RIGHT OF BENEFICIARY AND TRUSTEE TO APPEAR. If, during the
existence of the trust created hereby, there be commenced or pending any suit or
action materially and adversely affecting the Property, or any part thereof, or
the title thereto, or if any adverse claim for or against the Property, or any
part thereof, be made or asserted, the Trustee or Beneficiary may appear or
intervene in the suit or action and retain counsel therein and, unless such suit
or action is being diligently contested in good faith by Trustor and Trustor
shall have established and maintained adequate reserves with Beneficiary for the
full payment and satisfaction of such suit or action if determined adversely to
Trustor, may defend same, or otherwise take such action therein as the Trustee
or Beneficiary may be advised and may, after providing Trustor with written
notice, pay and expend such sums of money as the Trustee or Beneficiary may deem
to be necessary and Trustor shall pay all reasonable costs and expenses of
Trustee and Beneficiary incurred in connection therewith.
19. PERFORMANCE BY TRUSTEE OR BENEFICIARY. If Trustor fails to make
any payment or perform any act as and in the manner provided in any of the Basic
Documents and such failure becomes an "Event of Default" thereunder, then the
Trustee or Beneficiary, at the election of either of them and without any
obligation to do so, after the giving of reasonable notice to the Trustor, or
any successor in interest of the Trustor, or any of them and without releasing
Trustor from any obligation hereunder, may make such payment or perform such act
and incur any liability, or expend whatever amounts, in its absolute discretion,
it may deem necessary therefor. In connection therewith (without limiting their
general and other powers, whether conferred herein, in another Basic Document or
by law), Beneficiary and Trustee, and each of them, shall have and are hereby
given the right, but not the obligation, (i) to enter upon and take possession
of the Property; (ii) to make additions, alterations, repairs and improvements
to the Property which they or either of them may consider necessary or proper to
keep the Property in good condition and repair; (iii) to appear and participate
in any action or proceeding affecting or which may affect the security hereof or
the rights or powers of Beneficiary or Trustee; (iv) to pay, purchase, contest
or compromise any encumbrance, claim, charge, lien or debt which in the judgment
of either may affect or appears to affect the security of this Deed of Trust or
to be prior or superior hereto; and (v) in exercising such powers, to pay
necessary expenses, including employment of counsel and other necessary or
desirable consultants. All sums incurred or expended by the Trustee or
Beneficiary, under the terms hereof (including, without limiting the generality
of the foregoing, costs of evidence of title, court costs, appraisals, surveys,
and
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receiver's, Trustee's and attorneys' fees, costs and expenses (including,
without limitation, the fees and expenses of attorneys for Trustee), whether or
not an action is actually commenced in connection therewith), shall become due
and payable by the Trustor to the Trustee on the next interest or payment date
under the Notes secured hereby and shall bear interest until paid at an annual
percentage rate equal to the Agreed Rate. In no event shall the payment or
performance of any obligation by Trustee or Beneficiary be construed as a waiver
of the default occasioned by Trustor's failure to make such payment or payments
or to perform such obligation or obligations.
20. INSPECTIONS. Upon reasonable advance written notice,
Beneficiary, or its agents, representatives or workers, are authorized to enter
at any reasonable time upon or in any part of the Property for the purpose of
inspecting the same and for the purpose of performing any of the acts it is
authorized to perform hereunder or under the terms of any of the Basic
Documents; provided that, Beneficiary, its agents, representatives and workers
-------- ----
shall not unreasonably interfere with the Trustor's or its tenants' operations
on the Property.
21. INVALIDITY OF LIEN. If the lien of this Deed of Trust is invalid
or unenforceable as to any part of the Obligations, or if the lien is invalid or
unenforceable as to any part of the Property, the unsecured or partially secured
portion of the Obligations shall be completely paid prior to the payment of the
remaining and secured or partially secured portion of the Obligations, and all
payments made on the Obligations, whether voluntary or under foreclosure or
other enforcement action or procedure, shall be considered to have been first
paid on and applied to the full payment of that portion of the Obligations which
are not secured or are not fully secured by the lien of this Deed of Trust.
22. SUBROGATION. To the extent that proceeds of the Notes or other
sums advanced by Beneficiary are used to pay any outstanding lien, charge or
prior encumbrance against the Property, such proceeds shall be deemed to have
been advanced by Beneficiary at Trustor's request and Beneficiary shall be
subrogated to any and all rights and liens held by any owner or holder of such
outstanding liens, charges and prior encumbrances, regardless of whether said
liens, charges or encumbrances are released.
23. EVENTS OF DEFAULT. Trustor will be in default under this Deed of
Trust upon the occurrence of any one or more of the following events (some or
all collectively, "EVENTS OF DEFAULT"; any one singly, an "EVENT OF DEFAULT"):
(a) FAILURE TO PAY. Any installment of principal on any Note is
not paid when due, whether at stated maturity, by acceleration, by notice
of voluntary prepayment, by mandatory prepayment or otherwise; or any
installment of interest or any other amounts due and owing under the Second
Amended and Restated Note Purchase Agreement, this Deed of Trust or any
other Basic Document, or any other amount the payment of which is secured
hereby, is not paid within fifteen (15) days after the date when due; or
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(b) OTHER BREACHES HEREOF. A breach by Trustor of any
representation, warranty or covenant in this Deed of Trust which is not
cured within thirty (30) days after the earlier of (i) an officer of
Trustor or SGC (its parent) becoming aware of such default, and (ii)
receipt by Trustor of notice from Trustee, Beneficiary or any Holder of
such default;
(c) DEFAULTS UNDER OTHER BASIC DOCUMENTS. The occurrence under
the Second Amended and Restated Note Purchase Agreement or any of the other
Basic Documents of an "Event of Default" (as defined therein); or
(d) Trustor, or any other "borrower" (as that term is defined in
NRS 106.310, as amended or recodified from time to time) who may send a
notice pursuant to NRS 106.380(1), as amended or recodified from time to
time, with respect to this Deed of Trust: (i) delivers, sends by mail or
otherwise gives, or purports to deliver, send by mail or otherwise give, to
Beneficiary or any Holder (A) any notice of an election to terminate the
operation of this Deed of Trust as security for any Obligation (including,
without limitation, any obligation to repay any "future advance" (as
defined in NRS 106.320, as amended or recodified from time to time) of
"principal" (as defined in NRS 106.345, as amended or recodified from time
to time)), or (B) any other notice pursuant to NRS 106.380(1), as amended
or recodified from time to time; (ii) records a statement pursuant to NRS
106.380(3), as amended or recodified from time to time; or (iii) causes
this Deed of Trust, any Obligation, Beneficiary or any Holder to be subject
to NRS 106.380(2), 106.380(3) or 106.400, as amended or recodified from
time to time.
24. REMEDIES. At any time after an Event of Default, Beneficiary and
Trustee will be entitled to invoke any and all of the following rights and
remedies, all of which will be cumulative, and the exercise of any one or more
of which shall not constitute an election of remedies:
(a) ACCELERATION. Beneficiary may declare any or all of the
Obligations to be due and payable immediately, without presentment, demand,
protest or notice of any kind.
(b) RECEIVER. Subject to applicable Gaming Laws, Beneficiary may
apply to any court of competent jurisdiction for, and obtain appointment
of, a receiver for the Property or any part thereof, without notice to
Trustor or anyone claiming under Trustor, and without regard to the then
value of the Property or the adequacy of any security for the Obligations,
and Trustor hereby irrevocably consents to such appointment and waives
notice of any application therefor to the fullest extent permitted by law.
Any such receiver or receivers shall have all the usual powers and duties
of receivers in like or similar cases and all the powers and duties of
Beneficiary in case of entry as provided herein and in the Second Amended
and Restated Note Purchase Agreement and shall continue as such and
exercise all such powers until the later of (i) the date of confirmation of
sale of all of the Property; (ii) the disbursement of all proceeds of the
Property collected
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by such receiver and the payment of all expenses incurred in
connection therewith; or (iii) the termination of such receivership with
the consent of Beneficiary or pursuant to an order of a court of competent
jurisdiction.
(C) ENTRY. Beneficiary, in person, by agent or by court-
appointed receiver, may enter, take possession of, manage and operate all
or any part of the Property, subject to applicable Gaming Laws, and may
also do any and all other things in connection with those actions that
Beneficiary may, in its sole discretion, consider necessary and appropriate
to protect the security of this Deed of Trust. Such other things may
include, among other things, any of the following: taking and possessing
all of Trustor's or the then owner's books and records; entering into,
enforcing, modifying, or canceling Leases on such terms and conditions as
Beneficiary may consider proper; obtaining and evicting tenants; fixing or
modifying Rents; collecting and receiving any payment of money owing to
Trustor; completing any construction; and contracting for and making
repairs and alterations. If Beneficiary so requests, Trustor shall
assemble all of the Property that has been removed from the Real Property
and make all of it available to Beneficiary at the site of the Real
Property. Trustor hereby irrevocably constitutes and appoints Beneficiary
as Trustor's attorney-in-fact to perform such acts and execute such
documents as Beneficiary in its sole discretion may consider to be
appropriate in connection with taking these measures, including endorsement
of Trustor's name on any instruments. Regardless of any provision of this
Deed of Trust or the Second Amended and Restated Note Purchase Agreement,
Beneficiary shall not be considered to have accepted any property other
than cash or immediately available funds in satisfaction of any Obligation
of Trustor to Beneficiary, unless Beneficiary has given express written
notice of Beneficiary's election of that remedy in accordance with the
Nevada Uniform Commercial Code, as it may be amended or recodified from
time to time.
(D) CURE; PROTECTION OF SECURITY. Either Beneficiary or Trustee
may cure any breach or default of Trustor, and if it chooses to do so in
connection with any such cure, subject to applicable Gaming Laws,
Beneficiary or Trustee may also enter the Property and, whether or not
Beneficiary or Trustee enter the Property, do any and all other things
which it, in its sole discretion, may consider necessary and appropriate to
protect the security of this Deed of Trust, including, without limitation,
the right to complete any Improvements under construction thereon. Such
other things may include: appearing in and/or defending any action or
proceeding which purports to affect the security of, or the rights or
powers of Beneficiary or Trustee under, this Deed of Trust; paying,
purchasing, contesting or compromising any encumbrance, charge, lien or
claim of lien which in Beneficiary's or Trustee's sole judgment is or may
be senior in priority to this Deed of Trust, such judgment of Beneficiary
or Trustee to be conclusive as among the parties to this Deed of Trust;
obtaining insurance and/or paying any premiums or charges for insurance
required to be carried under this Deed of Trust; otherwise caring for and
protecting any and all of the Property; and employing counsel, accountants,
contractors and other appropriate persons to assist Beneficiary or Trustee.
Beneficiary and
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Trustee may take any of the actions permitted under this Subsection either
with or without giving notice to any person.
(e) UNIFORM COMMERCIAL CODE REMEDIES. With respect to Personal
Property, Beneficiary may exercise any or all of the remedies granted to a
secured party under NRS Article 104.9101 et seq. (the Nevada enactment of
the Uniform Commercial Code), together with any and all other rights and
remedies provided in the Henderson Security Agreement.
(f) JUDICIAL ACTION. Beneficiary may bring an action in any
court of competent jurisdiction to foreclose this Deed of Trust or to
obtain specific enforcement of any of the covenants or agreements of this
Deed of Trust or for any other remedy provided herein, in the Second
Amended and Restated Note Purchase Agreement, in any Basic Document or
otherwise provided by law or in equity.
(g) POWER OF SALE. Under the power of sale herein granted,
Beneficiary shall have the discretionary right to cause some or all of the
Property, including any Property which constitutes Personal Property, to be
sold or otherwise disposed of in any combination and in any manner
permitted by applicable law.
(i) SALES OF PERSONAL PROPERTY.
(A) For purposes of the power of sale herein granted,
Beneficiary may elect to treat as Personal Property any Property which
is intangible or which can be severed from the Land or Improvements
without causing structural damage. If Beneficiary chooses to do so,
Beneficiary may dispose of any Personal Property separately from the
sale of real property, in any manner permitted by or under the NRS,
including any public or private sale, or in any manner permitted by
any other applicable law or the Henderson Security Agreement.
(B) The following provision shall apply in the absence of
any specific statutory requirement which permits or requires a
different notice period: In connection with any sale or other
disposition of such Property, Trustor agrees that the following
procedures constitute a commercially reasonable sale: Beneficiary
shall mail written notice of the sale to Trustor not later than ten
(10) days prior to such sale. Upon receipt of any written request,
Beneficiary will, to the extent reasonably practicable, make the
Property available to any bona fide prospective purchaser for
inspection during reasonable business hours prior to the sale.
Notwithstanding any provision to the contrary, Beneficiary shall be
under no obligation to consummate a sale if, in its judgment, none of
the offers received by it equals the fair value of the Property
offered for sale. The foregoing procedures do not constitute the only
procedures that may be commercially reasonable.
(ii) TRUSTEE'S SALES OF REAL PROPERTY OR MIXED COLLATERAL.
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(A) Beneficiary may choose to dispose of some or all of the
Property which consists solely of real property in any manner then
permitted by applicable law. In its discretion, Beneficiary may also
or alternatively choose to dispose of some or all of the Property, in
any combination consisting of both real and personal property,
together in one sale to be held in accordance with the law and
procedures applicable to real property. Trustor agrees that any sale
of personal property together with real property constitutes a
commercially reasonable sale of the personal property. For purposes
of this power of sale, either a sale of real property alone, or a sale
of both real and personal property together in accordance with law,
will sometimes be referred to as a "TRUSTEE'S SALE."
(B) Before any Trustee's Sale, Beneficiary or Trustee shall
give and record such notice of default and election to sell as may
then be required by law. When all time periods then legally mandated
have expired, and after such notice of sale as may then be legally
required has been given, Trustee shall sell the property being sold at
a public auction to be held at the time and place specified in the
notice of sale. Neither Trustee nor Beneficiary shall have any
obligation to make demand on Trustor before any Trustee's Sale. From
time to time, in accordance with then applicable law, Trustee may, and
in any event at Beneficiary's request shall, postpone any Trustee's
sale by public announcement at the time and place noticed for that
sale, or may, in its discretion, give a new notice of sale.
(C) At any Trustee's Sale, Trustee shall sell to the highest
bidder at public auction for cash in lawful money of the United
States. Trustee shall execute and deliver to the purchaser(s) a deed
or deeds conveying the property being sold without any covenant or
warranty whatsoever, express or implied. The recitals in any such
deed of any matters or facts, including any facts bearing upon the
regularity or validity of any Trustee's Sale, shall be conclusive
proof of their truthfulness. Any such deed shall be conclusive
against all persons as to the facts recited in it.
(h) SINGLE OR MULTIPLE FORECLOSURE SALES. If the Property at the
time of sale or other disposition consists of more than one lot, parcel or
item of property, Beneficiary may:
(i) Designate the order in which the lots, parcels or items
shall be sold or disposed of or offered for sale or disposition; and
(ii) Elect to dispose of the lots, parcels or items through
a single consolidated sale or disposition to be held or made under the
power of sale herein granted, or in connection with judicial
proceedings, or by virtue of a judgment and decree of foreclosure and
sale; or through two or more such sales or dispositions; or in any
other manner that Beneficiary may deem to be in its best interests
(any
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such sale or disposition, a "FORECLOSURE SALE;" any two or more,
"FORECLOSURE SALES").
If Beneficiary chooses to have more than one Foreclosure Sale, Beneficiary
at its option may cause the Foreclosure Sales to be held simultaneously or
successively, on the same day, or on such different days and at such
different times and in such order as Beneficiary may deem to be in its best
interests. No Foreclosure Sale shall terminate or affect the liens of this
Deed of Trust on any part of the Property which has not been sold, until
all of the Obligations have been paid and satisfied in full.
25. Costs of Enforcement. If an installment of principal or interest
on the Notes is not paid when due or if any other Event of Default occurs,
Beneficiary and Trustee, and each of them, may employ an attorney or attorneys
to protect their rights hereunder. Trustor promises to pay to Beneficiary, on
demand, the fees and expenses of such attorneys and all other costs of enforcing
the Obligations secured hereby, including but not limited to, recording fees,
the expense of a Trustee's Sale Guarantee, Trustee's fees and expenses,
receivers' fees and expenses, and all other expenses, of whatever kind or
nature, incurred by Beneficiary and Trustee, and each of them, in connection
with the enforcement of the Obligations secured hereby, whether or not such
enforcement includes the filing of a lawsuit. Until paid, such sums shall be
secured hereby and shall bear interest, from date of expenditure, at an annual
rate equal to the Agreed Rate.
26. REMEDIES CUMULATIVE AND NOT EXCLUSIVE. Trustee and Beneficiary,
and each of them, shall be entitled to enforce payment and performance of any
indebtedness or other Obligations secured hereby and to exercise all rights and
powers under this Deed of Trust or under any Basic Document or other agreement
or any laws now or hereafter in force, notwithstanding some or all of the said
indebtedness and other Obligations secured hereby may now or hereafter be
otherwise secured, whether by mortgage, deed of trust, pledge, lien, assignment
or otherwise. Neither the acceptance of this Deed of Trust nor its enforcement
whether by court action or pursuant to the power of sale or other powers herein
contained, shall prejudice or in any manner affect Trustee's or Beneficiary's
right to realize upon or enforce any other security now or hereafter held by
Trustee or Beneficiary, it being agreed that Trustee and Beneficiary, and each
of them, shall be entitled to enforce this Deed of Trust and any other security
now or hereafter held by Beneficiary or Trustee in such order and manner as they
or either of them may in their absolute discretion determine. No remedy herein
conferred upon or reserved to Trustee or Beneficiary is intended to be exclusive
of any other remedy herein or by law provided or permitted, but each shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute. Every power or remedy
given by any of the Basic Documents to Trustee or Beneficiary or to which either
of them may be otherwise entitled, may be exercised, concurrently or
independently, from time to time and as often as may be deemed expedient by
Trustee or Beneficiary and either of them may pursue inconsistent remedies.
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27. CREDIT BIDS. At any Foreclosure Sale, any person, including
Trustor, Trustee or Beneficiary, may bid for and acquire the Property or any
part thereof to the extent permitted by then applicable law. Instead of paying
cash for such property, Beneficiary may settle therefor by crediting such
portion of the following obligations against the sales price of the property as
is necessary to equal such price:
(a) First, the portion of the Obligations attributable to the
expenses of sale, costs of any action and any other sums for which Trustor
is obligated to pay or reimburse Beneficiary or Trustee hereunder or under
any other Basic Document; and
(b) Second, any of the other Obligations, in any order and
proportion as Beneficiary, in its sole discretion, may elect.
28. APPLICATION OF FORECLOSURE SALE PROCEEDS. Beneficiary and
Trustee shall apply the proceeds of any Foreclosure Sale in the following
manner:
(a) First, to pay the portion of the Obligations attributable to
the expenses of sale, costs of any action and any other sums for which
Trustor is obligated to reimburse Beneficiary or Trustee hereunder or under
any other Basic Document;
(b) Second, to pay the portion of the Obligations attributable to
any sums expended or advanced by Beneficiary or Trustee under the terms of
this Deed of Trust which then remain unpaid;
(c) Third, to pay any and all other Obligations, in any order and
proportion as Beneficiary, in its sole discretion, may elect; and
(d) Fourth, the remainder, if any, shall be remitted to the
person or persons entitled to it.
29. APPLICATION OF RENTS AND OTHER SUMS. Beneficiary shall apply any
and all Rents collected by it, and any and all sums, other than proceeds of a
Foreclosure Sale, which Beneficiary may receive or collect, in the following
manner:
(a) First, to pay the portion of the Obligations attributable to
the costs and expenses of operation and collection that may be incurred by
Trustee, Beneficiary or any receiver;
(b) Second, to pay any and all other Obligations in any order and
proportion as Beneficiary, in its sole discretion, may elect; and
(c) Third, the remainder, if any, shall be remitted to the person
or persons entitled to it.
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Beneficiary shall have no liability for any funds which it does not actually
receive.
30. INCORPORATION OF CERTAIN NEVADA COVENANTS. The following
covenants, Nos. 1, 3, 4 (at the Agreed Rate), 6, 7 (reasonable), 8 and 9 of NRS
107.030, where not in conflict with the provisions of the Basic Documents, are
hereby adopted and made a part of this Deed of Trust. Upon any Event of Default
by Trustor hereunder, Beneficiary may (a) declare all sums secured immediately
due and payable without demand or notice or (b) subject to any applicable Gaming
Laws, have a receiver appointed as a matter of right without regard to the
sufficiency of said property or any other security or guaranty and without any
showing as required by NRS (S)107.100. All remedies provided in this Deed of
Trust are distinct and cumulative to any other right or remedy under this Deed
of Trust or afforded by law or equity and may be exercised concurrently,
independently or successively. The sale of said property conducted pursuant to
Covenants Nos. 6, 7 and 8 of NRS (S)107.030 may be conducted either as to the
whole of said property or in separate parcels and in such order as Trustee may
determine.
31. SUBSTITUTION OF TRUSTEE. Beneficiary or its assigns may, from
time to time, by a written instrument executed and acknowledged by Beneficiary,
recorded in the county in which the Real Property is located and otherwise
complying with applicable law, and delivered to Trustor, appoint a successor
trustee or trustees to any Trustee named herein or acting hereunder, to execute
the trust created by the Deed of Trust or other conveyance in trust. Upon the
recording of such instrument, the new trustee or trustees shall, without
conveyance from the predecessor trustee, be vested with all the title, estate,
interest, rights, powers, duties and trusts in the premises vested in or
conferred upon the predecessor trustee. If there be more than one trustee,
either may act alone and execute the trusts upon the request of the Beneficiary,
and all his acts thereunder shall be deemed to be the acts of all trustees, and
the recital in any conveyance executed by such sole trustee of such request
shall be conclusive evidence thereof, and of the authority of such sole trustee
to act.
32. BINDING NATURE. This Deed of Trust applies to, inures to the
benefit of and binds Trustor and the heirs, legatees, devisees, administrators,
personal representatives, executors and the successors and assigns thereof,
Trustee and Beneficiary. Trustee and Beneficiary will provide to Trustor
written notice of any assignment of Beneficiary's or Trustee's interest
hereunder. As used herein, the term "Beneficiary" shall mean the owners and
holders of the Notes and/or any other Obligations from time to time, whether or
not named as Beneficiary herein (it being expressly agreed, however, that
Beneficiary may act through an agent; that only the signature of such agent is
required on any amendment hereof or any consent, approval or other action
hereunder; and that SunAmerica, Inc. is the initial agent hereunder); the term
"Trustee" shall mean the trustee appointed hereunder from time to time, whether
or not notice of such appointment is given; and the term "Trustor" shall mean
the Trustor named herein and the permitted successors-in-interest, if any, of
said named Trustor, in and to the Property or any part thereof. If there be
more than one Trustor hereunder, their obligations hereunder shall be joint and
several. It is expressly agreed that the trust created hereby is irrevocable by
Trustor.
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33. ACCEPTANCE OF TRUST; RESIGNATION BY TRUSTEE. Trustee accepts
this trust when this Deed of Trust, duly executed and acknowledged, is made a
public record as provided by law, reserving, however, unto the Trustee, the
right to resign from the duties and obligations imposed herein whenever Trustee,
in its sole discretion, deems such resignation to be in the best interest of the
Trustee. Written notice of such resignation shall be given to Trustor and
Beneficiary.
34. FULL PERFORMANCE REQUIRED; SURVIVAL OF WARRANTIES. All
representations, warranties and covenants of Trustor contained in any loan
application or made to Beneficiary in connection with the Notes and other
Obligations secured hereby or contained in any of the Basic Documents or
incorporated by reference therein, shall survive the execution and delivery of
this Deed of Trust and shall remain continuing obligations, warranties and
representations of Trustor so long as any portion of the Obligations secured by
this Deed of Trust remains outstanding.
35. WAIVER OF CERTAIN RIGHTS BY TRUSTOR. Trustor waives, to the
extent permitted by law, (I) the benefit of all laws now existing or that may
hereafter be enacted providing for any appraisement before sale of any portion
of the Property, (II) all rights of redemption, valuation, appraisement, stay of
execution, notice of election to mature or declare due the whole of the secured
indebtedness and marshalling in the event of foreclosure of the liens hereby
created, and (III) all rights and remedies which Trustor may have or be able to
assert by reason of the laws of the State of Nevada pertaining to the rights and
remedies of sureties. Without limiting the generality of the foregoing, Trustor
waives, to the extent permitted by law, all rights (including any rights
provided by NRS 100.040 and 100.050) to direct the order in which any of the
Property shall be sold in the event of any sale or sales pursuant hereto and to
have any of the Property or any other property now or hereafter constituting
security for the indebtedness or other Obligations secured hereby marshalled
upon any foreclosure of this Deed of Trust or of any other security for any of
such indebtedness or other Obligations.
36. CONSTRUCTION. The language in all parts of this Deed of Trust
shall be in all cases construed simply according to its fair meaning and not
strictly for or against any of the parties hereto. Headings at the beginning
of Sections, Subsections, paragraphs and subparagraphs of this Deed of Trust are
solely for the convenience of the parties, are not a part hereof and shall not
be used in construing this Deed of Trust. The preamble, any recitals and all
exhibits and schedules to this Deed of Trust are part of this Deed of Trust and
are incorporated herein by this reference. When required by the context:
whenever the singular number is used in this Deed of Trust, the same shall
include the plural, and the plural shall include the singular; and the masculine
gender shall include the feminine and neuter genders and vice versa. Unless
otherwise required by the context (or otherwise provided herein): the words
"HEREIN", "HEREOF" and "HEREUNDER" and similar words shall refer to this Deed of
Trust generally and not merely to the provision in which such term is used; the
word "PERSON" shall include individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority and other entity of whatever
nature; the words "INCLUDING", "INCLUDE" or "INCLUDES" shall be interpreted in a
non-exclusive manner as though the words "but not limited to" or "but without
limiting the generality of the foregoing" or "without
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limitation" immediately followed the same; the word "MONTH" shall mean calendar
month; and the term "BUSINESS DAY" shall mean any day other than a Saturday,
Sunday or legal holiday under the laws of the State of California or Nevada. If
the day on which performance of any act or the occurrence of any event hereunder
is due is not a business day, the time when such performance or occurrence shall
be due shall be the first business day occurring after the day on which
performance or occurrence would otherwise be due hereunder. All times provided
in this Deed of Trust for the performance of any act will be strictly construed,
time being of the essence hereof.
37. PRIORITY. This Deed of Trust is intended to have, and retain,
priority over all other liens and encumbrances upon the Real Property, excepting
only: (i) such Impositions as, at the date hereof, have, or, by law, gain
priority over the lien created hereby; (ii) covenants, conditions, restrictions,
easements, rights of way and Leases which are of record and which, on the date
hereof, affect the Real Property and are superior in right or have priority over
this Deed of Trust; (iii) Leases, liens, encumbrances and other matters as to
which Beneficiary hereafter expressly subordinates the lien of this Deed of
Trust by written instrument in recordable form; and (iv) to the extent not
included within clauses (i) through (iii) above, the Permitted Exceptions.
----------- -----
Under no circumstances shall Beneficiary be obligated or required to subordinate
the lien hereof to any lien, encumbrance, covenant or other matter affecting the
Real Property or any portion thereof. Beneficiary may, however, at
Beneficiary's option, exercisable in its sole and absolute discretion,
subordinate the lien of this Deed of Trust, in whole or in part, to any or all
Leases, liens, encumbrances or other matters affecting all or any portion of the
Real Property, by executing and recording, in the Office of the County Recorder
of the county or counties in which the Real Property is located, a unilateral
declaration of such subordination specifying the Lease, lien, encumbrance or
other matter or matters to which this Deed of Trust shall thereafter be
subordinate.
38. AMENDMENTS. This Deed of Trust cannot be waived, changed,
discharged or terminated orally, but only by an instrument in writing signed by
the party against whom enforcement of any waiver, change, discharge or
termination is sought.
39. FIXTURE FILING AND FINANCING STATEMENT. Portions of the Personal
Property (and portions of the Real Property) are goods which are or are to
become fixtures on or relating to the Real Property. This Deed of Trust
constitutes a financing statement filed as a fixture filing in the Official
Records of the County Recorder of the County in which the Property is located
with respect to any and all fixtures included within the term "Property" as used
herein and with respect to any goods or other Personal Property that may now be
or hereafter become such fixtures. The address of Beneficiary, from which
information concerning the security interest granted hereunder may be obtained,
is:
SunAmerica Life Insurance Company
1 SunAmerica Center
Century City
Los Angeles, California 90067-6022
38
<PAGE>
Attention: Director-Mortgage Lending and
Real Estate
40. ATTORNEY-IN-FACT. Subject to any applicable Gaming Laws, Trustor
hereby appoints Beneficiary the attorney-in-fact of Trustor to prepare, sign,
file and record one or more financing statements; any documents of title or
registration, or like papers, and to take any other action deemed necessary,
useful or desirable by Beneficiary to perfect and preserve Beneficiary's
security interest against the rights or interests of third persons.
41. RELEASES, EXTENSIONS, MODIFICATIONS AND ADDITIONAL SECURITY.
(a) From time to time, Beneficiary may perform any of the following
acts without incurring any liability or giving notice to any person, and without
affecting the personal liability of any person for the payment of the
Obligations (except as provided below), and without affecting the security
hereof for the full amount of the Obligations on all Property remaining subject
hereto, and without the necessity that any sum representing the value of any
portion of the Property affected by the Beneficiary's action be credited on the
Obligations:
(i) Release any person liable for payment of any Obligation;
(ii) Extend the time for payment, or otherwise alter the terms
of payment, of any Obligation;
(iii) Accept additional real or personal property of any kind as
security for any Obligation, whether evidenced by deeds of trust,
mortgages, security agreements or any other instruments of security; or
(iv) Alter, substitute or release any property securing the
Obligations.
(b) From time to time when requested to do so by Beneficiary in
writing, Trustee may perform any of the following acts without incurring any
liability or giving notice to any person:
(i) Consent in writing to the making of any plat or map of the
Property or any part of it;
(ii) Join in granting any easement or creating any restriction
affecting the Property;
(iii) Join in any subordination or other agreement affecting
this Deed of Trust or the lien of it or other agreement or instrument
relating hereto or to the Property or any portion thereof; or
(iv) Reconvey the Property or any part of it without any
warranty.
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42. EXCULPATION AND INDEMNIFICATION.
(a) Beneficiary shall not be directly or indirectly liable to Trustor
or any other person as a consequence of any of the following:
(i) Beneficiary's exercise of or failure to exercise any rights,
remedies or powers granted to Beneficiary in this Deed of Trust;
(ii) Beneficiary's failure or refusal to perform or discharge any
obligation or liability of Trustor under any agreement related to the
Property or under this Deed of Trust; or
(iii) Any loss sustained by Trustor or any third party resulting
from Beneficiary's failure to lease the Property, or from any other act or
omission of Beneficiary in managing the Property, after an Event of
Default, unless the loss is caused by the willful misconduct or bad faith
of Beneficiary.
To the extent permitted by applicable law, Trustor hereby expressly waives and
releases all liability of the types described above, and agrees that no such
liability shall be asserted against or imposed upon Beneficiary.
(b) Except for losses caused by the willful misconduct or bad faith of
Trustee or Beneficiary, Trustor agrees to indemnify Trustee and Beneficiary
against and hold them harmless from all losses, damages, liabilities, claims,
causes of action, judgments, court costs, attorneys' fees and other reasonable
legal expenses, cost of evidence of title, cost of evidence of value, and other
reasonable costs and expenses which either may suffer or incur:
(i) In performing any act required or permitted by this Deed of
Trust or any of the other Basic Documents or by law;
(ii) Because of any failure of Trustor to perform any of
Trustor's Obligations; or
(iii) Because of any alleged obligation of or undertaking by
Beneficiary to perform or discharge any of the representations, warranties,
conditions, covenants or other obligations in any document relating to the
Property other than the Basic Documents.
This agreement by Trustor to indemnify Trustee and Beneficiary shall survive the
release and cancellation of any or all of the Obligations and the full or
partial release and/or reconveyance of this Deed of Trust.
(c) Trustor shall pay all obligations to pay money arising under this
Deed of Trust immediately upon demand by Trustee or Beneficiary.
40
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43. RELATIONSHIP TO SECOND AMENDED AND RESTATED NOTE PURCHASE
AGREEMENT. This Deed of Trust has been executed pursuant to and is subject to
the terms of the Second Amended and Restated Note Purchase Agreement and Trustor
agrees to observe and perform all provisions contained therein, to the extent
the same are applicable to Trustor. If and to the extent of any conflict
between the provisions of the Second Amended and Restated Note Purchase
Agreement applicable to Trustor and the provisions of this Deed of Trust, the
stricter provisions shall control.
44. RELATIONSHIP TO HENDERSON SECURITY AGREEMENT. Concurrently
herewith, Trustor is entering into the Henderson Security Agreement with
Beneficiary with respect to the Personal Property. As provided above, the terms
of said Henderson Security Agreement shall, with respect to the Personal
Property and the security interest granted hereby, supplement the terms of this
Deed of Trust and, if and to the extent of any conflict with the terms hereof
applicable to said security interest and Personal Property, shall, to the extent
enforceable, control. Nothing in this Section 44 shall be deemed or construed,
----------
however, to impair the rights of Beneficiary to conduct one or more Trustee's
Sales at which real and personal property are sold together pursuant to the laws
applicable to the sale of real property.
45. Relationship to HENDERSON ENVIRONMENTAL INDEMNITY AGREEMENT.
Concurrently herewith, Trustor has executed the Henderson Environmental
Indemnity for the benefit of the Beneficiary and certain other "Indemnitees" (as
defined therein) pertaining to the Property. Trustor hereby acknowledges and
agrees that, notwithstanding any other provision of this Deed of Trust to the
contrary, the obligations of Trustor under the Henderson Environmental Indemnity
shall be unlimited personal obligations of Trustor, the obligations of Trustor
under such instrument shall not be secured by this Deed of Trust and shall
survive foreclosure under this Deed of Trust, any transfer in lieu thereof, and
any satisfaction of the Obligations.
46. SEVERABILITY. If any provision in or obligation under this Deed
of Trust shall be invalid, illegal or unenforceable in any jurisdiction, the
validity, legality and enforce ability of the remaining provisions or
obligations, or of such provision or obligation in any other jurisdiction, shall
not in any way be affected or impaired thereby.
47. LOAN STATEMENT FEES. Trustor shall pay the amount demanded by
Beneficiary or its authorized loan servicing agent for any statement regarding
the Obligations secured hereby; provided, however, that such amount may not
exceed the maximum amount allowed by law at the time request for the statement
is made.
48. NOTICES.
(a) METHODS; ADDRESSEES. All notices, requests and demands to be made
hereunder to the parties hereto shall be in writing and shall be given by any of
the following means: (i) personal service; (ii) electronic communication,
whether by telex, telegram or telecopying (if confirmed in writing sent by
registered or certified, first class mail, return receipt requested); or (iii)
registered or certified, first class mail, return receipt requested. Such
addresses
41
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may be changed by notice to the other parties given in the same manner as
provided above. Any notice, demand or request sent pursuant to clause (i) of
----------
this Section shall be deemed received upon such personal service, and if
sent pursuant to clause (ii) of this Section shall be deemed received upon
-----------
receipt if sent prior to 5:00 p.m. on a Business Day, and otherwise shall be
deemed received on the next succeeding Business day, and, if sent pursuant to
clause (iii) of this Section shall be deemed received three (3) days following
- ------------
deposit in the mail.
TO BENEFICIARY: SunAmerica Life Insurance Company
1 SunAmerica Center
Century City
Los Angeles, California 90067-6022
Attention: Director-Mortgage Lending and Real Estate
Facsimile No.: (310) 772-6573
TO TRUSTOR: Sahara Las Vegas Corp.
2535 Las Vegas Blvd. South
Las Vegas, Nevada 89109
Attention: Mr. Thomas Land
Facsimile No.: (702) 658-4303
TO TRUSTEE: ______________________________
______________________________
______________________________
Attention: __________________
Facsimile No.: (___) ___-____
(b) RELIANCE OF FAXES. Each party hereto (a "RECIPIENT") who receives
from another party hereto (a "SENDER") by electronic facsimile transmission
(telecopier or fax) any writing which appears to be signed by an authorized
signatory of that Sender is authorized to rely and act upon that writing in the
same manner as if the original signed writing was in the possession of the
Recipient upon oral confirmation of that Sender to the Recipient that the
writing was signed by an authorized signatory of that Sender and is intended by
that Sender to be relied upon by the Recipient. Each party transmitting any
writing to any other party by electronic facsimile transmission agrees to
forward immediately to that Recipient, by expedited means (for next day
delivery, if possible), or by first class mail if the Recipient so agrees, the
signed hard copy of that writing, unless the Recipient expressly agrees to some
other disposition of the original by the Sender.
49. GOVERNING LAW. THIS DEED OF TRUST SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEVADA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
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50. CONSENT TO JURISDICTION AND SERVICE OF PROCESS. ALL JUDICIAL
PROCEEDINGS BROUGHT AGAINST TRUSTOR ARISING OUT OF OR RELATING TO
THIS DEED OF TRUST MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN THE STATE OF NEVADA, AND BY EXECUTION AND DELIVERY OF THIS DEED
OF TRUST TRUSTOR ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID
COURTS AND WAIVES ANY DEFENSE OF FORUM NON CONVENIENS AND IRREVOCABLY AGREES TO
BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS DEED OF TRUST.
Trustor hereby agrees that service of all process in any such proceeding in any
such court may be made by registered or certified mail, return receipt
requested, to Trustor at its address provided in Section 48 above, such service
----------
being hereby acknowledged by Trustor to be sufficient for personal jurisdiction
in any action against Trustor in any such court and to be otherwise effective
and binding service in every respect. Nothing herein shall affect the right to
serve process in any other manner permitted by law or shall limit the right of
Beneficiary to bring proceedings against Trustor in the courts of any other
jurisdiction.
51. WAIVER OF JURY TRIAL. TRUSTOR HEREBY AGREES TO WAIVE ITS RIGHTS
TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF
THIS DEED OF TRUST. The scope of this waiver is intended to be all-encompassing
of any and all disputes that may be filed in any court and that relate to the
subject matter of this transaction, including without limitation contract
claims, tort claims, breach of duty claims, and all other common law and
statutory claims. Trustor acknowledges that this waiver is a material
inducement for Beneficiary to enter into a business relationship, that
Beneficiary has already relied on this waiver in entering into this Deed of
Trust and that Beneficiary will continue to rely on this waiver in the parties'
related future dealings. Trustor further warrants and represents that Trustor
has reviewed this waiver with its legal counsel, and that it knowingly and
voluntarily waives its jury trial rights following consultation with legal
counsel. THIS WAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER
ORALLY OR IN WRITING, AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS DEED OF TRUST. In the event of
litigation, this Deed of Trust may be filed as a written consent to a trial by
the court.
52. NONFOREIGN ENTITY. Section 1445 of the Internal Revenue Code of
1986, as amended (the "CODE") provides that a transferee of a U.S. real property
interest must withhold tax if the transferor is a foreign person. To inform
Beneficiary that the withholding of tax will not be required in the event of the
disposition of the Property pursuant to the terms of this Deed of Trust, Trustor
hereby certifies, under penalty of perjury, that:
(a) Trustor is not a foreign corporation, foreign partnership, foreign
trust or foreign estate, as those terms are defined in the Code and the
regulations promulgated thereunder; and
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(b) Trustor's U.S. employer identification number is 88-0181943; and
(c) Trustor's principal place of business is 2535 Las Vegas Boulevard
South, Las Vegas, Nevada 89109.
It is understood that Beneficiary may disclose the contents of this
certification to the Internal Revenue Service and that any false statement
contained herein could be punished by fine, imprisonment or both. Trustor
covenants and agrees to execute such further certificates, which shall be signed
under penalty of perjury, as Beneficiary shall reasonably require. The covenant
set forth herein shall survive the foreclosure of the lien of this Deed of Trust
or acceptance of a deed in lieu thereof.
SIGNATURE ON NEXT PAGE
44
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IN WITNESS WHEREOF, Trustor has executed this instrument as of the day
and year first above written.
TRUSTOR:
SAHARA LAS VEGAS CORP.,
a Nevada corporation
By: Thomas K. Land
----------------------------------
Its: Treasurer & Asst. Secretary
---------------------------------
By: Paul W. Lowden
----------------------------------
Its: President
---------------------------------
S-1
<PAGE>
STATE OF ____________ )
) ss
COUNTY OF ___________ )
On ___________, 1997 before me, the undersigned, a Notary Public in
and for said State, personally appeared ________________________________ and
________________________________ personally known to me or proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature ___________________________
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION
DESCRIPTION: THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF CLARK,
STATE OF NEVADA AND IS DESCRIBED AS FOLLOWS:
That portion of the North Half (N 1/2) of Section 3, Township 22 South, Range 62
East, M.D.M., described as follows:
COMMENCING at the Southeast Corner (SE Cor.) of the Northeast Quarter (NE 1/4)
of said Section 3;
THENCE South 89 deg. 38'25" West along the South line of said section a distance
of 2246.06 feet to the TRUE POINT OF BEGINNING;
THENCE continuing along said South Line South 89 deg. 38'25" West 748.68 feet to
the Southeast Corner (SE Cor.) of land conveyed to R. Julian Moore by Deed
recorded March 20, 1970 as Document No. 14887;
THENCE along the East line of said land North 0 deg. 31'11" East 2653.57 feet to
a point on the North line of said Section 3;
THENCE along said North line North 89 deg. 49'18" East 554.75 feet;
THENCE continuing along said North line 89 deg. 32'18" East 185.60 feet;
THENCE South 0 deg. 20'26" West 2648.58 feet to THE TRUE POINT OF BEGINNING.
EXCEPTING THEREFROM the South 110.01 feet; the North 50.00 feet; the East 50.00
feet; a spandrel area at the Southwest Corner (SW Cor.) of the intersection of
Galleria Drive and Marks Street; a spandrel area at the Northwest Corner (NW
Cor.) of Sunset Road and Marks Street; and Marks Street. All as shown and
dedicated for public use by Parcel Map in File 55, Page 83, recorded March 2,
1988 in Book 880302 as Document No. 00576 and by Parcel Map in File 68, Page 38,
recorded April 9, 1991 in Book 910409 as Document No. 01057.
FURTHER EXCEPTING THEREFROM that portion of said land condemned for public use
by the State of Nevada under Case No. 255049 and recorded February 22, 1988 in
Book 880222 as Document No. 00558.
TOGETHER WITH that portion of Marks Street vacated by the Order of Vacation
recorded June 2, 1992 in Book 920602 as Document No. 01060. Vacation Map in
File 63, Page 10, Clark County, Nevada Records, recorded in Book 920602 as
Document No. 1059.
A-1
<PAGE>
EXHIBIT B
PERMITTED EXCEPTIONS
1. State, County and/or City Tax liens which are not yet due or payable.
Parcel number: 178-03-101-001.
2. State, County and/or City Tax liens which are not yet due or payable.
Parcel number: 178-03-501-001.
3. Mineral rights, reservations, and exclusions in patent from the United
States of America.
Recorded :December 23, 1988 in Book 881223
Document No. :00456, Official Records
4. An Easement
To :Nevada Power Company
For :electrical lines
Disclosed By :Parcel Map
Recorded :in File 55 of Parcel Maps, Page 83, Clark County, Nevada
Records
Except as reverted by that certain Reversionary Map as shown by map thereof
in File 68 of Parcel Maps, Page 38, recorded April 9, 1991 in Book 910409
as Document No. 01057, Official Records.
5. Dedications and Easements as indicated or delineated on the Plat of said
Reversionary Parcel Map in File 68 of Parcel Maps, Page 38, recorded April
9, 1991 in Book 910409 as Document No. 01057, Official Records.
6. The terms, covenants, conditions and provisions as contained in an
instrument, entitled "Declaration of Covenants"
Recorded :April 24, 1991 in Book 910424
Document No. :00855, Official Records.
7. An Easement affecting a portion of said land for the purposes stated
herein, and incidental purposes.
In Favor of :Nevada Power Company
For :power lines
Recorded :May 17, 1994 in Book 940517
Document No. :00899, Official Records.
8. Development Agreement dated as of February 20, 1997, by and between Ranch
Center Associates Limited Partnership, a Nevada limited partnership, Ranch
Center Associates II, a Nevada general partnership, and Santa Fe Valley,
Inc., a Nevada corporation.
B-1
<PAGE>
EXHIBIT 10.100
WHEN RECORDED MAIL TO:
O'MELVENY & MYERS LLP
1999 Avenue of the Stars
Suite 700
Los Angeles, California 90067
Attention: Dean Pappas, Esq.
File No.: 843,112-044
______________________________________________________________________________
SECOND AMENDMENT TO
SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT AGREEMENT
THIS SECOND AMENDMENT TO SUBORDINATION, NON-DISTURBANCE AND ATTORNMENT
AGREEMENT (this "AMENDMENT") is made and entered into as of this 25th day of
November, 1997, by and between SAHARA LAS VEGAS CORP., a Nevada corporation
("LANDLORD"), WET N' WILD NEVADA, INC., a Nevada corporation ("TENANT"), and
SUNAMERICA LIFE INSURANCE COMPANY, an Arizona corporation, as Collateral Agent
on behalf of itself and each of the Holders ("COLLATERAL AGENT").
R E C I T A L S
- - - - - - - -
A. Pursuant to that certain Note Purchase Agreement dated as of January
16, 1996 (the "NOTE PURCHASE AGREEMENT"), by and among Sahara Gaming
Corporation, Landlord, and Collateral Agent, Landlord issued and sold to the
Holders certain 12% Notes Due December 15, 1999 in a principal amount up to
$20,000,000 (the "ORIGINAL NOTES"), which Original Notes were secured by, among
other things, the "Property" described in and pursuant to the Deed of Trust,
Fixture Filing and Financing Statement and Security Agreement with Assignment of
Rents dated as of January 16, 1996 and recorded in the Official Records of the
County Recorder of Clark County, Nevada on January 18, 1996, in Book 960118, as
Instrument No. 00974 (as amended, the "DEED OF TRUST"), including, without
limitation, the real property described on Exhibit A attached hereto (the
---------
"PROPERTY").
B. Pursuant to that certain Amended and Restated Note Purchase Agreement
dated as of July 29, 1997 (the "AMENDED AND RESTATED NOTE PURCHASE AGREEMENT"),
by and among Santa Fe Gaming Corporation (formerly Sahara Gaming Corporation), a
Nevada corporation ("SGC"), Landlord, Collateral Agent and SunAmerica, Inc., a
Delaware corporation ("SUNAMERICA"), (i) Landlord agreed to issue and sell to
the Holders, in addition to the Original
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Notes, certain Tranche A Notes in a principal amount up to $15,000,000 (the
"ORIGINAL TRANCHE A NOTES"), which Original Tranche A Notes were issued on July
31, 1997, and certain Tranche B Notes in a principal amount up to $5,000,000
(the "ORIGINAL TRANCHE B NOTES"), which Original Tranche B Notes have not as of
this date been issued, and (ii) the parties amended the Deed of Trust pursuant
to that certain First Amendment to Deed of Trust, Fixture Filing and Financing
Statement and Security Agreement with Assignment of Rents dated as of July 31,
1997 and recorded in the Official Records of Clark County, Nevada on July 31,
1997, in Book 970731, as Instrument No. 01719 to provide that the Original
Tranche A Notes and Original Tranche B Notes would be secured by the Property
pursuant to the Deed of Trust. The Original Notes, Original Tranche A Notes and
Original Tranche B Notes shall sometimes hereinafter be collectively referred to
as the "EXISTING NOTES".
C. Tenant is a "tenant" of the Property pursuant to the terms and
provisions of that certain Ground Lease dated as of January 1, 1987, by and
between Howard Hughes Properties, Limited Partnership, a Delaware limited
partnership (Landlord's predecessor-in-interest), and Wet N' Wild, Inc., a
Florida corporation (Tenant's predecessor-in-interest) (as amended and assigned,
the "LEASE").
D. As a condition to the purchase of the Original Notes by the Holders,
and in order to assure Tenant of its continued occupancy of the Property under
the terms of the Lease, subject to the Note Purchase Agreement and all other
documents executed in connection therewith, the parties hereto executed,
acknowledged and delivered that certain Subordination, Non-Disturbance and
Attornment Agreement dated as of January 18, 1996 and recorded in the Official
Records of the County Recorder of Clark County, Nevada on January 18, 1996, in
Book 960118, as Instrument No. 00976, which document was amended as necessary to
reflect the terms and provisions of the Amended and Restated Note Purchase
Agreement and the Original Tranche A Notes and Original Tranche B Notes pursuant
to that certain First Amendment to Subordination, Non-Disturbance and Attornment
Agreement dated as of July 31, 1997, recorded in the Official Records of the
County Recorder of Clark County, Nevada on July 31, 1997, in Book 970731, as
Instrument No. 01720 (as amended, the "SUBORDINATION AGREEMENT").
E. Pursuant to and subject to the conditions set forth in the Second
Amended and Restated Note Purchase Agreement of even date herewith (the "SECOND
AMENDED AND RESTATED NOTE PURCHASE AGREEMENT"), by and among SGC, Landlord,
Collateral Agent, SunAmerica and Credit Suisse First Boston Mortgage Capital
LLC, a Delaware limited liability company ("FIRST BOSTON"), SGC, Landlord,
Collateral Agent, SunAmerica and First Boston agreed to: (i) amend and restate
all Existing Notes and the note facility described in the Amended and Restated
Note Purchase Agreement to provide for the issuance by Landlord of (x) certain
Tranche A Notes in a principal amount up to $37,000,000 (the "TRANCHE A NOTES"),
and (y) certain Tranche B Notes in a principal amount up to $20,500,000 (the
"TRANCHE B NOTES"), and (ii) amend the Deed of Trust to provide that the Tranche
A Notes and Tranche B Notes will be secured by, among other things, the Property
pursuant to the Deed of Trust.
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<PAGE>
F. Tenant hereby desires to assure its continued occupancy of the Property
under the terms of the Lease following the exercise of Collateral Agent's
remedies under the Second Amended and Restated Note Purchase Agreement and all
other documents executed in connection therewith, and is willing to enter into
this Amendment to ensure such continued occupancy.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereby amend the Subordination Agreement as follows:
1. All references in the Subordination Agreement to the term "Note
Purchase Agreement" shall be deemed to refer to the Second Amended and Restated
Note Purchase Agreement.
2. All references in the Subordination Agreement to the term "Notes" shall
be deemed to refer only to the Tranche A Notes and the Tranche B Notes,
collectively, and all references in the Subordination Agreement to the term
"Basic Documents" shall be deemed to refer to the Basic Documents described in
the Second Amended and Restated Note Purchase Agreement.
3. All references in the Subordination Agreement to the terms "Deed of
Trust" and "Security Agreement" shall be deemed to refer to the Company Deed of
Trust and Company Security Agreement as defined in and as amended pursuant to
and in accordance with the Second Amended and Restated Note Purchase Agreement.
4. The first sentence of Recital B of the Subordination Agreement is
hereby deleted in its entirety and the following sentence is substituted in its
place and stead:
"B. Landlord has issued or will or may issue to the Holders from
time to time, one or more secured promissory notes (including, without
limitation, the Tranche A Notes and Tranche B Notes) in an aggregate
principal amount of up to $57,500,000 (the "NOTES") pursuant to that
certain Second Amended and Restated Note Purchase Agreement dated as of
November 25, 1997, by and among Santa Fe Gaming Corporation (formerly named
Sahara Gaming Corporation), Landlord, Collateral Agent, SunAmerica, Inc., a
Delaware corporation, and Credit Suisse First Boston Mortgage Capital LLC,
a Delaware limited liability company (the "SECOND AMENDED AND RESTATED NOTE
PURCHASE AGREEMENT")."
5. Landlord, Tenant and Collateral Agent, on behalf of itself and
each of the Holders, each hereby reaffirms the Subordination Agreement. Subject
to the limitation hereinafter set forth, Tenant agrees that the Deed of Trust,
Security Agreement and other documents and instruments executed in connection
with the Tranche A Notes and the Tranche B Notes and the
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<PAGE>
Second Amended and Restated Note Purchase Agreement and granting a lien in the
Property, and all supplements, amendments and modifications thereto and all
renewals, replacements or extensions thereof, which secure indebtedness in the
principal amount of up to $57,500,000, shall unconditionally be and remain at
all times until released or terminated a lien or charge on the Property prior
and superior to the Lease, to the leasehold estate created thereby and to all
rights and privileges of Tenant thereunder; provided, however, that
-------- -------
notwithstanding the foregoing, Tenant shall be permitted, at its sole
discretion, to remove any or all improvements, personal property, fixtures,
structures or equipment located on the Property in the event of the expiration
or termination of the Lease pursuant to and in accordance with the terms and
provisions of the Letter Amendment to the Lease dated June 2, 1997 (the "LETTER
AMENDMENT"), which was acknowledged and consented to by Collateral Agent by
letter dated June 23, 1997, and the terms and provisions of the Letter Amendment
shall be binding upon Collateral Agent and the Holders, any successor or assign
of Collateral Agent or any of the Holders who acquires title to the Property and
any other Purchaser (as such term is defined in the Subordination Agreement).
6. Except as expressly amended and modified hereby, the
Subordination Agreement shall remain in full force and effect.
7. The provisions of this Amendment shall be binding upon, and shall
inure to the benefit of, the successors and assigns of the parties hereto.
8. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which when taken together
shall constitute one and the same instrument. The signature and acknowledgment
pages of any counterpart may be detached therefrom without impairing the legal
effect of the signatures and acknowledgments thereto, provided such signature
and acknowledgment pages are attached to any other counterpart identical thereto
except having additional signature and acknowledgment pages executed by other
parties to this Amendment attached thereto.
9. This Amendment shall be governed by, and shall be construed and
enforced in accordance with, the internal laws of the State of Nevada, without
regard to conflicts of laws principles.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.
"LANDLORD"
SAHARA LAS VEGAS CORP.,
a Nevada corporation
By: Paul W. Lowden
_____________________________
Its: President
____________________________
By: Thomas K. Land
_____________________________
Its: Treasurer & Asst. Secretary
____________________________
"TENANT"
WET N' WILD NEVADA, INC.,
a Nevada corporation
By: Gary G. Daning
_____________________________
Its: SVP/General Manager
____________________________
"COLLATERAL AGENT"
SUNAMERICA LIFE INSURANCE COMPANY,
an Arizona corporation
By: Keith C. Honig
_____________________________
Its: Authorized Agent
____________________________
S-1
<PAGE>
ACKNOWLEDGMENTS
STATE OF ____________ )
)
COUNTY OF ___________ )
On _____________, 1997 before me, the undersigned, a Notary Public in
and for said State, personally appeared ___________________________________
personally known to me or proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS, my hand and official seal.
Signature __________________________
STATE OF ____________ )
)
COUNTY OF ___________ )
On _____________, 1997 before me, the undersigned, a Notary Public in
and for said State, personally appeared ___________________________________
personally known to me or proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS, my hand and official seal.
Signature __________________________
<PAGE>
STATE OF CALIFORNIA )
)
COUNTY OF LOS ANGELES )
On _______________, 1997 before me, the undersigned, a Notary Public
in and for said State, personally appeared _____________________________,
personally known to me or proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
WITNESS, my hand and official seal.
Signature __________________________
<PAGE>
EXHIBIT A
LEGAL DESCRIPTION OF REAL PROPERTY
----------------------------------
The real property located in the County of Clark, State of Nevada and
described as follows:
Being a portion of the Northeast Quarter (NE 1/4) of Section 9 and a
portion of the Northwest Quarter (NW 1/4) of the Northwest Quarter (NW 1/4)
of Section 10, Township 21 South, Range 61 East, M.D.B.&M., Clark County,
Nevada, described as follows:
COMMENCING at the Northeast Corner (NE Cor) of the Northeast Quarter (NE
1/4) of said Section 9; thence South 04 Degrees 43 Minutes 06 Seconds East
along the East Line of said Section 9, a distance of 896.80 feet to a
point, said point being the Northeast Corner (NE Cor) of that certain
parcel of land conveyed by HOTEL SECURITIES CO. to EL RANCHO VEGAS by
Corporation Deed recorded March 20, 1945 shown as Document No. 194417,
Clark County, Nevada Official Records, said point also being the POINT OF
BEGINNING; thence South 87 Degrees 12 Minutes 23 Seconds East parallel to
the North Line of said Section 9 a distance of 342.86 feet to the West Line
of Paradise Road, thence South 00 Degrees 14 Minutes 47 Seconds West along
said West Line of Paradise Road, a distance of 868.44 feet; thence North 87
Degrees 12 Minutes 23 Seconds West parallel to the North Line of said
Section 9, a distance of 1572.55 feet to the East Line of Las Vegas
Boulevard South; thence North 28 Degrees 00 Minutes 00 Seconds East along
said East Line of Las Vegas Boulevard South, a distance of 958.89 feet;
thence South 87 Degrees 12 Minutes 23 Seconds, East parallel to the North
Line of said Section 9, a distance of 782.72 feet to the POINT OF
BEGINNING.
ASSESSOR'S PARCEL NUMBERS: 162-09-602-001
162-09-602-005
A-1
<PAGE>
EXHIBIT 10.101
SECOND AMENDMENT TO
ENVIRONMENTAL INDEMNITY AGREEMENT
THIS SECOND AMENDMENT TO ENVIRONMENTAL INDEMNITY AGREEMENT (this
"AMENDMENT") is made and entered into as of this 25th day of November, 1997, by
and between SAHARA LAS VEGAS CORP., a Nevada corporation ("COMPANY") and SANTA
FE GAMING CORPORATION (formerly named Sahara Gaming Corporation), a Nevada
corporation ("SGC" and together with Company, collectively, the "INDEMNITOR"),
and SUNAMERICA LIFE INSURANCE COMPANY, an Arizona corporation, as Collateral
Agent on behalf of itself and each of the Holders ("COLLATERAL AGENT"), and the
other Indemnitees.
R E C I T A L S
- - - - - - - -
A. Pursuant to that certain Note Purchase Agreement dated as of
January 16, 1996 (the "NOTE PURCHASE AGREEMENT"), by and among SGC, Company and
Collateral Agent, Company issued and sold to the Holders certain 12% Notes Due
December 15, 1999 in a principal amount up to $20,000,000 (the "ORIGINAL
NOTES"), which Original Notes were secured by, among other things, the
"Property" described in and pursuant to the Deed of Trust, Fixture Filing and
Financing Statement and Security Agreement with Assignment of Rents dated as of
January 16, 1996 and recorded in the Official Records of the County Recorder of
Clark County, Nevada on January 18, 1996, in Book 960118, as Instrument No.
00974 (the "DEED OF TRUST").
B. Pursuant to the Note Purchase Agreement, and as a condition
precedent to Collateral Agent's purchase of the Original Notes, Indemnitor
executed and delivered to Collateral Agent, as collateral agent for the Holders,
that certain Environmental Indemnity Agreement dated as of January 16, 1996 (as
amended, the "ENVIRONMENTAL INDEMNITY").
C. Pursuant to that certain Amended and Restated Note Purchase
Agreement dated as of July 29, 1997 (the "AMENDED AND RESTATED NOTE PURCHASE
AGREEMENT"), by and among SGC, Company, Collateral Agent and SunAmerica, Inc., a
Delaware corporation ("SUNAMERICA"), (i) Trustor agreed to issue and sell to the
Holders, in addition to the Original Notes, certain Tranche A Notes in a
principal amount up to $15,000,000 (the "ORIGINAL TRANCHE A NOTES"), which
Original Tranche A Notes were issued on July 31, 1997, and certain Tranche B
Notes in a principal amount up to $5,000,000 (the "ORIGINAL TRANCHE B NOTES"),
which Original Tranche B Notes have not as of this date been issued, and (ii)
the parties amended the Environmental Indemnity pursuant to that certain First
Amendment to Environmental Indemnity Agreement to reflect the note facility as
restructured pursuant to the Amended and Restated Note Purchase Agreement. The
Original Notes, Original Tranche A Notes and Original Tranche B Notes shall
sometimes hereinafter be collectively referred to as the "EXISTING NOTES".
1
<PAGE>
D. Pursuant to and subject to the conditions set forth in that
certain Second Amended and Restated Note Purchase Agreement of even date
herewith (the "SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT"), by and
among SGC, Company, Collateral Agent, SunAmerica, and Credit Suisse First Boston
Mortgage Capital LLC, a Delaware limited liability company ("FIRST BOSTON"),
SGC, Company, Collateral Agent, SunAmerica and First Boston agreed to: (i) amend
and restate all Existing Notes and the note facility described in the Amended
and Restated Note Purchase Agreement to provide for the issuance by Company of
(x) certain Tranche A Notes in a principal amount up to $37,000,000 (the
"TRANCHE A NOTES"), and (y) certain Tranche B Notes in a principal amount up to
$20,500,000 (the "TRANCHE B NOTES"), (ii) amend the Deed of Trust to provide
that the Tranche A Notes and Tranche B Notes will be secured by, among other
things, the Property pursuant to the Deed of Trust, and (iii) amend the
Environmental Indemnity as necessary to reflect the note facility as
restructured pursuant to the Second Amended and Restated Note Purchase
Agreement. All initially capitalized terms used herein without definition shall
have the meanings given such terms in the Second Amended and Restated Note
Purchase Agreement and when not defined herein or elsewhere in this Agreement
shall have the meanings given such terms in the Environmental Indemnity.
E. The parties hereby desire to amend the Environmental Indemnity as
necessary to reflect the note facility as restructured pursuant to the Second
Amended and Restated Note Purchase Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereby amend the Environmental Indemnity as follows:
1. All references in the Environmental Indemnity to the term "Note
Purchase Agreement" shall be deemed to refer to the Second Amended and Restated
Note Purchase Agreement.
2. All references in the Environmental Indemnity to the term "Notes"
shall be deemed to refer only to the Tranche A Notes and the Tranche B Notes,
collectively.
3. Recital A of the Environmental Indemnity is hereby amended and
restated in its entirety as follows:
"A. Company has issued or will or may issue to the Holders from
time to time certain secured promissory notes (including, without
limitation, the Tranche A Notes and Tranche B Notes) in an aggregate
principal amount up to $57,500,000 (the "NOTES") pursuant to that certain
Second Amended and Restated Note Purchase Agreement dated as of November
25, 1997 (the "SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT"), by
and among SGC, Company, Collateral Agent, SunAmerica, Inc., a Delaware
corporation, and Credit Suisse First Boston Mortgage Capital LLC, a
Delaware limited liability company. The Notes are secured pursuant to,
among other things, a Deed
2
<PAGE>
of Trust, Fixture Filing and Financing Statement and Security Agreement
with Assignment of Rents dated as of January 16, 1996 and recorded in the
Official Records of the County Recorder of Clark County, Nevada on January
18, 1996, in Book 960118, as Instrument No. 00974 (as amended, the "DEED OF
TRUST") covering certain real property more specifically described in the
Deed of Trust (the "REAL PROPERTY"), and a Security Agreement granted by
Company to Collateral Agent for the benefit of Holders (as amended, the
"SECURITY AGREEMENT") covering certain personal property more particularly
described in the Security Agreement (the "PERSONAL PROPERTY"), and are
guaranteed by, among other things, a Guaranty Agreement dated as of
January 16, 1996, by SGC to Collateral Agent for the benefit of Holders (as
amended, the "GUARANTY"). The Real Property and the Personal Property shall
sometimes hereinafter be collectively referred to as the "PROPERTY". All
capitalized terms used herein without definition shall have the meanings
given such terms in the Second Amended and Restated Note Purchase
Agreement."
4. The obligations evidenced by the Environmental Indemnity are
hereby reconfirmed in their entirety and the Environmental Indemnity, as amended
hereby, is hereby reconfirmed by Indemnitor.
5. Except as expressly amended and modified hereby, the
Environmental Indemnity shall remain in full force and effect.
6. The provisions of this Amendment shall be binding upon, and shall
inure to the benefit of, the successors and assigns of the parties hereto.
7. This Amendment may be executed in any number of counterparts,
each of which shall be deemed an original, but all of which when taken together
shall constitute one and the same instrument. The signature and acknowledgment
pages of any counterpart may be detached therefrom without impairing the legal
effect of the signatures and acknowledgments thereto, provided such signature
and acknowledgment pages are attached to any other counterpart identical thereto
except having additional signature and acknowledgment pages executed by other
parties to this Amendment attached thereto.
8. This Amendment shall be governed by, and shall be construed and
enforced in accordance with, the internal laws of the State of Nevada, without
regard to conflicts of laws principles.
3
<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as
of the date first written above.
"INDEMNITOR"
SAHARA LAS VEGAS CORP.,
a Nevada corporation
By:
_____________________________
Its:
____________________________
By: Thomas K. Land
_____________________________
Its: Treasurer & Asst. Secretary
____________________________
SANTA FE GAMING CORPORATION
(FORMERLY SAHARA GAMING CORPORATION),
a Nevada corporation
By: Thomas K. Land
_____________________________
Its: Treasurer & Asst. Secretary
____________________________
"COLLATERAL AGENT"
SUNAMERICA LIFE INSURANCE COMPANY,
an Arizona corporation
By: Keith C. Honig
_____________________________
Its: Authorized Agent
____________________________
S-1
<PAGE>
EXHIBIT 10.102
ENVIRONMENTAL INDEMNITY AGREEMENT
---------------------------------
THIS ENVIRONMENTAL INDEMNITY AGREEMENT (this "AGREEMENT"), dated as of
November 25, 1997, is made by SAHARA LAS VEGAS CORP., a Nevada corporation
("COMPANY"), and SANTA FE GAMING CORPORATION, a Nevada corporation, formerly
named "Sahara Gaming Corporation" ("SGC" and together with Company,
collectively, the "INDEMNITOR"), for the benefit of SUNAMERICA LIFE INSURANCE
COMPANY, an Arizona corporation ("SUN LIFE"), as Collateral Agent on behalf of
itself and each of the Holders ("COLLATERAL AGENT"), and the other Indemnitees
(as hereinafter defined).
RECITALS
--------
A. Company has issued or will or may issue to the Holders from time
to time, among other things, certain secured promissory notes in an aggregate
principal amount up to $57,500,000 (the "NOTES") pursuant to that certain Second
Amended and Restated Note Purchase Agreement of even date herewith, by and among
SGC, Company, Sun Life, SunAmerica, Inc., a Delaware corporation, and Credit
Suisse First Boston Mortgage Capital LLC, a Delaware limited liability company
(the "SECOND AMENDED AND RESTATED NOTE PURCHASE AGREEMENT"). All capitalized
terms used herein without definition shall have the meanings given such terms in
the Amended and Restated Note Purchase Agreement.
B. A portion of the consideration for the Notes received by Company
will be used by Company to acquire that certain real property more particularly
described on Exhibit A attached hereto (the "REAL PROPERTY"). The obligations
---------
of Company under the Notes and Second Amended and Restated Note Purchase
Agreement are secured by, among other things, (i) the Real Property pursuant to
that certain Deed of Trust, Fixture Filing and Financing Statement and Security
Agreement with Assignment of Rents of even date herewith and recorded
immediately prior hereto, and (ii) certain personal property (the "PERSONAL
PROPERTY") pursuant to that certain Security Agreement of even date herewith,
executed by Company to Collateral Agent for the benefit of Holders (the
"SECURITY AGREEMENT"). The Notes are also guarantied by, among other things, a
Guaranty Agreement of even date by SGC to Collateral Agent for the benefit of
Holders (the "SGC GUARANTY"). The Real Property and the Personal Property shall
sometimes hereinafter be collectively referred to as the "PROPERTY".
C. Company is the owner of a fee simple estate in and to the Real
Property.
<PAGE>
D. As a condition precedent to purchasing the Notes, the Holders
require that Indemnitor enter into this Agreement, whose covenants and
obligations are independent of and in addition to the obligations of Company
under the Deed of Trust, Security Agreement and the other documents governing,
evidencing and securing the Notes and/or the Second Amended and Restated Note
Purchase Agreement, and SGC's obligations under the SGC Guaranty.
NOW, THEREFORE, in consideration of the obligations set forth in the
Second Amended and Restated Note Purchase Agreement and guarantied by the SGC
Guaranty, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Indemnitor hereby represents,
warrants and covenants to Collateral Agent and each Holder and their respective
officers, directors, employees, agents, affiliates, successors and assigns
(collectively, the "INDEMNITEES"; provided, however, that the term "Indemnitees"
shall not include any third party who is not an affiliate of Collateral Agent or
any Holder and who acquires title to the Property) as follows:
SECTION 1. REPRESENTATIONS AND WARRANTIES. Indemnitor represents and
------------------------------
warrants to the Indemnitees that:
(a) to Indemnitor's best knowledge, Hazardous Substances have not at
any time been generated, used, treated or stored on, or transported to or from,
the Property in any quantity or manner which violates any Environmental Law,
except as disclosed in writing to Collateral Agent prior to the date hereof;
(b) to Indemnitor's best knowledge, Hazardous Substances have not at
any time been Released or disposed of on the Property in any quantity or manner
which violates any Environmental Law, except as disclosed in writing to
Collateral Agent prior to the date hereof;
(c) Company is in compliance with all applicable Environmental Laws
applicable to it with respect to the Property and the requirements of any
permits issued under such Environmental Laws with respect to the Property,
except as disclosed in writing to Collateral Agent prior to the date hereof;
(d) there are no pending, or to Indemnitor's best knowledge
threatened, Environmental Claims against Indemnitor or the Property, except as
disclosed in writing to Collateral Agent prior to the date hereof;
(e) to Indemnitor's best knowledge, there is no condition or
occurrence at the Property that could reasonably be anticipated (i) to form the
basis of any Environmental Claim against Indemnitor or the Property, or (ii) to
cause the Property to be subject to any restrictions on the ownership,
occupancy, use or transferability thereof under any Environmental Law, except as
disclosed in writing to Collateral Agent prior to the date hereof;
2
<PAGE>
(f) to Indemnitor's best knowledge, there are not now and never have
been any underground storage tanks located on the Property, except as disclosed
in writing to Collateral Agent prior to the date hereof;
(g) Company and SGC each (i) is a corporation, duly organized, validly
existing and in good standing under the laws of the State of Nevada, (ii) has
the power and authority to own its property and assets and to transact the
business in which it is engaged and (iii) is duly qualified as a foreign
corporation and is in good standing in each jurisdiction in which it owns or
leases property or in which failure to be duly qualified and in good standing
would have an adverse effect on its business, operations, property or financial
condition;
(h) Company and SGC each has the power to execute, deliver and perform
the terms and provisions of this Agreement and has taken all necessary action to
authorize the execution, delivery and performance by it of this Agreement;
(i) Company and SGC have each duly executed and delivered this
Agreement, and this Agreement constitutes such respective person's legal, valid
and binding obligation enforceable against such person in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization and other laws affecting creditors' rights generally and by
principles of equity;
(j) neither the execution, delivery or performance by Company or SGC
of this Agreement, nor compliance by such respective persons with the terms and
provisions hereof, will (i) contravene any provision of any law, statute, rule
or regulation or any order, writ, injunction or decree of any court or
governmental instrumentality, (ii) result in any breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
lien upon any of its property or assets pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement, loan agreement or any other
agreement, contract or instrument to which it is a party or by which it or any
of its property or assets is bound or to which it may be subject, or (iii)
violate any provision of its charter, bylaws or other organizational documents;
(k) no order, consent, approval, license, authorization or validation
of, or filing, recording or registration with, or exemption by, any governmental
or public body or authority, or any subdivision thereof, is required to
authorize, or is required in connection with, the execution, delivery and
performance by Company or SGC of this Agreement or the legality, validity,
binding effect or enforceability of this Agreement; and
(l) Company and SGC is each in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed by
all governmental bodies in respect of the conduct of its respective business and
the ownership of its property.
3
<PAGE>
SECTION 2. COVENANTS. Indemnitor covenants and agrees as follows:
---------
(a) Indemnitor will (i) comply with all Environmental Laws applicable
to the ownership or use of the Property, (ii) use its best efforts to cause all
tenants and other persons occupying the Property to comply with all
Environmental Laws, (iii) immediately pay or cause to be paid all costs and
expenses incurred in such compliance, and (iv) keep or cause the Property to be
kept free and clear of any liens imposed thereon pursuant to any Environmental
Laws.
(b) Indemnitor will not generate, use, treat, store, Release or
dispose of, or permit the generation, use, treatment, storage, Release or
disposal of, any Hazardous Substances on the Property, or transport or permit
the transportation of any Hazardous Substances to or from the Property, in each
case in any quantity or manner which violates any Environmental Law.
(c) At Collateral Agent's written request, at any time and from time
to time if it determines that an environmental site assessment is necessary in
its reasonable business judgment to protect it or any other Indemnitee from a
potential Environmental Claim, Indemnitor will provide to Collateral Agent an
environmental site assessment report concerning the Property, prepared by an
environmental consulting firm approved by Collateral Agent, indicating the
presence or absence of Hazardous Substances and the potential cost of any
removal or remedial action in connection with any Hazardous Substances on the
Property. Any such environmental site assessment report shall be conducted at
Indemnitor's sole cost and expense. If Indemnitor fails to deliver to
Collateral Agent any such environmental site assessment report within thirty
(30) days after being requested to do so by Collateral Agent pursuant to this
Section, Collateral Agent may obtain the same, and Indemnitor hereby grants to
Collateral Agent and its agents access to the Property and specifically grants
to Collateral Agent an irrevocable nonexclusive license to undertake such an
assessment, and the cost of such assessment (together with interest thereon at
the Agreed Rate) will be payable by Indemnitor on demand.
(d) Collateral Agent may, at its option, at any time and from time to
time, perform at its sole cost and expense an environmental site assessment
report for the Property, and Indemnitor hereby grants to Collateral Agent and
its agents access to the Property and specifically grants to Collateral Agent an
irrevocable non-exclusive license to undertake such an assessment; provided
--------
that, Collateral Agent shall not unreasonably interfere with the operations of
- ----
Indemnitor or any of its tenants during the preparation of such site assessment.
Collateral Agent agrees that, except as otherwise provided by law or unless
compelled by an order of a court, and except with respect to disclosures made to
the Holders, its and their lenders, attorneys, accountants and other
consultants, and its or their agents, assignees, partners, officers, directors
and employees, Collateral Agent shall use its reasonable efforts to keep the
contents of any environmental site assessments obtained under this subsection
----------
(d) or under subsection (c) above confidential.
- --- --------------
4
<PAGE>
(e) Indemnitor will advise Collateral Agent in writing immediately
upon learning of any of the following: (i) any pending or threatened
Environmental Claim against Indemnitor or the Property; (ii) any condition or
occurrence on the Property that (A) results in noncompliance by Indemnitor with
any applicable Environmental Law, or (B) could reasonably be anticipated to form
the basis of an Environmental Claim against Indemnitor or the Property; (iii)
any condition or occurrence on the Property that could reasonably be anticipated
to cause the Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of the Property under any Environmental Law;
and (iv) the taking of any removal or remedial action in response to the actual
or alleged presence, in any quantity or manner which violates any Environmental
Law, of any Hazardous Substances on the Property. Each such notice shall
describe in reasonable detail the nature of the claim, investigation, condition,
occurrence or removal or remedial action and Indemnitor's response thereto. In
addition, Indemnitor will provide Collateral Agent with copies of all
communications to or from Indemnitor and any governmental agency relating to
Environmental Laws, all communications to or from Indemnitor and any person
relating to Environmental Claims, and such detailed reports of any Environmental
Claim as may be requested by Collateral Agent.
(f) Collateral Agent shall have the right but not the obligation to
participate with Indemnitor in the defense of, or any action or proceeding
related to, any Environmental Claim. Without Collateral Agent's prior written
consent, Indemnitor shall not enter into any settlement, consent or compromise
with respect to any Environmental Claim that might impair the value of the
Property.
(g) At its sole expense, Indemnitor will conduct any investigation,
study, sampling and testing, and undertake any cleanup, removal, remedial or
other action necessary to remove and clean up all Hazardous Substances from the
Property which must be so removed or cleaned up in accordance with the
requirements of any applicable Environmental Laws, to the reasonable
satisfaction of a professional environmental consultant selected by Collateral
Agent and in accordance with all such requirements and with orders and
directives of all governmental authorities; provided that, Indemnitor shall have
-------- ----
the right to reasonably contest or object to such orders and directives by
appropriate proceedings so long as Indemnitor demonstrates to Collateral Agent's
satisfaction that the Property will not be foreclosed upon or sold pursuant to
any encumbrance attached thereto as a result of such orders or directives prior
to the resolution of Indemnitor's contest. If all or any portion of the
Obligations (as defined in the Deed of Trust) shall be outstanding, Indemnitor
may prepay such outstanding obligations in full, together with all applicable
prepayment penalties, in lieu of complying with the preceding sentence.
SECTION 3. INDEMNITY.
---------
(a) Indemnitor agrees to defend (with attorneys satisfactory to the
Indemnitees), protect, indemnify and hold harmless each of the Indemnitees and
their
5
<PAGE>
respective officers, directors, employees, attorneys and agents from and against
any and all liabilities, obligations (including removal and remedial actions),
losses, liens, damages (including foreseeable and unforeseeable consequential
damages and punitive damages), penalties, actions, judgments, suits, claims,
costs, expenses and disbursements (including reasonable attorneys' and
consultants' fees and disbursements) of any kind or nature whatsoever that may
at any time be incurred by, imposed on or asserted against any of them directly
or indirectly based on, or arising or resulting from (i) the actual or alleged
presence of Hazardous Substances on the Property in any quantity or manner which
violates Environmental Law, or the removal, handling, transportation, disposal
or storage of such Hazardous Substances, (ii) any Environmental Claim with
respect to Indemnitor or the Property, or (iii) the exercise of any Indemnitee's
rights under this Agreement (collectively, the "INDEMNIFIED MATTERS"),
regardless of when such Indemnified Matters arise, but excluding any Indemnified
Matter with respect to Hazardous Substances first placed or Released on the
Property after the later of (1) the date neither Indemnitor nor any of its
affiliates holds title to or any other interest in or lien on the Property, or
(2) the payment in full of the Obligations. To the extent that this indemnity is
unenforceable because it violates any law or public policy, Indemnitor agrees to
contribute the maximum portion that it is permitted to contribute under
applicable law to the payment and satisfaction of all Indemnified Matters.
(b) Indemnitor agrees to reimburse each Indemnitee for all sums paid
and costs incurred by such Indemnitee with respect to any Indemnified Matter
within ten (10) days following written demand therefor, with interest thereon at
the Agreed Rate (as defined in the Deed of Trust) if not paid within such ten
(10) day period.
(c) Should any Indemnitee institute any action or proceeding at law or
in equity, or in arbitration, to enforce any provision of this Agreement
(including an action for declaratory relief or for damage by reason of any
alleged breach of any provision of this Agreement) or otherwise in connection
with this Agreement or any provision hereof, it shall be entitled to recover
from Indemnitor its reasonable attorneys' fees and disbursements incurred in
connection therewith if it is the prevailing party in such action or proceeding.
SECTION 4. EVENTS OF DEFAULT. Upon the occurrence of any of the
-----------------
following specified events (each an "EVENT OF DEFAULT"):
(a) if any of the representations and warranties contained in Section
1 shall prove to be untrue in any material respect; or (b) if Indemnitor fails
to perform any of its obligations under this Agreement within fifteen (15) days
following notice thereof from Collateral Agent; provided that if such
nonperformance is incapable of cure within such 15-day period, no Event of
Default shall occur hereunder if Indemnitor has commenced a program to perform
such obligations, which program is reasonably satisfactory to Collateral Agent
and is in accordance with applicable law, and is diligently pursuing such
program to completion; and provided further that
6
<PAGE>
if a shorter cure period or notice requirement for any particular failure to
perform is provided by applicable law or this Agreement, such specific provision
shall control;
then and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, Collateral Agent may do or cause to be done whatever
is necessary in its sole judgment to cause the Property to comply with
applicable Environmental Laws, and the cost thereof (together with interest
thereon at the Agreed Rate) shall become immediately due and payable by
Indemnitor without notice. Indemnitor shall and does hereby grant to Collateral
Agent and its agents access to the Property and hereby specifically grants to
Collateral Agent an irrevocable, non-exclusive license to do whatever is
necessary in Collateral Agent's judgment to cause the Property to so comply,
including, without limitation, to enter the Property and remove therefrom any
Hazardous Substances.
SECTION 5. RECOURSE OBLIGATIONS.
--------------------
(a) Indemnitor agrees that notwithstanding any term or provision
contained in this Agreement or the other Basic Documents to the contrary, the
obligations of Indemnitor as set forth in this Agreement shall be exceptions to
any non-recourse or exculpatory provision relating to any of the Obligations,
and Indemnitor shall be fully liable for the performance of its obligations
under this Agreement.
(b) The liability of Indemnitor under this Agreement shall in no way
be limited to or impaired by any amendment or modification of the provisions of
the Basic Documents unless such amendment or modification expressly refers to
this Agreement. In addition, the liability of Indemnitor under this Agreement
shall in no way be limited or impaired by (i) any extensions of time for
performance required by any of the Basic Documents, (ii) any sale, assignment or
foreclosure of the Notes or SGC Guaranty or any sale or transfer of all or any
part of the Property, (iii) any exculpatory provision in any of the Basic
Documents limiting any Indemnitee's recourse to property encumbered by the Deed
of Trust or to any other security, or limiting the Indemnitees' rights to a
deficiency judgment against Indemnitor, (iv) the accuracy or inaccuracy of the
representations and warranties made by Indemnitor under any of the Basic
Documents, (v) the release of Indemnitor or any other person from performance or
observance of any of the agreements, covenants, terms or conditions contained in
any of the Basic Documents (other than this Agreement) by operation of law, any
Indemnitee's voluntary act, or otherwise, (vi) the release or substitution in
whole or in part of any security for the Notes or SGC Guaranty, or (vii)
Collateral Agent's or any Holder's failure to record the Deed of Trust or file
any Financing Statements (or Collateral Agent's improper recording or filing of
any thereof) or to otherwise perfect, protect, secure or insure any security
interest or lien given as security for the Notes; and, in any such case, whether
with or without notice to Indemnitor and with or without consideration.
7
<PAGE>
SECTION 6. INDEPENDENT OBLIGATIONS. This Agreement is intended to
-----------------------
create obligations that are separate and independent of Indemnitor's obligations
under the Notes, SGC Guaranty, Deed of Trust, Security Agreement and other Basic
Documents. Indemnitor's obligations are not secured by the Deed of Trust,
Security Agreement or any of the other Basic Documents.
SECTION 7. SURVIVAL.
--------
(a) Subject to the limitations set forth herein, the representations,
warranties, covenants and indemnities set forth in this Agreement shall survive
the repayment of the amounts evidenced by the Notes and guarantied by the SGC
Guaranty, the release of the lien of the Deed of Trust, any foreclosure of the
Deed of Trust or the delivery of a deed or assignment in lieu of foreclosure or
otherwise, and the transfer of any interest in and to the Property.
(b) This Agreement shall be binding on and inure to the benefit of
Indemnitor, the Indemnitees, and their respective successors and assigns
(subject to the limitation on successors and assigns described in the definition
of "Indemnitees" above). Without limiting the generality of the foregoing, this
Agreement shall inure to the benefit of each assignee or holder of the Notes and
each of such assignee's or holder's officers, directors, employees, agents and
affiliates. Notwithstanding the foregoing, Indemnitor, without the prior
written consent of Collateral Agent in each instance, may not assign, transfer
or set over in whole or in part, all or any part of its benefits, rights, duties
and obligations hereunder.
SECTION 8. DEFINITIONS. As used in this Agreement, the following
-----------
terms shall have the following meanings:
"AFFILIATE" means, with respect to any Person, any Person that,
---------
directly or indirectly, is in control of, is controlled by or is under common
control with, such Person, and any Person that has a direct or indirect
ownership interest in such Person, and any Person in which such Person has a
direct or indirect ownership interest.
"ENVIRONMENTAL CLAIMS" means any and all administrative, regulatory or
--------------------
judicial actions, suits, demands, demand letters, claims, liens, notices of non-
compliance or violation, investigations or proceedings relating in any way to
any Environmental Law (hereafter "CLAIMS") or any permit issued under any such
Environmental Law, including without limitation (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Substances or arising from alleged
injury or threat of injury to health, safety or the environment.
8
<PAGE>
"ENVIRONMENTAL LAW" means any federal, state or local law, whether
-----------------
common law, court or administrative decision, statute, rule, regulation,
ordinance, court order or decree, or administrative order or any administrative
policy or guidelines concerning action levels of a governmental authority
(federal, state or local) now or hereafter in effect relating to the
environment, public health, occupational safety, industrial hygiene, any
Hazardous Substances (including, without limitation, the disposal, generation,
manufacture, presence, processing, production, Release, storage, transportation,
treatment or use thereof), or the environmental conditions on, under or about
the Property, as amended and as in effect from time to time (including, without
limitation, the following statutes and all regulations thereunder as amended and
in effect from time to time: the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as amended, 42 U.S.C. (S)(S) 9601, et
--
seq.; the Superfund Amendments and Reauthorization Act of 1986, Title III, 42
- ---
U.S.C. (S)(S) 11001, et seq.; the Clean Air Act, 42 U.S.C. (S)(S) 7401 et seq.;
-- --- -- ---
the Safe Drinking Water Act, 42 U.S.C. (S)(S) 300(f), et seq.; the Solid Waste
-- ---
Disposal Act, 42 U.S.C. (S)(S) 3251, et seq.; the Hazardous Materials
-- ---
Transportation Act, as amended, 49 U.S.C. (S)(S) 1801, et seq.; the Resource
-- ---
Conservation and Recovery Act, as amended, 42 U.S.C. (S)(S) 6901, et seq.; the
-- ---
Federal Water Pollution Control Act, as amended, 33 U.S.C. (S)(S) 1251, et seq.;
-- ---
the Toxic Substances Control Act of 1976, 25 U.S.C. 2601, et seq.; the
-- ---
Occupational Safety and Health Act, 29 U.S.C. 651, et seq.; and any successor
-- ---
statutes and regulations to the foregoing).
"HAZARDOUS SUBSTANCES" means (a) any chemicals, materials or
--------------------
substances defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous wastes,"
"restricted hazardous wastes," "toxic substances," "toxic pollutants,"
"contaminants" or "pollutants," or words of similar import, under any applicable
Environmental Law (including, without limitation, any hazardous substances
defined in NRS 40.504); and (b) any other chemical, material or substance,
exposure to which is prohibited, limited or regulated by any governmental
authority, including, without limitation, asbestos and asbestos-containing
materials in any form, lead-based paint, any radioactive materials and
polychlorinated biphenyls ("PCB's"), or substances or compounds containing
PCB'S.
"PERSON" means and includes natural persons, corporations, limited
------
liability companies, limited partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks and other
organizations, whether or not legal entities, and governments and agencies and
political subdivisions thereof.
"RELEASE" means disposing, discharging, injecting, spilling, leaking,
-------
leaching, dumping, emitting, escaping, emptying, seeping, placing and the like,
into or upon any land or water or air, or otherwise entering into the
environment.
9
<PAGE>
SECTION 9. MISCELLANEOUS.
-------------
(a) If Indemnitor is more than one person or entity, then (i) all
persons or entities comprising Indemnitor are jointly and severally liable for
all of the Indemnitor's obligations hereunder; (ii) all representations,
warranties, and covenants made by Indemnitor shall be deemed representations,
warranties, and covenants of each of the persons or entities comprising
Indemnitor; (iii) any breach, Potential Event of Default or Event of Default by
any of the persons or entities comprising Indemnitor hereunder shall be deemed
to be a breach, Potential Event of Default, or Event of Default of Indemnitor;
and (iv) any reference herein contained to the knowledge or awareness of
Indemnitor shall mean the knowledge or awareness of any of the persons or
entities comprising Indemnitor.
(b) Indemnitor waives any right or claim of right to cause a
marshalling of its assets or to cause any Indemnitee to proceed against any of
the security for the loan evidenced by the Notes before proceeding under this
Agreement. Indemnitor expressly waives and relinquishes all present or future
rights, remedies, or circumstances which might constitute a legal or equitable
discharge of Indemnitor or which might otherwise impair the validity or
enforceability of this Agreement. Indemnitor hereby agrees to postpone the
exercise of any and all rights of subrogation to the rights of any Indemnitee
against Indemnitor hereunder and any rights of subrogation to any collateral
securing the Notes and other obligations relating thereto, until all obligations
of Indemnitor to the Indemnitees hereunder have been performed in full and all
principal, interest and other sums evidenced or secured by the Basic Documents
shall have been paid in full.
(c) Any party liable upon or in respect of this Agreement or the
Obligations may be released without affecting the liability of any party not so
released.
(d) No failure or delay on the part of any of the Indemnitees in
exercising any right, power or privilege hereunder or under any other Basic
Document and no course of dealing between Indemnitor and the Indemnitees (or any
of them) shall operate as a waiver thereof; nor shall any single or partial
exercise of any right, power or privilege hereunder or under any other Basic
Document preclude any other or further exercise thereof or the exercise of any
other right, power or privilege hereunder or thereunder. The rights, powers and
remedies herein or in any other Basic Document expressly provided are cumulative
with and not exclusive of any rights, powers or remedies which the Indemnitees
or any of them would otherwise have. No notice to or demand on Indemnitor in
any case shall, ipso facto, entitle Indemnitor to any other or further notice or
---- -----
demand in similar or other circumstances or constitute a waiver of the rights of
the Indemnitees to any other or further action in any circumstances without
notice or demand where notice or demand is not otherwise required.
10
<PAGE>
(e) All notices hereunder shall be in writing and shall be delivered
in accordance with the provisions of the Deed of Trust.
(f) Neither this Agreement nor any term hereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing and signed by each of the parties hereto.
(g) INDEMNITOR KNOWINGLY, IRREVOCABLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ANY RIGHT INDEMNITOR MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY
ACTION, PROCEEDING OR COUNTERCLAIM BASED ON THIS AGREEMENT, OR ARISING OUT OF,
UNDER OR IN CONNECTION WITH THIS AGREEMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENT (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY HERETO.
THIS PROVISION IS A MATERIAL INDUCEMENT FOR COLLATERAL AGENT AND EACH HOLDER TO
ENTER INTO THE TRANSACTION GOVERNED BY THE SECOND AMENDED AND RESTATED NOTE
PURCHASE AGREEMENT AND OTHER BASIC DOCUMENTS.
(h) This Agreement and the rights and obligations of the parties
hereunder shall be construed in accordance with and be governed by the law of
the State of Nevada.
(i) All pronouns and any variations of pronouns herein shall be deemed
to refer to the masculine, feminine, or neuter, singular or plural, as the
identity of the parties may require. Whenever the terms herein are singular,
the same shall be deemed to mean the plural, as the identity of the parties or
the context requires and vice versa.
(j) This Agreement may be executed in multiple counterparts, each of
which shall constitute a duplicate original, but all of which together shall
constitute one and the same instrument.
(k) As used herein, the term Holder shall include the owners and
holders of the Notes and other Obligations from time to time, whether or not
named as Holder herein (it being expressly agreed, however, that Holder may act
through an agent; that only the signature of such agent is required on any
amendment hereof or any consent, approval or other action hereunder; and that
Sun Life is the initial agent hereunder).
11
<PAGE>
IN WITNESS WHEREOF, Indemnitor has caused its duly authorized
representative to execute and deliver this Agreement as of the date first above
written.
SAHARA LAS VEGAS CORP.,
a Nevada corporation
By: Thomas K. Land
------------------------------
Its: Treasurer & Asst. Secretary
-----------------------------
SANTA FE GAMING CORPORATION,
a Nevada corporation
By: Thomas K. Land
------------------------------
Its: SVP & CFO
-----------------------------
S-1
<PAGE>
EXHIBIT A
---------
LEGAL DESCRIPTION OF REAL PROPERTY
----------------------------------
DESCRIPTION: THE LAND REFERRED TO HEREIN IS SITUATED IN THE COUNTY OF CLARK,
STATE OF NEVADA AND IS DESCRIBED AS FOLLOWS:
That portion of the North Half (N 1/2) of Section 3, Township 22 South, Range 62
East, M.D.M., described as follows:
COMMENCING at the Southeast Corner (SE Cor.) of the Northeast Quarter (NE 1/4)
of said Section 3;
THENCE South 89 deg. 38'25" West along the South line of said section a distance
of 2246.06 feet to the TRUE POINT OF BEGINNING;
THENCE continuing along said South Line South 89 deg. 38'25" West 748.68 feet to
the Southeast Corner (SE Cor.) of land conveyed to R. Julian Moore by Deed
recorded March 20, 1970 as Document No. 14887;
THENCE along the East line of said land North 0 deg. 31'11" East 2653.57 feet to
a point on the North line of said Section 3;
THENCE along said North line North 89 deg. 49'18" East 554.75 feet;
THENCE continuing along said North line 89 deg. 32'18" East 185.60 feet;
THENCE South 0 deg. 20'26" West 2648.58 feet to THE TRUE POINT OF BEGINNING.
EXCEPTING THEREFROM the South 110.01 feet; the North 50.00 feet; the East 50.00
feet; a spandrel area at the Southwest Corner (SW Cor.) of the intersection of
Galleria Drive and Marks Street; a spandrel area at the Northwest Corner (NW
Cor.) of Sunset Road and Marks Street; and Marks Street. All as shown and
dedicated for public use by Parcel Map in File 55, Page 83, recorded March 2,
1988 in Book 880302 as Document No. 00576 and by Parcel Map in File 68, Page 38,
recorded April 9, 1991 in Book 910409 as Document No. 01057.
FURTHER EXCEPTING THEREFROM that portion of said land condemned for public use
by the State of Nevada under Case No. 255049 and recorded February 22, 1988 in
Book 880222 as Document No. 00558.
TOGETHER WITH that portion of Marks Street vacated by the Order of Vacation
recorded June 2, 1992 in Book 920602 as Document No. 01060. Vacation Map in
File 63, Page 10, Clark County, Nevada Records, recorded in Book 920602 as
Document No. 1059.
Exhibit A-1
<PAGE>
EXHIBIT 10.103
EXHIBIT XI
CONSENT TO AMENDMENT AND RESTATEMENT
Reference is made to that certain Second Amended and Restated Note
Purchase Agreement dated as of November 25, 1997 (said Second Amended and
Restated Note Purchase Agreement, as it may hereafter be amended, supplemented
or otherwise modified from time to time, the "AMENDED AGREEMENT;" capitalized
terms used herein without definition have the meanings assigned to those terms
in the Amended Agreement), by and among SAHARA LAS VEGAS CORP., a Nevada
corporation (the "COMPANY"), SANTA FE GAMING CORPORATION, a Nevada Corporation
("SGC"), SUNAMERICA LIFE INSURANCE COMPANY, an Arizona corporation
("SUNAMERICA") and the other Holders party thereto.
Company is a party to certain Basic Documents, including the Company
Security Agreement, Company Pledge Agreement, Henderson Deed of Trust, Company
Deed of Trust, Henderson Environmental Indemnity, Company Environmental
Indemnity, Wet 'N' Wild Subordination, Non-Disturbance and Attornment Agreement,
Collateral Account Agreement, Collateral Account Letter, Cash Collateral
Agreement, Cash Collateral Account Letter, Additional Collateral Account
Agreement and Additional Collateral Account Letter. SGC is a party to certain
Basic Documents including the SGC Guaranty, the Company Environmental Indemnity
and the Henderson Environmental Indemnity, in each case as amended through the
Effective Date, pursuant to which, among other things, Company and SGC have (i)
guarantied the Obligations, and (ii) pledged certain Collateral to secure the
obligations of Company and SGC under the Basic Documents. Hacienda Hawaiian is
a party to certain Basic Documents including the Hacienda Hawaiian Guaranty and
the Hacienda Hawaiian Pledge Agreement, pursuant to which, among other things,
Hacienda Hawaiian has (i) guarantied the Guarantied Obligations (as defined in
the Hacienda Hawaiian Guaranty), and (ii) pledged certain Collateral to secure
the obligations of Hacienda Hawaiian under the Hacienda Hawaiian Guaranty.
Casino Properties is a party to certain Basic Documents including the Casino
Properties Guaranty and the Casino Properties Pledge Agreement, pursuant to
which, among other things, Casino Properties has (i) guarantied the Obligations,
and (ii) pledged certain Collateral to secure the obligations of Company under
the Basic Documents. Sahara Resorts is a party to certain Basic Documents
including the Sahara Resorts Guaranty and the Sahara Resorts Pledge Agreement,
pursuant to which, among other things, Sahara Resorts has (i) guarantied the
Obligations, and (ii) pledged certain Collateral to secure the obligations of
Company under the Basic Documents. The Company Security Agreement, Company
Pledge Agreement, Henderson Deed of Trust, Company Deed of Trust, Henderson
Environmental Indemnity, Company Environmental Indemnity, Wet 'N' Wild
Subordination, Non-Disturbance and Attornment Agreement, Collateral Account
Agreement, Collateral Account Letter, Cash Collateral Agreement, Cash Collateral
Account Letter, Additional Collateral Account Agreement, Additional Collateral
Account Letter, SGC Guaranty, Hacienda Hawaiian Guaranty, Hacienda Hawaiian
Pledge Agreement, Casino Properties
1
<PAGE>
Guaranty, Casino Properties Pledge Agreement, Sahara Resorts Guaranty, Sahara
Resorts Pledge Agreement and the other Basic Documents to which Company, SGC,
Hacienda Hawaiian, Casino Properties and Sahara Resorts are party are
collectively referred to herein as the "CREDIT SUPPORT DOCUMENTS".
Each of the undersigned hereby acknowledges that it has reviewed the
terms and provisions of the Amended Agreement and the other Basic Documents and
consents to the amendment and restatement of the Existing Note Purchase
Agreement effected by the Amended Agreement and the other Basic Documents,
including, but not limited to the issuance of $57,500,000 in principal amount of
Notes pursuant to the Amended Agreement. Each of the undersigned hereby
confirms and agrees that each Guaranty to which it is a party guaranties, and
the term "Guarantied Obligations" as defined in such Guaranty and used herein
shall include, the obligations of Company under the Amended Agreement, the Notes
to be issued thereunder, and the other Basic Documents relating to or connected
with the Amended Agreement. To the extent required, each of the Guaranties is
hereby amended to include said obligations within the meaning of the term
"Guarantied Obligations." Each of the undersigned hereby confirms and agrees
that the Credit Support Document to which it is a party secures, and the term
"Secured Obligations" (as defined in such Credit Support Document and used
herein) shall include, its respective obligations under the Amended Agreement,
the Guaranty to which it is a party (as confirmed and/or amended hereunder), and
other Basic Documents. To the extent required, each of the Credit Support
Documents to which any of the undersigned is a party is hereby amended to
include said obligations within the meaning of the term "Secured Obligations."
Each of the undersigned hereby confirms that each Credit Support Document to
which it is a party or otherwise bound and all Collateral encumbered thereby
guaranties or secures or otherwise supports, as the case may be, and will
continue to guaranty or secure or otherwise support, as the case may be, to the
fullest extent possible the payment and performance of all "Guarantied
Obligations" and "Secured Obligations", as the case may be (in each case as such
terms, as applicable, are defined in the applicable Credit Support Document, and
each of the undersigned acknowledges and agrees that such terms include all of
the obligations arising under or in connection with the Amended Agreement and
the other Basic Documents, including without limitation the Notes issued
pursuant to the Amended Agreement), including without limitation the payment and
performance of all such "Guarantied Obligations" or "Secured Obligations", as
the case may be, in respect of the Obligations of the Company now or hereafter
existing under or in respect of the Amended Agreement and other Basic Documents,
including but not limited to the Notes. Without limiting the generality of the
foregoing, each of the undersigned hereby acknowledges and confirms the
understanding and intent of such party that, upon the effectiveness of the
Amended Agreement, and as a result thereof, the definition of "Obligations"
contained in the Amended Agreement includes the obligations of the Company under
the Notes.
Each of the undersigned acknowledges and agrees that any of the Credit
Support Documents to which it is a party or otherwise bound shall continue in
full force and effect and that all of its obligations thereunder (as confirmed
and/or amended herein) shall be valid and
2
<PAGE>
enforceable and shall not be impaired or limited by the execution or
effectiveness of the Amended Agreement or any other Basic Document or any future
amendment or modification of the Amended Agreement or any other Basic Document.
Each of the undersigned represents and warrants that all representations and
warranties contained in the Amended Agreement and the Credit Support Documents
to which it is a party or otherwise bound are true, correct and complete in all
material respects on and as of the date of this Consent to Amendment and
Restatement to the same extent as though made on and as of that date, except to
the extent such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.
Each of the undersigned acknowledges and agrees that nothing in the
Amended Agreement, this Consent to Amendment and Restatement or any other Basic
Document shall be deemed to require the consent of any of the undersigned to any
future amendments to the Amended Agreement.
THIS CONSENT TO AMENDMENT AND RESTATEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF
NEVADA, WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
This Consent to Amendment and Restatement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such counterparts together shall constitute but one and the same instrument;
signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are physically attached to
the same document. This Consent to Amendment and Restatement shall become
effective upon the execution of a counterpart hereof by Company, SGC, Hacienda
Hawaiian, Casino Properties and Sahara Resorts and receipt by Company and
SunAmerica of written or telephonic notification of such execution and
authorization of delivery thereof.
[THE REMAINDER OF THIS PAGE HAS INTENTIONALLY BEEN LEFT BLANK]
3
<PAGE>
IN WITNESS WHEREOF, the undersigned have caused this Consent to
Amendment and Restatement to be duly executed and delivered by their respective
officers thereunto duly authorized as of the date first above written.
SAHARA LAS VEGAS CORP.
By: /s/ Thomas K. Land
------------------------------------
Name: Thomas K. Land
Title: Treasurer & Asst. Secretary
SANTA FE GAMING CORPORATION
By: /s/ Thomas K. Land
------------------------------------
Name: Thomas K. Land
Title: SVP & CFO
SAHARA RESORTS
By: /s/ Thomas K. Land
------------------------------------
Name: Thomas K. Land
Title: Treasurer & Asst. Secretary
CASINO PROPERTIES, INC.
By: /s/ Thomas K. Land
------------------------------------
Name: Thomas K. Land
Title: Treasurer & Asst. Secretary
HACIENDA HAWAIIAN PROPERTIES, INC.
By: /s/ Thomas K. Land
------------------------------------
Name: Thomas K. Land
Title: Asst. Secretary
S-1
<PAGE>
EXHIBIT 10.104
INTERCREDITOR AGREEMENT
between
CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL LLC
SUNAMERICA LIFE INSURANCE COMPANY
Dated: As of November 25, 1997
Company: Sahara Las Vegas Corp.
Loan Amount: $57,500,000
<PAGE>
INTERCREDITOR AGREEMENT
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
<S> <C>
RECITALS............................................................................... 1
1. Interests of Holders......................................................... 1
2. Expenses..................................................................... 1
3. Subordination of Notes....................................................... 2
4. Equal Liens.................................................................. 7
5. Notes and Basic Documents.................................................... 7
6. Company Defaults, Acceleration, Enforcement Expenses......................... 8
7. Subordinate Holders Rights to Purchase the Senior Note....................... 9
8. Other Financing.............................................................. 10
9. Interest Not A Security...................................................... 10
10. Insolvency................................................................... 10
11. No Third-Party Beneficiaries................................................. 11
12. No Partnership............................................................... 11
13. No Warranty.................................................................. 11
14. Notices...................................................................... 11
15. Modification and Waiver...................................................... 12
16. Governing Law................................................................ 12
17. Binding Effect............................................................... 12
18. Entire Agreement............................................................. 13
19. Termination.................................................................. 13
20. Severability................................................................. 13
21. Counterparts................................................................. 13
22. No Assignment................................................................ 13
</TABLE>
i
<PAGE>
This Intercreditor Agreement (this "Agreement") is dated as of this 25th
day of November, 1997 by and among CREDIT SUISSE FIRST BOSTON MORTGAGE CAPITAL
LLC, a Delaware limited liability company ("a "Senior Holder" and, together with
its successors and assigns, the "Senior Holders"), and SUNAMERICA LIFE INSURANCE
COMPANY, an Arizona corporation (a "Subordinate Holder" and together with its
successors and assigns, the "Subordinate Holders") (the Senior Holders and the
Subordinate Holders are sometimes herein referred to each individually as a
"Holder" and collectively as the "Holders").
RECITALS
--------
WHEREAS, the Holders and, SunAmerica Life Insurance Company, in its
capacity as the Collateral Agent (the "Collateral Agent") have made or are about
to enter into the Second Amended and Restated Note Purchase Agreement dated as
of the date hereof (as amended, modified or supplemented from time to time, the
"Note Purchase Agreement"), pursuant to which the Holders will acquire certain
secured notes (collectively, the "Loan") in the aggregate principal amount of
Fifty-Seven Million Five Hundred Thousand Dollars ($57,500,000) from Sahara Las
Vegas Corp., a Nevada corporation (the "Company"), comprised of Tranche A Notes
in the aggregate principal amount of $37,000,000, which is or will be in favor
of the Senior Holders (the "Senior Notes"), and Tranche B Notes in the aggregate
principal amount of $20,500,000, which is or will be in favor of the Subordinate
Holders (the "Subordinate Notes") (each a "Note" and, collectively, the
"Notes"). All terms not otherwise defined herein shall have the meanings set
forth in the Note Purchase Agreement.
WHEREAS, the Loan is or will be secured by a first deed of trust liens on
the Company's fee interests in certain real properties, together with
improvements thereon and related personal property owned by Company, referred to
as the Wet 'N' Wild Property and the Henderson Property, located in Las Vegas
and Henderson, Nevada, respectively, certain 11% Mortgage Bonds issued by Santa
Fe Hotel, Inc. owned by Company and certain cash collateral and other property
(the "Security"), all as more particularly set forth in the Security Agreements
and other Basic Documents (as defined in the Note Purchase Agreement) (all Basic
Documents, including all instruments evidencing, securing or otherwise relating
to the Loan, as the same may be amended or modified in writing from time to time
are referred to herein as the "Basic Documents").
WHEREAS, the Holders desire to set forth the terms of their relationship as
co-lenders relating to the enforcement of, and their respective rights in, to
and under the Basic Documents and otherwise with respect to, the Loan.
NOW, THEREFORE, in consideration of the premises, and the mutual promises
set forth herein, and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement
hereby agree as follows:
1. INTERESTS OF HOLDERS. No amount paid by any Senior Holder for the
--------------------
Senior Notes, and no amount paid by any Subordinate Holder for the Subordinate
Notes, shall be considered a loan by any Holder to any other Holder.
1
<PAGE>
2. EXPENSES. In accordance with the Basic Documents, (a) a Holder or the
--------
Collateral Agent may make any payment for expenses under the Basic Documents or
an advance for the purposes of avoiding a threat to any lien created under the
Basic Documents, the priority of any lien created under the Basic Documents, or
a significant threat to the Security or the safety of any person at the Security
or in connection with the exercise of any rights or remedies under the Basic
Documents, including, without limitation, advances (i) to pay or discharge taxes
immediately prior to such time as such taxes may become a lien on the Security,
(ii) to pay insurance premiums no earlier than thirty (30) days prior to when
any policy may be cancelled for nonpayment of same, (iii) to pay the cost of
emergency repairs to protect the Security from damage or to minimize such
damage, (iv) to pay any amount which, if unpaid, might result in a lien on the
Security with priority over the lien or liens created under the Basic Documents
or (v) to pay any costs or expenses of the Collateral Agent in connection with
the exercise of any rights or remedies of the Collateral Agent under the Basic
Documents; (any such payment or advance, together with interest as provided in
the Basic Documents, shall be deemed an "Expense Advance"). Any Expense Advance
described in clause (i), or (ii) or (v) of the preceding sentence and any other
Expense Advance that is made with the consent of Requisite Tranche A Holders or
Requisite Tranche B Holders (any such Expense Advance, a "Senior Expense
Advance") shall be senior and superior in right of payment to the outstanding
principal balance of, prepayment premium (if any) and interest on, and all other
amounts due in respect of, the Notes and shall be pari passu with all other
Senior Expense Advances. Any Expense Advance that is not a Senior Expense
Advance shall be junior in right of payment to the outstanding principal balance
of, prepayment premium (if any) and interest on, and all other amounts due in
respect of the Notes and shall be pari passu with all other Expense Advances
that are not Senior Expense Advances.
3. SUBORDINATION OF NOTES.
----------------------
A. SUBORDINATE NOTE IS SUBORDINATE TO SENIOR NOTE.
----------------------------------------------
The Subordinate Holders covenant and agree that the Subordinate Note
is hereby expressly made subordinate and subject in right of payment to the
prior payment in full in cash or cash equivalents of the outstanding
principal balance of, prepayment premium (if any) and interest on, and all
other amounts due in respect of the Senior Notes but excluding the loan fee
payable pursuant to Section 2.4F of the Note Purchase Agreement (the
"Senior Obligations"). Notwithstanding the foregoing, at all times prior
to a Payment Blockage (as hereinafter defined) the Subordinate Holders may
receive and retain payments of the outstanding principal balance of,
prepayment premium (if any) and interest on, and all other amounts due in
respect of the Subordinate Notes (the "Subordinate Obligations"). Any
payments so received shall remain the property of the Subordinate Holders
and under no circumstances shall the Subordinated Holders be obligated to
deliver the same to any Senior Holder.
This Section 3 shall constitute a continuing obligation on the part of
any and all holders of the Subordinate Notes to all persons who become
holder(s) of or continue to hold the Senior Notes; and such provisions are
deemed made by any and all holders of the Subordinate Notes for the benefit
of the holder(s) of the Senior Notes; and such holder(s) of the Senior
Notes are deemed made obligees hereunder and they or each of them may
enforce such provisions.
The Holders agree that the additional loan fees payable to Credit
Suisse First Boston Mortgage Capital LLC and SunAmerica Life Insurance
Company pursuant to subsection 2.4F of the Note Purchase Agreement shall be
subordinate and subject in right of payment to the prior payment in full in
cash or cash equivalent of the Senior Obligations and the Subordinate
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Obligations; provided, however, that this sentence shall not prohibit or
restrict the payment of the loan fee to Credit Suisse First Boston Mortgage
Capital LLC upon the payment in full of the Senior Notes so long as no
Event of Default has occurred and is continuing.
B. PAYMENT OVER OF PROCEEDS UPON BANKRUPTCY, ETC.
----------------------------------------------
In the event of (a) any insolvency or bankruptcy case or proceeding,
or any receivership, liquidation, reorganization or other similar case or
proceeding in connection therewith, relating to the Company or to its
assets, (b) any liquidation, dissolution or other winding-up of the
Company, whether voluntary or involuntary or (c) any assignment for the
benefit of creditors or any other marshalling of assets or liabilities of
the Company, then and in any such event:
(1) the holder(s) of the Senior Notes shall be entitled to
receive payment in full in cash or cash equivalents of the Senior
Obligations, whether or not such amount(s) are an allowed claim under
applicable law, before the holders of the Subordinate Notes are
entitled to receive any payment or distribution of any kind or
character on account of the Subordinate Obligations (other than Junior
Securities issued in connection with a reorganization pursuant to the
bankruptcy laws of any jurisdiction); and
(2) any payment or distribution of assets of the Company of any
kind or character, whether in cash, property or securities, by set-off
or otherwise, to which the holders of the Subordinate Notes would be
entitled but for the provisions of this Section 3B (other than Junior
Securities issued in connection with a reorganization pursuant to the
bankruptcy laws of any jurisdiction) shall be paid by the liquidating
trustee or agent or other person making such payment or distribution,
whether a trustee in bankruptcy, a receiver or liquidating trustee or
otherwise, directly to the holder(s) of the Senior Notes or their
representative or representatives, ratably according to the aggregate
amounts remaining unpaid on account of all of the Senior Obligations
held or represented by each, to the extent necessary to make payment
in full in cash or cash equivalents of the same after giving effect to
any concurrent payment or distribution to the holder(s) of the Senior
Notes; and
(3) in the event that, notwithstanding the foregoing provisions
of this Section 3B, any holder of a Subordinate Note shall have
received (after the occurrence of an event described in (a) through
(c) in the first grammatical paragraph of this Section 3B) any payment
or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, in respect of the Subordinate
Obligations (other than Junior Securities issued in connection with a
reorganization pursuant to the bankruptcy laws of any jurisdiction)
before the Senior Obligations are paid in full in cash or cash
equivalents or payment thereof provided for, then and in such event
such payment or distribution shall be received and held in trust for
the holder(s) of the Senior Notes and shall be paid over or delivered
forthwith to the trustee in bankruptcy, receiver, liquidating trustee,
custodian, assignee, agent or other person making payment or
distribution of assets of the Company for application to the payment
of all of the Senior Obligations to the extent necessary to pay the
same in full in cash or cash equivalents after giving effect to any
concurrent payment or distribution to or for the holder(s) of the
Senior Notes.
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(4) for purposes hereof, "Junior Securities" means securities
(including capital stock) issued by the Company to a Holder on account
of the Subordinate Notes that by their terms or by law are
subordinated to Senior Notes of the Company outstanding on the date of
issuance of such Junior Securities at least to the same extent as
provided herein. As used herein, "Senior Notes of Company outstanding
on the date of issuance of such Junior Securities" shall include
securities issued in connection with a reorganization pursuant to the
bankruptcy laws of any jurisdiction to persons which held the Senior
Notes in such reorganization proceeding.
(5) upon any payment or distribution of assets of the Company
referred to in this Agreement, the Collateral Agent and the Holders of
the Notes shall be entitled to rely upon any order or decree made by
any court of competent jurisdiction in which any insolvency,
bankruptcy, receivership, dissolution, winding-up, liquidation,
reorganization or similar case or proceeding is pending, or upon a
certificate of the receiver, trustee in bankruptcy, liquidating
trustee, receiver, assignee for the benefit of creditors, agent or
other person making such payment or distribution, delivered to the
Collateral Agent or the Holders of the Notes, for the purpose of
ascertaining the persons entitled to participate in such payment or
distribution, the Holders of the Notes and other indebtedness of the
Company, the amount thereof or payable thereon, the amount or amounts
paid or distributed thereon and all other fact pertinent thereto or to
this Agreement.
C. SUSPENSION OF PAYMENT WHEN SENIOR NOTE IN DEFAULT.
-------------------------------------------------
(1) Unless Section 3B shall be applicable, upon the occurrence of
any default in the payment of principal, premium, if any, or interest
on the Senior Notes beyond any applicable cure period with respect
thereto (a "Payment Default"), no payment or distribution of any
assets of the Company of any kind or character may be made by or on
behalf of the Company on account of the Subordinate Obligations or by
or on behalf of the Company on account of the purchase, redemption or
other acquisition of the Subordinate Obligations (a "Payment
Blockage") unless and until such Payment Default shall have been cured
or waived or shall have ceased to exist or the Senior Obligations
shall have been paid in full in cash or cash equivalents, after which,
subject to Section 3B (if applicable), the making of any and all
required payments in respect of the Subordinate Obligations, including
any missed payments, may be resumed by or on behalf of the Company.
(2) Unless Section 3B shall be applicable, upon the occurrence of
any event (other than a Payment Default) the occurrence of which
entitles the Senior Holders to act to accelerate the maturity of the
Senior Note (a "Non-payment Default") and upon the earlier to occur of
(i) the receipt by the Company and the Collateral Agent
from the holder or holders representing not less than a majority
of the principal amount of the Senior Notes of written notice of
such occurrence stating that such notice is a payment blockage
notice pursuant to this Section 3C(2) or
(ii) if such Non-payment Default results from acceleration
of any Subordinate Notes, from the date of such acceleration.
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there shall be a Payment Blockage for a period ("Payment Blockage
Period") commencing on the receipt by the Company and the Collateral
Agent of such notice or the date of acceleration referred to in clause
(ii) above, as the case may be, unless and until the earliest to occur
of the following events:
(w) 179 days shall have elapsed since receipt of such
written notice by the Company or the date of such acceleration
(provided the Senior Note shall not theretofore have been
accelerated),
(x) such Non-payment Default shall have been cured or waived
or shall have ceased to exist.
(y) the Senior Notes shall have been discharged or paid in
full in cash or cash equivalents, or
(z) such Payment Blockage Period shall have been terminated
by written notice to the Company or the Collateral Agent from the
holder or holders of the Senior Notes initiating such Payment
Blockage Period.
after which, in each case, the making of any and all required payments
in respect of the Subordinate Notes, including any missed payments,
may be resumed by or on behalf of the Company. During such Payment
Blockage Period, any payments in excess of amounts necessary to pay
the Senior Holders shall be held by the Collateral Agent.
Notwithstanding any other provision of this Agreement, only one
Payment Blockage Period may be commenced within any consecutive 365-
day period. No Non-payment Default with respect to the Senior Note
which existed or was continuing on the date of the commencement of any
Payment Blockage Period shall be, or be made, the basis for the
commencement of a second Payment Blockage Period, whether or not
within a period of 365 consecutive days, unless such default shall
have been cured or waived for a period of not less than 90 consecutive
days. In no event shall a Payment Blockage Period extend beyond 179
days from the receipt by the Company and the Collateral Agent of the
notice referred to in clause (i) above or the date of the acceleration
referred to in clause (ii) above and there must be a 186 consecutive
day period in any 365 consecutive day period during which no Payment
Blockage Period is in effect. In the event that such Non-payment
Default is not cured within the Payment Blockage Period, and the
Senior Holders accelerate the maturity of the indebtedness evidenced
by the Senior Notes, then the Senior Holders may instruct the
Collateral Agent to retain the funds received by it during such
Payment Blockage Period and apply the same to the Senior Obligations.
(3) In the event that, notwithstanding the foregoing, any holder
of any Subordinate Note shall have received any payment prohibited by
the foregoing provisions of this Section 3C, then and in such event
such payment shall be received and held in trust for the holder(s) of
the Senior Notes and shall be paid over and delivered forthwith to
such holder(s) of the Senior Notes or as a court of competent
jurisdiction shall direct for application to the payment of any Senior
Obligations, to the extent necessary to pay all such Senior
Obligations in cash or cash equivalents, after giving effect to any
concurrent payment or distributions to the holder(s) of the Senior
Note. However, in no event shall
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<PAGE>
any Subordinate Holders be required to hold in trust or return any
payment unless a Senior Holder shall have delivered notice of a
Payment Blockage to such Subordinate Holder.
D. NO WAIVER OF SUBORDINATION PROVISIONS.
-------------------------------------
(1) No right of any present or future holder of any Senior Note
to enforce subordination as herein provided shall at any time in any
way be prejudiced or impaired by any act or failure to act on the part
of any Subordinate Holder, or by any non-compliance by any Subordinate
Holder with the terms, provisions and covenants of this Agreement,
regardless of any knowledge thereof any such holder may have or be
otherwise charged with, or by any non-compliance by the Company or any
other person with the terms, provisions and covenants of the Basic
Documents, regardless of any knowledge thereof any holder of any of
the Notes may have or be otherwise charged with.
(2) Without limiting the generality of Section 3D(1), any holder
of any Senior Note may, at any time and from time to time, without the
consent of or notice to the Company or any holder of the Subordinate
Notes except to the extent provided in the Basic Documents, without
incurring responsibility to any holder of the Subordinate Notes and
without impairing or releasing the subordination provided in this
Section 3 or the obligations hereunder of the holders of the
Subordinate Notes to the holder(s) of the Senior Notes, do any one, or
more of the following on behalf of all holders of the Notes: (a)
change the manner, place or terms of payments (other than increasing
the interest rate, principal amount or amortization of a Senior Note)
or extend the time of payment of, or renew or alter, a Senior Note or
any instrument evidencing the same or any agreement under which a
Senior Note is outstanding; (b) sell, exchange, release or otherwise
deal with any property or other collateral pledged, mortgaged or
otherwise securing a Senior Note (but in no event may any Senior
Holder release any collateral, or alter the priority of the lien,
securing any Subordinate Notes other than in the course of a
foreclosure thereof); (c) release any person liable in any manner for
the collection or payment of any Senior Note with respect to any
Senior Note (but in no event may a Senior Holder release any person
liable in any manner for the collection or payment of any Subordinate
Note with respect to any Subordinate Note other than in the course of
a foreclosure thereof); and (d) exercise or refrain from exercising
any rights against the Company and/or any other person. In connection
with the foregoing, no Senior Holder shall engage in a course of
conduct the primary purpose of which is to willfully and directly
impair the security of the Subordinate Holders collateral.
(3) No notice of acceleration issued by any Subordinate Holder
shall be effective (a) unless a copy thereof has been delivered to the
Senior Holders that have been identified to the Collateral Agent and
such Subordinate Holder and (b) until the earlier of (i) five (5)
business days after such notice has been delivered to the Company and
the Senior Holders or (ii) the acceleration of the Senior Notes.
E. SUBROGATION.
-----------
Subject to the payment in full in cash or cash equivalents of the
Senior Notes, the holders of the Subordinate Notes shall be subrogated
to the rights of the holder(s) of the Senior Notes to receive payments
or distributions of cash, property or securities of the
6
<PAGE>
Company applicable to the Senior Notes until the Subordinate Notes
shall be paid in full; and, for the purposes of such subrogation, no
such payments or distributions to the holder(s) of the Senior Notes by
or on behalf of the Company or by or on behalf of the holders by
virtue of this Agreement which otherwise would have been made to the
holders of the Subordinate Notes shall, as between the Company and the
holders of the Subordinate Notes, be deemed to be a payment by the
Company to or on account of the Senior Notes, it being understood that
the provisions of this Agreement are and are intended solely for the
purpose of defining the relative rights of the holders of the
Subordinate Notes, on the one hand, and the holders of the Senior
Notes, on the other hand.
F. OBLIGATIONS OF THE COMPANY UNCONDITIONAL.
----------------------------------------
Nothing contained in this Agreement is intended to or shall
impair, as among the Company, its creditors other than the Holder(s)
of the Senior Notes, and the Holders of the Subordinate Notes, the
obligation of the Company, which is absolute and unconditional, to pay
to the holders of the Subordinate Notes, the principal of, prepayment
premium (if any) and any interest on and all other amounts due in
respect of the Subordinate Notes as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the holders of the Subordinate Notes and
creditors of the Company other than the holder(s) of the Senior Note,
nor shall anything herein or therein prevent the holders of the
Subordinate Notes from exercising all remedies otherwise permitted by
applicable law upon default under any Basic Document, subject to the
rights, if any, in respect of cash, property or securities of the
Company received upon the exercise of any such remedy.
4. EQUAL LIENS. Each of the Holders shall have an interest in each item
-----------
of Security, each Security Document, and all proceeds thereof, equal to the
ratio of the obligations due such Holders to the aggregate obligations due both
Holders in all cases subject to the priority of payments set forth in Section 3
hereof, regardless of whether such Holder has been granted a lien or security
interest in such item of Security pursuant to the Security Document or otherwise
or whether the Basic Documents relating to such item of Security are in favor or
for the benefit of such Holders. Notwithstanding the date, manner, time or
order of attachment or perfection of any such lien or security interest, and
notwithstanding any provision of the applicable Uniform Commercial Code, any
applicable law or decision or any Security Document, or whether either of the
Holders holds possession of all or any part of such Security, the interest of
each Holder in each item of Security shall be a co-equal first and paramount
lien or security interest in such item of Security to the extent of such
interest without any preference or priority over the interest of the other
Holders in such item of Security, except as otherwise provided in Section 3
hereof.
5. NOTES AND BASIC DOCUMENTS.
-------------------------
A. REPRESENTATIONS AND WARRANTIES. None of the Holders makes or will
------------------------------
make any representation or warranty to any other party to this Agreement as
to the adequacy, validity or binding effect of the Notes or the Basic
Documents. Each Holder hereby represents and warrants to the other, by
execution of this Agreement, that it has not relied, is not relying and
will not rely upon the other Holders with respect to, and that it has made
or will make its own independent judgment with respect to, the following:
(i) the creditworthiness of the Company and any other
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<PAGE>
Credit Party, (ii) the adequacy, effectiveness, enforceability,
genuineness, validity or due execution of any of the Basic Documents or any
other documents referred to or provided for therein or in this Agreement;
(iii) any representation, warranty, document, certificate, report or
statement contained in the Basic Documents; (iv) the collectability of the
Loan, adequacy of collateral for the obligations of the Company and the
other Credit Parties under the Basic Documents, and all other underwriting
aspects of the Loan, (v) the existence, priority or perfection of any liens
or security interest granted or purported to be granted in connection with
any of the Basic Documents, or (v) observation of or compliance with any of
the terms, covenants or conditions of any of the documents on the part of
the Company and any other Credit Party. Each of the Holders further
represents and warrants to the other that it has knowledge and experience
in financial and business matters, it is capable of evaluating the risk of
the proposed investment in the Loan, it has received or has access to all
information required for making its investment decision regarding the Loan,
the interest of such Holders has not been registered under the Securities
Act of 1933, as amended, and it has made no separate or independent
agreement or contract with the Company or any other Credit Party with
respect to the Loan or the Security, except for the Basic Documents.
B. ORIGINALS. The Senior Holders shall retain the original Senior
---------
Notes, and the Subordinate Holders shall retain the original Subordinate
Notes. The Collateral Agent shall retain originals of all recorded and
unrecorded Basic Documents, and the initial Senior Holders and Subordinate
Holders shall receive duplicate originals of all unrecorded Basic Documents
and photocopies of all recorded Basic Documents.
C. HOLDER CERTIFICATIONS. Each Holder shall, at any time, upon
---------------------
request of any other Holder, deliver to the other a written statement
certifying the outstanding principal balance of its Note, whether it has
transferred or encumbered its interest in the Loan or the Security and if
so, the details relating to such transfer or encumbrance.
D. COMMUNICATIONS WITH COMPANY. Each of the Holders shall be
---------------------------
entitled to individually deal with and communicate with the Company and the
other Credit Parties, subject, in all events, to the terms and provisions
of Section 6 hereof and the Basic Documents.
E. The parties agree that, as to the relative obligations and rights
between the Senior Holders and the Subordinate Holders. In the event of
any conflict or inconsistency between the Basic Documents and this
Agreement, this Agreement shall control.
6. COMPANY DEFAULTS, ACCELERATION, ENFORCEMENT EXPENSES.
----------------------------------------------------
A. NOTICE OF LOAN DEFAULT. Prior to sending any notice of default to
----------------------
the Company, any Holder or Holders or a representative of such Holder or
Holders shall notify the other Holders of the existence and nature of any
act or omission by the Company or any other circumstance which would, with
or without the passage of time or giving of notice or both, give rise to a
right of the Holders to accelerate the Notes or exercise any other rights
or remedies under the Basic Documents (a "Loan Default"), to the extent
such Holder or Holders have actual knowledge of such Loan Default.
Thereafter, such Holder or Holders or a representative of such Holder or
Holders may deliver a notice of default to the Company.
8
<PAGE>
B. NOTICE OF ACCELERATION. If, following a Loan Default and
----------------------
expiration of any applicable notice and cure periods, any Holder desires to
accelerate the maturity of its indebtedness and/or commence the exercise of
remedies under the Basic Documents, such Holders shall notify the other
Holders in writing of its desire to do so. The Holders will accelerate the
Notes as provided in the Note Purchase Agreement provided, however, if an
Event of Default under subsection 7.1 of the Note Purchase Agreement with
respect to the Senior Notes shall have occurred and be continuing for
ninety (90) days, Requisite Tranche A Holders (as defined in the Note
Purchase Agreement) may, by written notice to Company, declare all or a
portion of the amounts described in clause (i) in the provision immediately
following Section 7.14 of the Note Purchase Agreement relating to the
Senior Notes and all other Obligations owed to Holders of the Senior Notes
to be, and the same shall forthwith become, immediately due and payable;
provided further, if an Event of Default under subsection 7.1 of the Note
Purchase Agreement with respect to the Subordinate Notes shall have
occurred and be continuing for ninety (90) days, Requisite Tranche B
Holders (as defined in the Note Purchase Agreement) may, by written notice
to Company, declare all or a portion of the amounts described in clause (i)
in the provision immediately following Section 7.14 of the Note Purchase
Agreement relating to the Tranche B Notes and all other Obligations owed to
Holders of the Tranche B Notes to be, and the same shall forthwith become,
immediately due and payable.
C. ENFORCEMENT OF REMEDIES. Requisite Holders, either by themselves
-----------------------
or through the Collateral Agent, shall determine for the Holders what
remedies, if any, provided under the Basic Documents to utilize as provided
in the Basic Documents, including, without limitation, directing that one
or more the Notes be foreclosed upon, and when and how such remedies shall
be implemented. Notwithstanding the foregoing, if an Event of Default
under Section 7.1 of the Note Purchase Agreement has occurred and is
continuing for ninety (90) days with respect to the Tranche A Notes and
Requisite Holders have not initiated any foreclosure or similar proceedings
upon any Security, then Requisite Tranche A Holders may initiate and direct
foreclosure or similar proceedings upon any Security, it being understood
that to the extent that any direction by Requisite Holders and by Requisite
Tranche A Holders is in conflict or otherwise inconsistent, the direction
of Requisite Holders shall prevail. Any proceeds from such sale or
foreclosure in excess of the Senior Obligations shall be paid toward the
Subordinate Obligations before being returned to the Company. Except for
Sections 6D and 6E below, this Section 6 shall not apply in the event that
the Company becomes a debtor in a bankruptcy proceeding.
D. In any case commenced by or against the Company under Chapter 11
of the Bankruptcy Code or any similar provision thereof of any similar
federal or state statute (a "Reorganization Proceeding"), the Senior
-------------------------
Holders shall have the exclusive right to exercise any voting rights in
respect of the Senior Notes and the Subordinate Holders shall have the
exclusive right to exercise any voting rights in respect of the Subordinate
Notes against the Company, except that the Subordinate Holders shall not
have the right to vote affirmatively in favor of any plan of reorganization
unless the Holders of more than 50% in principal amount of the Senior Notes
grants its permission thereto or the Holders of more than 50% in principal
amount of the Senior Notes votes to accept such plan;
E. In any Reorganization Proceeding with respect to the Company, (i)
each Subordinate Holders shall file a proof of claim in respect of its
claims against the Company and shall send to Senior Holders a copy thereof
together with evidence of the filing with the appropriate court or other
authority, (ii) if any Subordinate Holder should fail to file such proof of
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claim by the tenth (10th) business day before the last day for filing of
proofs of claim, or if the Holders of more than 50% in principal amount of
the Senior Notes reasonably believes that the proof of claim so filed is
less than the proper amount thereof, then the Holders of more than 50% in
principal amount of the Senior Notes may file such proof of claim, or
corrected proof of claim, on behalf of such Subordinate Holder, and (iii)
if objection is made to the allowance of any claim of any Subordinate
Holder, the Holders of more than 50% in principal amount of the Senior
Notes shall have the right to intervene and fully participate in such
proceedings and if such rights are denied and such Subordinate Holder fails
to defend such claim, the Holders of more than 50% in principal amount of
the Senior Notes may defend such claim in the name of such Subordinate
Holder.
7. SUBORDINATE HOLDERS RIGHTS TO PURCHASE THE SENIOR NOTES. At any time
-------------------------------------------------------
after delivery of notice by any Senior Holder to the Collateral Agent or the
Subordinate Holders that an "Event of Default" has occurred under any of the
Basic Documents, a Subordinate Holder or Holders representing more than 50% of
the Subordinate Notes (the "Majority Subordinate Holder") may deliver to the
Senior Holders a notice of election to purchase the Senior Note from the Senior
Holders for a purchase price equal to the Senior Obligations, excluding any
prepayment premium which would have been due had the Company prepaid the Senior
Notes at the time of such purchase or any fee payable upon the payment in full
of the Senior Notes, but including only the reasonable expenses of such Note
purchase. At any time within twenty (20) days after the Majority Subordinate
Holder(s) has delivered such notice to the Senior Holders (time being of the
essence), a Senior Holder or Holders representing more than 50% of the Senior
Notes (the "Majority Senior Holder") may deliver to the Subordinate Holders a
notice of election to purchase the Subordinate Notes from the Subordinate
Holders for a purchase price equal to the Subordinate Obligations, excluding any
prepayment premium which would have been due had the Company prepaid the
Subordinate Notes at the time of such purchase or any fee payable upon the
payment in full of the Subordinate Notes, but including only the reasonable
expenses of such Note purchase. Either of such notices notice shall set forth
the date (no earlier than ten (10) days, nor later than forty-five (45) days,
after the date of delivery of such notice) on which such Holder(s) shall tender
such purchase price in immediately available funds to the other Holder(s) and
each other Holder(s) is to tender its Note duly endorsed, without
representation, warranty or recourse, to the purchasing Holder(s), together with
an assignment, in due form for recording, of all of such other Holder's right,
title and interest in and to the Loan and the Basic Documents. On the appointed
day and at the appointed time (time being of the essence), each party shall make
its tenders. Each party shall bear its own expenses in connection with such
purchase, but the purchasing Holder(s) shall pay any and all filing and/or
recording charges, fees and/or taxes in connection therewith. If the Majority
Senior Holder timely delivers its notice to the Subordinate Holders, then the
Majority Senior Holders shall be the purchasing Holder. If the Majority
Subordinate Holders timely delivers its notice to the Majority Senior Holder,
but the Majority Senior Holder fails to timely deliver its notice to the
Subordinate Holders, then such Majority Subordinate Holder shall be the
purchasing Holder. Any such notice shall be binding, non-contingent and
irrevocable.
8. OTHER FINANCING. Without limiting rights to which each of the Holders
---------------
otherwise is or may become entitled, none of the Holders shall have any interest
solely by virtue of this Agreement in (a) any present or future loans from,
letters of credit issued by, or leasing, note, or other financing transactions
by any other Holder(s) or any affiliate thereof to, or on behalf of, or with the
Company, any other Credit Party or any affiliate thereof (collectively, the
"Other Financing") other than as provided under the Basic Documents or as
expressly provided in this Agreement, (b) any present or future guaranties by or
for the account of the Company, any other Credit Party or any affiliate thereof
in connection with such Other Financing, (c) any present or future offset
exercised by any other Holder in
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respect of such Other Financing, (d) any present or future property taken as
security for any such Other Financing, or (e) any property now or hereafter in
the possession or control of any other Holder which may be or become security
for the obligations of the Company, any other Credit Party or any affiliate
thereof arising under any loan document by reason of the general description of
indebtedness secured or of property contained in any other agreements,
documents, or instruments related to any such Other Financing; provided,
however, that if payments in respect of such guaranties or such property or the
proceeds thereof shall be applied to the obligations of the Company arising
under the Basic Documents, then each Holder shall be entitled to share in the
amounts so applied in accordance with Section 3 hereof.
9. INTEREST NOT A SECURITY. Each of the Holders represents and warrants
-----------------------
to the others that (a) such Holder does not consider its interest in the Loan to
constitute the "purchase" or "sale" of a "security" within the meaning of the
Securities Act of 1933, as amended, the Securities Exchange Act of 1934, as
amended, or Rule 10b-5 promulgated thereunder, the Trust Indenture Act of 1939,
as amended, or any other applicable securities statute or law, or any rule or
regulation under any of the foregoing (collectively, the "Acts"), (b) such
Holder has no expectation that it will derive profits from the efforts of any
other Holder or any third party in respect of the acquisition of such Holder's
Note hereunder, (c) such Note merely constitutes a commercial transaction by
such Holder with the Company and the other Credit Parties and the other Holder
and does not represent an "investment" (as that term is commonly understood) in
any other Holder or the Company or any other Credit Party, (d) such Holder is
acquiring its Note for its own account in respect of a commercial transaction
made in the ordinary course of its business and not with a view to or in
connection with any subdivision, resale, or distribution thereof, and (e) such
Holder can bear the economic risk related to the purchase of the same, and has
had access to all information deemed necessary by it in making its decision
whether or not to purchase the same.
10. INSOLVENCY. In the event that (a) a Holder becomes insolvent or makes
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a transfer in fraud of creditors, or makes a general assignment for the benefit
of creditors, or admits in writing its inability to pay its debts as they become
due or is generally not paying its debts as such debts become due, or (b) a
receiver, trustee or custodian is appointed for, or takes possession of, all or
substantially all of the assets of a Holder, either in a proceeding brought by
such Holder or in a proceeding brought against such Holder, and such appointment
is not discharged or such possession is not terminated within sixty (60) days
after the effective date thereof or such Holder consents to or acquiesces in
such appointment or possession, or (c) a Holder files a petition for relief
under the Bankruptcy Code, as amended, or any other present or future federal or
state insolvency, bankruptcy or similar law (collectively, "applicable
Bankruptcy Law") or an involuntary petition for relief is filed against a Holder
under any applicable Bankruptcy Law and such petition is not dismissed within
sixty (60) days after the filing thereof, or an order for relief naming a Holder
is entered under any applicable Bankruptcy Law, or any composition,
rearrangement, extension, reorganization or other relief of debtors now or
hereafter existing is requested or consented to by a Holder, or (d) the interest
of a Holder in the Loan or any part thereof is taken on execution or other
process of law in any action against such Holder, or (e) the Holder is taken
over or subject to rehabilitation by any Commissioner of Insurance or state or
federal regulatory agency (a Holder who becomes insolvent or makes a transfer in
fraud of creditors or who is otherwise described by clauses (a) through (e)
above is hereinafter called an "Insolvent Holder"), to the extent the Insolvent
Holder holds Senior Notes, then any other Holder that holds Senior Notes or, to
the extent the Insolvent Holder holds the Subordinate Notes, then any other
Holder that holds Subordinate Notes (any such Holder, a "Solvent Holder") shall
have the right, but not the obligation, to purchase the Insolvent Holder's Note.
In order to exercise this right, such Solvent Holder shall give written notice
to the Insolvent Holder of its intention to exercise such option and shall
conclude the purchase of the Insolvent Holder's Note as soon as reasonably
practicable thereafter. The purchase price for the Insolvent Holder's Note shall
be the appraised fair market value thereof. In the
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event a Solvent Holder acquires the interest of the Insolvent Holder pursuant to
this Section 10, such Solvent Holder shall, on request of the Insolvent Holder,
certify in writing that it is acquiring such Note for the purpose of investment
and not with a view to such distribution thereof within the meaning of the
Securities Act of 1933, as amended, and the Insolvent Holder shall deliver to
the Solvent Holder (i) such of the original Basic Documents as are in the
Insolvent Holder's possession, if any, (ii) an assignment of all of the
Insolvent Holder's right, title and interest in the Loan and the Basic
Documents, and (iii) such evidence of the Insolvent Holder's existence, good
standing and authority and the due execution and delivery by the Insolvent
Holder of the assignment and any documents related thereto.
11. NO THIRD-PARTY BENEFICIARIES. This Agreement is made and entered into
----------------------------
for the sole protection and benefit of the parties and their successors and
permitted assigns and nothing in this Agreement, whether express or implied,
shall inure to the benefit of, or confer any rights or remedies upon the
Company, any other Credit Party or any person other than the Holders and their
permitted successors and assigns. Consequently, the Company, the other Credit
Parties and any person other than the Holders shall not be entitled to rely upon
or raise as a defense, in any manner whatsoever, the failure of any Holders to
comply with the provisions of this Agreement or any other intercreditor
agreement among any Holders.
12. NO PARTNERSHIP. Neither the execution of this Agreement, nor the
--------------
ownership of interests in the Loan or the security for the Loan is intended to
be, nor shall it be construed to be, the formation of a partnership, trust,
joint venture or agency between the parties. In addition, no Holder owes any
fiduciary duty to any other Holder with respect to the making, administration
and/or enforcement of the Loan, but is obligated to exercise good faith.
13. NO WARRANTY. No provision of this Agreement will be construed as a
-----------
warranty or guaranty by any Subordinate Holder or Senior Holder as to future
payments by the Company or any other person obligated to pay the Loan.
14. NOTICES. All notices, consents, demands, requests and other
-------
communications pursuant to this Agreement shall be deemed to have been properly
given, when made in writing, three business days after receipt, when delivered
personally or when sent either through United States Postal Service post-paid,
registered or certified mail with return receipt requested or by overnight mail
(such as Airborne, Federal Express, Purolator or similar service) at the expense
of the sender, addressed to the Senior Holders or the Subordinate Holders to
receive such notice at the following addresses or at such address as may
hereafter be specified by written notice given as set forth in this Section 14:
If to CSFB: Credit Suisse First Boston Mortgage
Capital LLC
11 Madison Avenue, 5th Floor
New York, New York 10010
Attention: Mr. Richard Luftig
Facsimile No.: (212) 325-8163
With a copy to:
Cadwalder, Wickersham & Taft
100 Maiden Lane
New York, New York 10038
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Attention: Fredric L. Altschuler
Facsimile No.: (212) 504-6666
If to SunAmerica: SunAmerica Life Insurance Company
SunAmerica, Inc.
One SunAmerica Center, 38th floor
Los Angeles, California 90067-6002
Attention: Peter McMillan III
Facsimile No.: (310) 772-6150
With a copy to: O'Melveny & Myers LLP
400 South Hope Street
Los Angeles, Ca 90071
Attention: Thomas W. Baxter
Facsimile No.: (213) 669-6407
15. MODIFICATION AND WAIVER. This Agreement may be modified, amended or
-----------------------
cancelled and compliance with any of its provisions waived, only by an
instrument in writing executed by all the parties hereto. No failure by any
party hereto to enforce compliance with any provision hereof at any time shall
affect the right at a later time to enforce its compliance. No waiver of
compliance with any provision hereof in any instance by any party shall, except
as otherwise provided in the instrument granting such waiver, operate as or be
construed as a further or continuing waiver of compliance with such provision or
other provision. The parties hereto waive the right to trial by jury.
16. GOVERNING LAW. This Agreement shall be governed by and construed in
-------------
accordance with the laws of the State of New York, without giving consideration
to principles of conflict of law.
17. BINDING EFFECT. This Agreement shall inure to the benefit of and be
--------------
binding on the parties hereto and their respective successors and assigns, and
the successors and assigns of all or any part of the interest of any party
hereto. Any Holder party may endorse, assign, sell or otherwise transfer its
Note or Notes as provided in the Note Purchase Agreement; provided that any such
endorsement, assignment, sale or transfer shall be made expressly subject to
this Agreement and such Holder shall cause such buyer, assignee or transferee to
unconditionally and irrevocably agree to be bound by all of the provisions
hereof and deliver an Intercreditor Assumption Agreement to the other Holders in
the form of Exhibit A hereto. In the event that any Holder defaults in any of
its obligations hereunder, the other Holders have the right to seek specific
performance of such Holder's obligations hereunder.
18. ENTIRE AGREEMENT. This Agreement sets forth the entire Agreement and
----------------
understanding of the parties hereto with respect to the transactions
contemplated hereby and the subject matter hereof and supersedes all prior
agreements or understandings relating thereto.
19. TERMINATION. This Agreement shall remain in full force and effect so
-----------
long as the Holders, their successors and permitted assigns shall have any
interest in any portion of the Loan or the Security, including, without
limitation, after acquisition of the Security by both Holders through
foreclosure, deed in lieu of foreclosure, or otherwise.
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20. SEVERABILITY. Any provision of this Agreement which is prohibited or
------------
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction. To the extent permitted by applicable law, the parties
hereto waive any provision of law which prohibits or renders unenforceable any
provision hereof.
21. COUNTERPARTS. This Agreement may be executed in counterparts, each of
------------
which shall be deemed an original and all of which, when taken together, shall
constitute one and the same instrument, binding on the Holders, and the
signature of any party to any counterpart shall be deemed a signature to, and
may be appended to, any other counterpart.
22. NO ASSIGNMENT. This Agreement may not be assigned, except in
-------------
connection with the endorsement, assignment, sale or other transfer of such
assignor's Note.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
CREDIT SUISSE FIRST BOSTON MORTGAGE
CAPITAL LLC
By: /s/ William Adamski
---------------------------------
Name: William Adamski
Its: Vice President
SUNAMERICA LIFE INSURANCE COMPANY
By: /s/ Stephen P. Hanover
--------------------------------
Name: Stephen P. Hanover
Its: Authorized Agent
Acknowledged (including with
respect to Section 11 hereof):
SAHARA LAS VEGAS CORP.
By: /s/ Thomas K. Land
------------------------------
Name: Thomas K. Land
Its: Treasurer & Asst. Secretary
S-1
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EXHIBIT 99.1
SANTA FE GAMING CORPORATION
4949 NO. RANCHO DR.
LAS VEGAS, NV 89130
FOR IMMEDIATE RELEASE:
SANTA FE GAMING CORPORATION ANNOUNCES
AMENDED AND RESTATED LOAN AGREEMENT
LAS VEGAS, NEV., DECEMBER 1, 1997 - Santa Fe Gaming Corporation (AMEX:SGM), a
diversified gaming company headquartered in Las Vegas, announced that its
indirect wholly owned subsidiary, Sahara Las Vegas Corp., entered into an
amended and restated loan agreement pursuant to which it increased an existing
loan to $57.5 million from $35 million. The additional proceeds were used by
Sahara Las Vegas Corp. primarily to acquire a 39 acre parcel of real property in
Henderson, Nevada from its affiliate, Santa Fe Valley, Inc., for cash
consideration of $20 million. Pursuant to the amended loan agreement, Sahara Las
Vegas issued two tranches of promissory notes, $37 million principal amount with
an interest rate of 9.75% and $20.5 million with an interest rate of 13.25%.
Certain other provisions of the loan agreement were amended, including the
elimination of any sinking fund principal payments prior to maturity in December
1999.
Santa Fe Valley, an indirect-wholly owned subsidiary of Santa Fe Gaming
Corporation, used approximately $5 million of the purchase price to repay an
existing mortgage on the property, and paid a dividend of $5 million to its
parent company, Pioneer Hotel. The balance of the proceeds, approximately $10
million, were retained by Santa Fe Valley.
Santa Fe Gaming Corporation owns and operates the Santa Fe Hotel and Casino in
northwest Las Vegas and the Pioneer Hotel & Gambling Hall in Laughlin, Nevada.
In addition, the Company holds several real estate parcels for future
development within or in the area surrounding Las Vegas, Nevada.
CONTACT: Thomas K. Land
Chief Financial Officer
Santa Fe Gaming Corporation
702-658-4340
